J. SMART & CO. (CONTRACTORS) PLC
ANNUAL REPORT
AND
STATEMENT OF ACCOUNTS
TO
31s t JULY 2013
J. Smart & Co. (Contractors) PLC
DIRECTORS
J. M. Smart, Chairman and Managing Director
D. W. Smart
a. H. roSS
J. r. Smart
COMPANY SECRETARY
P. Sweeney
REGISTERED OFFICE
28 Cramond road SoutH,
edinburgH,
eH4 6ab
SUBSIDIARY COMPANIES
mCGowan & Co. (ContraCtorS) Limited
Cramond reaL eState Company Limited
tHomaS menzieS (buiLderS) Limited
ConCrete produCtS (KirKCaLdy) Limited
C. & w. aSSetS Limited
edinburgH induStriaL eStateS Limited
REGISTRARS AND TRANSFER OFFICE
equiniti Limited,
34 SoutH gyLe CreSCent,
SoutH gyLe buSineSS parK,
edinburgH,
eH12 9eb
BANKERS
banK of SCotLand,
38 St andrew Square,
edinburgH,
eH2 2yr
AUDITORS
frenCH dunCan LLP,
CHartered aCCountantS,
375 weSt george Street,
gLaSgow,
g2 4Lw
SOLICITORS
ruSSeL & aitKen LLP,
27 rutLand Square,
edinburgH,
eH1 2bU
anderSon StratHern LLp,
1 rutLand Court,
edinburgH,
eH3 8ey
1
J. Smart & Co. (Contractors) PLC
NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of the Company will be held at the
Registered Office, 28 Cramond Road South, Edinburgh on 19th December 2013 at 12 noon, for the following
purposes:
1. To receive and consider the Annual Report and Statement of Accounts for the year ended 31st July 2013.
2. To receive and consider the Report on Directors’ Remuneration for the year ended 31st July 2013.
3. To declare a Final Dividend of 2.01p per share.
4. To re-elect D.W. Smart as a Director, who retires in accordance with provision B.7.1 of UK Corporate
Governance Code.
5. To re-elect J. R. Smart as a Director, who being appointed in the year, retires in accordance with provision
B.7.1 of UK Corporate Governance Code.
6. To re-elect French Duncan LLP as Auditors.
7. To authorise the Directors to determine the remuneration of the Auditors.
8. To transact any other business of an Annual General Meeting.
A member entitled to attend and vote at this Meeting is entitled to appoint one or more proxies to attend and
vote on a poll instead of him. A proxy need not be a member. Forms of proxy, if used, must be lodged with the
Registrars of the Company at least 48 hours before the time fixed for the Meeting. Forms of proxy
may also be lodged electronically by submitting a duly completed scanned copy of the proxy card to
proxy.votes@equiniti.com.You may not use the electronic address provided either in this Notice of Meeting or
any related documents (including the Form of Proxy) to communicate with the Company for any purpose other
than that expressly stated.
In accordance with section 311A of the Companies Act 2006, the contents of this Notice of Meeting, details of
the total number of shares in respect of which members are entitled to exercise voting rights at the AGM and,
if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the
Company after the date of this Notice will be available on the Company’s website www.jsmart.co.uk.
Pursuant to section 319A of the Companies Act 2006, the Company must cause to be answered at the AGM any
question relating to the business being dealt with at the AGM which is put by a member attending the meeting,
except in certain circumstances, including if it is undesirable in the interests of the Company or the good
order of the Meeting that the question be answered or if to do so would involve the disclosure of confidential
information.
BY ORDER OF THE BOARD
P. Sweeney, SeCretary
28 Cramond Road South,
Edinburgh EH4 6AB
19th November 2013
2
J. Smart & Co. (Contractors) PLC
CHAIRMAN’S REVIEW
ACCOUNTS
Profit for the year was again adversely affected by a reduction in the value of our property portfolio as dictated
by the International Financial Reporting Standards. Headline profit turned out at £829,000 which compares
with a headline profit of £55,000 last year. If the impact of revalued property on the figures is disregarded
then a truer reflection of Group performance emerges in the form of an underlying profit before tax for the
year under review of £3,956,000 (including £2,244,000 profit from property sales and a contribution from joint
ventures relating to property sales) which compares with the figure for underlying profit last year of £4,097,000
(no property sales). As forecast in the interim report, once property sales are stripped out of the figures,
underlying profit is well below that of last year.
The Board is recommending a Final Dividend of 2.01p nett making a total for the year of 2.93p nett which
compares with 2.90p nett for the previous year. After waivers by members holding over 50% of the shares, the
Final Dividend will cost the Company £430,000.
Profit adjusted for pension scheme surplus, dividends paid and fair value reserve adjustment when added to
opening shareholders’ funds brings the total equity of the Group to £91,125,000.
TRADING ACTIVITIES
Group construction work carried out decreased by 20%, own work capitalised decreased by 33%. Group
revenue decreased by 19% and headline Group profit increased fifteenfold. Underlying Group profit excluding
the unrealised reduction in revalued property decreased by 3%.
Turnover in contracting was less than last year and a loss was sustained. Private dwelling sales were down
on the previous year, although there has been a revival in sales since July 2013. Sales in precast concrete
manufacture remained static, although the loss was reduced.
The Robertson Avenue development in Edinburgh is all but complete and while the office block is so far unlet,
residential sales are currently proceeding satisfactorily.
Occupancy levels at our established industrial and commercial properties remain stable and we are seeing
increased interest in our recent unlet developments.
OTHER MATTERS
In January 2013 Mr L. E. Glenday, having attained his seniority, retired from the Board. Mr Glenday served
our Company for 41 years, 12 as a Director, during which time his hard work, loyalty, dedication and the
negotiating skills he demonstrated in his role as Quantity Surveying Director, were major factors in the Group’s
success. My sincere personal thanks go to Lionel for his tenacious and determined efforts on the Company’s
behalf, together with my wishes for a long and happy retirement.
FUTURE PROSPECTS
Work in hand in contracting is less than at this time last year and while there is work in the pipeline it seems
clear that turnover in contracting during the current year will approximate to half that of last year.
Residential sales are currently promising. We are about to commence Phase I of an industrial development at
South Gyle, Edinburgh. South Gyle is a very well established industrial and commercial area where we believe
letting prospects are favourable.
It is too early to forecast the outcome of the current year with any degree of accuracy. However, notwithstanding
that leased property values and occupation levels are currently stable and residential sales satisfactory, it is
evident that the anticipated reduction in contracting turnover will significantly limit the recovery of overhead
costs, leading to a substantial impairment in profitability for the current year.
19th November 2013
3
J.M. SMART
Chairman
J. Smart & Co. (Contractors) PLC
DIRECTORS
J.M. Smart, Chairman and Managing Director Aged 69
Joined the Company in 1967
Appointed Director in 1978 and appointed Chairman in 1988
L.E. Glenday Aged 65
Joined the Company in 1972
Appointed Director in 2001
Retired as a Director on 22nd January 2013
D.W. Smart Aged 40
Joined the Company in 1998
Appointed Director in 2010
A.H. Ross Aged 51
Joined the Company in 1989
Appointed Director in 2012
J. R. Smart Aged 43
Joined the Company in 2002
Appointed Director on 23rd January 2013
4
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS
31st JULY 2013
The Directors submit their Annual Report and Statement of Accounts for the year ended 31st July 2013.
RESULTS AND DIVIDENDS
The profit of the Group for the year after charging taxation amounted to
.
.
.
£384,000
Dividends paid in the year were:
Paying a Final Dividend for 2012 of 1.98p per 2p share (2011, 9.70p per 10p share)
£968,000
Paying an Interim Dividend for 2013 of 0.92p per 2p share (2012, 0.92p per 2p share) 435,000
£1,403,000
The Directors recommend a Final Dividend for the year of 2.01p per share, making a total for the year of 2.93p.
The Final Dividend, if approved, will be paid to all Members on the Share Register of the Company at the close
of business on 29th November 2013. Dividend warrants will be posted on 20th December 2013.
PRINCIPAL ACTIVITIES
The principal activities of the Company and its Subsidiaries are building and civil engineering contracting
of all types, building for sale of private houses, carrying out of industrial and commercial developments and
redevelopments for sale or lease. Other activities of Subsidiaries are the manufacture for sale of concrete
building products and investment holding.
The company has interests in Joint Venture Companies as follows:
Name of Joint Venture Company
Percentage of interest held
Joint Venture Party
Prestonfield Development Company Limited
Northrigg Limited
Duff Street Limited
Invertiel Developments Limited
50%
50%
50%
50%
Westerwood Limited
William Sanderson
Kiltane Developments Limited
Macdonald Estates PLC
Full details of the Joint Venture companies are given in note 14 to the accounts.
BUSINESS REVIEW
Group operations during the year were as follows:
CONSTRUCTION ACTIVITIES
The Company continues to undertake the construction of social housing for several housing associations within
the Edinburgh area.
Thomas Menzies (Builders) Limited continues to undertake small to medium sized civil engineering contracts
for Local Authorities, Enterprise Companies and private sector clients.
Concrete Products (Kirkcaldy) Limited continues to manufacture and sell hydraulically pressed concrete
products for the building and home improvement industries.
McGowan & Co (Contractors) Limited continues to support Group companies with the provision of plumbing
and heating services.
5
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
BUSINESS REVIEW (continued)
INVESTMENT ACTIVITIES
Rent, service charges recoverable and insurance premiums recharged are the main sources of investment
income received by the Group on investment properties owned and managed by the subsidiary, C. & W. Assets
Limited. The investment properties are located throughout the central belt of Scotland primarily within the
Edinburgh area.
Other investing activities of the Group consists of dividends and interest received on a portfolio of equity
investments and cash deposits.
JOINT VENTURES
Rents and service charges on industrial and residential properties and land sales remain the sources of income
earned by the Joint Venture companies. During the year there was no change in the development activities of
the Joint Ventures.
SUMMARY
Construction activities .
.
Investment activities
.
Joint Ventures
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Profit / (Loss)
excluding
unrealised
deficit
Profit / on revalued
property
(Loss)
£000
£000
(2,698)
(2,698)
4,216
1,089
2,438
2,438
Revenue
£000
20,595
5,383
-
25,978
829
3,956
Group external construction revenue decreased from £22,586,000 to £18,381,000 a decrease of £4,205,000
and internal own work capitalised decreased from £3,329,000 to £2,214,000. Rental income from investment
properties, excluding that from Joint Ventures, together with service charges and insurance receivable decreased
from £5,518,000 to £5,383,000.
The net deficit on valuation of investment properties as at 31st July 2013 amounted to £3,127,000 as compared
to a net deficit for the previous year of £4,042,000.
During the year investment property sales generated profits of £124,000, there were no sales in the previous
year.
The above movements have resulted in an Operating Loss for the Group for the year of £2,111,000 as compared
to £685,000 in the previous year.
The Group’s share of profits in Joint Ventures amounted to £2,438,000 as compared to a loss of £15,000 in the
previous year.
6
7
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
BUSINESS REVIEW (continued)
SUMMARY (continued)
Income from financial assets including profit arising on sale of financial assets together with finance income
less finance costs amounted to £502,000 as compared to £755,000 for the previous year.
Group Profit before tax amounted to £829,000 for the year as compared to £55,000 for the previous year.
If the unrealised net deficit on valuation of investment properties is excluded, the Group Profit before tax for
the year would be £3,956,000 as compared to £4,097,000 for the previous year.
GROUP FINANCIAL PERFORMANCE INDICATORS
.
.
.
.
.
.
.
Revenue
.
.
Own work capitalised
.
.
.
Other operating income .
Share of Joint Ventures’ profits/(losses)
.
Group investment income including profit on sale of available for
.
sale financial assets
.
Profit before tax .
Profit excluding unrealised deficit in revalued property
.
Net Assets
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
18,381
2,214
5,383
2,438
502
829
3,956
91,125
2012
£000
22,586
3,329
5,518
(15)
755
55
4,097
91,309
PRINCIPAL RISK FACTORS
RISK AND IMPACT
Main focus in contracting is on social
housing which can be highly competitive
putting pressure on turnover and margins
(there
but
unquantifiable increases in the risk and
impact).
been material
have
MEASURE
• Genuine “All Trades” Contractor employing own plant and
directly employed operatives to carry out all basic trades.
• No “labour-only” sub-contractors.
• Long serving site supervisory staff promoted through the ranks.
• Specialist trades sub-contracted to pool of tried and tested
sub-contractors who are paid in full on or ahead of time.
• Clients receive pre-contract design advice to resolve potential
technical problems.
• As property and private residential developers we identify sites
unsuitable for private development and offer them to Housing
Associations to negotiate package.
We believe the above measures ensure a high standard of service,
quality and progress which permits our clients to employ us on a
partnering “best value” basis where price is not the only criterion
and repeat business results.
7
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
BUSINESS REVIEW (continued)
PRINCIPAL RISK FACTORS (continued)
RISK AND IMPACT
MEASURE
Cuts in funding reduce or suspend the
social housing programme resulting
in reduced contracting workload and
substantial redundancies (there have
been material but unquantifiable
increases in the risk and impact).
• Take up slack by diverting staff and workforce to private
commercial and residential developments held in reserve.
• Unlike a pure “contractor” we can take the portion of
affordable housing required by the Planning Authority on
a private residential development to a Housing Association
resulting in reciprocal business and increased workload.
to find
Inability
tenants for new
development space and loss of existing
tenants leads to reduction of revenue and
capital resources.
• By restricting our operations to the central belt of Scotland
we are only involved in familiar locations we understand.
• Secure a pre-let before commencement of development.
• Only commence speculative development after a careful
assessment of the local market and once we are reasonably
certain of securing tenants.
• Freshen up existing developments from time to time in order
to retain and attract tenants and maintain market interest.
Free availability of credit leads to rise in
cost of developable land and property to
unsustainable levels resulting in heavy
losses or insolvency when the “bubble”
bursts and credit is withdrawn.
• Avoid overpaying for land or property.
• Do not over extend resources by over committing to
development while the market hots up.
• Build up liquidity for the tough times ahead by selective
selling of land and/or developed property at or near the top
of the market.
Possible failure of bank threatens the
Group’s existence due to loss of cash
reserves.
• Spread cash reserves among several banks placing more with
the strongest.
• Invest a proportion of cash in equities.
Reduction in bank interest rates results
in loss of Group revenue from cash on
deposit.
• Seek out best interest rates obtainable from banks consistent
with security of borrower.
• Consider investing a proportion of cash in high yielding
property with strong covenant.
• Increase investment in equities paying attention to yield,
high/low price history and security of investment.
Effect of recession and restriction on
mortgage lending results in stalling of
private house sales.
• Sales incentives within limitations.
• Shared equity and Government backed co-ownership
schemes.
• Consider letting until sales market improves.
8
9
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
RETIREMENT BENEFIT OBLIGATIONS
Note 27 to the accounts gives details of the most recent actuarial review of the Group’s defined benefit pension
scheme.
PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTIES
Full details of the movements in Property, plant and equipment and Investment properties during the year are
given in notes 12 and 13 to the accounts.
At 31st July 2013 a valuation of the Group’s non-investment heritable properties was carried out by Group
Directors. This valuation, which has not been incorporated into these accounts, showed a net surplus over the
cost of these properties after depreciation of £1,704,000 as at 31st July 2013.
FUTURE DEVELOPMENTS
It is not anticipated that the activities of the Company and its Subsidiaries, as described above, will substantially
change in the immediate future.
EMPLOYEE INVOLVEMENT
It is Company policy that there should be effective communication with employees at all levels, on matters
which affect their current jobs or future prospects. In achieving this policy, the Directors are aware of the need
to take account of the practical and commercial considerations of the Company, and of the needs of employees.
DISABLED EMPLOYEES
The policy of the Company with regard to disabled persons is to give full and fair consideration to all applicants
for employment and to all employees in relation to promotion. Wherever possible, employees who become
disabled during their employment and are unable to fulfil current duties are offered suitable alternative
employment.
CHARITABLE DONATIONS
During the year the Group made total charitable donations amounting to £35,000 (2012, £35,000). Donations
to local causes amounted to £16,000 (2012, £17,000) and donations to national charities amounted to £19,000
(2012, £18,000).
POLITICAL DONATIONS
It is the policy of the Group not to make donations for political purposes to EU Political Parties or incur EU
Political Expenditure and accordingly neither the Company nor its Subsidiaries made donations or incurred
such expenditure in the year.
The Companies Act 2006 prohibits companies from making any political donations to EU political organisations,
independent candidates or incurring EU political expenditure unless authorised by shareholders in advance. The
Company does not make, and does not intend to make, donations to EU political organisations or independent
election candidates, nor does it incur any EU political expenditure.
The definitions of political donations, political organisations and political expenditure used in the Companies
Act 2006 are very wide and can cover activities such as sponsorship, subscriptions, payment of expenses, paid
leave for employees fulfilling certain public duties, and support for bodies representing the business community
in policy review or reform. Shareholder approval is therefore being sought on a precautionary basis only, to
allow the Company, and any Subsidiary Company, to continue to support the community and put forward its
views to wider business and Government interests, without running the risk of being in breach of the legislation.
The Board has been granted, by a resolution at the 2011 Annual General Meeting, authority to make political
donations to EU political organisations and independent election candidates not exceeding £5,000 in total
and to incur EU political expenditure not exceeding £5,000 in total. This authority remains valid until the
conclusion of the Company’s Annual General Meeting to be held in 2015.
8
9
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
CREDITOR PAYMENT POLICY
The Group’s policy concerning payment of trade creditors is to settle in accordance with accepted best practice
in the building industry, i.e. payment is made by the end of the month following the month of supply or delivery.
Further information relating to the policy on payment of creditors may be obtained from the Group’s registered
office. The average number of days taken to pay creditors is 18, based on the average daily amount invoiced by
suppliers during the year and the creditors balance at the year end.
DIRECTORS AND THEIR INTERESTS
(i) The Directors at 31st July 2013 and their beneficial interests in the share capital of the Company were as
follows:
J. M. Smart
D. W. Smart
A. H. Ross
J. R. Smart
1st August 2012
31st July 2013
Ordinary shares of 2p each Ordinary shares of 2p each
Beneficial holdings
1,198,500
11,863,500
100,000
11,863,500
Beneficial holdings
1,198,500
11,863,500
100,000
11,863,500
L. E. Glenday retired as a Director on 22nd January 2013. As at 1st August 2012 he had a beneficial
holding in 225,000 Ordinary Shares of 2p in the Company.
(ii) D. W. Smart retires by rotation and, being eligible, offers himself for re-election in accordance with
provision B.7.1 of the UK Corporate Governance Code.
(iii) J. R. Smart was appointed as a director on 23rd January 2013 and in accordance with provision B.7.1 of
the UK Corporate Governance Code is subject to and offers himself for re-election at the first Annual
General Meeting of the Company following his election.
(iv) There are no Directors’ service contracts in existence.
(v) There have been no changes in the Directors’ beneficial interests between 31st July 2013 and 25th October
2013.
SHARE CAPITAL AND SUBSTANTIAL SHAREHOLDERS
The Company’s authorised and issued ordinary share capital as at 31st July 2013 comprises a single class
of ordinary shares. The Company was authorised by shareholders, at the 2012 Annual General Meeting, to
purchase in the market up to 10% of the Company’s issued share capital, as permitted under the Company’s
Articles of Association. During the year the Company made market purchases of 2,354,000 Ordinary Shares
of 2p under this authority, for a total consideration of £1,845,000. The purpose of the market purchase is to
enhance the earnings per share and/or the equity shareholders’ funds per share. The shares purchased were
subsequently cancelled. The shares purchased and cancelled represented 5% of the Company’s issued share
capital at the start of the year.
This authority is renewable and the Directors will seek renewal of this authority at the 2017 Annual General
Meeting.
As far as the Directors are aware, other than the Directors, the Company has been notified that as at 31st July
2013 and as at 25th October 2013, the following have interests of more than 3% in the Company’s issued share
capital:
Octet Investments Limited
.
A. J. Whitehead .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
10
Number
1,622,400
1,579,485
.
.
%
3.44
3.35
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
SHAREHOLDER AND VOTING RIGHTS
All members who hold ordinary shares are entitled to attend and vote at General Meetings. On a show of hands
at a General Meeting every member present in person and every duly appointed proxy shall have one vote and
on a poll, every member present in person or by proxy shall have one vote for every ordinary share held or
represented. The Company is not aware of any agreements between shareholders that may result in restrictions
on voting rights of shareholders.
Rights attached to ordinary shares may only be varied by special resolution at a General Meeting.
RESTRICTIONS ON TRANSFER OF SECURITIES
There are no specific restrictions on the transfer of securities in the Company, other than those imposed by
prevailing legislation and the requirements of the Listing Rules in respect of Company Directors. The Company
is not aware of any agreements between shareholders that may result in restrictions of the transfer of securities.
APPOINTMENT AND REPLACEMENT OF DIRECTORS
Initial appointments may be approved by the Board of Directors but anyone so appointed must be re-elected by
ordinary resolution at the next Annual General Meeting of the Company. Directors, excluding the Managing
Director, in accordance with the provision B.7.1 of UK Corporate Governance Code, must retire and offer
themselves for re-election at the Annual General Meeting at least every three years.
AMENDMENTS OF THE COMPANY’S ARTICLES OF ASSOCIATION
The Company’s Articles of Association can only be amended by a special resolution at a General Meeting.
CHANGE OF CONTROL
The Company is not party to any significant agreements which take effect, alter or terminate upon the change
of control of the Company following a takeover bid.
The Company does not have any agreements with any Director or employee that would provide compensation
for loss of office or employment, whether through resignation, purported redundancy or otherwise resulting
from a takeover bid.
CLOSE COMPANY STATUS
On the information available, the Directors are of the opinion that the Company is not a Close Company within
the provisions of the Corporation Tax Act 2010.
10
11
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
CORPORATE GOVERNANCE
STATEMENT OF COMPLIANCE
This statement details how your Company has applied the main and supporting principles of corporate
governance as set out in the Financial Reporting Council’s UK Corporate Governance Code issued in June 2010
(the Code). A copy of the Code can be found on the Financial Reporting Council’s website, www.frc.org.uk.
The Board is committed to the principles of openness, integrity and accountability in dealing with the Company’s
affairs and believes it has always acted with probity in the best interests of the Company, its employees and
shareholders without recourse to guidance or instruction from others and fully intends to continue to do so in
the future.
The Board recognises that it has not complied throughout the year in whole or in part with the following
provisions set out in Section 1 of the Code – A.1.1- A.1.2, A.2.1, A.3.1, A.4.1-A.4.3, B.1.1-B.1.2, B.2.1-B.2.4,
B.3.1-B.3.2, B.6.1-B.6.3, B.7.1-B.7.2, C.3.1-C.3.6, D.1.1, D.1.5, D.2.1-D.2.2, E.1.1 and E.2.2-E.2.3, details and
explanations for non-compliance are given below.
THE BOARD
The Company is led by a Board of Directors which comprises the executive management of the Company, being
the Chairman and three executive directors, and thus maintains full control of the Company. All the Directors
worked for the Company prior to their appointments as Director. During the year L. E. Glenday retired from
the Company, and J. R. Smart was appointed as Director. Decisions are taken by the Board quickly and
effectively following ad hoc consultation among the Directors concerned when any matter arises. Your Board
takes the view that this direct and flexible approach is preferable to the more cumbersome procedures prevalent
in larger organisations and has made a considerable contribution to your Company’s continuing success
and ensures that this approach best serves the interests of the Company and its shareholders.
The Board held 4 formal Board Meetings in the year, attendance at these meetings was as follows:
J. M. Smart
L. E. Glenday (retired 22nd January 2013)
D. W. Smart
A. H. Ross
J. R. Smart (appointed 23rd January 2013)
4
2
4
4
1
Given that the Board is the executive management of the Company and takes decisions on all material matters
and thereby exercises full direction and control, there is no formal schedule of matters reserved for the Board’s
decision.
The Chairman of the Company is also the Managing Director. Bearing in mind the size of the Company, the
Board sees no value in splitting the role of the Chairman and Managing Director, a policy which has served your
Company well over many years. The Chairman is responsible for the leadership of the Board, ensuring that all
the Directors receive accurate, timely and clear information on issues arising at Board meetings, setting Board
agendas and ensuring adequate time is given to discussion of the agenda points. The members of the Board have
complete freedom to seek independent professional advice, at the Company’s expense, when they feel it is
appropriate to do so. All Directors have access to the advice and services of the Company Secretary, who
is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are
complied with. All Directors openly express their views and make a valuable contribution to the running of the
Company.
The Board considers that increasing the manning level of the Board by 50% by the appointment of two non-
executive Directors would increase costs and impose an additional administrative burden for no discernible
benefit and, accordingly, would serve no useful purpose. As a result of not appointing non-executive Directors,
the Company has not established Nomination, Remuneration or Audit Committees.
12
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
CORPORATE GOVERNANCE (continued)
THE BOARD (continued)
As the Company does not have a Nomination Committee, nominations for appointment of new Directors to
the Board are submitted by the Chairman for approval by the other members of the Board. As all the Directors
of the Company were long-serving employees of the Company at the date of appointment, no formal tailored
induction upon joining the Board was necessary. As the Directors are all full-time employees of the Company
they are fully committed to the Company and to the discharge of their duties. The Directors are encouraged
by the Board to receive any training they consider necessary to ensure they remain up-to-date with their skills,
knowledge and familiarity of the Company’s business and they remain aware of the risks associated with the
Company and are also aware of regulatory, legal and financial and other developments to enable them to fulfil
their role effectively.
There is no formal system of performance evaluation of the Board or its members.
The Company’s Articles of Association do not require that Directors retire by rotation, however, in accordance
with provision B.7.1 of the Code all Directors, with the exception of the Managing Director, seek re-election at
intervals of no more than three years at the Annual General Meeting. Also in accordance with provision B.7.1 of the
Code all new Directors are subject to re-election at the first Annual General Meeting following their appointment.
As the Company does not have a Remuneration Committee, the Chairman is responsible for fixing the
remuneration packages of the Directors which are based on their performance and the scope of their duties and
responsibilities. No Director has a service contract with the Company and accordingly periods of notice and
termination payments would be construed in accordance with Employment Law. There is no scheme in place
for Directors to receive entitlement to share options nor are there any long term incentive schemes.
FINANCIAL AND BUSINESS REPORTING
The Directors have sole responsibility for the preparation of the Annual Report and Statement of Accounts, the
Half Yearly Financial Report, the Interim Management Reports and other price-sensitive public reports in a
balanced and understandable manner.
In order to ensure that the Company and Group have adequate resources to ensure the continuing operations of
the Company and Group for the foreseeable future the Directors consider future trading, investment property
acquisitions and cash requirements. The Directors take account of market conditions in all areas of the Group’s
activities and using their knowledge and experience relating to the Group’s investment property portfolio. The
Directors’ opinion is that the Company and Group have adequate financial resources to allow the Company and
Group to continue in operational existence for the foreseeable future and therefore considers the adoption of
the going concern basis as appropriate for the preparation of the Accounts.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board is responsible for and annually reviews the Group’s system of internal controls in relation to financial,
operational, compliance and risk management to ensure their continued effectiveness. The systems adopted by
the Board are designed to manage the risk of failure to achieve the Company’s business objectives as opposed
to eliminate them as any system of control can only provide reasonable but not absolute assurance against
material misstatement or loss.
The Board, in accordance with the Code, has reviewed the effectiveness of the internal controls from the
commencement of the accounting period to the date of approval of the Annual Report and Statement of Accounts.
No significant failings or weaknesses have been identified in that period. There has also been a continual
process of identification by the Directors of key areas of risk within the Group and appropriate action taken to
mitigate and monitor such risks.
The main features of the Group’s internal control and risk management systems in relation to the financial
reporting process are:
– contracts, development projects, land purchases and acquisition of property, plant and equipment are
proceeded with after due consideration by the Directors;
– monthly reports are prepared for each contract and development project for review by the Directors;
13
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT OF THE DIRECTORS (continued)
31st JULY 2013
CORPORATE GOVERNANCE (continued)
RISK MANAGEMENT AND INTERNAL CONTROL (continued)
– Subsidiary Company reports are prepared for consideration by the Directors; and
– treasury operations are carried out in accordance with policies and procedures already approved by the
Board.
AUDIT COMMITTEE
As the Company does not have an Audit Committee, it is the responsibility of the Chairman and Company
Secretary on a continuing basis to consider how the financial reporting and internal control principles apply to
the Company, to maintain an appropriate relationship with the Group’s Auditors and to review the scope and
results of the audit and its cost effectiveness. The Board is responsible for setting the remuneration of the
Auditors. In order to ensure the continued independence and objectivity of the Group’s Auditors, the Board has
established policies regarding the provision of non-audit services by the Auditors. In some cases, the nature of
the non-audit advice may make it more timely and cost effective to select the Group’s Auditors, who already have
a good understanding of the Group. In other circumstances the decisions on the allocation of work are made
on the basis of competence and cost effectiveness. The Group’s Auditors are subject to professional standards
which safeguard the integrity of the auditing role performed on behalf of the shareholders.
The Board has considered and for the time being has concluded that an internal audit function is not necessary.
The Board will continue to review the need for such a function. As such there is no internal audit of the risks
identified by the Board and the controls established by the Board to mitigate and monitor these risks.
RELATIONS WITH SHAREHOLDERS
The Board has in the past and will in the future continue to enter into dialogue with the shareholders wherever
possible. The Chairman is responsible for ensuring that the views and concerns of the shareholders are
communicated to the Board. The Chairman is also responsible for discussing governance and strategy matters
with the shareholders.
As the Company has no non-executive Directors there is no opportunity for shareholders to meet with these
Directors.
All shareholders have an opportunity at the Annual General Meeting to participate in questions and answers with
the Board on matters relating to the Company.
At the Annual General Meeting separate resolutions will be proposed on each substantially separate issue and
the number of proxy votes received for, against, and withheld for each resolution will be announced.
AUDITORS
In accordance with section 489 of the Companies Act 2006, a resolution is to be proposed at the forthcoming
Annual General Meeting for the re-appointment of French Duncan LLP as Auditors of the Company.
STATEMENT OF DISCLOSURE TO AUDITORS
In the case of each of the Directors who were Directors at the date this Report was approved:
– so far as the Directors are aware there is no relevant audit information (as defined in the Companies Act 2006)
of which the Company’s Auditors are unaware; and
– each of the Directors has taken all steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the Company’s Auditors are aware
of that information.
19th November 2013
14
APPROVED BY THE BOARD OF DIRECTORS
AND SIGNED ON ITS BEHALF BY
P. SWEENEY,
Secretary.
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
DIRECTORS’ STATEMENTS OF RESPONSIBILITY
31st JULY 2013
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each
financial year. Under that law they have prepared the Group and Parent Company financial statements in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU)
and applicable law. Under company law the Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of
their profit or loss for that year.
In preparing those financial statements, the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable and prudent;
– for the Group and Parent Company financial statements, state whether they have been prepared in accordance
with IFRS as adopted by the EU; and
– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and Parent Company will continue in business.
The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the
Company’s transactions and which disclose with reasonable accuracy at any time the financial position of the
Group and Parent Company to enable them to ensure that the financial statements comply with the Companies
Act 2006 and IFRS as adopted by the EU. They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Report of the Directors,
Report on Directors’ Remuneration and Corporate Governance Statement that comply with that law and those
regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
DIRECTORS’ RESPONSIBILITY STATEMENT
Each of the Directors confirms, to the best of their knowledge:
– that the Financial Statements, which have been prepared in accordance with IFRS as adopted by the EU,
give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and
Company; and
– that the Business Review contained in this report includes a fair review of the development and performance
of the business and the position of the Group and Company, together with a description of the principal risks
and uncertainties that they face.
19th November 2013
APPROVED BY THE BOARD OF DIRECTORS
AND SIGNED ON ITS BEHALF BY
P. SWEENEY,
Secretary.
15
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT ON DIRECTORS’ REMUNERATION
31st JULY 2013
The Directors’ Remuneration Report for the year to 31st July 2013 is set out below, in compliance with current
Listing Rules and statutory reporting requirements.
The Listing Rules require a Company to include a statement in its Annual Report and Statement of Accounts as
to whether or not it has complied with Section B of the Code of Best Practice annexed to the Listing Rules. These
provisions require the Company to set up a Remuneration Committee consisting exclusively of non-executive
Directors to determine the executive Directors’ remuneration.
For reasons set out under Corporate Governance above, your Board has appointed no non-executive Directors
and therefore no Remuneration Committee.
REMUNERATION POLICY
The Company’s policy on Directors’ remuneration for the current and future years is that individual rewards
should reflect performance and the scope of their duties and responsibilities.
DIRECTORS’ REMUNERATION
The following tables show an analysis of the various elements of remuneration receivable by those Directors who
served during the year ended 31st July 2013.
Directors’ Remuneration
(Audited Information)
J. M. Smart
A. D. McClure1
L. E. Glenday2
D. W. Smart
A. H. Ross
J. R. Smart3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Salary and
Fees
£000
123
–
209
90
90
44
.
.
.
.
.
.
Taxable
Benefits
£000
10
–
5
6
6
3
Total
2013
£000
133
–
214
96
96
47
Total
2012
£000
130
200
130
88
53
–
1. A.D. McClure retired from the Board on 19th December 2011. Included in the total for 2012 above is £150,000 being a gratuity payment on retiral.
2. L. E. Glenday retired from the Board on 22nd January 2013. Included in Salary and fees above is £150,000 being a gratuity payment on retiral.
3. J. R. Smart was appointed to the Board on 23rd January 2013.
Directors’ Pension Benefits
(Audited Information)
D. W. Smart
A. H. Ross
.
.
.
.
Transfer Value Transfer Value
Gross increase Total accrued
pension
31/7/13
£000
18
26
in accrued
pension
£000
5
6
.
.
.
.
of accrued
pension at
31/7/13
£000
207
369
of accrued Total change
in value
pension at
31/7/12 during period
£000
45
59
£000
118
266
J. R. Smart is a member of the Group Personal Pension Plan and the Company made a contribution to the Plan
during the period of his directorship of £3,000.
No Director receives fees or bonuses.
No Director holds share options and there is no scheme in place which could give such an entitlement, nor is
there any long term incentive scheme.
No Director has a service contract with the Company and accordingly periods of notice and termination
payments would be construed in accordance with Employment Law.
16
17
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
REPORT ON DIRECTORS’ REMUNERATION (continued)
31st JULY 2013
PERFORMANCE GRAPH
The graph below shows the total shareholder return performance of the Company’s shares in comparison with
the FTSE EPRA/NAREIT UK Index for the five years to 31st July 2013. For the purposes of the graph, total
shareholder return has been calculated as the percentage change during the five year period in the market price
of the shares, assuming that Dividends are reinvested.
Total Shareholder Return over the last five financial years
£
120
100
80
60
40
20
0
J Smart & Co (Contractors) PLC
FTSE EPRA / NAREIT UK Index
2008 2009 2010 2011 2012
2013
This graph shows the value of £100 invested in J. Smart & Co. (Contractors) PLC over the last five
financial years compared to £100 invested in the FTSE EPRA/NAREIT UK Index which the Directors believe
is the most appropriate comparative index.
19th November 2013
APPROVED BY THE BOARD OF DIRECTORS
AND SIGNED ON ITS BEHALF BY
P. SWEENEY,
Secretary.
17
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
INDEPENDENT REPORT OF THE AUDITORS
31st JULY 2013
INDEPENDENT AUDITORS’ REPORT
to tHe memberS of J. Smart & Co. (ContraCtorS) pLC
We have audited the financial statements of J. Smart & Co. (Contractors) PLC for the year ended 31st July
2013 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income,
Consolidated and Company Statement of Changes in Equity, Consolidated and Company Statement of Financial
Position, Consolidated and Company Statement of Cash Flows and related notes to the accounts. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRS) as adopted by the European Union and, as regards the Parent Company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s shareholders, 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
shareholders 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 shareholders as a body, for our audit work, for this report, or for the opinions we have
formed.
RESPECTIVE RESPONSIBILITIES OF THE DIRECTORS AND AUDITORS
As explained more fully in the Directors’ Responsibilities Statement (set out on page 15), the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s
and the Parent Company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the
financial statements. In addition we read all the financial and non-financial information in the Annual Report
to identify material inconsistencies with the audited financial statements. If we become aware of any apparent
material misstatements or inconsistencies we consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
– the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31st July 2013 and of the Group’s profit for the year then ended;
– the Group financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union;
– the Parent Company financial statements have been properly prepared in accordance with IFRS as adopted
by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the IAS Regulation.
18
19
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
INDEPENDENT REPORT OF THE AUDITORS (continued)
31st JULY 2013
OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion:
– the part of the Report on Directors’ Remuneration to be audited has been properly prepared in accordance
with the Companies Act 2006; and
– the information given in the Report of the Directors for the financial year for which the financial statements
are prepared is consistent with the financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required 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’s financial statements and the part of the Report on Directors’ Remuneration to be
audited 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.
Under the Listing Rules we are required to review:
– the Directors’ statement set out on page 13, in relation to going concern;
– the part of the Corporate Governance Statement relating to the Company’s compliance with the nine
provisions of the UK Corporate Governance Code specified for our review; and
– certain elements of the report to shareholders by the Board on Directors’ remuneration.
375 weSt george Street,
gLaSgow g2 4Lw.
19th November 2013
pauLa gaLLoway
Senior Statutory Auditor
for and on behalf of FRENCH DUNCAN LLP
Statutory Auditor and Chartered Accountants
18
19
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
CONSOLIDATED INCOME STATEMENT for the year ended 31st JULY 2013
Group construction work carried out
Less: Own construction work capitalised
REVENUE 1 2
Cost of sales 2
GROSS PROFIT
.
.
.
.
.
.
Other operating income .
Net operating expenses .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
OPERATING PROFIT BEFORE PROFIT ON SALE AND NET DEFICIT
.
ON VALUATION OF INVESTMENT PROPERTIES .
.
Profit on sale of investment properties .
Net deficit on valuation of investment properties
.
.
.
.
OPERATING LOSS
Share of profits/(losses) in Joint Ventures
.
Income from available for sale financial assets
Profit on sale of available for sale financial assets
.
Finance income .
.
.
.
.
PROFIT BEFORE TAX
Taxation
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
PROFIT/(LOSS) ATTRIBUTABLE TO EQUITY SHAREHOLDERS
EARNINGS/(LOSS) PER SHARE – BASIC AND DILUTED .
.
.
.
.
.
.
.
.
.
.
.
Notes
2013
£000
2012
£000
20,595
(2,214)
25,915
(3,329)
18,381
(17,313)
22,586
(18,645)
1,068
3,941
3
5,383
(5,559)
5,518
(6,102)
892
3,357
124
(3,127)
–
(4,042)
(2,111)
2,438
138
8
356
(685)
(15)
128
34
593
829
55
(445)
(586)
384
(531)
5
14
6
7
8
9
11
0.80p
(1.06)p
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
All activities in both the current and previous year relate to continuing operations.
1. Revenue excludes the share of Joint Ventures’ revenue of £6,523,000 (2012, £67,000).
2. 2012 Revenue and Cost of sales have been amended to revise income recognition on private housing in accordance with the requirements of IAS18:
Revenue. There is no impact on reported profit.
The notes on pages 28 to 56 form an integral part of these accounts.
20
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31st JULY 2013
Profit/(Loss) for the year
Other comprehensive income
Items that may be reclassified subsequently to Income Statement:
Fair value adjustment of available for sale financial assets
Tax adjustment on fair value reserve
Total items which may be reclassified subsequently to
Income Statement
2013
£000
384
2012
£000
(531)
736
(108)
46
5
628
51
Items that will not be reclassified subsequently to Income Statement:
Actuarial gain/(loss) recognised in defined benefit pension scheme
Deferred taxation on actuarial (gain)/loss
2,926
(874)
(4,517)
937
Total items that will not be reclassified subsequently to
Income Statement
Total other comprehensive income/(loss)
TOTAL COMPREHENSIVE INCOME/(LOSS)
FOR THE YEAR, NET OF TAX
ATTRIBUTABLE TO EQUITY SHAREHOLDERS
2,052
(3,580)
2,680
(3,529)
3,064
(4,060)
3,064
(4,060)
20
21
The notes on pages 28 to 56 form an integral part of these accounts.
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY as at 31st JULY 2013
Capital
Share Redemption
Reserve
Capital
£000
£000
Fair Value
Reserve
£000
Retained
Earnings
£000
Total
£000
At 1st August 2011
1,008
–
407
96,145
97,560
.
Loss for the year .
Other comprehensive income/(loss)
TOTAL COMPREHENSIVE INCOME/
.
(LOSS) FOR THE YEAR
.
.
.
.
–
–
–
–
–
51
(531)
(3,580)
(531)
(3,529)
.
–
–
51
(4,111)
(4,060)
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled
.
Transfer to Capital Redemption Reserve
.
Dividends
(19)
–
–
–
19
–
.
.
.
–
–
–
(732)
(19)
(1,440)
(751)
–
(1,440)
TOTAL TRANSACTIONS WITH OWNERS .
(19)
19
–
(2,191)
(2,191)
At 31st July 2012 .
.
Profit for the year
Other comprehensive income
.
.
.
.
.
.
.
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
989
19
458
89,843
91,309
–
–
–
–
–
628
384
2,052
384
2,680
–
–
628
2,436
3,064
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled
.
Transfer to Capital Redemption Reserve
.
Dividends
(47)
–
–
–
47
–
.
.
.
–
–
–
(1,798)
(47)
(1,403)
(1,845)
–
(1,403)
TOTAL TRANSACTIONS WITH OWNERS .
(47)
47
–
(3,248)
(3,248)
At 31st July 2013 .
.
.
.
942
66
1,086
89,031
91,125
The notes on pages 28 to 56 form an integral part of these accounts.
22
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
COMPANY STATEMENT OF CHANGES IN EQUITY as at 31st JULY 2013
Capital
Share Redemption
Reserve
£000
Capital
£000
Retained
Earnings
£000
Total
£000
At 1st August 2011
1,008
–
22,760
23,768
Profit for the year
Other comprehensive loss
–
–
–
–
590
(3,580)
590
(3,580)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
–
–
(2,990)
(2,990)
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled
Transfer to Capital Redemption Reserve
Dividends
(19)
–
–
–
19
–
(732)
(19)
(1,440)
(751)
–
(1,440)
TOTAL TRANSACTIONS WITH OWNERS
(19)
19
(2,191)
(2,191)
At 31st July 2012
989
19
17,579
18,587
Profit for the year
Other comprehensive income
–
–
–
–
766
2,052
766
2,052
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
–
–
2,818
2,818
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled
Transfer to Capital Redemption Reserve
Dividends
(47)
–
–
–
47
–
(1,798)
(47)
(1,403)
(1,845)
–
(1,403)
TOTAL TRANSACTIONS WITH OWNERS
(47)
47
(3,248)
(3,248)
At 31st July 2013
942
66
17,149
18,157
The notes on pages 28 to 56 form an integral part of these accounts.
23
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31st JULY 2013
NON-CURRENT ASSETS
Property, plant and equipment .
.
Investment properties
Investments in Joint Ventures
.
Available for sale financial assets
.
Retirement benefit surplus
.
.
Deferred tax assets
.
CURRENT ASSETS
Inventories
.
Trade and other receivables
.
Current tax asset
Cash at bank and in hand
.
TOTAL ASSETS
.
.
.
.
.
.
.
NON-CURRENT LIABILITIES
Retirement benefit obligations .
.
Deferred tax liabilities
.
CURRENT LIABILITIES
Trade and other payables
.
Current tax liabilities
.
Bank overdraft
.
TOTAL LIABILITIES
NET ASSETS
.
.
.
EQUITY
Called up share capital
Capital redemption reserve
Fair value reserve
Retained earnings
.
.
.
TOTAL EQUITY
.
.
Approved by the Board on
19th November 2013
.
.
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.
Notes
12
13
14
16
27
22
17
18
27
22
20
23
.
.
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.
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.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
1,279
62,325
819
3,817
2,567
109
2012
£000
1,122
70,437
997
2,988
–
557
70,916
76,101
13,620
6,650
90
15,157
10,654
6,921
–
9,761
35,517
27,336
106,433
103,437
–
2,049
1,490
2,180
2,049
3,670
3,595
–
9,664
3,961
32
4,465
13,259
8,458
15,308
12,128
91,125
91,309
942
66
1,086
89,031
989
19
458
89,843
91,125
91,309
J. M. SMART, Director
D. W. SMART, Director
Company Registration No. SC025130
The notes on pages 28 to 56 form an integral part of these accounts.
24
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
COMPANY STATEMENT OF FINANCIAL POSITION as at 31st JULY 2013
NON-CURRENT ASSETS
.
Property, plant and equipment .
Investments in Subsidiaries and Joint Ventures
.
Retirement benefit surplus
.
.
Deferred tax assets
.
.
.
.
.
CURRENT ASSETS
Inventories
.
Trade and other receivables
Current tax asset .
.
Cash at bank and in hand
.
TOTAL ASSETS
.
.
.
.
.
.
.
NON-CURRENT LIABILITIES
Retirement benefit obligations .
.
Deferred tax liabilities
.
CURRENT LIABILITIES
Trade and other payables
.
Bank overdraft
.
TOTAL LIABILITIES
NET ASSETS
.
.
.
EQUITY
Called up share capital
Capital redemption reserve
Retained earnings
.
.
TOTAL EQUITY
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Notes
12
14
27
22
17
18
27
22
20
23
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Approved by the Board on
19th November 2013
Company Registration No. SC025130
The notes on pages 28 to 56 form an integral part of these accounts.
25
2013
£000
760
1,235
2,567
20
4,582
13,380
7,538
1,993
1
22,912
2012
£000
596
733
–
387
1,716
10,336
9,032
776
1,045
21,189
27,494
22,905
–
571
571
2,278
6,488
8,766
1,490
68
1,558
2,760
–
2,760
9,337
4,318
18,157
18,587
942
66
17,149
989
19
17,579
18,157
18,587
J. M. SMART, Director
D. W. SMART, Director
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31st JULY 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Tax paid on profits
.
.
.
.
.
NET CASH FLOWS FROM OPERATING ACTIVITIES
.
.
.
.
.
.
CASH FLOWS FROM INVESTING ACTIVITIES
.
Additions to property, plant and equipment
.
.
Additions to investment properties
.
Sale of property, plant and equipment .
Sale of investment properties
.
.
Expenditure on own work capitalised - investment properties
.
.
Purchase of available for sale financial assets
Proceeds of sale of available for sale financial assets
.
Acquisition of investment in subsidiary, net of cash acquired
.
Interest received .
.
.
Dividend received from Joint Venture .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
NET CASH FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares .
.
Dividends paid
.
.
.
.
.
NET CASH FROM FINANCING ACTIVITIES
.
.
.
.
.
.
.
.
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
.
.
.
.
.
.
Notes
2013
£000
. 24 (a)
(1,842)
2012
£000
984
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(1,232)
(823)
(3,074)
161
(544)
(879)
51
8,202
(2,214)
(277)
192
(227)
100
2,115
(230)
(94)
16
–
(3,329)
(49)
159
–
103
–
6,519
(3,424)
(1,845)
(1,403)
(751)
(1,440)
(3,248)
(2,191)
197
(5,454)
. 24 (b)
5,296
10,750
CASH AND CASH EQUIVALENTS AT END OF YEAR
.
.
. 24 (b)
5,493
5,296
The notes on pages 28 to 56 form an integral part of these accounts.
26
27
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
COMPANY STATEMENT OF CASH FLOWS for the year ended 31st JULY 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Tax (paid)/received
.
.
.
.
.
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Sale of property, plant and equipment .
Acquisition of investment in subsidiary
.
Interest received .
.
.
NET CASH FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares .
.
Dividends paid
.
.
.
.
.
NET CASH FROM FINANCING ACTIVITIES
.
.
.
.
.
.
.
.
DECREASE IN CASH AND CASH EQUIVALENTS
.
.
.
.
.
.
.
.
.
.
.
.
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
.
Notes
2013
£000
2012
£000
. 25 (a)
(3,033)
(4,894)
.
.
.
.
.
.
.
.
.
.
.
(426)
354
(3,459)
(4,540)
(427)
59
(463)
6
(211)
9
–
7
(825)
(195)
(1,845)
(1,403)
(751)
(1,440)
(3,248)
(2,191)
(7,532)
(6,926)
. 25 (b)
1,045
7,971
. 25 (b)
(6,487))
1,045
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The notes on pages 28 to 56 form an integral part of these accounts.
27
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES
GENERAL INFORMATION
J. Smart & Co. (Contractors) PLC which is the ultimate Parent Company of the J. Smart & Co.
(Contractors) PLC Group is a public limited company registered in Scotland, incorporated in the United
Kingdom and listed on the London Stock Exchange.
STATEMENT OF COMPLIANCE
The accounts are prepared in accordance with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC) Interpretations endorsed by the
European Union (EU) and with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS EFFECTIVE IN THE YEAR TO 31ST
JULY 2013
There was only one new standard which was mandatory for the first time for the year to 31st July 2013,
being IAS 1 (amended), Presentation of Financial Statements which has resulted in a change to the
presentation of the Consolidated Statement of Comprehensive Income. The comparative amounts in the
Consolidated Statement of Comprehensive Income have been reclassified to conform with the current
year’s presentation.
In the year to 31st July 2012 the Company and Group adopted early IAS 12 (revised) Income tax
relating to Deferred Tax and the recovery of underlying assets, although mandatory adoption was not
required until the year to 31st July 2013.
Also there have been changes to standards resulting from the International Accounting Standards
Board’s 2010 Annual Improvement Programme, none of the amendments had a material impact on the
Group and Company financial statements.
NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS NOT YET APPLIED
The following new Standards, Amendments to Standards and Interpretations relevant to the Group have
been issued by the International Accounting Standard Board but are not yet effective for the Group and
Company at the date of these financial statements, and have not been adopted early:
• IFRS 10 Consolidated Financial Statements – amended for investment entities (effective for
accounting periods beginning on or after 1st January 2013).
• IFRS 12 Disclosure of Interests in Other Entities – amended for investment entities (effective
for accounting periods beginning on or after 1st January 2013).
• IFRS 13 Fair Value Measurement (effective for accounting periods beginning on or after 1st
January 2013).
• IAS 19 (amended) Employee Benefits (effective for accounting periods beginning on or after 1st
January 2013).
The Directors are to fully consider the implications of these Standards, Amendments to Standards and
Interpretations and their relevance and impact on the financial statements of the Company and Group.
The Directors anticipate that there will be no material effect on the financial statements, other than with
regards to IAS 19 (amended): Employee Benefits as noted below.
28
29
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued)
NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS NOT YET APPLIED (continued)
In the year to 31st July 2014, IAS 19 (amended): Employee Benefits will be adopted for the first time
and will result in a change to the measurement and presentation of defined benefit pension expense/
income and other disclosures relating to defined benefit pensions. The change to the measurement of the
pension expense/income will result in replacing the interest cost and expected return on scheme assets
with a single net finance cost or return which is determined by applying the same discount rate used to
determine the defined benefit obligations to the net defined benefit liability or asset. The Directors are
still assessing the implication of applying the revised standard on the results and financial position of
the Group.
BASIS OF PREPARATION
The accounts have been prepared on a going concern basis and under the historical cost convention
except where the measurement of balances at fair value is required as noted below for investment
properties and available for sale financial assets.
The accounting policies set out below have been consistently applied to all periods presented
in these accounts.
The preparation of financial statements requires management to make estimates and assumptions
concerning the future that may affect the application of accounting policies and the reported amounts of
assets and liabilities and income and expenses. Management believes that the estimates and assumptions
used in the preparation of these accounts are reasonable. However, actual outcomes may differ from
those anticipated.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
INVESTMENT PROPERTIES
Investment properties are revalued annually by the Directors in accordance with the RICS Valuation
Standards. The valuations are subjective due to, among other factors, the individual nature of the property,
its location and the expected future rental income. As a result, the valuation of the Group’s investment
property portfolio incorporated into the financial statements is subject to a degree of uncertainty and is
made on the basis of assumptions which may prove to be inaccurate.
The assumptions used by the Directors are market standard assumptions in accordance with the RICS
Valuation Standards and include matters such as tenure and tenancy details, ground conditions of the
properties and their structural conditions, prevailing market yields and comparable market conditions.
If any of the assumptions used by the Directors prove to be incorrect this could result in the valuation
of the Group’s investment property portfolio differing from the valuation incorporated into the financial
statements and the difference could have a material effect on the financial statements.
LONG-TERM CONTRACT PROVISIONS
Judgement is required in the area of provisions for losses on long-term contracts. The Directors consider
adequate, but not excessive provisions have been made in this respect.
RETIREMENT BENEFIT OBLIGATION
The valuation of the retirement benefit obligation is dependent upon a series of assumptions, mainly
discount rates, mortality rates, investment returns, salary inflation and the rate of pension increases,
which are determined after taking expert advice from the Group's Actuary. These are set out in note 27
to the financial statements.
28
29
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued)
BASIS OF CONSOLIDATION
The Group accounts consolidate the accounts of J. Smart & Co. (Contractors) PLC and all of its
Subsidiaries made up to 31st July each year. Subsidiaries are entities controlled by the Company.
Control is assumed where the Company has the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities.
Intra-group balances and any income or expenses arising from intra-group transactions are eliminated in
preparing the Group accounts.
No income statement is presented for the Parent Company as provided by section 408 of the Companies
Act 2006.
BUSINESS COMBINATIONS AND GOODWILL
Subsidiaries acquired in the year are accounted for using the acquisition method of accounting.
Identifiable assets acquired and liabilities assumed are measured at their fair values at the acquisition
date. The consideration transferred for the acquisition is the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the acquisition date. The excess of the cost of
acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded
as goodwill. If the cost of acquisition is less than the fair value of the identifiable assets acquired
and liabilities assumed, the difference is recognised directly in the Income Statement. After initial
recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not
amortised and is subject to annual impairment review.
Acquisition related costs are expensed as incurred.
CAPITAL MANAGEMENT
Group objectives in managing capital are to safeguard the interests of the Company to operate as a net
debt-free going concern, of its employees to maintain wherever possible security of employment,
remuneration and retirement provisions and of its shareholders to maintain continuity of dividends and
stability of share price.
The capital structure of the Group consists of issued share capital, reserves and retained earnings
represented predominantly by investment properties, financial investments and cash.
These assets are purchased, managed and maintained by the Group’s management and employees, advised
where appropriate by independent outside professionals. Refer to pages 7 and 8 of this report for details
of relevant risk factors and management measures.
The Group has sufficient cash reserves and readily realisable assets available to meet its foreseeable
commitments.
INVESTMENT IN JOINT VENTURES
Joint Ventures are those entities over which the Company has a 50% holding and exercises joint control
under a contractual arrangement. The results of Joint Venture undertakings are accounted for using the
equity method of accounting. Under this method the investment is initially recorded at cost and is
subsequently adjusted to reflect the Group’s share of the net profit or loss in the Joint Venture.
The Accounts of the Group’s Joint Ventures have been prepared in accordance with UK GAAP. The
Group’s interest in the assets and liabilities of the Joint Ventures have only been restated in accordance
with International Financial Reporting Standards where such restatement is considered material to an
understanding of the Group’s interest.
30
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued)
INVESTMENT PROPERTIES
Investment properties are properties, either owned by the Group or where the Group is a lessee under
a finance lease, which are held for long-term rental income or for capital appreciation or both. Also,
properties held under operating leases are accounted for as investment properties when the rest of the
definition of an investment property is met. In such cases, the operating leases concerned are accounted
for as if they were finance leases.
Investment properties, whether completed or under development, are initially recognised at cost and
revalued at the Balance Sheet date to fair value as determined by the Directors in accordance with the
RICS Valuation Standards.
Gains or losses arising from the changes in fair value are included in the Income Statement in the year
in which they arise. In accordance with IAS 40: Investment Property, as the Group uses the fair value
model, no depreciation is provided in respect of investment properties including integral plant.
Additions to investment properties consist of costs of a capital nature and, in the case of investment
properties under development, includes certain internal staff and associated costs directly attributable to
the management of the developments under construction.
PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are stated at cost less accumulated depreciation.
Subsequent costs are included in the asset’s carrying value or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of them can be measured reliably. All other repairs and maintenance expenditure
is charged to the Income Statement as incurred.
DEPRECIATION
Depreciation is provided on all items of property, plant and equipment, other than investment properties
and freehold land, at rates calculated to write off the cost of each asset over its expected useful life, as
follows:
Freehold buildings
Plant and machinery
Office furniture and fittings
Motor vehicles
- over 40 to 66 years
- 25% to 33 1⁄3% reducing balance
- 20% to 33 1⁄3% reducing balance
- 33 1⁄3% reducing balance
IMPAIRMENT REVIEWS
PROPERTY, PLANT AND EQUIPMENT
Individual assets are grouped for impairment assessment purposes at the lowest level at which there are
identifiable cash inflows independent of the cash inflows of other groups of assets.
The Group assesses at each Balance Sheet date whether there is an indication that an asset may be
impaired. If an indication exists the Group makes an estimate of the recoverable amount of each asset
group, being the higher of its fair value less costs to sell and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. An impairment loss is recognised where the recoverable amount
is lower than the carrying value of assets.
30
31
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued)
IMPAIRMENT REVIEWS (continued)
If there is an indication that previously recognised impairment losses may have decreased or no longer
exist, a reversal of the loss may be made. The carrying amount of the asset is increased to its recoverable
amount only up to the carrying amount that would have resulted, net of depreciation, had no impairment
loss been recognised for the asset in prior years.
Impairment losses and any subsequent reversals are recognised in the Income Statement.
GOODWILL
Goodwill is reviewed for impairment annually. Impairment is determined by reference to the recoverable
amount of the operating segment, where this is less than the carrying value of the operating segment an
impairment loss is recognised immediately in the Income Statement. This loss cannot be reversed in
future periods.
INVENTORIES AND WORK IN PROGRESS
Inventories are valued at the lower of cost and net realisable value.
Land held for development is included at the lower of cost and net realisable value.
Work in progress other than long-term contract work in progress is valued at the lower of cost and net
realisable value.
Cost includes materials, on a first-in first-out basis and direct labour plus attributable overheads based
on normal operating activity, where applicable. Net realisable value is the estimated selling price less
anticipated disposal costs.
Variations and claims are included in Revenue where it is probable that the amount, which can be
measured reliably, will be recovered from the customer.
LONG-TERM CONTRACTS
Amounts recoverable on contracts which are included in debtors are stated at cost as defined above, plus
attributable profit to the extent that this is reasonably certain after making provision for maintenance
costs, less any losses incurred or foreseen in bringing contracts to completion, and less amounts received
as progress payments.
For any contracts where receipts exceed the book value of work done, the excess is included in trade and
other payables as payments on account.
INCOME TAX
The charge for current UK corporation tax is based on results for the year as adjusted for items that
are non-assessable or disallowed and any adjustments for tax payable in respect of previous years. It is
calculated using rates that have been enacted or substantially enacted at the Balance Sheet date.
DEFERRED TAXATION
Deferred tax is provided using the liability method in respect of temporary differences between the
carrying value of assets and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit. Deferred tax is provided on all temporary differences, except in
respect of investments in Subsidiaries and Joint Ventures where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary difference will not reverse in
the foreseeable future.
32
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued)
DEFERRED TAXATION (continued)
Deferred tax is determined using tax rates that have been enacted or substantially enacted by the Balance
Sheet date and are expected to apply when the deferred tax asset is realised or the deferred tax liability
is settled. It is recognised in the Income Statement except when it relates to items credited or charged
directly to Equity, in which case the deferred tax is also dealt with in Equity.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which the temporary differences can be utilised.
PENSIONS
The Group operates a defined benefit pension scheme, which was closed to new members during the year
to 31st July 2003 and which requires contributions to be made to an administered fund.
The obligations of the scheme represent benefits accruing to employees and are measured at discounted
present value while scheme assets are measured at their fair value. The discount rate used is the yield on
AA credit rated corporate bonds that have maturity dates approximating to the terms of the Group’s
obligations. The calculation is performed by a qualified actuary using the projected unit credit method.
The operating and financial costs of such plans are recognised separately in the Income Statement, service
costs are spread systematically over the working lives of the employees concerned and financing costs
are recognised in the year in which they arise. Actuarial gains and losses, arising from either experience,
differing from previous actuarial assumptions, or changes to those assumptions, are recognised
immediately in the Consolidated Statement of Comprehensive Income.
The Group also operates a defined contribution Group Personal Pension Plan for eligible employees.
The plan is externally administered and professionally managed. Contributions payable are expensed to
the Income Statement as incurred.
LEASES
Leases are classified according to the substance of the transaction. A lease that transfers substantially all
the risks and rewards of ownership to the lessee is classified as a finance lease. All other leases are
classified as operating leases.
GROUP AS A LESSEE
In accordance with IAS 40: Investment Property, leases of investment property are assessed on a property
by property basis. Where future rentals are material, the properties are capitalised and treated as finance
leases in accordance with IAS 17: Leases, otherwise properties are classified as operating leases and
rentals payable are charged to the Income Statement on a straight line basis over the term of the lease.
Other leases are classified as operating leases and rentals payable are charged to the Income Statement
on a straight line basis over the term of the lease.
GROUP AS A LESSOR
Properties leased out under operating leases are included in investment property, with rental income
recognised on a straight line basis over the lease term.
REVENUE
Revenue, which is stated net of value added tax, represents the invoiced value of goods sold, except in
the case of long-term contracts where revenue represents the amounts received and receivable for work
done in the year. The measurement and stage of completion of long-term contracts are based on external
valuations issued by third party surveyors.
33
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
1.
ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued)
REVENUE (continued)
Profits on long-term contracts are calculated in accordance with International Financial Reporting
Standards and do not relate directly to revenue. Profit on current contracts is only taken at a stage near
enough to completion for that profit to be reasonably certain after making provision for contingencies,
whilst provision is made for all losses incurred to the accounting date together with any further losses
that are foreseen in bringing contracts to completion. The value of construction work transferred to
investment properties is excluded from revenue.
Revenue from investment properties comprises rental income, service charges, insurance receivable and
other recoveries, and is disclosed as other operating income in the Income Statement.
Rental income from investment property leased out under an operating lease is recognised in the Income
Statement on a straight line basis over the term of the lease.
Revenue from private housing sales is recognised when transactions are legally completed.
Revenue from private house sales under shared ownership scheme are accounted for as instalments are
received.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised on the Group’s Statement of Financial Position
when the Group becomes a party to the contractual provision of the instrument. The principal treasury
objective is to provide sufficient liquidity to meet operational cash requirements. The Group operates
controlled treasury policies which are monitored by the Board to ensure that the needs of the Group are
met as they arise.
AVAILABLE FOR SALE FINANCIAL ASSETS
Financial assets available for sale represent investments in quoted shares which are recognised at fair
value at the year end. The movement in fair value is transferred directly to Equity and shown in a
separately designated Fair Value Reserve.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised at invoiced value less provisions for impairment. A provision
for impairment of trade receivables is established where there is objective evidence that the Group will
not be able to collect all amounts due according to the terms of the receivables concerned.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand, deposits with banks and other short-term highly liquid
investments with original maturities of three months or less. For the Statement of Cash Flows, cash
and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
TRADE AND OTHER PAYABLES
Trade and other payables are non-interest bearing and are recognised at invoiced amount.
DIVIDENDS
Final Dividends are recognised as a liability in the year in which they are approved by the Company’s
shareholders. Interim Dividends are recognised when they are paid.
34
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
2.
SEGMENTAL INFORMATION
IFRS 8: Operating Segments requires operating segments to be identified on the basis of internal
reporting about components of the Group that are regularly reviewed by the chief operating decision
maker to allow the allocation of resources to the segments and to assess their performance. The chief
operating decision maker has been identified as the Board of Directors.
All revenue arises from activities within the UK and therefore the Board of Directors does not consider
the business from a geographical perspective. The operating segments are based on activity and
performance of an operating segment is based on a measure of operating results.
2013
Construction activities
Investment activities
.
.
.
.
2012
Construction activities
Investment activities
.
.
.
.
External
Revenue
Internal
Revenue
Total
Revenue
£000
£000
£000
Operating
Loss
2013
£000
2012
£000
18,381
5,383
2,214
–
20,595
5,383
(2,961)
850
–
–
23,764
2,214
25,978
(2,111)
–
22,586
5,518
28,104
3,329
–
25,915
5,518
–
–
(25)
(660)
3,329
31,433
–
(685)
OPERATING LOSS
Share of results of Joint Ventures
Finance and investment income
.
.
.
.
.
.
.
PROFIT ON ORDINARY ACTIVITIES BEFORE TAX
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(2,111)
2,438
502
(685)
(15)
755
829
55
Internal revenue relates to own work capitalised, all other internal transactions are eliminated on
consolidation. The Group had sales under construction activities from three customers amounting to
£11,000,000, (2012, two customers - £10,721,000).
OTHER SEGMENTAL INFORMATION
2013
Construction activities
Investment activities
Joint Ventures
.
.
.
Non-Current
Asset Additions Depreciation
£000
£000
.
.
.
.
.
.
544
3,093
–
360
–
–
Segment
Segment
Assets Liabilities
£000
£000
32,089
75,444
819
11,202
6,025
–
108,352
17,227
Allocation of corporation tax debtor
.
.
.
.
.
.
(1,919)
(1,919)
2012
Construction activities
Investment activities
Joint Ventures
.
.
.
.
.
.
.
.
.
230
3,423
–
363
–
–
Allocation of corporation tax debtor
.
.
.
.
.
.
106,433
15,308
26,223
77,022
997
104,242
(805)
5,016
7,917
–
12,933
(805)
103,437
12,128
35
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
3.
OTHER OPERATING INCOME
Rental income
Service charges and insurance receivable
.
.
.
Direct property costs
Net rental income
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
4,901
482
2012
£000
5,000
518
5,383
(1,495)
5,518
(2,121)
3,888
3,397
Direct property costs included £513,000 (2012, £620,000) in respect of investment properties that did
not generate rental income in the year.
4.
STAFF COSTS AND DIRECTORS’ REMUNERATION
Staff costs during the year amounted to:
Wages, salaries and short term benefits.
.
.
Social security costs
.
Post-employment benefits
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
9,496
982
852
9,005
877
822
11,330
10,704
The average weekly number of employees during the year was made up as follows:
Construction and related services.
Office and management .
.
Directors’ remuneration:
– Salaries and short term benefits
.
– Post-employment benefits
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
No.
No.
258
25
244
25
283
269
£000
586
58
£000
601
67
644
668
D. W. Smart and A. H. Ross are members of the Group’s defined benefit pension scheme.
J. R. Smart is a member of the Group’s defined contribution Group Personal Pension Plan.
Key management is comprised solely of the Directors of the Company.
5.
OPERATING LOSS
This is stated after charging/(crediting):
.
Cost of inventories recognised as an expense .
.
.
Staff costs (per note 4) .
.
.
Hire of plant and machinery
.
.
Contingent rents .
.
Depreciation of owned assets
.
Profit on disposal of property, plant and equipment
.
Auditors’ remuneration and expenses – audit services
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
15,965
11,330
547
73
360
(24)
114
21,210
10,704
332
71
363
(6)
120
The auditors’ fees for the Parent Company are £50,000 (2012, £52,000).
2012 Revenue and Cost of sales have been equally amended by £2,098,000 to revise for income
recognition on private housing in accordance with IAS 18: Revenue. There was no impact on reported
profit for that year.
36
37
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
6.
INCOME FROM INVESTMENTS
Dividend income from available for sale financial assets
.
7.
FINANCE INCOME
Receivable:
Interest on short term deposits .
.
.
Other interest
.
Pension scheme .
.
.
8.
TAXATION
UK Corporation Tax
Current tax on income for the year
Corporation tax over provided in previous years
.
.
Deferred taxation (note 22)
.
.
Current Tax Reconciliation
Profit on ordinary activities before tax .
Share of (profits)/losses of Joint Ventures
.
.
.
.
Current tax at 23.67% (2012, 25.33%) .
Effects of:
Expenses not deductible for tax purposes
.
Depreciation in excess of capital allowances .
.
Non taxable income
.
.
Deferred tax asset not recognised
.
Effect of indexation allowances .
Effect of change in tax rate
.
.
Adjustments to tax charge in respect of prior years
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
2012
£000
.
138
128
.
.
.
69
31
256
96
7
490
356
593
.
.
.
.
.
.
.
.
.
.
.
.
.
1,113
(3)
620
–
1,110
(665)
620
(34)
445
586
829
(2,438)
55
15
(1,609)
70
(381)
18
16
16
(34)
1,197
(112)
(254)
(3)
15
1
(32)
–
915
(331)
–
445
586
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The Finance Act 2013, which received Royal Ascent on 17th July 2013 states that the UK corporation
tax rate will reduce to 23% for financial years commencing 1st April 2013 with further reductions to
21% for financial years commencing 1st April 2014 and to 20% for financial years commencing 1st
April 2015.
The effective corporation tax rate is 23.67% (2012, 25.33%) being the average rate applicable over the
period. Deferred tax provisions have been calculated using the 20% rate.
In addition to amounts charged to the Income Statement, a deferred tax charge of £874,000 (2012,
credit – £937,000) relating to actuarial gains/(losses) on defined benefit pension scheme has been
recognised directly to Equity. Also a deferred tax charge of £108,000 (2012, credit – £5,000) relating to
the movement in fair value of available for sale financial assets has been recognised directly to Equity.
The value of the deferred tax asset in respect of Capital Losses not recognised in the financial statements
amounted to £1,197,000 (2012, £nil).
There are no income tax consequences attached to dividends paid or proposed by the Company to its
shareholders.
37
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
9.
PROFIT /(LOSS) FOR THE FINANCIAL YEAR
Dealt with in the accounts of the Parent Company
.
Retained by Subsidiary and Joint Venture Companies
10.
DIVIDENDS
2011 Final Dividend of 9.70p per 10p share
.
2012 Interim Dividend of 0.92p per 2p share .
.
2012 Final Dividend of 1.98p per 2p share
2013 Interim Dividend of 0.92p per 2p share .
.
.
.
.
Proposed 2013 Final Dividend of 2.01p per 2p share
(2012, 1.98p per 2p share), after wavers.
.
.
2013
£000
2012
£000
766
(382)
590
(1,121)
384
(531)
–
–
968
435
1,403
978
462
–
–
1,440
430
980
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The proposed Final Dividend is subject to approval by the shareholders at the Annual General Meeting
and has not been included as a liability in these financial statements.
11.
EARNINGS/(LOSS) PER SHARE
Profit/(Loss)
attributable
to Equity
shareholders
£000
Basic
Earnings/
(Loss)
per share
Year to 31st July 2013
.
Year to 31st July 2012
.
.
.
.
.
.
.
.
.
.
.
.
.
.
384
0.80p
. (531)
(1.06)p
Basic earnings/(loss) per share are calculated by dividing the profit/(loss) attributable to equity
shareholders by the weighted average number of shares in issue during the year.
The weighted average number of shares in issue as at 31st July 2013 amounted to 48,299,000 (2012,
50,201,000).
There is no difference between basic and diluted earnings/(loss) per share.
38
39
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
12.
PROPERTY, PLANT AND EQUIPMENT
(a) GROUP
Cost:
At 1st August 2012
Additions
Disposals
.
.
At 31st July 2013
.
.
.
.
Depreciation:
At 1st August 2012
.
Provided during year .
.
Disposals
.
At 31st July 2013
Net book value:
At 31st July 2013
.
.
.
.
.
.
.
.
.
.
.
Cost:
At 1st August 2011
Additions
.
Transfer to investment properties
.
Disposals
.
.
.
.
.
.
At 31st July 2012
.
Depreciation:
.
At 1st August 2011
Provided during year .
.
Disposals
.
At 31st July 2012
Net book value:
At 31st July 2012
.
.
.
.
.
.
.
.
Land and
buildings
Freehold
£000
Plant,
equipment
and vehicles
£000
Total
£000
714
182
–
5,546
362
(348)
6,260
544
(348)
896
5,560
6,456
478
18
–
4,660
342
(321)
5,138
360
(321)
496
4,681
5,177
400
879
1,279
739
–
(25)
–
5,452
230
–
(136)
6,191
230
(25)
(136)
714
5,546
6,260
462
16
–
4,439
347
(126)
4,901
363
(126)
478
4,660
5,138
236
886
1,122
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
As referred to in the Report of the Directors, the Group’s non-investment heritable properties were
revalued at 31st July 2013. This revaluation which has not been incorporated into these accounts, showed
a net surplus over the cost of those properties after depreciation of £1,704,000 as at 31st July 2013.
Included within Freehold Land and Buildings is land costing £13,000 (2012, £13,000) which is not
depreciated.
38
39
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st July 2013
12.
PROPERTY, PLANT AND EQUIPMENT (continued)
(b) COMPANY
Land and
buildings
Freehold
£000
Plant,
equipment
and vehicles
£000
179
182
–
–
2,591
245
(241)
(42)
Total
£000
2,770
427
(241)
(42)
361
2,553
2,914
95
5
–
–
2,079
226
(219)
(32)
2,174
231
(219)
(32)
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
. 100
2,054
2,154
.
.
.
.
.
.
.
.
.
.
.
.
.
261
499
760
.
.
.
.
.
179
–
–
–
179
.
.
.
.
92
3
–
–
2,516
211
(122)
(14)
2,695
211
(122)
(14)
2,591
2,770
1,990
214
(113)
(12)
2,082
217
(113)
(12)
.
95
2,079
2,174
.
84
512
596
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Cost:
At 1st August 2012
Additions
Disposals
Group transfer disposals
.
.
.
.
.
At 31st July 2013
.
Depreciation:
.
At 1st August 2012
Provided during year .
Disposals
.
Group transfer disposals
.
At 31st July 2013
Net book value:
At 31st July 2013
.
.
Cost:
At 1st August 2011
Additions
Disposals
Group transfer disposals
.
.
.
.
.
At 31st July 2012
.
Depreciation:
At 1st August 2011
.
Provided during year .
.
Disposals
Group transfer disposals
.
At 31st July 2012
Net book value:
At 31st July 2012
.
.
As referred to in the Report of the Directors, the Company’s non-investment heritable properties were
revalued at 31st July 2013. This revaluation which has not been incorporated into these accounts, showed
a net surplus over the cost of those properties after depreciation of £1,421,000 as at 31st July 2013.
40
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
13.
INVESTMENT PROPERTIES
Cost or valuation:
At 1st August 2012
Additions
Disposals
.
.
.
.
.
(Deficit)/surplus on valuation
.
.
.
At 31st July 2013
.
.
.
.
.
.
.
.
.
.
.
.
.
Cost or valuation:
.
.
At 1st August 2011
Additions
.
.
Transfer from property, plant and equipment
.
Transfer to inventories
.
.
Transfers
.
Deficit on valuation .
.
.
.
.
.
.
.
.
.
.
.
At 31st July 2012
.
.
.
.
Land and
buildings
Freehold
£000
63,834
2,914
(8,060)
(3,149)
Land and
buildings
Leasehold
£000
Total
£000
6,603
179
(18)
22
70,437
3,093
(8,078)
(3,127)
55,539
6,786
62,325
64,699
3,400
25
(1,555)
1,035
(3,770)
7,887
23
–
–
(1,035)
(272)
72,586
3,423
25
(1,555)
–
(4,042)
63,834
6,603
70,437
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The Group’s investment properties were valued on the basis of market value on 31st July 2013 in
accordance with the RICS Valuation Standards by J. M. Smart, MRICS and D. W. Smart, MRICS both
of whom are Directors of the Parent Company. Open market value represents the estimated amount for
which property should exchange on the date of valuation between a willing buyer and willing seller in
an arm’s length transaction, and does not account for costs of disposals.
In accordance with IAS 40: Investment Property, investment properties are revalued annually and the
aggregate surplus or deficit is taken to the Income Statement and no depreciation is provided in respect
of these properties.
The Group had obligations of £1,230,000 in respect of developments and repair costs of investment
properties at the Balance Sheet date.
40
41
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st July 2013
14.
INVESTMENTS
Shares in Subsidiaries at Cost .
.
Joint Ventures
.
.
(a) JOINT VENTURES
Share of Assets:
Share of Non-Current Assets
.
Share of Current Assets .
Share of Liabilities:
Share of Non-Current Liabilities .
Share of Current Liabilities. .
Share of Net Assets
.
.
.
Turnover .
.
.
Cost of Sales
Net rental income
.
Net operating expenses .
Operating profit .
Finance income .
.
Finance costs
Profit before tax .
.
Taxation .
.
.
.
.
.
Share of post tax results .
.
Dividends paid
.
.
.
.
.
.
.
.
.
.
.
.
.
Group
2013
£000
2012
£000
Company
2013
£000
2012
£000
.
–
. 819
819
–
997
1,235
–
708
25
997
1,235
733
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Group
2013
£000
2012
£000
3,241
1,837
3,241
1,693
5,078
4,934
–
4,259
–
3,937
4,259
3,937
819
997
6,523
(3,746)
315
(30)
3,062
4
(3)
67
(328)
316
(25)
30
1
(3)
3,063
(625)
28
(43)
2,438
(2,115)
(15)
–
323
(15)
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
The Group’s share of retained profits in the Joint Ventures at 31st July 2013 amounted to £819,000
(2012, £972,000).
Included in share of net assets at 31st July 2012 is £501,000 relating to Edinburgh Industrial Estates
Limited (refer to note 15). On 6th March 2013, the Group acquired all of the issued share capital of
Edinburgh Industrial Estates Limited thus making that company a wholly owned subsidiary of J Smart
& Co (Contractors) PLC.
42
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
14.
INVESTMENTS (continued)
(a) JOINT VENTURES (continued)
During the year, the Group transferred land into Invertiel Developments Limited which, with the
exception of one piece thereof, was then subsequently sold to a third party. This generated a profit
after tax in Invertiel Developments Limited of £4,240,000 of which J Smart & Co (Contractors) PLC
received half thereof.
Name of Joint Venture
Prestonfield Development Company Limited
Northrigg Limited
Duff Street Limited
Invertiel Developments Limited
Registered in and
Principal Country J. Smart & Co. (Contractors) PLC
Interest in Joint Venture’s Capital
50%
50%
50%
50%
of Operation
Scotland
Scotland
Scotland
Scotland
Name of Joint Venture
Jointly managed with
Prestonfield Development
Company Limited
Westerwood
Limited
Northrigg Limited
William Sanderson
Duff Street Limited
Kiltane Developments
Limited
Invertiel Developments
Limited
Macdonald Estates PLC
Issued Share capital
Issued shares held
by J. Smart & Co.
(Contractors) PLC
1 B Share
1 A Share
50 A Shares
50 A Shares
2 ordinary £1 shares
split equally into A & B
shares and ranking
equally in all respects
2 ordinary £1
shares split equally
into A & B shares
and ranking equally
in all respects
100 ordinary £1
shares split equally
into A & B shares
and ranking equally
in all respects
100 ordinary £1
shares split equally
into A & B shares
and ranking equally
in all respects
All of the Joint Venture companies were established for the purposes of property development and all
have accounting years ending on 31st July.
On 6th March 2013 the Company acquired the shares held by The EDI Group Limited in Edinburgh
Industrial Estates Limited. As of that date, Edinburgh Industrial Estates Limited became a wholly owned
subsidiary of the Company. Refer to Note 15 for details of the Business Combination.
43
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
14.
INVESTMENTS (continued)
(b) SUBSIDIARIES
At 1st August 2012
Transfer from Joint Venture.
Additions.
.
.
.
At 31st July 2013.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
708
25
502
2012
£000
708
–
–
.
.
.
. 1,235
708
At 31st July 2013 the Company held the entire issued share capital of the following companies, all of
which are registered in and operate in Scotland:
McGowan & Co. (Contractors) Limited
Cramond Real Estate Company Limited
Thomas Menzies (Builders) Limited
Concrete Products (Kirkcaldy) Limited
C. & W. Assets Limited
Edinburgh Industrial Estates Limited
Plumbing contractors
Investment holding
Civil Engineering contractors
Manufacture of concrete building products
Property company
Property development
15. BUSINESS COMBINATIONS
On 6th March 2013 the Company acquired the entire issued ‘A’ Ordinary Shares of property development
company, Edinburgh Industrial Estates Limited. Edinburgh Industrial Estates Limited was prior to the
above acquisition a Joint Venture investment of the Company. Following the acquisition on 6th March
2013, Edinburgh Industrial Estates Limited became a wholly owned subsidiary of the Company.
The business combination was to allow the Company to gain total control over Edinburgh Industrial
Estates Limited.
Fair value of assets acquired:
.
.
Inventories
.
Other receivables
Cash and cash equivalents
.
.
.
Fair value of net assets acquired
.
.
.
.
Fair value of previously held interest .
Goodwill
Consideration
.
.
.
.
Fair value of consideration:
Cash
.
Deferred consideration .
.
Total consideration
.
.
.
.
.
.
.
.
.
.
.
44
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
£000
725
40
236
1,001
501
500
2
502
463
39
502
.
.
.
.
.
.
.
.
.
.
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
15. BUSINESS COMBINATIONS (continued)
Cash impact:
Total cash consideration .
.
Cash acquired.
.
Deferred consideration. .
.
.
.
.
.
.
.
.
.
.
.
.
£000
502
(236)
.
.
.
266
(39)
227
Goodwill has arisen due to excess of the consideration given over the fair value of assets acquired at
date of acquisition. The goodwill was written off in the Income Statement in the year.
The deferred consideration is payable on receipt by Edinburgh Industrial Estates Limited of amounts
included in Other Receivables acquired at the acquisition date.
Edinburgh Industrial Estates Limited has contributed £nil and £nil to the Group’s revenue and profit,
respectively from the acquisition date. Had the acquisition occurred on 1st August 2012, the impact on
the Group’s revenue for the year to 31st July 2013 would have been £nil and the profit for the year would
have increased £180,000.
16.
AVAILABLE FOR SALE FINANCIAL ASSETS
Group
2013
£000
2012
£000
Listed investments
.
.
.
.
.
.
.
.
3,817
2,988
Fair value movement on shares held at 31st July 2013 before tax amounted to £754,000 (2012,
£57,000).
There has been no impairment adjustment on available for sale financial assets in this or the previous
year.
Fair value of listed investments is determined by the unadjusted quoted prices of these investments in
active markets as at the balance sheet date. Any changes in quoted prices in an active market at the
balance sheet date will have an immediate impact on the value of the listed investments.
45
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
17.
INVENTORIES
.
Long-term contract balances
.
Work in progress .
Land held for development
.
Raw materials and consumables
.
Finished goods
.
.
.
Group
Company
2013
£000
58
11,644
1,708
138
72
.
.
.
.
.
2012
£000
201
8,472
1,708
182
91
2013
£000
–
11,644
1,708
28
–
2012
£000
130
8,472
1,708
26
–
13,620
10,654
13,380
10,336
.
.
.
.
.
CONTRACTS IN PROGRESS AT
THE BALANCE SHEET DATE:
Aggregate amount of costs incurred and
recognised profits less recognised losses to date
.
Retentions outstanding
.
.
Advances received
.
.
.
.
3,781
101
(3,581)
15,011
481
2,702
98
(15,133) (2,730)
13,339
446
(13,600)
Net value of contracts in progress
.
.
301
359
70
185
18.
TRADE AND OTHER RECEIVABLES
.
CURRENT ASSETS:
Trade receivables
.
Amounts owed by Subsidiaries .
Other receivables
.
Prepayments and accrued income
Amounts recoverable on contracts
Loans to Joint Venture companies
.
.
.
.
.
.
.
.
.
.
.
.
.
1,493
–
73
406
1,007
3,671
1,411
–
400
455
664
3,991
462
2,250
–
322
833
3,671
330
3,358
419
373
561
3,991
6,650
6,921
7,538
9,032
Trade receivables are shown net of provision for doubtful debts of £26,000 (2012, £4,000).
The aging of past due but not impaired trade debtors is as follows:
Less than 30 days
30 to 60 days
Greater than 60 days
1,136
354
3
1,493
987
355
69
409
53
–
291
31
8
1,411
462
330
Trade receivables includes £509,000 (2012, £341,000) in respect of outstanding retentions.
The loans to Joint Venture companies (note 14(a)) are repayable on demand. The Group has charged
interest on one loan to a Joint Venture Company at a rate of 1% above the Group’s banker’s base rate.
The Directors consider that the carrying amount of trade and other receivables approximates to their
fair value.
46
47
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
19.
BANK
The bank has been granted guarantees and letters of offset by each member of the Group in favour of
the bank on account of all other members of the Group as a continuing security for all monies, obligations
and liabilities owing or incurred to the bank.
20.
TRADE AND OTHER PAYABLES
CURRENT LIABILITIES:
.
.
Trade payables
.
Amounts owed to Subsidiaries .
Other taxes and social security costs
Other creditors and accruals
.
Group
Company
2013
£000
1,386
–
469
1,740
2012
£000
1,701
–
299
1,961
2013
£000
1,045
96
189
948
2012
£000
1,346
188
171
1,055
3,595
3,961
2,278
2,760
.
.
.
.
.
.
.
.
21.
FINANCIAL INSTRUMENTS
The Group’s financial instruments comprise of bank balances and cash, available for sale financial
assets, trade receivables and trade payables. The amounts presented in relation to trade receivables are
net of allowances for doubtful receivables.
The carrying amount of these assets approximates to their fair value.
CREDIT RISK
In relation to the Group’s financial assets, the Group has no significant concentration of credit risk, as
exposure is spread over a large number of counterparties and customers.
There is no significant impairment loss recognised or significant receivables that are past due but not
impaired.
The Group has assessed that there is no significant credit risk in relation to loans to Joint Venture
companies given the underlying value of the assets held by these entities.
IFRS 7: Financial Instrument Disclosures requires a company to undertake a sensitivity analysis
on its financial instruments which are affected by changes in interest rates. The Group financial
instruments affected by interest rate fluctuations are bank deposits and bank overdrafts. Based on the
Group’s net position at the year end, a 1% increase or decrease in the interest rates would change the
Group’s profit before tax by approximately £49,000 and £55,000 respectively (2012, £75,000 and
£42,000 respectively).
47
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
22.
DEFERRED TAXATION
DEFERRED TAX ASSETS
GROUP
.
At 1st August 2011
Charged to Income Statement .
.
Credited to Equity
.
.
At 31st July 2012
.
.
.
.
.
.
Credited/(Charged) to Income Statement
Charged to Equity
.
.
.
At 31st July 2013
.
.
COMPANY
At 1st August 2011
.
Charged to Income Statement .
.
Credited to Equity
.
.
At 31st July 2012
.
.
.
.
.
.
.
Credited/(Charged) to Income Statement
Charged to Equity
.
.
At 31st July 2013
.
.
.
Retirement
Benefit
Obligations
£000
–
(1,874)
2,217
Other
£000
253
(39)
–
343
214
Total
£000
253
(1,913)
2,217
557
1,874
(2,217)
(105)
–
1,769
(2,217)
–
109
109
–
(1,874)
2,217
56
(12)
–
343
44
56
(1,886)
2,217
387
1,874
(2,217)
(24)
–
1,850
(2,217)
–
20
20
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Deferred tax assets arising in respect of valuation surpluses on Investment Properties of £1,197,000 have
not been recognised because it is not probable that relevant future taxable profits will be available against
which the Group can use the benefits therefrom.
DEFERRED TAX LIABILITIES
GROUP
Accelerated
Capital
Allowances
£000
Fair Value
Reserve
£000
Valuation
Other
Surplus on Retirement
Investment
Timing
Benefit
Properties Obligations Differences
£000
£000
£000
Total
£000
1,530
At 1st August 2011
.
Charged / (Credited) to Equity .
–
Credited to Income Statement . (83)
.
77
(5)
–
720
–
(155)
415
1,280
(1,695)
110
–
(14)
2,852
1,275
(1,947)
At 31st July 2012
.
. 1,447
72
565
–
96
2,180
Charged/(Credited) to Equity
Charged/(Credited) to Income
Statement
.
.
–
108
–
(1,343)
–
(1,235)
. (162)
–
(565)
1,856
(25) 1,104
At 31st July 2013
.
. 1,285
180
–
513
71
2,049
48
49
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
22.
DEFERRED TAXATION (continued)
DEFERRED TAX LIABILITIES (continued)
COMPANY
.
At 1st August 2011
.
Charged to Equity
Credited to Income Statement .
.
.
At 31st July 2012
.
.
.
.
.
.
Credited to Equity
Charged/ (Credited) to Income Statement
.
.
.
At 31st July 2013
.
.
.
23.
SHARE CAPITAL
Retirement
Benefit
Other
Timing
Obligations Differences
£000
81
–
£000
415
1,280
(1,695)
Total
£000
496
1,280
(13) (1,708)
–
68 68
(1,343)
(1,343)
1,856 (10) 1,846
–
513
58 571
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Issued and fully paid ordinary shares of 2p each
At 1st August 2012
.
Purchased and cancelled
.
.
.
.
.
.
2013
2012
Number
£000
Number
£000
49,472,000
(2,354,000)
989 50,410,000
(47) (938,000)
1,008
(19)
At 31st July 2013
.
.
.
.
47,118,000 942
49,472,000
989
During the year to 31st July 2013 the Company purchased for cancellation 2,354,000 ordinary shares of
2p each with a nominal value of £47,000 for a consideration of £1,845,000.
All shareholders of ordinary shares have a right to receive dividends paid by the Company in accordance
with their shareholding. Each shareholder has the right to attend and vote at a General Meeting and each
share attracts one vote. There are no restrictions on the distribution of dividends or repayment of capital.
24. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) RECONCILIATION OF PROFIT BEFORE TAX TO CASH FLOWS FROM OPERATING ACTIVITIES
.
.
.
.
.
.
.
.
.
Profit before tax .
.
Share of (profits)/losses from Joint Ventures .
Depreciation
.
.
Unrealised valuation deficit on investment properties .
.
Profit on sale of property, plant and equipment
.
Profit on sale of investment properties .
.
.
Profit on sale of available for sale financial assets
.
Change in retirement benefits
.
Interest received .
.
Change in inventories
.
Change in receivables
.
Change in payables
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
48
CASH FLOWS FROM OPERATING ACTIVITIES
.
.
49
2013
£000
829
.
(2,438)
.
360
.
3,127
.
(24)
.
(124)
.
(8)
.
(1,131)
.
(100)
.
(2,235)
.
.
311
. (409)
2012
£000
55
15
363
4,042
(6)
–
(34)
(1,367)
(103)
(2,021)
454
(414)
.
(1,842)
984
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
24. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
(b) CASH AND CASH EQUIVALENTS FOR STATEMENT OF CASH FLOWS
.
Cash and cash equivalents
.
.
Bank overdraft
.
.
Net position
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
15,157
(9,664)
5,493
2012
£000
9,761
(4,465)
5,296
.
.
.
(c) ANALYSIS OF NET FUNDS
Cash and cash equivalents
.
Bank overdraft
.
Net funds
.
.
.
.
.
.
.
.
.
.
.
.
.
.
At 1st
August 2012
£000
9,761
(4,465)
.
.
Cash
Flow
£000
5,396
(5,199)
At 31st
July 2013
£000
15,157
(9,664)
.
5,296
197
5,493
25. NOTES TO THE COMPANY STATEMENT OF CASH FLOWS
(a) RECONCILIATION OF (LOSS)/PROFIT BEFORE TAX TO CASH FLOWS FROM OPERATING ACTIVITIES
.
.
.
.
.
.
.
.
(Loss)/Profit before tax .
.
.
Depreciation
(Profit)/Loss on sale of property, plant and equipment
.
Change in retirement benefits
.
Interest received .
.
Change in inventories
.
Change in receivables
.
Change in payables
.
CASH FLOWS FROM OPERATING ACTIVITIES
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(b) CASH AND CASH EQUIVALENTS FOR STATEMENT OF CASH FLOWS
.
Cash and cash equivalents
.
.
Bank overdraft
.
.
.
.
.
.
.
.
.
.
.
Net funds
.
.
.
.
.
.
.
.
2013
£000
2012
£000
(30)
231
(27)
(1,131)
(6)
(3,044)
1,494
(520)
(3,033)
581
217
2
(1,367)
(7)
(3,556)
(790)
26
(4,894)
1
(6,488)
1,045
–
(6,487)
1,045
.
.
.
.
.
.
.
.
.
.
.
.
(c) ANALYSIS OF NET FUNDS
Cash and cash equivalents
.
Bank overdraft
.
Net Funds
.
.
.
.
.
.
.
.
.
.
.
.
.
.
At 1st
August 2012
£000
1,045
–
.
.
Cash
Flow
£000
(1,044)
(6,488)
At 31st
July 2013
£000
1
(6,488)
.
1,045
(7,532)
(6,487)
50
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
26.
FUTURE CAPITAL EXPENDITURE
There were no amounts of Capital Expenditure relating to Property, plant and equipment contracted for
at 31st July 2013 or 31st July 2012.
The Group’s share of Capital Expenditure contracted for by its Joint Ventures as at 31st July 2013
amounted to £nil (2012, £nil).
27.
RETIREMENT BENEFIT OBLIGATIONS
The Group operates a defined benefit scheme for its employees which was closed to new members
during the year to 31st July 2003. The scheme's assets are held separately from the assets of the Group
and are administered and managed professionally. The last completed triennial actuarial valuation
of the scheme was made at 31st October 2012 by an independent qualified Actuary. A Statement of
Funding Principles has been agreed with the scheme trustees and based on these principles the technical
provisions at this valuation reveals a deficit of £3,092,000, representing a funding level of 89.7%. It has
also been agreed with the scheme trustees that the employer contributions to the scheme will increase
to a level of 68.8% of pensionable salaries and employee contributions will remain at 3%. The total net
pension charge for the year was £632,000 (2012, £608,000). The actuarial valuation has been updated
to take account of the requirements of IAS 19: Employee Benefits, in order to assess the assets and
liabilities of the scheme at 31st July 2013.
The financial assumptions used to calculate scheme liabilities under IAS 19 are:
.
.
.
.
Valuation method
.
Discount rate
.
.
Inflation rate - Retail price index
.
Inflation rate - Consumer price index .
.
Salary increases .
.
Pension increases
.
.
.
.
2013
2012
2011
Projected Unit Projected Unit Projected Unit
5.3%
4.3%
.
3.5%
3.1%
.
3.0%
2.3%
.
4.0%
.
3.3%
2.4%–3.5%
. 2.2% – 3.1%
3.9%
2.4%
1.6%
2.6%
1.5%–2.6%
.
.
.
.
.
.
The mortality assumptions imply the following expectations of years of life from age 65:
Man currently aged 65 .
Woman currently aged 65
Man currently aged 45 .
Woman currently aged 45
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
22.1
24.4
23.4
25.9
22.2
24.4
23.5
25.9
22.1
24.2
23.5
25.8
The expected rates of return on scheme assets are determined as the aggregate weighted return for the
various classes of assets held by the scheme.
The rates of return for each class were determined as follows:
– equity returns are based on yields on Gilts Index plus a margin to allow for expected outperformance;
– bonds returns are based on yields and Government and corporate debt as appropriate to the Scheme’s
holdings in these instruments; and
– cash returns are based on short term returns on cash deposits based on current base rates.
As at 31st July 2013 the actual return on plan assets amounted to £3,752,000 (2012, £131,000).
50
51
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
27.
RETIREMENT BENEFIT OBLIGATIONS (continued)
The assets of the scheme are invested in funds managed by Newton Investment Management Limited, in
direct investments via Speirs & Jeffery, in insurance policies with companies belonging to the AEGON
UK Group and in bank accounts. The assets do not include any directly owned ordinary shares issued
by J Smart & Co (Contractors) PLC. The analysis of the underlying investments in these policies, the
expected rates of returns and reconciliation of scheme assets and liabilities to the Balance Sheet were:
Long term rate
of return
expected at
31st July 2013
.
.
.
.
.
.
.
.
Equities
Bonds
Gilts
Other
Market value
of assets
Present value of
scheme liabilities
.
.
7.3%
4.3%
3.3%
0.5%
.
.
Scheme surplus/(deficit)
Related deferred tax
.
Net pension
Surplus/(deficit) .
.
Long term rate
of return
expected at
31st July 2012
6.5%
3.9%
2.5%
0.5%
Long term rate
of return
expected at
31st July 2011
8.3%
5.3%
3.9%
0.5%
Value at
31st July 2012
£000
17,366
1,712
1,985
4,014
25,077
(26,567)
(1,490)
343
(1,147)
Value at
31st July 2011
£000
19,706
1,726
1,006
2,172
24,610
(22,950)
1,660
(415)
1,245
Value at
31st July 2013
£000
20,349
2,115
2,157
4,030
. 28,651
.
.
.
.
(26,084)
2,567
(513)
2,054
Investments are in mixed management funds, split being 71% equity investments and 29% bonds, gilts,
cash and other assets.
The following amounts are incorporated into the financial statements:
2013
£000
2012
£000
Amounts included in operating loss:
Current service cost
Past service cost .
.
.
.
.
Total included within operating loss
Amounts included in finance income:
Expected return on assets
.
Interest cost
.
.
.
Total included as net finance income
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(488)
–
(520)
–
(488)
(520)
1,272
(1,016)
1,705
(1,215)
256
490
52
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
27.
RETIREMENT BENEFIT OBLIGATIONS (continued)
Amounts included in Consolidated Statement of Comprehensive Income:
.
Actual return less assumed return on assets
.
Experience gains and losses arising on scheme liabilities
.
Changes in assumptions underlying the valuation of liabilities
.
.
.
.
.
.
.
2013
£000
2,480
(130)
576
2012
£000
(1,574)
122
(3,065)
Total actuarial gain/(loss)
.
.
.
.
.
.
.
2,926
(4,517)
Changes in the present value of the defined benefit obligations are as follows:
At 1st August 2012
Current service cost
.
Interest cost
Charges paid
.
Benefit payments .
Actuarial (gain) /loss
At 31st July 2013
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Changes in the fair value of plan assets are as follows:
.
At 1st August 2012
.
.
Employer contributions .
.
Employee contributions .
.
.
Benefits paid
Charges paid
.
.
Expected return on plan assets .
.
Actuarial gain /( loss)
.
.
.
At 31st July 2013
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Analysis of movement in scheme surplus / (deficit):
At 1st August 2012
Current service cost
Past service cost .
.
Contributions
Other finance income
Actuarial gain/ (loss)
At 31st July 2013
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Cumulative actuarial gains and losses recognised in Equity:
At 1st August 2012
Net actuarial gain/(loss) recognised in year
.
.
.
At 31st July 2013
.
.
.
.
.
.
.
.
.
.
.
.
53
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
26,567
488
1,016
(36)
(1,505)
(446)
22,950
520
1,215
(34)
(1,027)
2,943
26,084
26,567
25,077
1,308
55
(1,505)
(36)
1,272
2,480
24,610
1,334
63
(1,027)
(34)
1,705
(1,574)
28,651
25,077
(1,490)
(488)
–
1,363
256
2,926
1,660
(520)
–
1,397
490
(4,517)
2,567
(1,490)
(3,171)
2,926
1,346
(4,517)
(245)
(3,171)
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
27.
RETIREMENT BENEFIT OBLIGATIONS (continued)
History of experience gains and losses:
Difference between actual return and assumed
return on assets
2013
2012
2011
2010
2009
Amount (£000)
.
Percentage of market value of scheme assets
.
.
.
.
.
2,480
8.7%
(1,574)
6.3%
1,315
5.3%
1,284
5.9%
(1,086)
5.9%
Experience gains and losses arising on scheme
liabilities
.
.
.
Amount (£000)
.
Percentage of market value of scheme liabilities .
Total amounts included in Consolidated Statement of
Comprehensive Income
Amount (£000)
2,926
Percentage of market value of scheme liabilities . 11.2%
(130)
0.5%
.
.
.
.
.
.
122
0.5%
(480)
2.1%
1,736
7.6%
(166)
0.7%
(4,517)
17.0%
1,847
8.1%
2,489
10.8%
(4,553)
19.8%
The contribution expected to be paid by the Group during the financial year ending 31st July 2014
amounts to £1,131,000.
In the year to 31st July 2003 the Group commenced operation of a defined contribution Group Personal
Pension Plan for eligible employees. The plan is externally administered and managed professionally by
AEGON UK. The net contribution to the plan for the year was £132,000 (2012, £132,000).
28.
CONTINGENT LIABILITIES
The Company and certain of its Subsidiaries have, in the normal course of business, entered into
counter-indemnities in respect of performance bonds relating to their contracts. As at 31st July 2013
these amounted to £317,000.
29. OPERATING LEASE ARRANGEMENTS
GROUP – AS LESSEE
Future minimum lease payments payable under non-cancellable operating leases:
Within one year .
.
In two – five years exclusively .
.
After five years .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
£000
71
214
2012
£000
72
233
58 65
343
370
GROUP – AS LESSOR
Gross property rental income earned in the year amounted to £4,901,000 (2012, £5,000,000). At the
Balance Sheet date, the Group had contracted with its tenants for the following future minimum lease
payments:
.
Within one year .
In two – five years exclusively .
.
After five years .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
4,758
13,458
7,236
4,806
13,806
7,601
25,452
26,213
54
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
30.
RELATED PARTY TRANSACTIONS
(a) SUBSIDIARIES
Transactions between the Company and its Subsidiaries, which are related parties of the Company, have
been eliminated on consolidation. Details of transactions between the Company and Subsidiaries are as
follows:
SUBSIDIARY
McGowan & Co. (Contractors) Limited
Cramond Real Estate Company Limited
Thomas Menzies (Builders) Limited
.
Concrete Products (Kirkcaldy) Limited
C. & W. Assets Limited .
.
Edinburgh Industrial Estates Limited .
.
SUBSIDIARY
McGowan & Co. (Contractors) Limited
Cramond Real Estate Company Limited
Thomas Menzies (Builders) Limited
.
Concrete Products (Kirkcaldy) Limited
.
C. & W. Assets Limited .
Edinburgh Industrial Estates Limited .
.
2013
£000
2012
£000
Sale of goods
and services
137
–
78
39
710
–
112
–
79
43
954
–
2013
£000
2012
£000
Purchase of goods
and services
1,615
–
50
39
–
725
892
–
20
19
–
–
Amounts owed
by Subsidiaries
Amounts owed
to Subsidiaries
–
–
–
–
2,250
–
–
–
–
–
3,358
–
90
–
4
2
183
–
1
4
– –
–
–
.
.
.
.
.
.
.
.
.
.
.
.
The amounts outstanding are unsecured and will be settled for cash. No expense has been recognised in
the year for bad or doubtful debts in respect of the amounts owed by Subsidiaries.
(b) JOINT VENTURE COMPANIES
Transactions between the Company and its Joint Ventures were as follows:
Prestonfield Development Company Limited – construction costs invoiced in the year to Prestonfield
Development Company Limited amounted to £4,000 (2012, £nil). During the year the Company was
repaid £200,000 (2012, £200,000) of the loan due from the Joint Venture company. As at 31st July 2013
the loan outstanding due from Prestonfield Development Company Limited amounted to £2,575,000
(2012, £2,775,000).
Northrigg Limited – during the year there were no transactions with this company. As at 31st July 2013
the loan outstanding due from Northrigg Limited amounted to £176,000 (2012, £176,000).
Duff Street Limited – during the year the Company received interest from the Joint Venture company
amounting to £6,000 (2012, £6,000) on the loan to Duff Street Limited. As at 31st July 2013, £3,000
of this interest remained outstanding (2012, £3,000). Construction costs invoiced in the year to Duff
Street Limited amounted to £1,000 (2012, £1,000). During the year the Company was repaid £nil (2012,
£180,000) of the loan due from the Joint Venture company. As at 31st July 2013 the loan outstanding
due from Duff Street Limited amounted to £920,000 (2012, £920,000).
Invertiel Developments Limited – during the year the Company was repaid £130,000 (2012, £nil) and
advanced £10,000 (2012, £10,000) of the loan due from the Joint Venture company. As at 31st July 2013
the loan outstanding due from Invertiel Developments Limited amounted to £nil (2012, £120,000). The
Company received a dividend of £2,115,000 (2012, £nil) in the year from the Joint Venture Company.
The amounts outstanding are unsecured and will be settled for cash. No expense has been recognised in
the year for bad or doubtful debts in respect of the amounts owed by Joint Ventures.
55
J. Smart & Co. (Contractors) PLC and Subsidiary Companies
NOTES TO THE ACCOUNTS (continued)
31st JULY 2013
30.
RELATED PARTY TRANSACTIONS (continued)
(c) DIRECTORS’ INTEREST IN CONTRACTS
D. W. Smart and J. R. Smart, throughout the year had material beneficial interests in Plean Precast
Limited, Sterling Precast Limited and The Roofing and Building Supply Co. Limited, which have
interests in continuing contracts for the purchase of materials and services from and for the sale of
materials and services to the Group.
During the year to 31st July 2013 the Group purchased materials amounting to £393,000
(2012, £653,000) from these companies and sold materials and services amounting to £75,000 (2012,
£271,000) to these companies.
During the year the Group sold property to The Roofing and Building Supply Co. Limited for £1,000,000
and also purchased from the same company property costing £180,000.
All transactions were at normal commercial rates.
As at 31st July 2013 the Group owed these companies £19,000 (2012, £54,000) and was owed £31,000
(2012, £157,000).
(d) DIRECTORS’ REMUNERATION
The remuneration of the Directors, who are the only key management of the Company, is set out in
note 4 to the accounts with further information contained in the audited part of the Report on Directors’
Remuneration.
(e) DIRECTORS’ DIVIDENDS
During the year the Directors received dividends from the Company as follows:
2013
£000
34
4
344
3
109
J. M. Smart
L. E. Glenday
D. W. Smart
A. H. Ross
J. R. Smart
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2012
£000
34
6
339
1
–
56