FLETCHER_HOMES_(SHROPSHIR - Accounts

The directors present the strategic report for the year ended 31 March 2022.

This report should be read in conjunction with additional information and commentary set out in the Chairman’s Statement.

The company has achieved a successful year’s trading despite the ongoing concerns regarding the COVID-19 pandemic and the UK’s exit from the European Union.

House sales rates resumed quickly following the easing of COVID-19 restrictions and remained buoyant throughout the year, and we have been able to sell new homes at increased prices, these being reserved quickly as soon as they have been released for sale.

However, production, and consequently sale completion dates, have been adversely affected by materials supply shortages where manufacturers and suppliers have not been able to keep up with demand and have perhaps favored the larger homebuilders to the detriment of medium and smaller developers.

In February 2022 Fletcher Homes completed the purchase of a large site at Oswestry with outline planning approval for 150 dwellings, resulting in a high value for stock and work in progress at the year end. Plans for the development of this site were submitted in July 2022 and we await approval from Shropshire Council.

Help to Buy and Stamp Duty Land Tax and Interest rates

Help to Buy is due to end in 2023, and from March 2021 Help to Buy has only be available to first time buyers of new homes and with regional price limits, so this has not been available on all company developments. However, buyers do not seem to be relying on Help to Buy as much as previously and have preferred to buy without this assistance.

The changes in Stamp Duty Land Tax have not had a major impact on sales during the year.

Interest rates are beginning to rise, and this appears to be one of the contributory factors in a slow down in the rate of sales.

Economy and the housing market

In common with many businesses operating in the residential market the Company is exposed to the risks presented by the general economic climate, the strength of the housing market and the impact on this of mortgage availability and movement in interest rates.

The economic climate continues to be monitored closely by the directors and the rate of production is maintained to reflect the rate of sales reservations and the availability of funding to home purchasers.

The housing market has improved since the easing of COVID-19 restrictions and sales have been generally good in our area of operations although there is continuing disruption to the supply of materials and labour and cost increases present an unquantifiable risk. Supply shortages have impacted on sales handover dates which have had to be extended.

The phasing out of the Help to Buy scheme has not had a great impact on sales and homebuyers have often preferred not to take this up when it was available.

Interest rate rises remain a significant risk and are likely to affect homebuyers’ ability to obtain mortgages but have not had a major impact during the financial year.

Further changes to Government policy may affect the housing market but the directors keep themselves appraised of all threat and opportunities arising from policy changes.

Land and planning

The Company operates principally in the West Midlands region and is not subject to the same volatility of market conditions as seen in London and the Southeast. The Company relies on holding sufficient land with planning permission and of finance available for its continuing operations.

At the date of signing the accounts the Company held land with planning approval sufficient for between three- and four-years production at present rates of build.

Additional land will be required to ensure the continuation of operations beyond this, and the directors are constantly looking for sites of a size that will provide continuity of production and that will produce a satisfactory return on capital employed.

Where sites are acquired with outline planning approval there may be a delay in obtaining detailed planning approvals and technical approvals before a development can be commenced. Obtaining planning approval is becoming increasingly complex, now with the additional requirement of biodiversity net gain and storm-water management. These additional requirements add to delays before all planning conditions are satisfied and may be substantial and in excess of 12 months. The directors plan the acquisition of land and commencement of construction to allow sufficient time for all planning and technical issues to be resolved.

Funding

Speculative development is capital intensive and requires the purchase of land and construction of infrastructure and houses prior to the sale of the completed product. In addition to its own capital, the Company currently obtains funding for the acquisition and development of sites from a funder who specialises in housing development finance and with whom the Company have a strong relationship going back for more than 25 years. Development funding is drawn down against monthly valuations up to an agreed limit and repaid from the proceeds of sale of each house at agreed rates. When purchasing new sites, the directors prepare financial appraisals and cashflow forecasts to ensure that the requirements of the funders can be met.

Cashflow

The directors monitor cashflow and gearing carefully to ensure that funding remains adequate. Houses remain the property of the Company companies until they have been completed and paid for by homebuyers, so exposure to bad debts is low, Trade creditors and subcontractors are paid within agreed credit periods.

Covid-19

Following the easing of the Covid-19 restrictions, the Company has been able to resume pre-Covid rates of production on its active sites and with its sales operations. There are still issues surrounding the supply chain and labour markets that are outside of our control, but these are being monitored and are considered when setting sales and production targets.

Health, safety and welfare

Health and Safety of employees, contractors, clients and the public is of paramount importance to the Company. It strives to ensure that a fully comprehensive Health and Safety management system is implemented and supported by policies and procedures. This is achieved by using external safety advisors and continuous monitoring of our systems. All sites are equipped with welfare provisions for contractors and staff and site managers are trained and qualified in site safety and as First Aiders. The Company experienced no serious Health and Safety issues within the year.

Brexit

The UK's decision to leave the European Union has adversely affected some materials supplies resulting in extended delivery periods and increased materials prices. Further changes in legislation may impact the importation of materials from abroad but the effects of this are at present uncertain. The likelihood is that there will be upward pressure on materials and labour costs, and these will be monitored and considered when acquiring further development sites.

The ‘GREEN’ Agenda and Future Homes Standard

The government’s Future Homes Standard and the move towards sustainable energy sources is likely to result in increased building costs initially as gas boilers are phased out and low carbon technologies are introduced. These new standards will be introduced through phased amendments to Building Regulations so as to create a level playing field for all housing developers. Advantage will be taken of modern methods of construction and new technologies as these emerge.

As a company, we currently have land and work in progress for around 250 house sale completions (down from 320 this time last year) with a sales value of £64 million. Due to delays on starting work on the new sites, we are building at a rate of around 90 houses per year, so ideally need to continue to buy further land to maintain this level of production. At present, we have decided to proceed with caution due to the current recession and would like to reduce financial gearing so that we are in a good position to weather any continued downturn in the market.

We own 12 acres of land on two sites in Shropshire without planning approval and we are promoting these sites through the local planning system. There is a chance that some of this will come forward for development.

We also hold an option on 12 acres of land at Cockshut, Shropshire that we are promoting through the local plan. This has currently been excluded from the site allocation plan and is unlikely to come forward for development in the near future.

Negotiations are currently taking place on various other land in Shropshire.

Where possible, we shall ‘de-risk’ by entering into option agreements and joint ventures where we do not have to pay for the land purchase ‘up front.’ This means that if the economy stalls, we can reduce production without large development loans eating into our reserves.

GOING CONCERN

The Directors have considered cashflow forecasts, budgets and confirmed reservations going forward at least twelve months from the date of approval of these financial statements. They have also assessed the company’s situation regarding the ongoing consequences of the COVID-19 pandemic and the likely impact on the company. They are satisfied that this review and those forecasts provide an expectation that the company will continue to trade for the foreseeable future and so the company continues to adopt the going concern basis.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2022.

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The auditor, Spencer Gardner Dickins Audit LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of Future Developments.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Fletcher Homes (Shropshire) Limited (the 'company') for the year ended 31 March 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 March 2022 and of its profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' 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.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' 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 remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, 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.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

- Enquiry of management and those charged with governance around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Fletcher Homes (Shropshire) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 95 Mount Pleasant Road, Shrewsbury, Shropshire, SY1 3EN.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income.

The financial statements have been prepared on the going concern basis. The directors have a reasonable

expectation that the company will continue in operational existence for the foreseeable future.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Stocks and work in progress are stated at the lower of cost and estimated selling price less costs to complete and sell on an item by item basis. Cost comprises all direct materials and, where applicable, direct labour costs and those overheads that have been incurred in getting the site into its current state of completion. Net realisable value is based on estimated selling price allowing for all further costs of completion and disposal.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks and work in progress over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

An analysis of the company's turnover is as follows:

All turnover for the company was generated in the UK.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 1).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Bank loans of £117,869 (2021: £128,476) are secured by the UK government under the Coronavirus Business Interruption Loan Scheme (CBILS).

Obligations under finance leases of £45,553 (2021 - £90,674) are secured on the assets to which they relate.

Other borrowings of £4,388,482 (2021 - £2,191,708) are secured against land held by the company.

Bank loans and overdrafts of £52,590 (2021 - £175,864) are secured by the UK government under the Coronavirus Business Interruption Loan Scheme (CBILS).

Obligations under finance leases of £nil (2021- £56,433) are secured on the assets to which they relate.

Bank loans comprise two loans under the Coronavirus Business Interruption Loan Scheme (CBILS).

The first loan was advanced in July 2020 and is for a term of 24 months.

The second loan was advanced in September 2020 and is for a term of 36 months. Interest is charged at and annual rate of 13.56%.

The first 12 interest payments for both loans are payable by the CBILS Guarantor (Government).

Other loans compromise of finance secured against land purchased by the company and the construction of houses on that land. There are no fixed repayment terms, settlement occurs when house sales are completed. The loans are repayable on demand.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. There are no restrictions placed on the use of the assets. The lease term is two years. The lease is on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The company was committed to pay £7,660 (2021: £7,146) in respect of defined contribution schemes at the balance sheet date.

Profit and loss reserves represent the retained profits of the group since its inception.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Road bonds have been issued on behalf of the company in favour of various local authorities amounting to £461,727 (2021 - £304,148).

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The company has a loan with K B Benfield Holdings Limited, an entity under common control. The loan is not subject to interest and the are no fixed repayments. The loan is repayable on demand.

A C Benfield has personally guaranteed 50% of a loan included in other borrowings due within one year amounting to £nil at 31 March 2022 (2021 - £92,730).

The company has taken advantage of the exemption under the terms of FRS 102 not to disclose related party transactions with wholly owned subsidiaries within the group.

The ultimate controlling party is A C Benfield by virtue of his majority shareholding.