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Registered number: 01305987
HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
COMPANY INFORMATION
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R I Longfellow (resigned 31 December 2019)
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R J Shaw (resigned 31 December 2018)
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C R N Forshaw (appointed 17 December 2018)
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P Walthall (appointed 9 January 2020)
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
CONTENTS
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Independent auditors' report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2019
The directors present the Strategic report of Harry Fairclough (Construction) Limited ("the Company") for the year ended 31 March 2019. In preparing this Strategic report, the directors have complied with section 414C of the Companies Act 2006.
On 21 February 2020 Administrators were appointed to the Company's immediate parent Harry Fairclough Limited ("HFL"). In conjunction the Company ceased to trade. Both the Company and HFL are insolvent. In due course the Company will enter a formal insolvency process.
This report was approved by the board on 11 March 2020 and signed on its behalf.
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C R N Forshaw
Director
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2019
The directors present their report and the financial statements for the year ended 31 March 2019.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgments 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 to 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.
The loss for the year, after taxation, amounted to £4,925k (2018 - profit £95k).
No dividends have been paid or recommended in the current or prior year.
The directors who served during the year were:
R I Longfellow (resigned 31 December 2019)
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R J Shaw (resigned 31 December 2018)
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C R N Forshaw (appointed 17 December 2018)
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For reasons outlined in the Strategic Report it is no longer appropriate to view the Company as a Going Concern.
The Company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force until 31 March 2020.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2019
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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On 21 February 2020 Administrators were appointed to the Company's immediate parent Harry Fairclough Limited ("HFL"). In conjunction the Company ceased to trade. Both companies are insolvent. As a result it is no longer appropriate to view the Company as a going concern.
This report was approved by the board on 11 March 2020 and signed on its behalf.
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C R N Forshaw
Director
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
We were engaged to audit the financial statements of Harry Fairclough (Construction) Limited (the 'Company') for the year ended 31 March 2019, which comprise the Income Statement, the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, 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).
We do not express an opinion on the accompanying financial statements of the Company. Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for disclaimer of opinion
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Due to the significant events that have taken place post year end as detailed in note 2, it has not been possible to obtain sufficient audit evidence to support the financial statements as at 31 March 2019.
On 21 February 2020 Administrators were appointed to the Company’s immediate parent Harry Fairclough Limited (“HFL”). In conjunction the Company ceased to trade. Both companies are insolvent. Also, note the Company's interconnectedness and trading relationships with HFL in Note 18. As a result it is not appropriate to compile these financial statements on a going concern basis.
The Company no longer has access to its IT systems and all employees have been made redundant. It is therefore unlikely that any audit evidence will be obtained to support the figures included in these accounts due to the restricted access to the accounting records. The accounts have been updated by the directors to be prepared on a basis other than that of going concern in light of recent events, however our audit testing on the original figures has not been finalised and it is not possible for us to audit the revised valuation of the assets. We have been unable to obtain all of the information and explanations required for the audit. We are therefore unable to confirm or verify any of the figures included in these accounts. As a result, we are unable to provide an opinion on these financial statements.
Opinion on other matters prescribed by the Companies Act 2006
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Because of the significance of the matter described in the basis for disclaimer of opinion
section of our report, we have been unable to form an opinion, whether based on the
work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report 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.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED (CONTINUED)
Matters on which we are required to report by exception
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Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatement in the Strategic report or the Directors' report.
Arising from the limitation of our work referred to above:
• We have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
• We were unable to determine whether adequate accounting records have been kept.
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:
∙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 directors' remuneration specified by law are not made.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement on page 2, 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.
Auditors' responsibilities for the audit of the financial statements
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Our responsibility is to conduct an audit of the Company's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report.
However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
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.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED (CONTINUED)
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 Auditors' 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.
Andrew Malpass BA FCA (Senior statutory auditor)
for and on behalf of
Whittingham Riddell LLP
Statutory Auditors
Belmont House
Shrewsbury Business Park
Shrewsbury
Shropshire
SY2 6LG
13 March 2020
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2019
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(Loss)/profit for the financial year
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The notes on pages 11 to 28 form part of these financial statements.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2019
(Loss)/profit for the financial year
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Other comprehensive income
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Actuarial gain/(loss) on defined benefit schemes
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Movement on deferred tax relating to pension (losses)/gains
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 11 to 28 form part of these financial statements.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
REGISTERED NUMBER: 01305987
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2019
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 11 March 2020.
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C R N Forshaw
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The notes on pages 11 to 28 form part of these financial statements.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2019
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Comprehensive income for the year
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Actuarial gains on pension scheme
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Total comprehensive income for the year
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The notes on pages 11 to 28 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2018
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Comprehensive income for the year
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Actuarial losses on pension scheme
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 11 to 28 form part of these financial statements.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
Harry Fairclough (Construction) Limited ("the Company") is a private limited Company, limited by shares, incorporated in England and Wales, with its registered office and principal place of business at Howley Lane, Howley, Warrington, Cheshire, WA1 2DN.
The principal activity of the Company has been that of building and civil engineering contracting.
2.Accounting policies
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Basis of preparation of financial statements
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On 21 February 2020 Administrators were appointed to the Company’s immediate parent Harry Fairclough Limited (“HFL”). In conjunction the Company ceased to trade. Both companies are insolvent. Also, note the Company's interconnectedness and trading relationships with HFL in Note 18. As a result it is not appropriate to compile these financial statements on a going concern basis.
The financial statements have therefore been prepared under the historical cost convention unless otherwise specified within these accounting policies, and in accordance with Financial Reporting Standard 102, the Financial Reporting Standards applicable in the UK and the Republic of Ireland and the Companies Act 2006 after making due allowance for the fact that it is no longer appropriate to view the Company as a going concern. Asset and liabilities, where appropriate, have been restated accordingly based upon in the case of assets, estimated or actual realisable values and in the case of liabilities known or anticipated values.
The specific accounting policies outlined in the remainder of this Note 2 describe the policies applied before asset and liability valuations considered appropriate to reflect the fact that the Company is no longer a going concern. These policies should be read in that context. The aggregate impact of such asset and liability revaluations is separately shown in the Statement of Comprehensive Income in arriving at the loss for the financial year.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial reporting standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Harry Fairclough Group Limited as at 31 March 2019 and these financial statements may be obtained from Companies House.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
2.Accounting policies (continued)
For the reasons outlined in Note 2.1 it is not appropriate to compile these financial statements on a Going Concern basis. Asset and liability amounts have been valued/ assessed accordingly.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Interest income is recognised in the Income statement using the effective interest method.
All borrowing costs are recognised in the Income statement in the year in which they are incurred.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. 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 payment obligations.
The contributions are recognised as an expense in the Income statement when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
Defined benefit pension plan
The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The liability recognised in the Statement of financial position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income.
The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Income statement, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations on contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable they will be irrecoverable. Contract costs are recognised as expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Income statement in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Income statement.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
2.Accounting policies (continued)
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Financial instruments (continued)
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contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances. Accounting estimates will by definition seldom equal the related actual results.
Key source of estimation uncertainty
(i) Asset and liability revaluations
As explained in Note 2.1 it is not appropriate to compile these financial statements on a going concern basis. Assets and liabilities have therefore initially been assessed/valued in accordance with the specific policies outlined in Note 2 and then revalued to reflect the fact that the Company should not be viewed as a going concern. This revaluation exercise by necessity involves estimations of the outcome of future transactions in uncertain circumstances. As a result there is a significant risk that the carrying amounts of assets and liabilities may in due course be significantly different to the actual results and/or realisations. There may also be liabilities that crystallise in the future that are not possible to anticipate and quantify and therefore incorporate in these financial statements.
(ii) Access to accounting records
A further impact of the circumstances referred to in Note 3(i) above (and Note 2.1) is that access to the Company's accounting records in finalising these financial statements has been restricted. In preparing these accounts therefore certain estimates have had to be made based upon incomplete information including in respect of asset, liability, revenue and cost categorisations.
(iii) Revenue recognition
Accounting for revenue involved determining both the total revenue that will be earned on a contract and how and when that revenue should be allocated to specific accounting periods. The revenue recognition process involves considerable use of estimates in determining revenues, costs and profits, and in assigning the mounts to relevant accounting periods. In addition, where variations or claims exist on a contract there may be uncertainty over whether the amounts carried in amounts recoverable on contracts are recoverable.
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An analysis of turnover by class of business is as follows:
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All turnover arose within the United Kingdom.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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The operating (loss)/profit is stated after charging:
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Defined contribution pension cost
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Asset and liability impairments
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Asset and liability revaluations represent the aggregate impact of those reassessment of values reflecting the directors' view of impairment consequent upon not adopting the Going Concern basis in preparing these financial statements and comprises revaluations of:
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Amounts recoverable on long-term contracts
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Amounts owed by Group companies
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Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of its ultimate parent company.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined benefit scheme
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Key Management Personnel
Key management personnel is constituted of only thrs.
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to no directors (2018 - NIL) in respect of defined benefit pension schemes.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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Net interest on defined benefit pension scheme
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Current tax on profits for the year
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
10.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2018 - the same as) the standard rate of corporation tax in the UK of 19% (2018 - 19%). The differences are explained below:
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(Loss)/profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2018 - 19%)
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Total tax charge for the year
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Factors that may affect future tax charges
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At Budget 2016, the government announced a further reduction to the Corporation Tax main rate to 17% (effective 1 April 2020) and this rate was substantively enacted on 6 September 2016. This will reduce the company’s future current tax charge accordingly.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts recoverable on long term contracts
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All debtor balances as at 31 March 2019 have been assessed to reflect the impact of not compiling these financial statements on a Going Concern basis for the reasons explained in note 2.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Accruals and deferred income
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Amounts owed to group undertakings are repayable on demand and non-interest bearing.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities measured at amortised cost
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Financial assets that are debt instruments measured at amortised cost comprise of trade and other debtors and amounts owed by group undertakings.
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Financial liabilities measured at amortised cost comprise of trade creditors, accruals and bank overdrafts.
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Charged to the statement of comprehensive income
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The charge in the year is stated after including a write off amounting to £46,000 (2018: £nil) representing the impact of not compiling these financial statements on a Going Concern basis for the reasons explained in note 2.
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
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Allotted, called up and fully paid
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100 (2018 - 100) Ordinary shares of £1.00 each
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The issue price of £100 has been rounded to £nil (2018: £nil) for financial statements disclosures.
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Profit and loss account
The profit and loss account represents the accumulated losses of the Company since incorporation less distributions made to shareholders.
A contingent liability exists in the form of an inter-company bank guarantee between Harry Fairclough Limited, Fairclough Developments Limited, Harry Fairclough (Construction) Limited, Harry Fairclough (New Build) Limited and Harry Fairclough (Contracting) Limited.
On 21 February 2020 Administrators were appointed to the Company's immediate parent Harry Fairclough Limited ("HFL"). In conjunction the Company ceased to trade. Both Companies are insolvent. It is not possible to identify all liabilities (contingent or otherwise) that may arise in consequence of these events at the date of approval of these financial statements.
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
The Company operated a defined contribution retirement benefit scheme for all qualifying employees. The total expense charged to profit or loss in the year ended 31 March 2019 was £131k (2018: £214k).
The Company operated a Defined benefit pension scheme.
There are no active members in the scheme. No other post retirement benefits are provided. The scheme is a funded scheme.
The scheme also provided benefits to spouses and dependants in the event of a member’s death before or after retirement. The Company does not expect to pay any contributions to the scheme during the next financial year.
The most recent actuarial valuation of scheme assets and the present value of the defined obligation were carried out at 1 April 2016 by Mr Jones of Broadstone, Fellow of the Institute of Actuaries. The scheme ceased all future accrual from 1 October 2000.
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Reconciliation of present value of plan liabilities:
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Reconciliation of present value of plan liabilities
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At the beginning of the year
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Reconciliation of present value of plan assets:
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At the beginning of the year
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Expected return on plan assets
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
19.Pension commitments (continued)
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Composition of plan assets:
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Fair value of plan assets
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Present value of plan liabilities
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Net pension scheme liability
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The amounts recognised in profit or loss are as follows:
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Principal actuarial assumptions at the Statement of financial position date (expressed as weighted averages):
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- at 65 for a male aged 43 now
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- for a female aged 63 now
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
19.Pension commitments (continued)
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- at 65 for a female member aged 43 now
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Amounts for the current and previous four periods are as follows:
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Defined benefit pension schemes
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Defined benefit obligation
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Commitments under operating leases
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At 31 March 2019 the Company had future minimum lease payments under non-cancellable operating leases as follows:
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Later than 1 year and not later than 5 years
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Related party transactions
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During the year the Company was charged £1,390,000 (2018: £1,880,000) by Harry Fairclough Limited in respect of professional and contracting services. At 31 March 2019 there was a balance owed from that company for £2,965,000 (2018: £886,000). This balance has been assessed to reflect the impact of not compiling these financial statements on a Going Concern basis for the reasons explained in note 2, and is now nil.
Included in cost of sales are subcontract costs of £7,223,000 (2018: £7,929,000) from Harry Fairclough (New Build) Limited a fellow group Company at market value. At 31 March 2019 there was no balance outstanding (2018: £nil).
Included in cost of sales are subcontract costs of £3,099,000 (2018: £9,257,000) from Harry Fairclough (Contracting) Limited a fellow group Company at market value. At 31 March 2019 there was no balance outstanding (2018: £nil).
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HARRY FAIRCLOUGH (CONSTRUCTION) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
The Company is expected to come under the control of the Official Receiver. The Company's ultimate parent company and controlling party as at year end was Harry Fairclough Group Limited, which is a UK registered Company. The accounts are included in the consolidated accounts of Harry Fairclough Group Limited which is both the largest and smallest group in which these results are consolidated. Copies of the financial statements of the ultimate parent company can be obtained from Companies House.
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