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Registered number: 05623949
CITY & DOCKLANDS CONSTRUCTION LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
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CITY & DOCKLANDS CONSTRUCTION LIMITED
REGISTERED NUMBER: 05623949
BALANCE SHEET
AS AT 30 SEPTEMBER 2022
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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CITY & DOCKLANDS CONSTRUCTION LIMITED
REGISTERED NUMBER: 05623949
BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2022
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 3 to 14 form part of these financial statements.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
City & Docklands Construction Limited (the "Company") is a private company limited by share capital, incorporated under the UK Companies Act 1985 and domiciled in England. The address of the Company's registered office is Regina House, 124 Finchley Road, London, NW3 5JS.
2.Accounting policies
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Summary of significant accounting policies
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The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all reporting periods presented, unless otherwise stated.
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Basis of preparation of financial statements
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The financial statements of the Company have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland, and the UK Companies Act 2006.
The preparation of financial statements in conformity with Financial Reporting Standard 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies.
Details of those estimates and/or judgments made in applying the Company's accounting policies towards the preparation of these financial statements that may be considered as yielding a significant risk of a material adjustment being made to the carrying amounts of assets and/or liabilities reported in the balance sheet during the next financial reporting period are disclosed in note 3 to the financial statements.
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Functional and presentational currency
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Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the "functional currency").
The functional currency of the Company and the currency in which the financial statements are presented (the "presentational currency") is 'Pounds Sterling' (£) rounded to the nearest single unit of currency.
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Foreign currency translation
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Foreign currencies are translated into the functional (and presentational) currency using the exchange rates prevailing at the date of the respective transaction or valuation where items are re-measured.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Comparatives are for the year ended 30 June 2021.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
2.Accounting policies (continued)
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Change in financial reporting period end date
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The financial reporting period end date has been changed from 30 June to 30 September and so the current and prior period figures reported within the financial statements are not entirely comparable.
The financial reporting period end date was changed for management reporting purposes.
In assessing whether the going concern basis remains appropriate for the preparation of the financial statements, the directors have reviewed the Company’s principal and emerging risks, existing loan facilities, access to funding and liquidity position and the Company's performance up to the date these financial statements were approved and the expected performance over the 12 months following the balance sheet date.
At both the balance sheet date and the date these financial statements were approved by the directors, the Company continued to be dependent on the continued financial support of third party lenders to provide sufficient working capital in order for the Company to continue trading and complete construction of its ongoing property development projects.
In preparing these financial statements the directors, having reviewed the financial performance and position of the Company up to the date these financial statements were approved, are of the opinion that:
∙the Company will require its lenders to not seek repayment until such time as the Company is able to make payment without detriment to its operational activities or on realisation of revenues on the sale of the underlying property stocks being constructed;
∙the market value of its ongoing property development projects, as of the date these financial statements were approved, are in excess of its borrowings from lenders;
∙the Company shall have adequate financial resources available at its disposal to meet the cashflow requirements of its ongoing projects;
∙completion of its ongoing projects is forecasted for January 2023 with no material overspend;
∙there are no current or expected events likely to transpire which would result in projects being undertaken to suffer an extended period of delay; and
∙no such event of default is expected to transpire in which the Company would be in breach of the terms of its loan finance arrangements and subsequently be required to immediately repay its borrowings.
While there will always remain inherent uncertainty, the directors have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the Company to continue as a going concern and therefore consider it both appropriate to continue to adopt the going concern basis in preparing the Company's financial statements and to not recognise any adjustments in the financial statements that would arise if the going concern basis were to become no longer appropriate.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
2.Accounting policies (continued)
Revenue represents the fair value received and receivable in respect of the sale of residential housing and of commercial developments net of value added tax and discounts.
Revenue is recognised in profit or loss at the point upon which when title and control of the property passes to the customer on legal completion and the performance obligation associated with the sale is completed.
The Company recognises the value of property stocks charged to cost of sales at the same time revenues on the sale of stocks are recognised in profit or loss.
The underlying value of a particular item of property stock is determined based on the total budgeted cost of developing a site. Once the total expected costs of development are established, they are allocated to individual property stocks to achieve a standard build cost per unit. Costs directly attributable to an individual property stock item, such as sales commissions, are allocated to the specific property stock item.
All borrowing costs are recognised in profit or loss during the reporting period in which they are incurred except where borrowing costs are in respect of borrowings undertaken towards the construction of specific fixed assets and/or stocks. Such borrowing costs are capitalised as part of the total cost of the specific asset and subsequently released on depreciation, impairment or disposal.
The Company makes direct contributions towards defined contribution pension plans on behalf of its employees; the assets of which are held separately from the Company in independently administered funds.
A defined contribution plan is a pension plan under which fixed contributions are payable into a separate entity. Once the contributions have been paid there are no further payment obligations. Contributions payable by the Company are recognised as an expense in profit or loss during the reporting period in which they fall due. Amounts not paid are shown as part of other creditors in the balance sheet.
Taxation comprises of income and/or corporate taxation ("current taxation") and deferred taxation recognised solely in profit or loss.
Current taxation is calculated using tax rates and on the basis of tax laws enacted or substantively enacted at the balance sheet date in the United Kingdom where the Company solely operates and generates taxable income.
Deferred taxation is recognised on temporary differences arising between the tax bases of assets and liabilities and their respective carrying amounts in the financial statements. Deferred taxation is calculated using tax rates and on the basis of tax laws enacted or substantively enacted at the balance sheet date expected to apply when the related deferred tax asset/liability is realised/settled.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
2.Accounting policies (continued)
Deferred tax assets are recognised only to the extent that it is sufficiently probable that future taxable profits will be available against which the temporary differences can be utilised.
Tangible fixed assets are recognised under the cost model and stated at historical cost less accumulated depreciation. 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 upon acquisition.
Depreciation is provided on a straight line basis over the following estimated range of useful lives:
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Freehold property and improvements
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Depreciation of a tangible fixed asset commences once the asset is available for use.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investment property is carried at cost as the property was still under construction at the balance sheet date.
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Stocks and work in progress
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Stocks and work in progress, comprising of property stocks in the course of construction and held for resale, are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.
At each balance sheet 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.
Cost comprises land and associated acquisition costs, direct materials, subcontract work and other direct costs, including directly attributable borrowing costs, that have been incurred in bringing the stocks and/or work in progress to their present location and condition.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities; with said financial assets and liabilities classified in accordance with the substance of the underlying contractual obligations rather than its legal form.
Financial assets and liabilities are recognised in the balance sheet upon becoming party to the contractual provisions of the instrument. Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or the financial asset is transferred along with substantially all the risks and rewards of ownership of the asset to another party. Financial liabilities are derecognised only when the Company’s obligations are discharged, cancelled or expired.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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The measurement of specific financial assets, financial liabilities and equity is as follows:
Debtors and creditors
Debtors, excluding deferred taxation (see note 2.12), and creditors, excluding loans (see below), are initially measured at transaction price (i.e fair value) and subsequently held, at transaction price less provision for impairment of assets.
Loans payable are initially measured at fair value, net of transaction costs, and subsequently measured at amortised cost using the effective interest method with the interest expense recognised on an effective yield basis.
Cash and cash equivalents
Cash balances are reported by the Company as being financial instruments classified as short term receivables and are represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours and subject to an insignificant risk of changes in value. Cash balances are held at floating interest rates linked to UK bank rates.
Equity and dividends
Ordinary share capital, shown in equity, is initially measured and subsequently held at its nominal value. Where the transaction price for issued shares exceeds their nominal value, the difference is shown under equity in a share premium account with any directly attributable transaction costs associated with the issuing of said shares deducted from said share premium account.
Equity dividends are recognised during the financial reporting period in which they become legally payable.
The Company uses commercial variable to fixed interest rate swaps to manage its exposure to interest rate risk on its borrowings. These derivatives are measured at fair value at each balance sheet date.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company's accounting policies, the directors are required to apply judgment and make estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other available sources based on historical experience and other factors that are considered to be relevant. Consequently, actual results may differ from that originally estimated.
In the opinion of the directors, the following judgments, estimates and/or assumptions made in applying the principal accounting policies, outlined in note 2 of these financial statements, towards the preparation of these financial statements may be considered as having a significant risk of causing a material adjustment to the carrying amount of assets and/or liabilities carried forward as at the balance sheet date where by which the actual future outcome observed may differ from that originally determined and reported.
Impairment of stocks and work in progress
The directors assess the net realisable value of property stocks in the course of construction and held for resale according to their recoverable amounts based on the realisability of these properties, taking into
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
3.Judgments in applying accounting policies (continued)
account estimated costs to completion based on past experience and committed contracts and estimated net sales based on prevailing market conditions. Provisions are made when events or changes in circumstances indicate that the current carrying value exceeds the expected net sales value.
Impairment of debtors
When assessing the recoverable value of debtors, the directors consider a variety of factors including the ageing profile of the debt, historical experience and the quality of communications to date with the debtor.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, reference is made to the latest available profit forecasts. Where the temporary differences are related to losses, relevant tax law is considered to determine the availability of the losses to offset against the future taxable profits.
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The average monthly number of employees, including directors, during the period was 3 (2021 - 0). In accordance with UK legislation, certain office holders (i.e. registered company directors and/or secretaries) of the Company are not employees of the Company on the grounds that they are not party to a contract with the Company that meets the criteria for status of an employee.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
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Freehold property and improvement
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Charge for the period on owned assets
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
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Freehold investment property
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The freehold investment properties are still under construction and are held at cost rather than at valuation.
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Property stocks in the course of construction
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No impairment was recognised in cost of sales against stocks held during the reporting period. At the balance sheet date, the provision for impairment losses in respect of stocks carried forward was £nil (2021: £nil).
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Deferred taxation is measured on an undiscounted basis and is in respect of fixed asset timing differences and trading losses carried forward as at the balance sheet date. There was no unprovided deferred taxation at the balance sheet date.
The directors are of the opinion that there is sufficient certainty the Company will generate adequate trading profits upon completion and realisation of income on its construction projects ongoing as at the balance sheet date against which said deferred tax assets will be offset.
Other debtors falling due within one year are non-interest bearing and, in the opinion of the directors, of a fair value not materially different from their carrying value.
Amounts owed by group undertakings are unsecured, interest free and repayable on demand with no fixed date of repayment.
At the balance sheet date, the provision for impairment against other debtors falling due within one year was £nil (2021: £nil).
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Cash and cash equivalents
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
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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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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand with no fixed date of repayment.
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Creditors: Amounts falling due after more than one year
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Payments received on account
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Included in creditors falling due after more than one year are the following other loans which are secured, inclusive of a negative pledge, by a fixed and floating charge over all present and future assets of the Company including a first legal charge over certain freehold land and buildings under the course of construction, included within stocks and work in progress at the balance sheet date, and a cross guarantee between the Company and certain fellow group undertakings in the form of a fixed and floating charge over all their respective present and future assets:
∙£28,245,570 (2021: £27,892,818), inclusive of accrued interest of £1,245,570 (2021: £892,818), repayable on the earlier of either the date upon which final realisation of income against which properties under construction is secured or 15 March 2032;
∙£63,127,597 (2021: £59,621,204), inclusive of accrued interest of £6,240,621 (2021: £3,192,211), repayable in monthly installments following the seventh anniversary of the first facility drawdown date (23 September 2019) with a final lump sum payment of the balance outstanding on the tenth anniversary of the first facility drawdown; and
∙£111,159,998 (2021: £51,689,630), inclusive of accrued interest of £5,788,755 (2021: £526,865), repayable in full before the fifth anniversary of the first facility drawdown.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
Excluding financial instruments of £233,350 (2021: £29,950) in respective of derivatives measured at fair value, the Company held no other financial instruments during either the current or preceding financial reporting periods that would require specific disclosure under sections 1.12, 11 or 12 of Financial Reporting Standard 102 and paragraph 36 of Schedule 1 to the Companies Act 2006.
The Company is party to contractual commitments for the purchase of property construction services entered into in the normal course of business.
The pension cost charge represents contributions made by the Company towards defined contribution pension plans on behalf of its employees and amounted to £1,635 (year ended 30 June 2021: £nil).
Employee and employer contributions payable of £466 were outstanding at the balance sheet date (30 June 2021: £nil).
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Related party transactions
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The Company has taken advantage of exemptions provided by Section 33 of Financial Reporting Standard 102 from the requirement to disclose transactions undertaken or balances carried forward as at the balance sheet date between the Company and its fellow wholly-owned group undertakings.
At the balance sheet date, the Company was owed £725,823 (2021: £725,823) and £9,600 (2021: £9,600) by the UK establishment of Freysporne Ltd. and Garu Investments Limited respectively in respect of amounts that are interest free, unsecured and repayable on demand with no fixed date of repayment. The UK establishment of Freysporne Ltd. and Garu Investments Limited are related parties by virtue of common control.
There were no other related party transactions and/or period end balances to report in accordance with the UK Companies Act 2006 and Section 1A of Financial Reporting Standard 102 as part of these financial statements.
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The immediate parent undertaking is Amber Quay Limited, a company incorporated under the BVI Business Companies Act, which holds a 100% interest in the issued share capital of the Company.
Landeck Services Limited, whose registered office is located at Craigmuir Chambers, Road Town, Tortola, British Virgin Islands, is the parent undertaking of the smallest group to consolidate these financial statements.
Copies of consolidated group financial statements for Landeck Services Limited are not publicly available.
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CITY & DOCKLANDS CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
The auditors' report on the financial statements for the period ended 30 September 2022 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
We draw attention to the reader that the Company is reliant on the continued availability of long term loan finance and continued financial support of its lenders to ensure sufficient working capital is available to achieve completion of construction projects ongoing at the balance sheet date, for the Company to make repayment as and when without detriment to its operational activities and to continue as a going concern.
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The audit report was signed on 16 November 2023 by Richard Paul (senior statutory auditor) on behalf of Nyman Libson Paul LLP.
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