Company registration number 01069492 (England and Wales)
PADDINGTON CONSTRUCTION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
PADDINGTON CONSTRUCTION LIMITED
COMPANY INFORMATION
Directors
P J Byrne
C J Byrne
Company number
01069492
Registered office
6 Wharf Studios
28 Wharf Road
London
England
N1 7GR
Auditor
MHA MacIntyre Hudson
2 London Wall Place
London
EC2Y 5AU
PADDINGTON CONSTRUCTION LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
PADDINGTON CONSTRUCTION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 1 -
The directors present the strategic report for the year ended 30 September 2022.
Nature of the business
The principal activity of the
C
ompany continued to be that of
the design, manufacture and supply of bespoke joinery, stonemasonry and metalwork used in the construction of residential and commercial developments in the UK.
The primary customer of the Company is Ardmore Construction Limited, a sister company in the Ardmore Group. Ardmore Construction Limited has a geographic focus of London and the South East with developments ranging from high end luxury apartments and hotel refurbishments, to mixed residential schemes for private housebuilders and housing associations. The nature of the Company's business therefore closely matches this profile.
Performance
As anticipated, financial year 2022 was a record year for turnover and results, with the performance of the Company improving compared to prior years with turnover of £35.9m (2021 - £28.0m) generating a gross profit of £5.4m (2021 - £3.4m) and a profit before tax of £3.1m (2021 - £1.7m).
The Company continues to invest in its facilities, people and operations. Tangible fixed asset additions totalled £411k in the year.
2021 saw the recognition of a deferred tax asset relating to brought forward tax losses. As anticipated, in 2021 this deferred tax asset has largely been utilised by the profits generated in the year.
Cash and working capital
The working capital position of the Company continues to improve year-on-year, with net current assets totalling £3.2m at the balance sheet date (2021 - £3.1m). As anticipated, stock reduced in the year as it was released to customers and realised in sales and receivables.
Cash continued to improve, with £2.5m (2021 - £1.1m) at the balance sheet date.
Net assets and reserves
Following the trend set in previous years, the profit generated allowed a dividend to be paid to the parent company, with interim dividends of £2.5m (2021 - £1.0m) in the period. After this, net assets was still mainained at £4.3m (2021 - £4.3m).
PADDINGTON CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 2 -
Principal risks and uncertainties
The Company continues to operate within specific policies, agreed by the board, to control and monitor risks within the Company. The primary areas of risk are as follows:
Operational risk
The Company recognises the risks involved in the various stages of project completion. Budgets are prepared for all projects prior to commencement, with detailed planning performed in advance to support the operations on site. All projects are closely monitored via monthly Cost Valuation Reporting mechanisms with action taken where any variations are identified.
Supply chain
The Company's supply chain is a key element of business operations. The risk of supply chain failure continues to increase and can have a significant impact on projects. The Company manages this risk wherever possible with proactive engagement of the supply chain, and robust monitoring, including a newly introduced PQQ (pre-qualification questionnaire) and due diligence process, and contingency plans where appropriate.
Political and economic risks
The Company follows industry best practice in its operations and on its sites. Any changes to the legislative environment may impact the Company. The Company is also impacted by UK direct and indirect tax changes, together with inflation and government actions to manage or mitigate this. The Company manages these risks wherever possible through active management an engagement with stakeholders, reforecasting and monitoring for changes in the wider environment. .
Financial risk management objectives and policies
The Company is exposed to a variety of financial risks including liquidity and credit risk. The Company has in place a risk management programme that seeks to limit any adverse effect on the financial performance of the Company.
Credit risk
The Company's financial assets are debtors and cash. The primary debtors are due from fellow group companies.
Liquidity risk
The Company maintains appropriate funding levels relative to the level of current and future requirements arising from the Company's strategy. Cash flow forecasts are prepared and are closely monitored. Having performed detailed analysis, we consider the degree of headroom within our current facilities to be adequate.
Market risk
The Company is aware of the risks inherent in the current market place which stem from wider economic issues facing the global economy. As such we continue to work closely with fellow group companes to understand anticipated demand and prepare twelve month flexed forecasts focussing on the implications for liquidity and profitability. These are closely monitored by the board with remedial action taken as and when required.
Outlook
With the challenging economic environment expected to continue into 2023 management have reset expectations. Turnover remains strong with the continued performance of the Company's key customer, Ardmore Construction, however pressure continues on margins and this is set to continue. The Company is well positioned to weather the headwinds, with a strong balance sheet and project pipeline.
This report was approved by the board on 22 December 2022 and signed on its behalf.
PADDINGTON CONSTRUCTION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 3 -
P J Byrne
Director
22 December 2022
PADDINGTON CONSTRUCTION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 4 -
The directors present their annual report and financial statements for the year ended 30 September 2022.
Principal activities
The principal activity of the
C
ompany continued to be that of
the design, manufacture and supply of bespoke joinery, stonemasonry and metalwork.
Results and dividends
The results for the year are set out on page 9.
See the Strategic Report which covers the business update, including a business review and outlook, together with a description of the Company's financial risk management objectives and policies.
Ordinary dividends were paid amounting to £2,500,000 (2021 - £1,000,000). The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P J Byrne
C J Byrne
M Byrne
(Resigned 22 February 2022)
The above directors are covered by the Ardmore Group's directors and officer's indemnity insurance.
Auditor
MHA MacIntyre Hudson were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
This report was approved by the board on 22 December 2022 and signed on its behalf.
On behalf of the board
P J Byrne
Director
22 December 2022
PADDINGTON CONSTRUCTION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 5 -
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.
PADDINGTON CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PADDINGTON CONSTRUCTION LIMITED
- 6 -
Opinion
We have audited the financial statements of Paddington Construction Limited (the 'company') for the year ended 30 September 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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 Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 September 2022 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.
PADDINGTON CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PADDINGTON CONSTRUCTION LIMITED
- 7 -
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 or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, 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
.
-
Enquiry of management, those charged with governance and the entity’s in-house legal team around actual and potential litigation and claims;
-
Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations;
-
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
-
Reviewing minutes of meetings of those charged with governance; and
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
PADDINGTON CONSTRUCTION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PADDINGTON CONSTRUCTION LIMITED
- 8 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Atul Kariya FCCA
Senior Statutory Auditor
22 December 2022
For and on behalf of MHA MacIntyre Hudson
Statutory Auditor
London
PADDINGTON CONSTRUCTION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
3
35,934,585
28,029,013
Cost of sales
(30,556,854)
(24,637,000)
Gross profit
5,377,731
3,392,013
Administrative expenses
(2,408,131)
(1,673,108)
Other operating income
112,422
Operating profit
4
3,082,022
1,718,905
Interest payable and similar expenses
7
(3,467)
(2,848)
Profit before taxation
3,078,555
1,716,057
Tax on profit
8
(656,160)
726,243
Profit for the financial year
2,422,395
2,442,300
The income statement has been prepared on the basis that all operations are continuing operations.
There was no other comprehensive income for the year (2021
-
none)
.
The notes on pages 12 to 21 form part of these financial statements.
PADDINGTON CONSTRUCTION LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
30 September 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,397,032
1,217,455
Current assets
Stocks
11
4,138,247
5,830,932
Debtors
12
1,032,991
2,836,060
Cash at bank and in hand
2,486,487
1,078,899
7,657,725
9,745,891
Creditors: amounts falling due within one year
13
(4,464,564)
(6,627,059)
Net current assets
3,193,161
3,118,832
Total assets less current liabilities
4,590,193
4,336,287
Creditors: amounts falling due after more than one year
14
(331,511)
Net assets
4,258,682
4,336,287
Capital and reserves
Called up share capital
16
150,000
150,000
Profit and loss reserves
4,108,682
4,186,287
Total equity
4,258,682
4,336,287
The notes on pages 12 to 21 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 22 December 2022 and are signed on its behalf by:
P J Byrne
Director
Company Registration No. 01069492
PADDINGTON CONSTRUCTION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2020
150,000
2,743,987
2,893,987
Year ended 30 September 2021:
Profit and total comprehensive income for the year
-
2,442,300
2,442,300
Dividends
9
-
(1,000,000)
(1,000,000)
Balance at 30 September 2021
150,000
4,186,287
4,336,287
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
2,422,395
2,422,395
Dividends
9
-
(2,500,000)
(2,500,000)
Balance at 30 September 2022
150,000
4,108,682
4,258,682
The notes on pages 12 to 21 form part of these financial statements.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 12 -
1
Accounting policies
Company information
Paddington Construction Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
6 Wharf Studios, 28 Wharf Road, London, England, N1 7GR.
The principal activity is detailed in the Directors' report.
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. The principal accounting policies adopted are set out below.
Reduced disclosure exemptions
This Company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this
C
ompany,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he Company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the Company are consolidated in the financial statements of Ardmore Group Limited. These consolidated financial statements are available from Companies House.
The company has taken advantage of the exemption available in Financial Reporting Standard 102 and has not disclosed transactions and balances with entities that form part of the group headed by Ardmore Group Limited.
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
represents amounts invoiced for building services provided, and is recognised once the goods or services have been delivered. The building services include the design, manufacture and supply of bespoke joinery, stonemasonry and architectural metalwork.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
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
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
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.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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.
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.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, 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.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
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.
1.10
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
income statement
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
income statement
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.11
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.
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.
1.13
The Company's capital and reserves comprise the following categories:
-
Share capital - represents the nominal value of the shares issued.
-
Retained earnings - represents cumulative profits or losses, net of dividends paid and other adjustments.
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Stocks
Determining the NRV of individual stock items and projects requires estimation by management. Key estimates include the costs to complete and to sell raw materials and work in progress, and the expected use and sale of materials. Management consider past practice, current projects and expected future performance.
3
Turnover
All turnover relates to the supply of manufactured furniture and equipment used in construction, and arose within the United Kingdom.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 17 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
20,000
15,875
Depreciation of owned tangible fixed assets
216,077
170,241
Operating lease charges
858,840
541,861
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
2
3
Production and technical
38
38
Administrative
24
1
Total
64
42
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,651,168
2,143,175
Social security costs
5,313
9,236
2,656,481
2,152,411
6
Directors' remuneration
No remuneration was paid to the directors.
The directors are remunerated by a fellow group company.
7
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
3,467
2,848
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 18 -
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
782
Deferred tax
Origination and reversal of timing differences
772,681
Previously unrecognised tax loss, tax credit or timing difference
(726,243)
Adjustment in respect of prior periods
(117,303)
Total deferred tax
655,378
(726,243)
Total tax charge/(credit)
656,160
(726,243)
The actual charge/(credit) 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:
2022
2021
£
£
Profit before taxation
3,078,555
1,716,057
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
584,925
326,051
Tax effect of expenses that are not deductible in determining taxable profit
3,095
Tax effect of utilisation of tax losses not previously recognised
(326,051)
Adjustments in respect of prior years
(117,303)
Recognition of unrecognised deferred tax asset
(726,243)
Remeasurement of deferred tax for changes in tax rate
185,443
Taxation charge/(credit) for the year
656,160
(726,243)
9
Dividends
2022
2021
£
£
Interim paid
2,500,000
1,000,000
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 19 -
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 October 2021
1,887,758
201,513
2,089,271
Additions
368,123
43,285
411,408
Disposals
(59,866)
(59,866)
At 30 September 2022
2,196,015
244,798
2,440,813
Depreciation
At 1 October 2021
795,471
76,345
871,816
Depreciation charged in the year
193,732
22,345
216,077
Eliminated in respect of disposals
(44,112)
(44,112)
At 30 September 2022
945,091
98,690
1,043,781
Carrying amount
At 30 September 2022
1,250,924
146,108
1,397,032
At 30 September 2021
1,092,287
125,168
1,217,455
11
Stocks
2022
2021
£
£
Raw materials and consumables
2,669,783
2,677,003
Work in progress
912,764
2,250,667
Finished goods and goods for resale
555,700
903,262
4,138,247
5,830,932
Stocks are shown net of provisions totaling £Nil (2021 - £Nil).
There is no material difference between the replacement cost of stocks and the amounts stated above.
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
39,402
Amounts owed by group undertakings
299,278
409,098
Other debtors
485,765
1,575,890
Prepayments and accrued income
137,681
124,829
Deferred tax asset (note 15)
70,865
726,243
1,032,991
2,836,060
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 20 -
13
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,139,976
3,416,314
Amounts owed to group undertakings
900,704
Taxation and social security
160,970
Other creditors
23,630
300,492
Accruals and deferred income
3,300,958
1,848,579
4,464,564
6,627,059
Included in other creditors is an amount owed to related parties of £22,836 (2021 £22,836) which relates to an amount due from Ardmore Contracting (Ireland) Limited, which is related due to common control of the directors. This balance is unsecured, interest free and repayable on demand.
14
Creditors: amounts falling due after more than one year
2022
2021
£
£
Trade creditors
331,511
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
(94,909)
-
Tax losses
165,774
726,243
70,865
726,243
2022
Movements in the year:
£
Asset at 1 October 2021
(726,243)
Charge to profit or loss
655,378
Asset at 30 September 2022
(70,865)
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
PADDINGTON CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 21 -
16
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
150,000
150,000
150,000
150,000
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:
2022
2021
£
£
Within one year
858,000
473,000
18
Guarantees
The Company has entered into an unlimited cross guarantee in respect of an overdraft facility, secured over all the assets of the Company, and fellow group companies Ardmore Construction Limited, and British Contractors Plant Limited. The net indebtedness of the above companies in respect of the overdraft facility at the balance sheet date was Nil (2021 - Nil).
C J Byrne and P J Byrne have together provided personal guarantees in respect of the overdraft facility to the sum of £500,000. The life assurance policy for C J Byrne held by Ardmore Construction Limited and the policy for P J Byrne held by the Company have been assigned to the lender as part of the overdraft guarantee.
19
Ultimate controlling party
The Company's immediate and ultimate parent company is Ardmore Group Limited, incorporated in England and Wales.
Ultimate control of the Company rests with C J Byrne and P J Byrne.
The largest and smallest group in which the results of the Company are consolidated is that headed by Ardmore Group Limited. The consolidated accounts of Ardmore Group Limited are available to the public and may be obtained from Companies House.
2022-09-30
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M Byrne
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