Company registration number 02770746 (England and Wales)
HIGHADMIT PROJECTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
HIGHADMIT PROJECTS LIMITED
COMPANY INFORMATION
Directors
Mr M Tuchli
Mrs M H Tuchli
Mr N Tuchli
Mr D Wells
Mr M Lewis
Secretary
Mrs M H Tuchli
Company number
02770746
Registered office
The Old Courthouse
Heol Y Gyfraith
Talbot Green
Pontyclun
CF72 8AJ
Auditor
UHY Hacker Young
Lanyon House
Mission Court
Newport
South Wales
United Kingdom
NP20 2DW
HIGHADMIT PROJECTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
HIGHADMIT PROJECTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
There ha
s
not been any changes in the principal activities of the company in the year under review.
The
directors
expect revenues to continue to grow and results to improve.
As shown in the profit and loss account
,
the
company
's revenue increased by
67
% compared with 20
20, to
£
17,584,001 from £10,542,421
.
The
operating
profit
was £
882,035
for the year to 3
1 December
20
21
compared to
£500,485
for the year to 3
1 December
20
20
.
In the current year there has been an exceptional bad debt write off totalling £800,092. See note 5 for more detail.
At 3
1
December
20
21
the
company
had net
current assets of £2,873,724
(20
20
: £
2,553,651
)
and net assets of £3,203,081 (2020: £2,826,577) as shown on the balance sheet.
The business has grown through the employment of additional key personnel in multiple departments, to achieve this we have invested heavily in our new headquarters in Talbot green. We have developed an excellent reputation within the industry, this is reflected in the reoccurring work provided by our clients. Good relationships and mutual respect have been forged with many building services and consulting engineers, consultants and building services engineers. This has enabled us to secure contracts with new principle contractors in regions of the UK which previously we have not operated in. This period of significant growth has been achieved despite the impact of the pandemic, resulting in changes to our risk management and procurement strategies.
The company continues to develop our work force through its long standing apprenticeship scheme. In addition, as part of our continued professional development we have enrolled numerous employees on higher education at both University West of England and Bridgend College.
We have successfully delivered a number of prestigious project across multiple sectors, these include:
-
South Wales Police Headquarters
-
Gwent Police Headquarters
-
Marriot Hotel Sandy Park Exeter
-
Centre for Student living Cardiff
-
Swan Court London
-
Merthyr Bus Station
The company has managed to achieve an overall increase in profit, despite a significant loss on one of our largest projects. This was due to the main contractor becoming insolvent. This further highlights the strength and resolve of the business.
HIGHADMIT PROJECTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties
The
company
operates in a highly competitive market which is a continuing risk to the
company
and could result
in losing sales to its key competitors. The
company
manages this risk by focusing on quality of service.
The
company
's activities expose it to a number of financial risks including price risk, credit risk, cash flow risk
and liquidity risk. The
company
does not use derivative financial instruments for speculative purposes.
Cash flow risk
The company has no interest bearing assets and few interest bearing liabilities which minimises the uncertainty of cash flows.
Credit Risk
The
company'
s principal financial assets are cash, and trade and other receivables.
The
company
's credit risk is primarily attributed to its trade receivables. The amounts presented in the balance
sheet are net of allowances for doubtful receivables.
The
company
has no significant concentration of credit risk, with exposure spread over a large number of
counterparties and customers.
Liquidity risk
The company manages the liquidity risk by monitoring working capital and ensuring there are sufficient funds to meet payments.
Key performance indicators
The Board regards the key measures of operating effectiveness to be sales growth and margins. However, the performance of individual contracts is also regarded as a key indicator of performance. Each contract is assessed individually with a number of large contracts per year. The company is satisfied with the contract performance in the year with no real issues noted. The contracts largely ran to budget and on time which means that the company hit its targets and the customers were generally delighted.
Turnover increased in the year and is expected to increase again in 2022. The overall gross profit margin has increased during the year to 17.71% from 14.35% and a small increase in operating profit to 5.02% from 4.75%.
Mr N Tuchli
Director
26 May 2022
HIGHADMIT PROJECTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors present their report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company
in the
year
under review was
that of
electrical installation.
Results and dividends
The results for the year are set out on page 8, a fair review of business is set out in the strategic report on page 1.
Ordinary dividends were paid amounting to £346,962. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M Tuchli
Mrs M H Tuchli
Mr N Tuchli
Mr D Wells
Mr M Lewis
Auditor
UHY Hacker Young have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting.
Statement of directors' responsibilities
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.
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.
HIGHADMIT PROJECTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
Going concern
In response to the risks posed to the business by Covid-19, fortunately, we have been able to continue operating with minimal disruption and our order book remains strong. The business has taken a number of measures to ensure the safety of its staff and the security of its labour supply to ensure that it can continue to operate effectively through 2022 and beyond.
On behalf of the board
Mr N Tuchli
Director
26 May 2022
HIGHADMIT PROJECTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HIGHADMIT PROJECTS LIMITED
- 5 -
Opinion
We have audited the financial statements of Highadmit Projects Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, 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 Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 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.
HIGHADMIT PROJECTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHADMIT PROJECTS LIMITED
- 6 -
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:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
-
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
-
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;
-
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and ISO standards;
-
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
-
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
HIGHADMIT PROJECTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HIGHADMIT PROJECTS LIMITED
- 7 -
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
-
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
-
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
-
To address the risk of fraud through management bias and override of controls, we:
-
performed analytical procedures to identify any unusual or unexpected relationships;
-
tested journal entries to identify unusual transactions;
-
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
-
investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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.
Mr John Griffiths (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
26 May 2022
Chartered Accountants
Statutory Auditor
Newport
South Wales
United Kingdom
HIGHADMIT PROJECTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
17,584,001
10,542,421
Cost of sales
(14,469,727)
(9,030,046)
Gross profit
3,114,274
1,512,375
Administrative expenses (including £800,092 (2020 £nil) exceptional item, see note 5)
(2,232,239)
(1,071,588)
Other operating income
4
59,698
Operating profit
6
882,035
500,485
Interest receivable and similar income
9
5,160
237
Interest payable and similar expenses
10
(11,448)
(8,392)
Profit before taxation
875,747
492,330
Tax on profit
11
(152,261)
(90,842)
Profit for the financial year
723,486
401,488
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HIGHADMIT PROJECTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
£
£
Profit for the year
723,486
401,488
Other comprehensive income
-
-
Total comprehensive income for the year
723,486
401,488
HIGHADMIT PROJECTS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
13
507,278
486,703
Current assets
Stocks
14
12,443
12,010
Debtors
15
3,771,733
3,318,077
Cash at bank and in hand
1,092,525
1,107,703
4,876,701
4,437,790
Creditors: amounts falling due within one year
16
(2,002,977)
(1,884,139)
Net current assets
2,873,724
2,553,651
Total assets less current liabilities
3,381,002
3,040,354
Creditors: amounts falling due after more than one year
17
(121,241)
(177,283)
Provisions for liabilities
Deferred tax liability
20
56,680
36,514
(56,680)
(36,514)
Net assets
3,203,081
2,826,557
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
3,202,981
2,826,457
Total equity
3,203,081
2,826,557
The financial statements were approved by the board of directors and authorised for issue on 26 May 2022 and are signed on its behalf by:
Mr N Tuchli
Director
Company Registration No. 02770746
HIGHADMIT PROJECTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
100
2,743,439
2,743,539
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
401,488
401,488
Dividends
12
-
(318,470)
(318,470)
Balance at 31 December 2020
100
2,826,457
2,826,557
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
723,486
723,486
Dividends
12
-
(346,962)
(346,962)
Balance at 31 December 2021
100
3,202,981
3,203,081
HIGHADMIT PROJECTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
656,399
811,927
Interest paid
(11,448)
(8,392)
Income taxes paid
(69,371)
(89,742)
Net cash inflow from operating activities
575,580
713,793
Investing activities
Purchase of tangible fixed assets
(34,836)
(87,274)
Proceeds on disposal of tangible fixed assets
8,000
Receipts arising from loans made
(120,749)
(73,398)
Interest received
5,160
237
Net cash used in investing activities
(150,425)
(152,435)
Financing activities
Repayment of bank loans
(45,002)
(18,584)
Payment of finance leases obligations
(48,369)
(20,210)
Dividends paid
(346,962)
(318,470)
Net cash used in financing activities
(440,333)
(357,264)
Net (decrease)/increase in cash and cash equivalents
(15,178)
204,094
Cash and cash equivalents at beginning of year
1,107,703
903,609
Cash and cash equivalents at end of year
1,092,525
1,107,703
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
1
Accounting policies
Company information
Highadmit Projects Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
The Old Courthouse, Heol Y Gyfraith, Talbot Green, Pontyclun, CF72 8AJ.
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.
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 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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
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:
Land and buildings Freehold
2% straight line balance
Plant and machinery
15% reducing balance
Fixtures, fittings & equipment
15% reducing balance
Motor vehicles
15% reducing balance
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
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.
1.6
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 balance sheet 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.
Debtors and creditors with no stated interest rate and receivables or payables within one year are recorded at transaction price. Any loss arising from impairment are recognised in the profit and loss account in other administration expenses.
1.7
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.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.8
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.10
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.11
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.
1.12
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Revenue recognition
As noted in 1.3 above, revenue from contracts is recognised by reference to the stage of completion, this inevitably involves the directors making estimates about the total anticipated costs of contracts and the future costs; these estimates can have a significant effect on revenue recognition and profit.
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
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.
Recoverability of retention balances
Management regularly reviews retention balances and makes provision for balances that it believes will not be recovered. The assessment of retention recovery requires management's best estimate based on knowledge of the underlying contracts and past history of recovery.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Contract sales
17,584,001
10,542,421
2021
2020
£
£
Other revenue
Interest income
5,160
237
Grants received
59,698
4
Other operating income
Other operating income is made up of £nil (2020:
£
59,698)
of
grants received in relation to furlough income from the UK Government due to the Covid-19 pandemic.
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
5
Exceptional item
Included within admin expenses is a bad debt write off in relation to a significant contractor which has entered into administration. The amount written off totals £800,092.
6
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(59,698)
Fees payable to the company's auditor for the audit of the company's financial statements
8,250
8,250
Depreciation of owned tangible fixed assets
32,560
30,460
Depreciation of tangible fixed assets held under finance leases
16,425
5,016
Loss on disposal of tangible fixed assets
4,934
1,429
Operating lease charges
37,945
42,359
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Productive labour
56
54
Admin & management
12
12
Total
68
66
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,968,681
1,661,995
Social security costs
158,847
138,119
Pension costs
81,425
68,499
2,208,953
1,868,613
8
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
72,510
82,593
Company pension contributions to defined contribution schemes
21,928
22,089
94,438
104,682
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
9
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
37
4
Other interest income
5,123
233
Total income
5,160
237
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
37
4
10
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
2,436
3,836
Other finance costs:
Interest on finance leases and hire purchase contracts
9,012
4,556
11,448
8,392
11
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
131,830
69,106
Deferred tax
Origination and reversal of timing differences
8,900
21,736
Changes in tax rates
11,531
Total deferred tax
20,431
21,736
Total tax charge
152,261
90,842
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
11
Taxation
(Continued)
- 19 -
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
875,747
492,330
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
166,392
93,543
Tax effect of expenses that are not deductible in determining taxable profit
2,301
4,479
Research and development tax credit
(30,053)
Other permanent differences
(7,869)
Fixed asset differences
689
Depreciation in excess of capital allowances
(6,810)
Deferred tax rate change
11,531
Current deferred tax charge
8,900
Taxation charge for the year
152,261
90,842
12
Dividends
2021
2020
£
£
Final paid
346,962
318,470
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
13
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2021
225,420
27,154
88,689
367,584
708,847
Additions
74,494
74,494
Disposals
(20,510)
(20,510)
At 31 December 2021
225,420
27,154
88,689
421,568
762,831
Depreciation and impairment
At 1 January 2021
10,884
24,171
55,201
131,888
222,144
Depreciation charged in the year
4,508
447
5,023
39,007
48,985
Eliminated in respect of disposals
(15,576)
(15,576)
At 31 December 2021
15,392
24,618
60,224
155,319
255,553
Carrying amount
At 31 December 2021
210,028
2,536
28,465
266,249
507,278
At 31 December 2020
214,536
2,983
33,488
235,696
486,703
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
£
£
Motor vehicles
103,097
28,424
Freehold land and buildings with a carrying amount of
£170,496
(
2020 - £174,124)
have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
14
Stocks
2021
2020
£
£
Finished goods and goods for resale
12,443
12,010
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
15
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
6,232
225,026
Gross amounts owed by contract customers
2,625,835
2,166,338
Other debtors
1,049,654
911,676
Prepayments and accrued income
90,012
15,037
3,771,733
3,318,077
16
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
18
16,452
18,527
Obligations under finance leases
19
33,026
28,622
Trade creditors
983,237
708,339
Corporation tax
131,830
69,106
Other taxation and social security
48,496
181,314
Other creditors
689,786
845,023
Accruals and deferred income
100,150
33,208
2,002,977
1,884,139
17
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
18
55,355
98,282
Obligations under finance leases
19
65,886
79,001
121,241
177,283
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
2,809
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
18
Loans and overdrafts
2021
2020
£
£
Bank loans
71,807
116,809
Payable within one year
16,452
18,527
Payable after one year
55,355
98,282
The long-term loans are secured by fixed charges over the property held in the accounts.
19
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
33,026
28,622
In two to five years
65,886
79,001
98,912
107,623
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
56,680
36,514
2021
Movements in the year:
£
Liability at 1 January 2021
36,514
Charge to profit or loss
20,166
Liability at 31 December 2021
56,680
The deferred tax liability set out above is expected to reverse in future years and relates to accelerated capital allowances that are expected to mature within the same period.
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
21
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
81,425
68,499
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.
22
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
38
38
38
38
Ordinary B of £1 each
5
5
5
5
Ordinary C of £1 each
5
5
5
5
Ordinary D of £1 each
5
5
5
5
Ordinary E of £1 each
5
5
5
5
Ordinary F of £1 each
5
5
5
5
Ordinary G of £1 each
37
37
37
37
100
100
100
100
23
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
24,997
26,778
Between two and five years
11,610
27,778
36,607
54,556
24
Related party transactions
Included within other debtors is £832,600 (2020: £832,600) owed by MT Properties (South Wales) Limited, a company owned by Mekola Tuchli and Maria Tuchli.
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
25
Directors' transactions
Dividends totalling £246,880 (2020 - £318,470) were paid in the year in respect of shares held by the company's directors.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Directors loan account
2.50
-
274,024
5,123
(85,000)
194,147
Directors loan account
-
73,398
-
-
(73,398)
-
73,398
274,024
5,123
(158,398)
194,147
26
Ultimate controlling party
The company is ultimately controlled by Mekola Tuchli by virtue of his shareholding.
27
Comparative restatement
The Directors have reconsidered the classification of
cost of sales
in the
profit
and
loss
account and have restated the prior year comparative figures because they believe that this better represents the true nature of the
expenditure
.
28
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
723,486
401,488
Adjustments for:
Taxation charged
152,261
90,842
Finance costs
11,448
8,392
Investment income
(5,160)
(237)
Loss on disposal of tangible fixed assets
4,934
1,429
Depreciation and impairment of tangible fixed assets
48,985
35,476
Movements in working capital:
Increase in stocks
(433)
(510)
Increase in debtors
(332,907)
(446,526)
Increase in creditors
53,785
721,573
Cash generated from operations
656,399
811,927
HIGHADMIT PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
29
Analysis of changes in net funds
1 January 2021
Cash flows
New finance leases
31 December 2021
£
£
£
£
Cash at bank and in hand
1,107,703
(15,178)
-
1,092,525
Borrowings excluding overdrafts
(116,809)
45,002
-
(71,807)
Obligations under finance leases
(107,623)
48,369
(39,658)
(98,912)
883,271
78,193
(39,658)
921,806
2021-12-31
2021-01-01
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