Far East Facade (UK) Limited - Limited company accounts 23.2
Far East Facade (UK) Limited - Limited company accounts 23.2
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 |
FOR |
FAR EAST FACADE (UK) LIMITED |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 DECEMBER 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Income Statement | 8 |
Other Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
FAR EAST FACADE (UK) LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 DECEMBER 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
and Statutory Auditor |
61 Queen Square |
Bristol |
BS1 4JZ |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
STRATEGIC REPORT |
for the Year Ended 31 DECEMBER 2022 |
The directors present their strategic report for the year ended 31 December 2022. |
REVIEW OF BUSINESS |
The principal activity of the Company continues to be the design and installation of structural property facades. |
In 2022, geopolitical differences intensified, the conflict between Russia and Ukraine triggered an energy and food crisis and supply chain blockade, and global inflation became higher. In order to curb inflation, the United States and the United Kingdom raised interest rates several times during the year, which continued to trigger a wave of interest rate hikes around the world, and economic growth slowed down. The Brexit hangover continues to affect the cost of business. |
Given the uncertainty of the future, the Company remains focused on completing on-hand projects and maintenance work. The Company will continue to utilise and integrate existing resources and production capacity, and continue to focus on the unfinished project progress, quality, safety, capital and cost management. |
The parent company, China State Construction Development Holdings Limited, continues to support the Company's cross-field resources allocation and coordination to ensure the smooth progress of various projects. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Looking ahead to 2023, due to various uncertain factors, such as shortage of labour and high inflation, it is expected that the UK economic growth will continue to slow down and the economics will weaken significantly. |
The curtain wall business in the UK is still facing great challenges. The Company will carefully consider the development prospects and hope to have a suitable time and opportunity for further development. |
FINANCIAL KEY PERFORMANCE INDICATORS |
Our key performance indicators (KPIs) are aligned to the business strategy and are used to actively monitor business performance. |
During the year ended 31 December 2022, the turnover of the Company amounted to £8.5 million, representing a decrease of 54% from last year. Gross profit margin was -25.0%, representing a decrease of 219% from last year. Net profit margin was -33%, representing a decrease of 367% from last year. |
ON BEHALF OF THE BOARD: |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 DECEMBER 2022 |
The directors present their report with the financial statements of Far East Facade (UK) Limited (the 'Company') for the year ended 31 December 2022. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2022. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report. |
S Y A Lau |
H Wang |
C Zhang |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 DECEMBER 2022 |
AUDITORS |
The auditors, Burnside, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FAR EAST FACADE (UK) LIMITED |
Opinion |
We have audited the financial statements of Far East Facade (UK) Limited (the 'Company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FAR EAST FACADE (UK) LIMITED |
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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, 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. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FAR EAST FACADE (UK) LIMITED |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
An understanding of the legal and regulatory framework applicable to the entity was obtained from management and those charged with governance of the entity, and the audit engagement team was confirmed to have the appropriate competence and capabilities to identify non-compliance with such a framework. |
No significant instances of fraud, non-compliance with laws and regulations or other irregularities were communicated to the engagement team by management or those charged with governance, and no particular audit areas or legislation were identified that gave rise to any significant risks of material misstatement in respect of such irregularities. |
Due to the size and nature of the entity, its susceptibility to material misstatement resulting from fraud, non-compliance with laws and regulations, or other irregularities is considered to be low, and the audit approach was appropriately planned so as to address this risk. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants |
and Statutory Auditor |
61 Queen Square |
Bristol |
BS1 4JZ |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
INCOME STATEMENT |
for the Year Ended 31 DECEMBER 2022 |
2022 | 2021 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS (LOSS)/PROFIT | ( |
) |
Administrative expenses |
OPERATING (LOSS)/PROFIT | 4 | ( |
) |
Interest receivable and similar income |
(LOSS)/PROFIT BEFORE TAXATION | ( |
) |
Tax on (loss)/profit | 5 |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 DECEMBER 2022 |
2022 | 2021 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
BALANCE SHEET |
31 DECEMBER 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 6 |
CURRENT ASSETS |
Debtors | 7 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 8 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
( |
) |
( |
) |
CAPITAL AND RESERVES |
Called up share capital | 11 |
Retained earnings | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
The financial statements were approved by the Board of Directors and authorised for issue on |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 DECEMBER 2022 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2021 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2021 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 | ( |
) | ( |
) |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 DECEMBER 2022 |
1. | STATUTORY INFORMATION |
Far East Facade (UK) Limited ('the Company') is a private company, limited by shares, registered in England and Wales. The Company's registered number and registered office address can be found on the Company Information page. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The presentation currency of the financial statements is the Pound Sterling (£). |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); |
• | the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A; |
• | the requirement of paragraph 33.7. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Tangible fixed assets |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial assets and liabilities are recognised in the balance sheet when the Company becomes party to the contractual provisions of the instrument. |
Trade and other debtors and creditors are classified as basic financial instruments and are measured on initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company not be able to collect all amounts due. |
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank. |
Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of any direct issue costs. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The Company operates a defined contribution pension scheme. Contributions payable to the Company's pension scheme are charged to profit or loss in the period to which they relate. |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
The financial statements have been prepared on a going concern basis which assumes that the Company will continue in operational existence for the foreseeable future. |
The Company made a loss for the year ended 31 December 2022 of £2,849,587 (2021 - profit £805,990), and had net liabilities at 31 December 2022 of £12,851,065 (2021 - £10,001,478). Therefore the validity of this assumption depends on the continuing financial support from the Company's parent undertaking and fellow group companies. |
The parent undertaking, China State Construction Development Holdings Limited, has confirmed this financial support will continue to be provided for the foreseeable future, and that amounts owed to the parent and other group undertakings will only be repayable to the extent that funds allow. The directors have also confirmed that they believe the results and asset position of the Company will improve in future years as the number of contracts the Company secures increases. |
The directors therefore consider that the going concern assumption remains appropriate. |
3. | EMPLOYEES AND DIRECTORS |
2022 | 2021 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2022 | 2021 |
Administration | 3 | 3 |
Project and design | 11 | 12 |
2022 | 2021 |
£ | £ |
Directors' remuneration |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 DECEMBER 2022 |
4. | OPERATING (LOSS)/PROFIT |
The operating loss (2021 - operating profit) is stated after charging: |
2022 | 2021 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Auditors' remuneration |
Auditors' remuneration for non audit work |
5. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
2022 | 2021 |
£ | £ |
Deferred tax |
Tax on (loss)/profit |
UK corporation tax has been charged at 19% (2021 - 19%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2022 | 2021 |
£ | £ |
(Loss)/profit before tax | ( |
) |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Change in unrecognised tax losses carried forward | 538,897 | 56,194 |
Total tax charge | - | 261,256 |
At 31 December 2022 the Company had tax losses available to offset future taxable profits totalling £12,473,526 (2021 - £9,664,134), and therefore has an unrecognised deferred tax asset totalling £2,363,864 (2021 - £1,824,967). |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 DECEMBER 2022 |
6. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor | Computer |
machinery | fittings | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2022 |
Additions |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
VAT recoverable |
Prepayments and accrued income |
8. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Other creditors |
Accruals and deferred income |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 DECEMBER 2022 |
9. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2022 | 2021 |
£ | £ |
Within one year |
Between one and five years |
10. | PROVISIONS FOR LIABILITIES |
The deferred tax provision at 31 December 2022 comprised: |
2022 | 2021 |
£ | £ |
Capital allowances in excess of depreciation | 6,228 | 11,372 |
Other timing differences | (122 | ) | (154 | ) |
Tax losses carried forward | (6,106 | ) | (11,218 | ) |
- | - |
At 31 December 2022, in addition to the deferred tax asset recognised above, the Company had an unrecognised deferred tax asset totalling £2,363,864 (2021 - £1,824,967) in respect of tax losses carried forward and available to offset future taxable profits. |
11. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
Ordinary | £1.00 | 1 | 1 |
FAR EAST FACADE (UK) LIMITED (REGISTERED NUMBER: 06665536) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 DECEMBER 2022 |
12. | ULTIMATE PARENT COMPANY |
China State Construction Engineering Corporation Limited (incorporated in People's Republic of China ) is regarded by the directors as being the Company's ultimate parent company. |
The immediate parent undertaking is Far East Facade Investments Limited, a private limited company incorporated in the British Virgin Islands. |
The smallest group to which the Company belongs and for which consolidated financial statements are prepared is headed by China State Construction Development Holdings Limited, a company incorporated in the Cayman Islands and listed on The Stock Exchange of Hong Kong. |
The consolidated financial statements of China State Construction Development Holdings Limited can be obtained from: |
16/F, Eight Commercial Tower |
8 Sun Yip Street |
Chai Wan |
Hong Kong. |