Badger Building (E.Anglia) Ltd - Limited company accounts 18.2

REGISTERED NUMBER: 02407008 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 March 2019

for

Badger Building (E.Anglia) Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Consolidated Income Statement

6

Consolidated Other Comprehensive Income

7

Consolidated Balance Sheet

8

Company Balance Sheet

9

Consolidated Statement of Changes in Equity

10

Company Statement of Changes in Equity

11

Consolidated Cash Flow Statement

12

Notes to the Consolidated Cash Flow Statement

13

Notes to the Consolidated Financial Statements

14

DIRECTORS:

Mr S D George

Mr S Muirhead

Mr R J Lockhart

SECRETARY:

Mr S D George

REGISTERED OFFICE:

Stanley House

Stanley Street

Lowestoft

Suffolk

NR32 2DZ

REGISTERED NUMBER:

02407008 (England and Wales)

AUDITORS:

Cunninghams Statutory Auditors

Number Sixty One

Alexandra Road

Lowestoft

Suffolk

NR32 1PL

The directors present their strategic report of the company and the group for the year ended 31 March 2019.

REVIEW OF BUSINESS

The group has once again had a successful and profitable year in line with the directors' expectations.

The group continues to add to its large and diversified land bank which will provide development opportunities for many

years to come.

There a number of operational and financial challenges in the housing industry that the group has continued to face. In

particular, these have been:-

- The impact of requirements to provide social housing on each site that provide no contribution to margin;

- The lack of skilled labour in the job market;

- Shortages in certain material supplies and the associated cost pressures.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors are fully aware of the various risks and uncertainties that would affect the successful operation of the

group's business.

Their approach to strategic risk mitigation is to hold a significant and diversified land bank that will allow the group to

choose both the location and the types of properties it develops to best suit the prevailing economic conditions. These

can be affected by the condition of the housing market and the availability or affordable mortgage finance to buyers.

Other operating risks include, but are not limited to:-

- The availability of development land and the complexities involved in the processes to achieve planning consent;

- The ability to attract and retain the very best personnel, workforce, subcontractors and professional advisors;

- The adequacy and completeness of systems in place to mitigate the dangers inherent in the construction process;

- The unknown impact of Brexit and its potential effects on both the demand for housing and the supply of materials and

labour.

KEY PERFORMANCE INDICATORS

Turnover for the year shows a small decrease of 0.35%. Turnover can fluctuate year on year and is reliant on the

buoyancy of the housing market and the types of housing constructed in the year and their location.

The gross profit has decreased by 2.25% when compared with the previous year. However, the margin achieved of

39.3% shows a healthy increase on the 5 year average of 36.8%. This margin is influenced by the location of

developments as well as the mix of houses built.

The group completed on 68 plots this year, with a further 6 plots being retained within the group and held as housing

properties. This is in line with the total of 74 plots sold within the prior year.

ON BEHALF OF THE BOARD:

Mr S D George - Director

30 September 2019

The directors present their report with the financial statements of the company and the group for the year ended

31 March 2019.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2019.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2018 to the date of this report.

Mr S D George

Mr S Muirhead

Mr R J Lockhart

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group 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 the group and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as

a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are

aware of that information.

AUDITORS

The auditors, Cunninghams Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

Mr S D George - Director

30 September 2019

Opinion

We have audited the financial statements of Badger Building (E.Anglia) Ltd (the 'parent company') and its subsidiaries

(the 'group') for the year ended 31 March 2019 which comprise the Consolidated Income Statement, Consolidated Other

Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated

Cash Flow Statement, Notes to the Financial Statements, including a summary of 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 group's and of the parent company affairs as at 31 March 2019 and of the group's 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the group 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the

Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in

the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the

Directors.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 group's and the parent company's

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease

operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs

(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Benjamin Lynes (Senior Statutory Auditor)

for and on behalf of Cunninghams Statutory Auditors

Number Sixty One

Alexandra Road

Lowestoft

Suffolk

NR32 1PL

18 November 2019

TURNOVER

3

15,607,536

15,662,293

Cost of sales

9,474,127

9,154,770

GROSS PROFIT

6,133,409

6,507,523

Administrative expenses

1,578,719

5,086,161

4,554,690

1,421,362

Other operating income

58,119

61,559

OPERATING PROFIT

5

4,612,809

1,482,921

Interest receivable and similar income

23,666

9,659

4,636,475

1,492,580

Interest payable and similar expenses

6

781

-

PROFIT BEFORE TAXATION

4,635,694

1,492,580

Tax on profit

7

887,157

274,735

PROFIT FOR THE FINANCIAL YEAR

3,748,537

1,217,845

Profit attributable to:

Owners of the parent

3,748,537

1,217,845

PROFIT FOR THE YEAR

3,748,537

1,217,845

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,748,537

1,217,845

Total comprehensive income attributable to:

Owners of the parent

3,748,537

1,217,845

FIXED ASSETS

Intangible assets

9

10,559

21,118

Tangible assets

10

682,441

391,651

Investments

11

100

100

693,100

412,869

CURRENT ASSETS

Stocks

12

31,535,357

29,262,858

Debtors

13

423,369

584,021

Cash at bank and in hand

4,919,551

4,487,887

36,878,277

34,334,766

CREDITORS

Amounts falling due within one year

14

5,549,162

6,462,249

NET CURRENT ASSETS

31,329,115

27,872,517

TOTAL ASSETS LESS CURRENT LIABILITIES

32,022,215

28,285,386

PROVISIONS FOR LIABILITIES

17

40,220

51,928

NET ASSETS

31,981,995

28,233,458

CAPITAL AND RESERVES

Called up share capital

18

6,075

6,075

Share premium

19

2,735,843

2,735,843

Capital redemption reserve

19

168

168

Retained earnings

19

29,239,909

25,491,372

SHAREHOLDERS' FUNDS

31,981,995

28,233,458

The financial statements were approved by the Board of Directors on 30 September 2019 and were signed on its behalf

by:

Mr S D George - Director

FIXED ASSETS

Intangible assets

9

10,559

21,118

Tangible assets

10

310,900

391,651

Investments

11

200

100

321,659

412,869

CURRENT ASSETS

Stocks

12

31,535,357

29,262,858

Debtors

13

809,600

584,021

Cash at bank and in hand

4,917,895

4,487,887

37,262,852

34,334,766

CREDITORS

Amounts falling due within one year

14

5,547,478

6,462,249

NET CURRENT ASSETS

31,715,374

27,872,517

TOTAL ASSETS LESS CURRENT LIABILITIES

32,037,033

28,285,386

PROVISIONS FOR LIABILITIES

17

40,220

51,928

NET ASSETS

31,996,813

28,233,458

CAPITAL AND RESERVES

Called up share capital

18

6,075

6,075

Share premium

19

2,735,843

2,735,843

Capital redemption reserve

19

168

168

Retained earnings

19

29,254,727

25,491,372

SHAREHOLDERS' FUNDS

31,996,813

28,233,458

Company's profit for the financial year

3,763,355

1,217,845

The financial statements were approved by the Board of Directors on 30 September 2019 and were signed on its behalf by:

Mr S D George - Director

Mr S Muirhead - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 April 2017

6,075

24,273,527

2,735,843

168

27,015,613

Changes in equity

Total comprehensive income

-

1,217,845

-

-

1,217,845

Balance at 31 March 2018

6,075

25,491,372

2,735,843

168

28,233,458

Changes in equity

Total comprehensive income

-

3,748,537

-

-

3,748,537

Balance at 31 March 2019

6,075

29,239,909

2,735,843

168

31,981,995

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 April 2017

6,075

24,273,527

2,735,843

168

27,015,613

Changes in equity

Total comprehensive income

-

1,217,845

-

-

1,217,845

Balance at 31 March 2018

6,075

25,491,372

2,735,843

168

28,233,458

Changes in equity

Total comprehensive income

-

3,763,355

-

-

3,763,355

Balance at 31 March 2019

6,075

29,254,727

2,735,843

168

31,996,813

Cash flows from operating activities

Cash generated from operations

1

(212,268

)

3,263,381

Interest paid

(781

)

-

Tax paid

(283,202

)

(815,485

)

Net cash from operating activities

(496,251

)

2,447,896

Cash flows from investing activities

Purchase of tangible fixed assets

(396,906

)

(98,995

)

Sale of tangible fixed assets

5,925

11,041

Interest received

23,666

9,659

Net cash from investing activities

(367,315

)

(78,295

)

Cash flows from financing activities

Amount withdrawn by directors

1,447,959

(141,182

)

Net cash from financing activities

1,447,959

(141,182

)

Increase in cash and cash equivalents

584,393

2,228,419

Cash and cash equivalents at beginning of year

2

4,303,774

2,075,355

Cash and cash equivalents at end of year

2

4,888,167

4,303,774

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.3.19

31.3.18

£

£

Profit before taxation

4,635,694

1,492,580

Depreciation charges

106,532

104,540

Loss on disposal of fixed assets

4,218

3,955

Finance costs

781

-

Finance income

(23,666

)

(9,659

)

4,723,559

1,591,416

Increase in stocks

(2,272,499

)

(1,840,724

)

Decrease in trade and other debtors

160,652

47,416

(Decrease)/increase in trade and other creditors

(2,823,980

)

3,465,273

Cash generated from operations

(212,268

)

3,263,381

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 31 March 2019

31.3.19

1.4.18

£

£

Cash and cash equivalents

4,919,551

4,487,887

Bank overdrafts

(31,384

)

(184,113

)

4,888,167

4,303,774

Year ended 31 March 2018

31.3.18

1.4.17

£

£

Cash and cash equivalents

4,487,887

2,075,355

Bank overdrafts

(184,113

)

-

4,303,774

2,075,355

1.	STATUTORY INFORMATION

Badger Building (E. Anglia) Limited is a private company, limited by shares, registered in England and Wales.

The company's registered number and registered office address can be found on the Company Information page.

The functional and presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The

Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The

financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

The preparation of the financial statements involves, in certain areas, the use of accounting estimates and

management judgement. The key areas involving estimates and judgements are as follows:

- the valuation of work in progress, incorporating assessments of future income and costs.

- the appropriate method and rate of depreciation for tangible fixed assets.

- loans under shared equity schemes are valued according to the Nationwide House Price Index.

Revenue recognition

Revenue represents the total sales of legally completed properties, excluding part exchange property sales (which

are included within cost of sales). Revenue and profit on sales are recognised upon legal completion.

Sale of bare land are recognised upon legal completion.

Licence plates

The company have acquired a number of licence plate entitlements. The directors consider that the residual value

of the entitlements cannot be reliably estimated and so are depreciating the asset at a rate of 25% per annum on

the straight line basis.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful

life.

Plant and machinery

-

20% on reducing balance and 15% on cost

Fixtures and fittings

-

20% on reducing balance

Motor vehicles

-

20% on reducing balance

Office equipment

-

25% on cost

Depreciation of housing properties

The group separately identifies the major components which comprise its housing properties, and charges

depreciation, as so to write down the cost of each component to its estimated residual value, on a straight line

basis, over its estimated useful economic life.

The group depreciates the major components of its housing properties at the following annual rates:

Structure (including roofs)

- 2% on a straight line basis

Windows and doors

- 4% on a straight line basis

Internal fixtures and fittings

- 5% on a straight line basis

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks and work in progress

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance

for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in

bringing stocks to their present location and condition.

Stocks and work in progress are stated at the lower of cost and net realisable value. Work in progress comprises

direct materials, labour costs, sub-contractor costs, site overheads and associated professional charges.

Development land is included where contracts to purchase land have been completed prior to the year end.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income

Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. A defined contribution plan is a pension plan

under which the company pays fixed contributions into a separate entity. Once the contributions have been paid

the Company has no further further payment obligations.

The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not

paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the

company in an independently administrated fund.