Company Registration No. 00451880 (England and Wales)
FOREST GATE CONSTRUCTION CO LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
FOREST GATE CONSTRUCTION CO LTD
COMPANY INFORMATION
Directors
T S Hosking
P R Reeves
Company number
00451880
Registered office
Sidney House
Christy Close
Southfields
Basildon
Essex
SS15 6TN
Auditor
Myers Clark
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
Business address
Sidney House
Christy Close
Southfields
Basildon
Essex
SS15 6TN
Bankers
National Westminster Bank Plc
South Essex Commercial Office
Ground Floor
Thanet Grange
Westcliff-on-Sea
Essex
SS0 0EJ
FOREST GATE CONSTRUCTION CO LTD
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
FOREST GATE CONSTRUCTION CO LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 1 -
The directors present the strategic report for the year ended 30 September 2021.
Fair review of the business
The principal activity of the company was that of building contractors. The Directors are satisfied with the results for the year and the company's financial position at the year end, and are confident about the company's long term prospects. Turnover has increased on the previous year, and this is mainly due to the company's successful marketing aim to apply greater focus to the healthcare sector. Although there was a drop in the GP percentage, the company has maintained a very strong margin as in previous years.
Principal risks and uncertainties
The Directors considers the key performance indicators for Forest Gate Construction to be tenders converted into secured contracts, gross margin and profit before tax. The company has derived a large proportion of its turnover in previous years via public sector projects. This has resulted in the fluctuation of tenders received due to government fiscal pressures. The Directors have aimed to seek a larger client base within the commercial and private sectors to reduce any short-term reduction in tenders in the time of recession. This is proving to be positive.
Development and performance
The volume of tenders submitted throughout the period decreased on the previous period although the percentage of tenders secured remained similar at an approximate conversion rate of 1:4. Those tenders secured into firm orders proved to be profitable and contracts have been managed in an efficient manner.
Key performance indicators
Cash reserves have increased and the Directors place great important on having sufficient surplus funds to provide working capital for the Company's business. These funds are placed in non-risk accounts bearing interest in order that the Company continues to pay creditors in a timely fashion. The company generates consistent cash inflows from operations and has liabilities that are known and can be discharged without recourse to external funding.
Other performance indicators
The Directors are pleased that the strong balance sheet has been maintained. Cash reserves continue to be healthy and this enables the Director's to monitor performance.
T S Hosking
Director
16 December 2021
FOREST GATE CONSTRUCTION CO LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2021.
Principal activities
The principal activity of the company continued to be that of building contractors.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
T S Hosking
P R Reeves
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,095,150. The directors do not recommend payment of a final dividend.
Preference dividends were paid amounting to £150,000.
Future developments
The directors recognise the increasing importance of the effect that the company and its employees have upon the environment and the demands placed upon contractors by local authorities and clients in that area. The company follows the Environmental Management Scheme and achieved the ISO14001 accreditation again this year. This should continue to enable the company to widen its client base.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
T S Hosking
Director
16 December 2021
FOREST GATE CONSTRUCTION CO LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
FOREST GATE CONSTRUCTION CO LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FOREST GATE CONSTRUCTION CO LTD
- 4 -
Opinion
We have audited the financial statements of Forest Gate Construction Co Ltd (the 'company') for the year ended 30 September 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 September 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
FOREST GATE CONSTRUCTION CO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOREST GATE CONSTRUCTION CO LTD
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
FOREST GATE CONSTRUCTION CO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOREST GATE CONSTRUCTION CO LTD
- 6 -
Identifying and assessing potential risks related to irregularities
In identified and assessing risks of material misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, we considered the following;
-
The nature of the industry and sector, control environment and business performance including the design of the remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
-
any matters we identified having obtained and review the company’s documentation of their policies and procedures relating to;
-
identifying, evaluating and complying with laws and regulation and whether they were aware of any instances of non-compliance;
-
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
-
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
-
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included the Employment law and the Health and Safety Act.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
FOREST GATE CONSTRUCTION CO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOREST GATE CONSTRUCTION CO LTD
- 7 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Ian Meaburn (Senior Statutory Auditor)
For and on behalf of Myers Clark
13 January 2022
Chartered Accountants
Statutory Auditor
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
FOREST GATE CONSTRUCTION CO LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
14,309,874
11,964,453
Cost of sales
(11,532,801)
(9,362,281)
Gross profit
2,777,073
2,602,172
Administrative expenses
(1,216,303)
(1,045,015)
Other operating income
57,601
95,140
Operating profit
4
1,618,371
1,652,297
Interest receivable and similar income
7
19,699
32,126
Profit before taxation
1,638,070
1,684,423
Tax on profit
8
(313,064)
(320,915)
Profit for the financial year
1,325,006
1,363,508
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FOREST GATE CONSTRUCTION CO LTD
BALANCE SHEET
AS AT
30 SEPTEMBER 2021
30 September 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
10
149,239
115,354
Current assets
Stocks
11
910,475
844,510
Debtors
12
1,485,475
600,997
Cash at bank and in hand
4,171,706
4,704,816
6,567,656
6,150,323
Creditors: amounts falling due within one year
13
(4,113,100)
(3,751,479)
Net current assets
2,454,556
2,398,844
Total assets less current liabilities
2,603,795
2,514,198
Provisions for liabilities
Deferred tax liability
14
13,700
3,959
(13,700)
(3,959)
Net assets
2,590,095
2,510,239
Capital and reserves
Called up share capital
16
46,001
46,001
Distributable profit and loss reserves
2,544,094
2,464,238
Total equity
2,590,095
2,510,239
The financial statements were approved by the board of directors and authorised for issue on 16 December 2021 and are signed on its behalf by:
T S Hosking
Director
Company Registration No. 00451880
FOREST GATE CONSTRUCTION CO LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2019
46,001
2,352,730
2,398,731
Year ended 30 September 2020:
Profit and total comprehensive income for the year
-
1,363,508
1,363,508
Dividends
9
-
(1,252,000)
(1,252,000)
Balance at 30 September 2020
46,001
2,464,238
2,510,239
Year ended 30 September 2021:
Profit and total comprehensive income for the year
-
1,325,006
1,325,006
Dividends
9
-
(1,245,150)
(1,245,150)
Balance at 30 September 2021
46,001
2,544,094
2,590,095
FOREST GATE CONSTRUCTION CO LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 11 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
1,080,268
2,758,473
Income taxes paid
(323,439)
(222,769)
Net cash inflow from operating activities
756,829
2,535,704
Investing activities
Purchase of tangible fixed assets
(75,488)
(31,804)
Proceeds on disposal of tangible fixed assets
11,000
1
Receipts arising from loans made
40,130
Interest received
19,699
32,126
Net cash (used in)/generated from investing activities
(44,789)
40,453
Financing activities
Dividends paid
(1,245,150)
(1,252,000)
Net cash used in financing activities
(1,245,150)
(1,252,000)
Net (decrease)/increase in cash and cash equivalents
(533,110)
1,324,157
Cash and cash equivalents at beginning of year
4,704,816
3,380,659
Cash and cash equivalents at end of year
4,171,706
4,704,816
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 12 -
1
Accounting policies
Company information
Forest Gate Construction Co Ltd is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Sidney House, Christy Close, Southfields, Basildon, Essex, SS15 6TN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts
are
recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably
.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
15% of net book value
Motor vehicles
25% of net book value
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the
stocks
to their present location and condition.
1.6
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 13 -
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’
of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.11
Retirement benefits
The pension costs charged in the financial statements represent the contribution payable by the company during the year.
1.12
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.13
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Sales
14,309,874
11,964,453
2021
2020
£
£
Other significant revenue
Interest income
19,699
32,126
Grants received
3,813
37,087
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 16 -
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(3,813)
(37,087)
Fees payable to the company's auditor for the audit of the company's financial statements
12,775
11,880
Depreciation of owned tangible fixed assets
32,353
32,757
(Profit)/loss on disposal of tangible fixed assets
(1,750)
2,840
Operating lease charges
50,004
50,004
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
25
24
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,295,001
1,192,275
Social security costs
170,320
148,242
Pension costs
44,102
36,160
1,509,423
1,376,677
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
210,540
154,730
Company pension contributions to defined contribution schemes
15,000
10,000
225,540
164,730
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to
1
(2020 - 1).
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
6
Directors' remuneration
(Continued)
- 17 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
201,730
146,140
Company pension contributions to defined contribution schemes
15,000
10,000
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
19,122
31,839
Other interest income
577
287
Total income
19,699
32,126
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
19,122
31,839
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
303,324
323,441
Deferred tax
Origination and reversal of timing differences
9,740
(2,526)
Total tax charge
313,064
320,915
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
8
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
1,638,070
1,684,423
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
311,233
320,040
Tax effect of expenses that are not deductible in determining taxable profit
1,918
1,029
Tax effect of income not taxable in determining taxable profit
(333)
Permanent capital allowances in excess of depreciation
(9,494)
2,372
Deferred tax
9,740
(2,526)
Taxation charge for the year
313,064
320,915
9
Dividends
2021
2020
£
£
Interim paid
1,245,150
1,252,000
10
Tangible fixed assets
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
Cost
At 1 October 2020
70,709
176,146
246,855
Additions
3,400
72,088
75,488
Disposals
(18,150)
(31,470)
(49,620)
At 30 September 2021
55,959
216,764
272,723
Depreciation and impairment
At 1 October 2020
51,506
79,995
131,501
Depreciation charged in the year
3,066
29,287
32,353
Eliminated in respect of disposals
(16,373)
(23,997)
(40,370)
At 30 September 2021
38,199
85,285
123,484
Carrying amount
At 30 September 2021
17,760
131,479
149,239
At 30 September 2020
19,203
96,151
115,354
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 19 -
11
Stocks
2021
2020
£
£
Finished goods and goods for resale
910,475
844,510
12
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
1,428,473
543,795
Other debtors
2,032
2,000
Prepayments and accrued income
54,970
55,202
1,485,475
600,997
13
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
1,297,066
1,170,628
Corporation tax
303,324
323,440
Other taxation and social security
511,232
385,069
Other creditors
650,767
662,570
Accruals and deferred income
1,350,711
1,209,772
4,113,100
3,751,479
14
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
13,700
3,959
2021
Movements in the year:
£
Liability at 1 October 2020
3,959
Charge to profit or loss
9,741
Liability at 30 September 2021
13,700
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
14
Deferred taxation
(Continued)
- 20 -
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
15
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
44,102
36,160
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of of £1 each
46,000
46,000
46,000
46,000
2021
2020
2021
2020
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference share of of £1 each
1
1
1
1
Preference shares classified as equity
1
1
Total equity share capital
46,001
46,001
The Ordinary Shares are irredeemable and have full rights in the company with regards to voting, dividend and capital distribution. A dividend may be declared on this class of shares to the exclusion of the other classes but where a dividend is declared on more than one class of shares the dividend for each class may be fixed individually.
The Preference Shares are irredeemable and do not entitle the holders thereof to receive notice of, attend or vote at general meetings, or vote on a written resolution, of the company. The Preference Shares do not entitle the holders thereof to participate in any capital distribution other than to reclaim the capital paid up on such shares. A dividend may be declared on this class of share to the exclusion of other classes but where a dividend is declared on more than one class of share the dividend for each class may be fixed individually.
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 21 -
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
50,000
50,000
Between two and five years
70,833
120,833
120,833
170,833
Lessor
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2021
2020
£
£
Within one year
40,000
40,000
Between two and five years
86,666
126,667
126,666
166,667
18
Related party transactions
Remuneration of key management personnel
Other than the directors there are no other members of key management.
Other information
R
ent of
£50,004 (20
20
:
£50,004
)
was paid to a company under the same control as Forest Gate Construction Company Ltd and has been charged to the P&L.
The company owes the directors £
430
,4
48 (2020 - £600,498)
at the year ending 30 September 202
1
.
These loans are interest free and are repayable on demand and therefore classed as a creditor due within one year.
19
Controlling party
The ultimate controlling party is T S Hosking who, together with his wife, holds 100% of the issued share capital of the company.
FOREST GATE CONSTRUCTION CO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2021
- 22 -
20
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
1,325,006
1,363,508
Adjustments for:
Taxation charged
313,064
320,915
Investment income
(19,699)
(32,126)
(Gain)/loss on disposal of tangible fixed assets
(1,750)
2,840
Depreciation and impairment of tangible fixed assets
32,353
32,757
Movements in working capital:
(Increase)/decrease in stocks
(65,965)
547,635
(Increase)/decrease in debtors
(884,478)
162,510
Increase in creditors
381,737
360,434
Cash generated from operations
1,080,268
2,758,473
2021-09-30
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