Badger Building (E. Anglia) Limited - Limited company accounts 17.3

REGISTERED NUMBER: 02407008 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 March 2017

for

Badger Building (E. Anglia) Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTORS:

S D George

S R Lambert

S Muirhead

R J Lockhart

SECRETARY:

S D George

REGISTERED OFFICE:

Stanley House

Stanley Street

Lowestoft

Suffolk

NR32 2DZ

REGISTERED NUMBER:

02407008 (England and Wales)

AUDITORS:

Cunninghams Statutory Auditors

Number Sixty One

Alexandra Road

Lowestoft

Suffolk

NR32 1PL

The directors present their strategic report for the year ended 31 March 2017.

REVIEW OF BUSINESS

The company has had another profitable year and the directors are satisfied with the trading performance.

The company has a strong and diversified land bank with plot additions exceeding plot sales in the year.

The company has faced a number of challenges in the year and these are ongoing, namely:

- a shortage of material supply with associated cost pressures;

- a shortage of skilled labour;

- pressure on the gross profit margin caused by having to provide a significant number of social houses on each site with

no contribution to margin.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors are mindful at all times of the risks and and factors which affect the successful operation of the company's

business.

Operating risks include, but are not limited to, the following issues:

- the economic climate, housing market and mortgage availability;

- the availability of development land and the complexities of dealing with the planning process;

- attracting and retaining the very best personnel, workforce, subcontractors and professional advisors;

- adequate systems in place to mitigate the dangers inherent in the construction process.

KEY PERFORMANCE INDICATORS

Turnover - up 3.3%

Margin - up 5%

Plot sales - up 17 units

BY ORDER OF THE BOARD:

S D George - Secretary

6 November 2017

The directors present their report with the financial statements of the company for the year ended 31 March 2017.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of housebuilding.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2017.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2016 to the date of this report.

S D George

S R Lambert

S Muirhead

R J Lockhart

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), 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 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.

AUDITORS

The auditors, Cunninghams Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

BY ORDER OF THE BOARD:

S D George - Secretary

6 November 2017

We have audited the financial statements of Badger Building (E. Anglia) Limited for the year ended 31 March 2017 on

pages six to eighteen. The financial reporting framework that has been applied in their preparation is 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'.

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.

Respective responsibilities of directors and auditors

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. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.

This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and

have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by

the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with

the audited financial statements and to identify any information that is apparently materially incorrect based on, or

materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2017 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and

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

Opinion on other matter 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with

the financial statements, and has been prepared in accordance with applicable legal requirements. In the light of the

knowledge and understanding of the company and its environment, we have not identified any material misstatements in

the Strategic Report or the Report of the Directors.

Matters on which we are required to report by exception

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.

Martin Smith (Senior Statutory Auditor)

for and on behalf of Cunninghams Statutory Auditors

Number Sixty One

Alexandra Road

Lowestoft

Suffolk

NR32 1PL

29 November 2017

TURNOVER

4

14,810,621

14,354,453

Cost of sales

9,611,056

9,984,144

GROSS PROFIT

5,199,565

4,370,309

Administrative expenses

1,265,411

2,971,292

3,934,154

1,399,017

Other operating income

82,055

64,407

OPERATING PROFIT

7

4,016,209

1,463,424

Interest receivable and similar income

7,949

24,325

PROFIT BEFORE TAXATION

4,024,158

1,487,749

Tax on profit

8

808,463

280,353

PROFIT FOR THE FINANCIAL YEAR

3,215,695

1,207,396

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,215,695

Prior year adjustment

27,237

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

1,234,633

FIXED ASSETS

Intangible assets

9

31,677

42,236

Tangible assets

10

401,633

391,390

Investments

11

100

100

433,410

433,726

CURRENT ASSETS

Stocks

12

27,422,134

24,085,965

Debtors

13

631,437

610,287

Cash at bank and in hand

14

2,075,355

3,122,295

30,128,926

27,818,547

CREDITORS

Amounts falling due within one year

15

3,486,328

4,384,947

NET CURRENT ASSETS

26,642,598

23,433,600

TOTAL ASSETS LESS CURRENT LIABILITIES

27,076,008

23,867,326

PROVISIONS FOR LIABILITIES

18

60,395

67,408

NET ASSETS

27,015,613

23,799,918

CAPITAL AND RESERVES

Called up share capital

19

6,075

6,075

Share premium

20

2,735,843

2,735,843

Capital redemption reserve

20

168

168

Retained earnings

20

24,273,527

21,057,832

SHAREHOLDERS' FUNDS

27,015,613

23,799,918

The financial statements were approved by the Board of Directors on 6 November 2017 and were signed on its behalf by:

S D George - Director

S Muirhead - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 April 2015

6,075

19,823,199

2,735,843

168

22,565,285

Prior year adjustment

-

27,237

-

-

27,237

As restated

6,075

19,850,436

2,735,843

168

22,592,522

Changes in equity

Total comprehensive income

-

1,207,396

-

-

1,207,396

Balance at 31 March 2016

6,075

21,057,832

2,735,843

168

23,799,918

Changes in equity

Total comprehensive income

-

3,215,695

-

-

3,215,695

Balance at 31 March 2017

6,075

24,273,527

2,735,843

168

27,015,613

Cash flows from operating activities

Cash generated from operations

1

(1,217,848

)

630,628

Tax paid

(267,285

)

(1,042,941

)

Net cash from operating activities

(1,485,133

)

(412,313

)

Cash flows from investing activities

Purchase of tangible fixed assets

(140,778

)

(141,473

)

Sale of tangible fixed assets

42,590

38,920

Interest received

7,949

24,325

Net cash from investing activities

(90,239

)

(78,228

)

Cash flows from financing activities

Amount withdrawn by directors

850,768

114,929

Net cash from financing activities

850,768

114,929

Decrease in cash and cash equivalents

(724,604

)

(375,612

)

Cash and cash equivalents at beginning of year

2

2,799,959

3,175,571

Cash and cash equivalents at end of year

2

2,075,355

2,799,959

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.3.17

31.3.16

£

£

Profit before taxation

4,024,158

1,487,749

Depreciation charges

100,202

78,503

Profit on disposal of fixed assets

(1,697

)

(12,459

)

Finance income

(7,949

)

(24,325

)

4,114,714

1,529,468

Increase in stocks

(3,336,169

)

(2,699,462

)

(Increase)/decrease in trade and other debtors

(21,150

)

244,017

(Decrease)/increase in trade and other creditors

(1,975,243

)

1,556,605

Cash generated from operations

(1,217,848

)

630,628

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 31 March 2017

31.3.17

1.4.16

£

£

Cash and cash equivalents

2,075,355

3,122,295

Bank overdrafts

-

(322,336

)

2,075,355

2,799,959

Year ended 31 March 2016

31.3.16

1.4.15

£

£

Cash and cash equivalents

3,122,295

3,397,489

Bank overdrafts

(322,336

)

(221,918

)

2,799,959

3,175,571

1.	GENERAL INFORMATION

Badger Building (East Anglia) Limited is a limited company incorporated and domiciled in the United Kingdom.

2.	STATUTORY INFORMATION

Badger Building (E. Anglia) Limited 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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Preparation of consolidated financial statements

The financial statements contain information about Badger Building (E. Anglia) Limited as an individual

company and do not contain consolidated financial information as the parent of a group. The company has taken

the option under Section 405 of the Companies Act 2006 not to prepare consolidated financial statements.

Significant judgements and estimates

The preparation of the financial statements involves, in certain areas, the use of accounting estimates and

management judgement. The key areas involving estimates and judgements are as follows:

- the valuation of work in progress, incorporating assessments of future income and costs.

- the appropriate method and rate for depreciation of depreciation of tangible fixed assets.

- loans under shared equity schemes are valued according to the Nationwide House Price Index.

Changes in accounting policies

The adoption of FRS102 - 'The Financial Reporting Standard applicable in the UK and Republic Of Ireland' has

resulted in a change of accounting policy in respect of the treatment of Shared Equity Schemes. The previous

accounting policy was to value the loans at cost less any identified impairment. Under the new policy, such loans

are measured at fair value each year. The new policy is set out below under Shared Equity Schemes and an

assessment of the impact of the change is detailed later in the accounts.

Revenue recognition

Revenue represents the total sales of legally completed properties, excluding part exchange property sales (which

are included within cost of sales). Revenue and profit on sales are recognised upon legal completion.

Sales of bare land are recognised on legal completion.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Patents and licences are being amortised evenly over their estimated useful life of nil years.

Licence plates

The company have acquired a number of licence plate entitlements. The directors consider that the residual value

of the entitlements cannot be reliably estimated and so are depreciating the asset at a rate of 25% per annum on

the straight line basis.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

20% on reducing balance and 15% on cost

Fixtures and fittings

-

20% on reducing balance

Motor vehicles

-

20% on reducing balance

Office equipment

-

25% on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks and work in progress

Stocks and work in progress are stated at the lower of cost and net realisable value. Work in progress comprises

direct materials, labour costs, sub-contractor costs, site overheads and associated professional charges.

Development land is included where contracts to purchase land have been completed prior to the year end.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, 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.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. 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 further payment obligations.

The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not

paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the

company in an independently administrated fund.

Shared equity scheme

The Company offers shared equity home ownership schemes, either on its own account or through HomeBuy

Direct, under which qualifying home buyers can defer payment of part of the agreed sales price up to a maximum

of 25% under the Company's own scheme or 30% under the HomeBuy Direct scheme, of which half is

attributable to the Company.

The deferral period ends with the earlier of 10 years, remortgage or resale of the property. On occurrence of one

of these events, the Company will receive a repayment based on its contributed equity percentage and the

applicable market value of the property as determined by an arms length disposal or by a member of the Royal

Institute of Chartered Surveyors. Early or part repayment is allowable under the schemes and amounts are

secured by way of a second charge over the property.

The shared equity loans receivable are a hybrid financial instrument consisting of an initial principle component

and an embedded derivative whose value varies in accordance with movements in the specific property price to

which the loan relates. The loans are non-interest bearing.

At each reporting date the valuation of the loans will be adjusted to reflect changes in market conditions (fair

value) through the Statement of Comprehensive Income.

4.

TURNOVER

Turnover and profit before taxation are attributable to one continuing activity, housebuilding. All turnover arose

within the United Kingdom.

5.	EMPLOYEES AND DIRECTORS

31.3.17

31.3.16

£

£

Wages and salaries

1,446,212

2,957,123

Social security costs

147,421

362,731

Other pension costs

57,361

29,050

1,650,994

3,348,904

The average monthly number of employees during the year was as follows:

31.3.17

31.3.16

Office and management

17

18

Construction

33

32

50

50

6.	DIRECTORS' EMOLUMENTS

31.3.17

31.3.16

£

£

Directors' remuneration

211,326

1,903,992

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

4

Information regarding the highest paid director is as follows:

31.3.17

31.3.16

£

£

Emoluments etc

85,089

1,682,008

7.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.3.17

31.3.16

£

£

Plant hire and consumables

163,559

124,911

Depreciation - owned assets

89,642

78,505

Profit on disposal of fixed assets

(1,697

)

(12,459

)

Patents and licences amortisation

10,559

-

Auditors' remuneration

10,500

11,500

Auditors' remuneration for non audit work

12,000

12,000

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.3.17

31.3.16

£

£

Current tax:

UK corporation tax

815,476

267,294

Deferred tax

(7,013

)

13,059

Tax on profit

808,463

280,353

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:

31.3.17

31.3.16

£

£

Profit before tax

4,024,158

1,487,749

Profit multiplied by the standard rate of corporation tax in the UK of 20% (2016 - 20%)

804,832

297,550

Effects of:

Expenses not deductible for tax purposes

1,858

2,364

Capital allowances in excess of depreciation

-

(13,067

)

Depreciation in excess of capital allowances

5,794

-

Adjustments to tax charge in respect of previous periods

(8

)

-

Pension contributions paid

(3,000

)

(28,000

)

Deferred taxation

(7,013

)

13,059

Transition to FRS 102

-

5,447

Pension contributions not paid

6,000

3,000

Total tax charge

808,463

280,353