The year ending 31 March 2023 was again a positive year for the Group with turnover of £80m and pre-tax profit at £2.3m. Our balance sheet remained strong with key performance measures all improving. Cash remains in excess of £12.4m and we continue to have no bank or other financial borrowings. Our careful and cautious financial controls and cash reserves, continue to be major factors in overcoming the unusual challenges faced by our industry over the past few years. These results are something we can all be proud of, bearing in mind the testing circumstances that have prevailed recently within our industry.
Our ability to win work in most sectors of the industry and on projects within a wide range of values, stood us in good stead throughout the year and continues to do so.
Health & Education still continues to form a major part of our activities. A care home project at Mariners Park, Wallasey has been awarded and we have been welcomed back onto Edge Hill University, Ormskirk where we have been awarded several projects including a new Life Sciences building. In addition to this new work, we have grown our relationship at Burnley College with the award of two more projects. Post year end we have been appointed onto the Lancashire County Council Construction Partnering Framework which covers public sector building projects across the county for the next four years.
All our internal divisions performed well throughout the year with credible increases in turnover and profit by Wright Build Ltd, our specialist social housing maintenance company.
Once again our ISO accreditations were successfully audited and renewed in the year. We achieved an 18th Gold Medal in a row from RoSPA and received the prestigious Order of Distinction. This was again a tremendous result by everyone within the Group!
We are actively engaged in maximising our social value in the areas in which we work. This involves providing work experience, employing apprentices and generally promoting interaction and communication with the local residents, where possible. The work of our employee lead charity group (TLC) raised much needed funds for worthy causes such as over £4,000 for DEC Ukraine, Chorley Youth Zone, Backup, MacMillan and Sue Ryder.
We continued to invest in our business throughout the year in the ongoing promotion of our very successful Career Development Programme and the offer of Apprenticeships. In October 2022, we were once again awarded the ‘We Invest in People’ standard accreditation by Investors in People. This extends our accreditation through to autumn 2025, a quarter of a century since we originally became accredited in 2000. This is a great achievement which we are very proud of.
In the year to 31 March 2024 we have over £90m of Group turnover currently secured and over £45m secured for the year to 31 March 2025. The level of opportunities we have received to tender or negotiate for clients has always been high and this situation continues to date. We attribute our good reputation and the overall stability of the Group to this welcome trend.
We must always be cautious when there is uncertainty and turmoil within the global economy but I look forward to the future of our business with confidence.
The directors present the strategic report for the year ended 31 March 2023.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2023.
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £2,010,000 (2021: £2,384,548). The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
JTCG has committed to reducing its impact on the environment, including on climate change. This commitment has been shown by the company’s ongoing accreditation to the ISO 14001 (environmental) and ISO 50001 (energy) international standards.
Over recent years the company has implemented a number energy efficiency measures as part of our ISO 50001 commitment to continual improvement. This commitment has seen the installation of smart meters to our head offices and an energy efficiency campaign throughout our offices and construction sites. The replacement of our LEV system with an energy efficient “soft start” system with variable flow rates was a significant capital expenditure in the name of increasing the energy efficiency of the company. Our energy management system is externally audited each year to ensure that the company is making all reasonable efforts towards continual improvement.
As part of the ISO 50001 accreditation the company measures energy usage, sets energy performance indicators (EnPIs), sets annual targets against significant usage areas and identifies opportunities for improvement.
The energy efficiency measures which have been implemented in the reporting period include:
Continued phasing out of “traditional” lighting technologies, such as sodium, fluorescent and incandescent lamps by replacing these lamps with high efficiency LED lighting
Continued implementation of the company electric car scheme introduced in 21/22
Ongoing removal of aging plant with more energy efficient replacements
Replacing company owned vehicles with more energy efficient models
The table below shows the company’s total energy use in kWh and the emissions arising as a result of that energy usage in kg of CO2e.
Emissions Source | Operational Area / Energy source | 2022/23 Energy (kWh)
| 2022/23 Emissions (kgCO2e)
| 2021/22 Energy (kWh)
| 2021/22 Emissions (kgCO2e)
|
Emissions from burning natural gas, namely for heating | Combustion of natural gas | 12,477 | 2,214 | 17,075 | 3,038 |
Emissions from burning DERV fuel through company owned and rented fleet, “grey fleet” and plant including on-site electricity generation | Combustion of fuels | 951,476 | 221,248 | 1,885,505 | 457,182 |
Indirect emissions of purchased electricity | Electricity | 635,045 | 134,839 | 819,786 | 174,065 |
Total |
| 1,598,998 | 358,301 | 2,722,366 | 634,285 |
Intensity Ratio
Emissions | 2022/23 | 2021/22 |
Kgs CO2e per £100,000 turnover | 506 | 865 |
To allow the company to provide comparative figures each year and improve target setting the intensity ratio is calculated to provide a year-to-year “normalising factor”. The intensity ratio we have decided upon is Kilograms of CO2 equivalent per £100,000 turnover. This normalising factor considers the company’s turnover, allowing for variations in the company’s growth and productivity.
The Group holds or issues financial instruments in order to achieve three main objectives, being:
(a) to finance its operations;
(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and
(c) for trading purposes.
In addition, various financial instruments (e.g. trade debtors and trade creditors) arise directly from the Group's operations.
Transactions in financial instruments result in the company assuming or transferring to another party one or more of the financial risks described below.
Credit risk
The investment of cash surpluses is made through banks which must fulfil credit rating criteria approved by the Board. The Group has no borrowings.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary.
Liquidity risk
The Group manages its cash in order to maximise interest income, whilst ensuring the Group has sufficient liquid resources to meet the operating needs of the business.
During the year, the policy of providing employees with information about the company has been continued through the company's newsletter in which employees have also been encouraged to present their suggestions and views on the company's performance. Regular meetings are held between management and employees to allow a free flow of information and ideas.
Disabled employees
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
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 group and parent 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 group's and parent 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 group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the company’s shareholder, 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 shareholder 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 shareolders, 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,643,890 (2022: £1,336,276).
John Turner Construction Group Ltd (“the Company”) is a limited company domiciled and incorporated in England and Wales. The registered office is 2 Preston Road, Grimsargh, Preston, Lancashire, United Kingdom, PR2 5SD.
The Group consists of John Turner Construction Group Ltd and all of its subsidiaries.
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 under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements present the results of the Group and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Subcontractor costs are accounted for on the basis of certified invoices received. Turnover derived from variations on contracts is recognised only when they have been accepted by the customer. Full provision is made for losses on all contracts during the year in which they are first foreseen.
Costs incurred in the early stages of contracts or where progress contract values are individually
insignificant are held on the balance sheet as work in progress; related sales invoices are treated as
deferred income.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
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 recognised in the Statement of Comprehensive Income.
The group took advantage of the arrangements under FRS102 which allows the retention of the carrying value of the revalued freehold land and buildings before the transition date of 1 April 2014 to be deemed cost. All additions since this date are stated at cost.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Investments in subsidiaries are valued at the cost less provision for impairment.
At each reporting period end date, the group 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The Group 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 Group's statement of financial position when the Group becomes party to the contractual provisions of the instrument.
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.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price. 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 derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 are classified according to the substance of the contractual arrangements entered into.
Basic financial liabilities, including creditors and loans from fellow group companies are initially recognised at transaction price.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
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 Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
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 Group operates a defined benefits pension scheme and the pension charge is based on a full actuarial valuation dated 5 April 2020. From 31 July 2004 the accrual of benefits for this defined benefit pension scheme ceased.
A defined contribution scheme has been put in place by John Turner Construction Group Ltd as an alternative to the defined benefit scheme and a further defined contribution scheme for the benefit of a director. Wright Build Limited operates two defined contribution schemes. Both companies operate auto enrolment schemes. Defined contribution scheme contributions are charged to the Statement of Comprehensive Income as they become payable in accordance with the rules of the scheme.
In relation to the defined benefit scheme, the service cost of the pension provision relating to the period, together with the cost of any benefits relating to past service, is charged to the Statement of Comprehensive Income. A charge equal to the increase in the present value of the scheme liabilities and a credit equivalent to the company's long-term expected return on assets (based on the market value of the scheme assets at the start of the period), are included in the Statement of Comprehensive Income.
The difference between the market value of the assets of the scheme and the present value of the accrued pension liabilities is shown as an asset or liability in the balance sheet. Any difference between the expected return on assets and that actually achieved is recognised in the Statement of Comprehensive Income along with differences which are from experience, gains and losses and changes of assumptions.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Dividends
Equity dividends are recognised when they become legally payable.
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Where losses on contracts are expected, an appropriate provision is recognised immediately within the Statement of Comprehensive Income.
Defined benefit schemes
The cost of defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to uncertainty. In determining the appropriate discount rate, management considers the interest rates of corporate bonds in the respective currency with at least AA rating, with extrapolated maturities corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables and future salary increases and pension increases are based on expected future inflation rates.
The whole of the turnover is attributable to the group's principal activities.
All turnover arose within the United Kingdom.
The average monthly number of persons (including directors) employed by the Group during the year was:
Their aggregate remuneration comprised:
The number of directors and key management personnel for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
FRS 102 prescribes that the Group may take the open market value of the freehold land and property at the transition date as the 'deemed cost' of the freehold land and property with the uplift being a non distributable reserve to be held up until eventual disposal, as per FRS 102 Section 35.10d.
Investment property comprises of a freehold property which has been transferred from work in progress during the year. The fair value of the investment property has been arrived at on the basis of a valuation carried out using external market data. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
The valuation held at year end is the same as the historical cost of £200,000.
The company owned 100% of the ordinary share capital of the following subsidiaries at 31 March 2023:
* Held indirectly via Wright Build Holdings Limited.
The registered office of all subsidiaries is 2 Preston Road, Grimsargh, Preston, Lancashire, PR2 5SD.
The provisions relate to events arising while work is in progress or post project completion.
Deferred tax assets and liabilities are offset where the Group or 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 Group operates a defined contribution pension scheme for all qualifying employees and a further defined contribution scheme for the benefit of a Director. The assets of the schemes are held separately from those of the group in independently administered funds.
The company operates a defined benefit pension scheme for the benefit of a director and certain employees, the assets of which are held in separately administered funds managed by Friends Provident Life and Pensions Limited and the defined benefit scheme trustees. Contributions to the scheme are determined with the advice of independent qualified actuaries on the basis of triennial valuations using the projected unit method. In the course of 2004/05 the accrual of the benefits under the scheme ceased.
The last full actuarial valuation was carried out as at 5 April 2020 and concluded that, subject to the company continuing to make contributions in accordance with the actuary's recommendations set out below, the resources of the scheme are likely in the normal course of events to meet in full liabilities of the scheme as they fall due.
The actuary recommended contributions of £71,000 per annum from 6 April 2020 to 4 April 2023 in order to clear the scheme's funding deficit by 5 April 2023 as anticipated in the scheme Recovery Plan arising from this actuarial valuation.
Amounts taken to other comprehensive income
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
Movements in the present value of defined benefit obligations
The defined benefit obligations arise from plans which are wholly or partly funded.
Movements in the fair value of plan assets
The actual return on plan assets was £35,000 (2022 - 169,000).
Fair value of plan assets at the reporting period end
At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year, the group carried out development work on behalf of BXB Cottam Properties Limited, a company in which John J Clarke has a controlling interest. At the balance sheet date, accrued income and amounts due from BXB Cottam Properties Limited were £272,534 (2022: £nil) and £685,867 (2022: £471,393) respectively.
During the year, an amount of £69,996 (2022: £69,996) in relation to rent payable, was paid to Clarke JJ Redswan SIPP, a pension scheme in which John J Clarke is the main beneficiary.
During the year, the group made sales of £88 (2022: £785) to John J Clarke, a director of the company, in relation to the construction and refurbishment of property.
The company has taken advantage of the exemption conferred by Section 33 Related Party Disclosures paragraph 33.7. not to disclose details of transactions with other members of the group.
The following amounts were outstanding with group companies that do not form part of these consolidated accounts at the reporting end date: