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Financial Statements
Adston (UK) Limited
For the financial year ended 31 December 2021
Registered number: NI605512
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Company Information
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Chartered Accountants & Statutory Auditors
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Contents
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Directors' responsibilities statement
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Independent auditor's 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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Strategic report
For the financial year ended 31 December 2021
The loss for the year, after taxation, amounted to £1,297,036 (2020: profit £622,972). Brexit & Coronavirus had a negative impact on the 2021 financial results, resulting in material supply issues, labour shortages & price inflation. Given the current financial environment, the directors are satisfied with the Company’s activity levels during the financial year along with its performance.
The directors anticipate that 2022 will be a challenging financial year with continued issues with material supply, labour shortages & price inflation. However, the Company is managing these risks & has a strong pipeline of booked work for 2022 and on into 2023. The directors expect to return to strong profitability from 2022 & onwards and are putting the resources in place to deliver on this expectation.
Key performance indicators
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The Company's key performance indicators are Turnover, Gross Margin and EBITDA.
Principal risks and uncertainties
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The directors consider that the principal risks and uncertainties faced by the Company are in the following categories:
Economic risk
The risk of increased interest rates and or inflation having an adverse impact on served markets. However, the outlook for the construction sector remains robust and the Company's pipeline of future works is strong at present. This is continually monitored and capacity levels understood.
Competitor risk
The directors of the Company manage competition through close attention to customer service levels and through monitoring the Company's tender wins and being aware of projects awarded to competitors.
Financial risk
The company has budgetary and financial reporting procedures, supported by appropriate key performance indicators, to manage credit, liquidity and other financial risk. Project reports are reviewed closely at both project team and senior management levels and all variances from budgets are monitored carefully. The directors have KPIs in place around Health & Safety, Training, Tender Returns and Client Feedback. By having these KPIs in place across the Company, the directors can manage both financial and non-financial risk.
COVID-19 outbreak
Uncertainty about global economic conditions due to the Coronavirus could result in difficulties in labour supply, unemployment, negative financial news and or declines in income or asset values. At a local economic level, there is future risk and uncertainty relating to reduced construction demand and further tightening of margins for main contractors. At this point, the extent to which the Coronavirus may impact the Company's results in the long term is uncertain and the directors continue to monitor and assess the ongoing developments and respond accordingly.
Page 1
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Strategic report (continued)
For the financial year ended 31 December 2021
Principal risks and uncertainties (continued)
Staff Retention
Staff Retention is a critical contributor to the continued success of the company. The directors understand and operate the business as a team and our business is built around our team. The directors place significant value on everyone’s experience and knowledge. The directors ensure the remuneration packages are highly competitive and additionally the company have invested hugely in staff health and wellbeing.
This report was approved by the board and signed on its behalf.
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Sean McNally
Director
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Page 2
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Directors' report
For the financial year ended 31 December 2021
The directors present their report and the financial statements for the financial year ended 31 December 2021.
The principal activity of the Company continued to be that of a main contractor and project management company within the UK. The Company has maintained a strong presence throughout the UK and continue to diversify within the construction sector.
The loss for the financial year, after taxation, amounted to £1,297,036 (2020: profit £622,972).
The directors have not recommended payment of a dividend (2020: £Nil).
The directors who served during the financial year and their interests in the Company's issued share capital were:
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Ordinary shares
of £1 each
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Disclosure of information to auditor
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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 auditor is 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 auditor is aware of that information.
Events since the end of the financial year
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There have been no significant events affecting the Company since the financial year end.
The directors do not anticipate any changes in the nature of the business.
Matters contained in the Strategic Report
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As permitted by Section 414 (c) (11) of the Companies Act 2006, the directors have elected to disclose information required to be in the directors' report by Schedule 7 of the "Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008", in the Strategic report.
Page 3
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Directors' report (continued)
For the financial year ended 31 December 2021
The auditor, Grant Thornton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Sean McNally
Director
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Page 4
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Directors' responsibilities statement
For the financial year ended 31 December 2021
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;
∙state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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.
On behalf of the board:
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Sean McNally
Director
Date: 27 September 2022
Page 5
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Independent auditor's report to the members of Adston (UK) Limited
We have audited the financial statements of Adston (UK) Limited, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity, the Statement of cash flows for the financial year ended 31 December 2021, and the related 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, Adston (UK) Limited's financial statements:
∙give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Company as at 31 December 2021 and of its financial performance and cash flows for the financial year then ended; 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 'Responsibilities of the auditor 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 United Kingdom, namely the FRC's Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances of the entity. 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
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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 the date 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.
Page 6
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Independent auditor's report to the members of Adston (UK) Limited (continued)
Other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon, including the Directors' report and the Strategic Report. The directors are responsible for the other information. Our opinion on the financial statements does not cover the 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 in the financial statements, 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 Directors' report and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements, and
∙the Directors' report and the Strategic Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the Directors' report and the Strategic Report.
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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Page 7
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Independent auditor's report to the members of Adston (UK) Limited (continued)
Responsibilities of management and those charged with governance for the financial statements
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Management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS102 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, management is 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 management either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
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The objectives of an auditor 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 their 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 an auditor's 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 auditor's report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to compliance with Data Privacy Law, Employment Law, Environmental Regulations and Health & Safety Regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and UK tax legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statement.
Page 8
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Independent auditor's report to the members of Adston (UK) Limited (continued)
Responsibilities of the auditor for the audit of the financial statements (continued)
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
In response to these principal risks, our audit procedures included but were not limited to:
∙inquiries of management on the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
∙inspection of the company’s legal correspondence and review of minutes of directors’ meetings during the year to corroborate inquiries made;
∙gaining an understanding of the internal controls established to mitigate risk related to fraud;
∙discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
∙identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
∙designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
∙challenging assumptions and judgements made by management in their significant accounting estimates, including construction contract revenue recognition; and
∙review of the financial statement disclosures to underlying supporting documentation and inquiries of management.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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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.
Kevin Foley FCA (Senior statutory auditor)
for and on behalf of
Grant Thornton
Chartered Accountants &
Statutory Auditors
Dublin 2
Date: 27 September 2022
Page 9
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Statement of comprehensive income
For the financial year ended 31 December 2021
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Interest receivable and similar income
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Interest payable and expenses
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(Loss)/profit for the financial year
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All amounts relate to continuing operations.
There was no other comprehensive income for 2021 (2020: £Nil).
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The notes on pages 15 to 26 form part of these financial statements.
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Page 10
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Adston (UK) Limited
Registered number:NI605512
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Statement of financial position
As at 31 December 2021
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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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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................
Sean McNally
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The notes on pages 15 to 26 form part of these financial statements.
Page 11
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Statement of changes in equity
For the financial year ended 31 December 2021
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Comprehensive income for the financial year
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Loss for the financial year
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Statement of changes in equity
For the financial year ended 31 December 2020
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Comprehensive income for the financial year
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Profit for the financial year
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The notes on pages 15 to 26 form part of these financial statements.
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Page 12
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Statement of cash flows
For the financial year ended 31 December 2021
Cash flows from operating activities
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(Loss)/profit for the financial financial year
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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(Increase)/decrease in debtors
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(Decrease) in amounts owed to groups
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash from investing activities
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Net (decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of financial year
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Cash and cash equivalents at the end of financial year
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Cash and cash equivalents at the end of financial year comprise:
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The notes on pages 15 to 26 form part of these financial statements.
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Page 13
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Analysis of Net Debt
For the financial year ended 31 December 2021
The notes on pages 15 to 26 form part of these financial statements.
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Page 14
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Notes to the financial statements
For the financial year ended 31 December 2021
Adston (UK) Limited is private company limited by shares, incorporated in the UK under company number NI605512, with a registered address at Unit 4 The Square, Manderwood Park, Drumhaw, Lisnaskea, Co. Fermanagh, BT92 0FP.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have 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 Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
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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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of comprehensive income within 'other operating income'.
Page 15
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Notes to the financial statements
For the financial year ended 31 December 2021
2.Accounting policies (continued)
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:
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.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Page 16
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Notes to the financial statements
For the financial year ended 31 December 2021
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 profit or loss 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.
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Current and deferred taxation
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The tax expense for the financial year comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income, 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.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Page 17
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Notes to the financial statements
For the financial year ended 31 December 2021
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Costs of long term contracts include all direct costs and attributable profits. Provision is made in full for any foreseeable losses.
Long term contracts are assessed on a contract by contract basis and reflected in the Statement of comprehensive income by recording turnover and related costs as contract activity progresses. No profit is recognised until the outcome of a long term contract can be assessed with reasonable certainty. Work in progress represents costs incurred net of amounts transferred to costs of sales, less foreseeable losses and applicable payments on account not matched with turnover.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, including transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Page 18
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Notes to the financial statements
For the financial year ended 31 December 2021
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.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, including transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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 ordinary shares.
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 Statement of comprehensive income.
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 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.
Page 19
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Notes to the financial statements
For the financial year ended 31 December 2021
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Judgments in applying accounting policies and key sources of estimation uncertainty
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When preparing financial statements, management makes a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
3.1 Critical Management Judgments in Applying Accounting Policies
The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the financial statements.
Impairment of trade and Other Debtors
Adequate amount of allowance is made and provided for specific and groups of accounts where objective evidence of impairment exists. The Company evaluates these accounts based on available facts and circumstances affecting the collectability of the accounts, including, but not limited to, the length of the Company’s relationship with its contracting parties, contracting parties’ current credit status, average age of accounts, settlement experience and historical loss experience.
3.2 Key Sources of Estimation Uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Construction contract revenue recognition
Recognised amounts of construction contract revenues and related work in progress reflect management’s best estimate of each contract’s outcome and stage of completion. This includes the assessment of the profitability of on-going construction contracts and the order backlog. For more complex contracts in particular, costs to complete and contract profitability are subject to significant estimation uncertainty.
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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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Page 20
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Notes to the financial statements
For the financial year ended 31 December 2021
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The operating (loss)/profit is stated after charging:
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Research & development credited
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Depreciation of tangible fixed assets
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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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Defined contribution pension cost
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the financial year was as follows:
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Page 21
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Notes to the financial statements
For the financial year ended 31 December 2021
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Interest payable and similar expenses
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Current tax on profits for the financial year
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Factors affecting tax charge for the financial year
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The tax assessed for the financial year is lower than (2020 - higher than) the standard rate of corporation tax in the UK of19% (2020 - 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% (2020 - 19%)
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Expenses not deductible for tax purposes
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Capital allowances for financial year in excess of depreciation
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Trading lossess carried back
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Total tax charge for the financial year
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Page 22
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Notes to the financial statements
For the financial year ended 31 December 2021
10.Taxation (continued)
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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Charge for the financial year on owned assets
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Raw materials and consumables
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There was no significant difference between the replacement cost of work in progress and finished goods and goods held for resale and their carrying amount.
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Page 23
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Notes to the financial statements
For the financial year ended 31 December 2021
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Debtors: Amounts falling due within one year
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Corporation tax repayable
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Prepayments and accrued income
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Amounts owed by other debtors are unsecured, accrue interest at 10%, and are repayable in instalments.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Amounts received in advance from construction contracts
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Trade and other creditors are payable at various dates over the coming months in accordance with the suppliers' usual and customary credit terms.
Amounts owed to group undertakings are unsecured, accrue interest at market rate and are repayable on demand.
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Other taxation and social security
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Page 24
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Notes to the financial statements
For the financial year ended 31 December 2021
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Authorised, allotted, called up and fully paid
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100 (2020 - 100) Ordinary shares of £1.00 each
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Share premium account
Includes the premium received on the issue of share capital.
Other reserves
Includes capital contributions received in prior periods.
Profit and loss account
Profit and loss accounts - include all current and prior period retained profits and losses.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £23,024 (2020: £13,208). Contributions totalling £2,663 (2020: £3,552) were payable to the fund at the reporting date and are included in creditors.
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Commitments under operating leases
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At 31 December 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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In respect of land and buildings
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Other operating lease commitments
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Later than 1 year and not later than 5 years
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Page 25
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Notes to the financial statements
For the financial year ended 31 December 2021
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Related party transactions
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The Company is related to Adston Limited through common shareholders. During the year goods and services totalling £156,579 (2020: £179,329) were provided by Adston (UK) Limited. Total purchases for the year from Adston Limited amounted to £475,366 (2020: £382,706). Total management charge payable by the Company to Adston Limited for the year amounted to £454,084 (2020: £427,645). Total interest charged on the balance during the year amounted to £36,551 (2020: £63,291). During the year, Company repaid loans on behalf of the Adston Limited amounting to £248,496 (2020: £1,815,282). At the year end the balance owed by Adston (UK) Limited was £377,045 (2020: £1,501,725).
The are no key management personnel, other than directors, that need to be disclosed under FRS102 (2020:
£Nil).
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Events since the end of the financial year
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There have been no significant events affecting the Company since the financial year end.
The Company is an 80% subsidiary of Adston Group Holdings Limited, a company incorporated in the Republic of Ireland.
The ultimate parent company is EM International Investment Co. LLC, a company incorporated in the USA.
The results are consolidated into the results of Adston Group Holdings Limited, the smallest and largest group company to prepare consolidated accounts. These accounts present information about the Company as an individual undertaking.
Page 26
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