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Registered number: 13121579









LOW CARBON CONSTRUCTION PLC









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2023

 
LOW CARBON CONSTRUCTION PLC
 
 
COMPANY INFORMATION


Directors
Bridgette M Farrow 
Michael D Cookson 




Company secretary
Michael D Cookson



Registered number
13121579



Registered office
Faretec Building
Cams Hall Estate

Fareham

PO16 8UY




Independent auditors
Accendo Consulting Ltd
Chartered Certified Accountants & Statutory Auditors

160 City Road

London

EC1V 2NX




Bankers
Revolut Ltd
7 Westferry Circus

Canary Wharf

London

 E14 4HD




Solicitors
Stokes Solicitors LLP
108 Victoria Road North

Southsea

Portsmouth

Hants

PO5 1QQ





 
LOW CARBON CONSTRUCTION PLC
 

CONTENTS



Page
Strategic Report
 
1 - 4
Directors' Report
 
5 - 7
Independent Auditors' Report
 
8 - 13
Statement of Comprehensive Income
 
14
Statement of Financial Position
 
15
Statement of Changes in Equity
 
16 - 17
Statement of Cash Flows
 
18
Analysis of Net Debt
 
19
Notes to the Financial Statements
 
20 - 26


 
LOW CARBON CONSTRUCTION PLC
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023

Introduction
 
The directors present their strategic report for the company covering the period from July 2022 to accounting year end of 30th June 2023.
Strategy and business model
Low Carbon Construction plc ('LCC plc') is a national housebuilder in the inaugural stages of its 5-year business plan to deliver in excess of 15,000 affordable homes per annum using its unique Offsite/Onsite™ SIP volumetric build system.
The strategy of LCC plc is multifaceted and defined by the financial goals contained within the company's 5-year business plan first published in 2021 which is now under review with an updated 2024 version envisaged to be published in January 2024. The highlights of the company’s Strategic Vision can be found by downloading the 2023 Strategic Vision document from the company’s website www.lowcarbonconstruction.co.uk and can be summarised as follows:
• To become the largest affordable housebuilder in the United Kingdom by adopting our own direct affordable housing strategy that creates new housing and communities in a way not seen before.
• To provide truly affordable quality homes - for either owner occupiers or tenants - at a fixed purchase price or monthly rental across England and Wales and across all tenures thus working towards achieving a balanced housing market.
• To locate our affordable developments in sustainable, new or existing communities within a balanced housing market that provides a mix of housing of different sizes, types and tenures to meet local needs.
• To keep such developments truly affordable in perpetuity by restricting the rental charged and the re-sale price of our developed homes to the original cost plus CPIH (Consumer Prices Index including owner occupiers' housing costs).
• To provide homes that are well designed and of a high quality and produced using modern methods of construction (MMC).
• To meet the company's Net Zero Carbon targets by 2028 in both construction and use.
• To provide value for money and the best use of public resources where such grant funds have been made available in high value land areas.
• To identify and explore additional profitable opportunities in expansion by the provision of licencing the Offsite/Onsite™ system overseas.
In keeping with the company's overall strategy and 5-year business plan the directors have agreed to continue in 2022 - 2023 to work towards both the 2021 5-year business plan objectives - as well as the upcoming revised 2024 5-year business plan - and the general strategy and ethos of the company as described more fully in the updated LCC plc 2023 Strategic Vision document.

Page 1

 
LOW CARBON CONSTRUCTION PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Business review
 
Throughout the reporting period, the business remains engaged both in the position of strategic planning and the process of raising investment funding in order to fully undertake and fulfil the goals contained within the 5-year business plan and undertakes to follow the upcoming revised 2024 5-year business plan.
Strategic planning:
Throughout the reporting period the directors have:
• re-evaluated the appointed lawyers, advisers and other professionals
• commenced the revision and re-evaluation of the original (2021) 5-year business plan
• withdrawn the inaugural £1OM share offer on the Globacap Platform and replaced such with an individually negotiated equity participation model in conjunction with the company’s equity advisors, Strand Hanson, to allow a more flexible approach to the raising of external equity/bond funds
• continued to negotiate the purchase of the first R&D development site
• developed and expanded the Team and Supply Partner network
• refined the roadmap to achieve Net Zero Carbon objectives by 2028
• continued the recruitment evaluation to appoint further main board directors
• developed further the inward investment strategy
• developed further the marketing strategy to attract investment
• reviewed the need for formal ISO standards and concluded these were not required at this pre-revenue stage prior to major developments.
The directors remain focused on the need to continue with the strategic planning necessary to achieve the full implementation of both the original 5-year business plan as well as the currently being revised 2024 version of such 5-year business plan.
Inward investment: Primarily this was being undertaken through the company's initial £10M share offer, which was originally released on the Globacap Platform in mid-2021, with an end date of 31st March 2023. As above, withdrew this inaugural £1OM share offer on the Globacap Platform and replaced such with an individually negotiated equity participation model in conjunction with the company’s equity advisors, Strand Hanson, to allow a more flexible approach to the raising of external equity/bond funds. The directors, with Strand Hanson, have produced an inward investor specific Pitch Deck which is being promoted through the Merchant Banking advisory services of Strand Hanson Ventures. The initial response to the company’s equity/bond proposals is strong albeit with an anticipated slow take up.
However, the directors remain confident of success with numerous interested parties via Strand Hanson showing early interest. 
Financial performance
The directors have decided to continue implementing the 2021 5-year business plan until the January 2024 revised version of the 5-year Business Plan is envisaged to be published.
• Sales: within the 5-year business plan no sales were anticipated until mid-2023 at the earliest in any event but due to the Covid 19 disruption that unforeseeably continued well beyond any predicted end date. It is now anticipated that these first sales will not occur until the end of 2024 or into 2025 at the earliest.
• The business anticipated, within the 2021 5-year business plan, that it would suffer losses of some £5.3m within the full year of 2022. In fact, the business suffered a reduced trading loss of £1.2m in the inaugural 18-month period (to June 2022) and has suffered a less than anticipated loss in the current period of £1.1m. This has been achieved by the directors agreeing a continued reduction in the management fees charged by Low Carbon Construction Management Limited to the company thereby reducing the outgoing costs. 
• The directors continue to maintain an agreement for both an interest free loan facility from the company's
Page 2

 
LOW CARBON CONSTRUCTION PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

main shareholder, LCC Property Holdings Limited and extended credit facilities from Low Carbon Construction Management Limited - which provides a complete management service to the company including all staff, offices administration and other services within one monthly fee - in order to cover any shortfall in funding trading losses. In that respect, in the reporting period, £1.9m was provided in loans and £168k in extended credit.
• The directors remain committed to minimising delays in achieving the financial performance anticipated both within the original 2021 5-year business plan and the under review 2024 5-year business plan. 

Principal risks and uncertainties
 
The directors have identified the following principal risks and uncertainties affecting the company:
R&D site
There are still remaining further delays and uncertainty to the first R&D site being obtained as the contract is still not fully agreed in order to be exchanged. The site was not exchanged by July 2023 as envisaged; therefore, the directors are now reviewing the options available in substitution and have alternative land options in discussion.
Inward investment
Whilst the directors remain confident of achieving the goal of raising external funding by way of equity participation there is uncertainty over the timing of such inward investment. The directors reviewed the position in July 2023 and have already implemented discussions in respect of alternative methods of substantial investment and/or loans by way of a Bond Issue.
Funding of trading losses
As aforementioned, the trading losses to date have been covered by the interest free loans provided by the company's main shareholder and the extended credit provided by Low Carbon Construction Management Limited. The directors are extremely confident that there will be no change to the forward provision of both interest free loans and/or extended credit facilities thereby allowing the company to continue towards its strategic goals whilst awaiting more substantial inward equity investment and/or external loan funds by way of wholesale bond issuance.

Financial key performance indicators
 
The company will monitor its performance using a number of measures but until sales commence there are no specific monitoring processes in place.

Page 3

 
LOW CARBON CONSTRUCTION PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Directors' statement of compliance with duty to promote the success of the Company
 
In accordance with Section 172 of the Companies Act 2006, each of the directors of the company acknowledges that they have a duty to act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. In doing this, they have regard (amongst other matters) to the:
a) Likely consequences of any decision in the long term,
b) Interests of the company's employees,
c) Need to foster the company's business relationships with suppliers, customers, and others,
d) Impact of the company's operations on the community and the environment,
e) Desirability of the company maintaining a reputation for high standards of business conduct, and
f) Need to act fairly as between members of the company.
The directors have set out in this Strategic Report how they have discharged their duties under Section 172 by taking into account the factors set out above in their decision-making. The directors also considered the interests of other stakeholders and factors relevant to the company's operations, and they believe they have acted in a way that would be most likely to promote the success of the company for the benefit of its members.
The board of directors consistently seeks to engage with our stakeholders to understand their perspectives and takes into account their feedback in board discussions and decision-making processes. The key decisions taken by the board during the year are outlined in the strategic report, with each decision reflecting our commitment to promoting the company's success.
The directors confirm that they have complied with the above requirements in deciding the company's strategy and its activities throughout the period.


This report was approved by the board and signed on its behalf.



Bridgette M Farrow
Director

Date: 21 December 2023

Page 4

 
LOW CARBON CONSTRUCTION PLC
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023

The directors present their report and the financial statements for the year ended 30 June 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £1,110,726 (2022 - loss £1,185,989).



Directors

The directors who served during the year were:

Bridgette M Farrow 
Michael D Cookson 

Future developments

Whilst the directors are disappointed to still have to report the slower than anticipated initial progress of the company towards its stated 5-year business plan financial goals - which are now under review with a revised plan anticipated to be ready for publication in January 2024; they remain eminently confident about the future of the company and its ultimate ambition to achieve the goals set out in both its original published Vision and Strategy documents, and those in the revised 2023 Strategic Vision document, as well as its long term financial plan to deliver the forecasted shareholder investment value and performance.

Page 5

 
LOW CARBON CONSTRUCTION PLC
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Research and development activities

The directors are advised that some of the work carried out during the year, specifically in respect of designing the 'flying factory' could constitute expenditure that will attract HMRC tax reliefs. The directors still intend to make such R&D tax relief application(s) in the y/e 30th June 2024 accounting period.

Engagement with suppliers, customers and others

The directors remain an integral part of the company's day to day management in that the company continues to be managed solely by the directors during this period of trading. When making decisions, each director ensures that they act in the way they consider, in good faith, would most likely promote the company's success for the benefit of its members, and in doing so have regard to:
• S172(1) (A) “The likely consequences of any decision in the long term” The Directors’ strategy is to build a quality business in the long term whilst minimising losses pre-revenue. The directors regard it important that long-term relationships are maintained and developed.
• S172(1) (B) “The interests of the company’s employees” There have been no employees during the period.
• S172(1) (C) “The need to foster the company’s business relationships with suppliers, customers and others” The directors believe in lasting partnerships, founded on a shared commitment to quality, value and service.
• S172(1) (D) “The impact of the company’s operations on the community and the environment” The Directors recognise the role that the company must play in society and is deeply committed to public collaboration and stakeholder engagement. The Directors believe strongly that the company will only succeed by working with customers, governments, suppliers, and other stakeholders particularly, for example, when facing issues as complex and challenging as climate change. The directors are developing a sustainability policy for the company to assist in decision making and the impact on the environment.
• S172(1) (E) “The desirability of the company maintaining a reputation for high standards of business conduct” The directors seek to enhance the reputation of the company for competency, reliability, quality and honesty in all its dealings with stakeholders. The directors have communicated their ethical standards and zero-tolerance approach to modern slavery, fraud, corruption and bribery to all suppliers and partners at the outset of business relationships. The Directors will investigate any suspicious activities or irregularities in its supply chain.
• S172(1) (F) “The need to act fairly as between members of the company” After weighing-up all relevant factors, the directors consider which course of action best enables delivery of the company strategy through the long-term, taking into consideration the impact on stakeholders.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Page 6

 
LOW CARBON CONSTRUCTION PLC
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Auditors

The auditorsAccendo Consulting Ltdwill be proposed for reappointment in accordance with section 489 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





Bridgette M Farrow
Director

Date: 21 December 2023

Page 7

 
LOW CARBON CONSTRUCTION PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOW CARBON CONSTRUCTION PLC
 

Opinion


We have audited the financial statements of Low Carbon Construction Plc (the 'Company') for the year ended 30 June 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 30 June 2023 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 United Kingdom, including the Financial Reporting Council'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.


Page 8

 
LOW CARBON CONSTRUCTION PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOW CARBON CONSTRUCTION PLC (CONTINUED)


Material uncertainty related to going concern


We draw attention to note 2.2 in the financial statements, which states that the company had not commenced generating income and made a loss of £1.1m for the period, with net liabilities of £2.1m, including current assets of £21k. The company's ability to commence trading is contingent upon the successful raising of finance and the timely implementation of its five-year plan. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements (and notes thereto) do not include any adjustments that might result if the company is unable to continue as a going concern. Our opinion is not modified in respect of this matter.


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. However, the aforementioned uncertainties underline that it's necessary to assess the company's ability to continue as a going concern, for which management's plans are discussed in Note 2.2. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:
1. Review of management's plans: We scrutinised the company's financial forecasts and plans, assessing their realism based on our understanding of the company and its industry.
2. Analysis of financial viability: We reviewed the company's financial position, taking into account its current loss-making status, cash flow situation, and capital structure.
3. Consideration of fundraising plans: We evaluated the company's future fundraising initiatives and the probability of these plans being successful, given the current market conditions.
4. Evaluation of support from parent company: We critically examined the commitment of the parent company to continue offering support, even in the absence of further equity or bond issue. This included a review of the parent company's financial statements.
6. Review of subsequent events: We surveyed events after the balance sheet date to determine whether any circumstances have arisen that could impact the company's going concern status.
The key observations arising from our evaluation are:
1. The company's ability to continue as a going concern is heavily dependent on the successful raising of finance, which is uncertain.
2. The company's future is also contingent upon the successful implementation of its delayed five-year plan.
3. While the directors and the parent company express confidence in raising funds and continuing to support the company, these are predicated on future events that are yet to transpire.
4. The company's negative equity position and minimal cash resources present significant liquidity risk.
5. After reviewing the parent company's last available financial statements, we noted a loss of £7k and negative assets of £17k. Excluding the investment in and loan receivable from the company, the negative assets would increase to £240k, casting further doubt on the parent company's ability to continue supporting the company.
These conditions, along with the other matters set out in the going concern note, signify that a material uncertainty exists that may cast substantial doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The financial statements (and accompanying notes) should be read with an understanding that these
Page 9

 
LOW CARBON CONSTRUCTION PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOW CARBON CONSTRUCTION PLC (CONTINUED)


uncertainties could lead to a significant adjustment to the carrying values of assets and liabilities in future periods.


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 Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion 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 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.


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 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Page 10

 
LOW CARBON CONSTRUCTION PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOW CARBON CONSTRUCTION PLC (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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.


Page 11

 
LOW CARBON CONSTRUCTION PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOW CARBON CONSTRUCTION PLC (CONTINUED)


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 an Auditors' 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.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Extent the audit was considered capable of detecting irregularities, including fraud:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
The nature of the industry and sector, control environment and business performance including results of our enquiries of management about their own identification and assessment of the risks of irregularities and any matters we identified having reviewed the Company’s policies and procedures; the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in and focused on those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006 and local tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- enquiring of management, concerning actual and potential litigation and claims;
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of
Page 12

 
LOW CARBON CONSTRUCTION PLC
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOW CARBON CONSTRUCTION PLC (CONTINUED)


any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.


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 a 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 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 Auditors' 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 2006Our 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 Auditors' 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.





R M Asif Rafique (Senior Statutory Auditor)
for and on behalf of
Accendo Consulting Ltd
Chartered Certified Accountants & Statutory Auditors

21 December 2023
Page 13

 
LOW CARBON CONSTRUCTION PLC
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023

2023
2022
Note
£
£

  

Administrative expenses
  
(1,110,726)
(1,185,989)

Operating loss
  
(1,110,726)
(1,185,989)

Loss for the financial year
  
(1,110,726)
(1,185,989)

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 20 to 26 form part of these financial statements.

Page 14

 
LOW CARBON CONSTRUCTION PLC
REGISTERED NUMBER: 13121579

STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023

2023
2022
Note
£
£

  

Current assets
  

Debtors: amounts falling due within one year
 5 
21,419
19,837

Cash at bank and in hand
 6 
-
405

  
21,419
20,242

Creditors: amounts falling due within one year
 7 
(2,148,084)
(1,036,181)

Net current liabilities
  
 
 
(2,126,665)
 
 
(1,015,939)

Total assets less current liabilities
  
(2,126,665)
(1,015,939)

  

Net liabilities
  
(2,126,665)
(1,015,939)


Capital and reserves
  

Called up share capital 
 9 
55,082
55,082

Share premium account
 10 
114,968
114,968

Profit and loss account
 10 
(2,296,715)
(1,185,989)

  
(2,126,665)
(1,015,939)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Bridgette M Farrow
Michael D Cookson
Director
Director
Date: 21 December 2023
Date:21 December 2023

The notes on pages 20 to 26 form part of these financial statements.

Page 15

 
LOW CARBON CONSTRUCTION PLC
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£

At 1 July 2022
55,082
114,968
(1,185,989)
(1,015,939)


Comprehensive income for the year

Loss for the year

-
-
(1,110,726)
(1,110,726)


Other comprehensive income for the year
-
-
-
-


Total comprehensive income for the year
-
-
(1,110,726)
(1,110,726)


Total transactions with owners
-
-
-
-


At 30 June 2023
55,082
114,968
(2,296,715)
(2,126,665)


The notes on pages 20 to 26 form part of these financial statements.

Page 16

 
LOW CARBON CONSTRUCTION PLC
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


Comprehensive income for the period

Loss for the period

-
-
(1,185,989)
(1,185,989)


Other comprehensive income for the period
-
-
-
-


Total comprehensive income for the period
-
-
(1,185,989)
(1,185,989)


Contributions by and distributions to owners

Shares issued during the period
55,082
114,968
-
170,050


Total transactions with owners
55,082
114,968
-
170,050


At 30 June 2022
55,082
114,968
(1,185,989)
(1,015,939)


The notes on pages 20 to 26 form part of these financial statements.

Page 17

 
LOW CARBON CONSTRUCTION PLC
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023

2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(1,110,726)
(1,185,989)

Adjustments for:

(Increase) in debtors
(1,582)
(19,837)

(Decrease)/increase in creditors
(678,380)
862,211

Increase in amounts owed to groups
1,790,283
173,970

Net cash generated from operating activities

(405)
(169,645)



Cash flows from financing activities

Issue of ordinary shares
-
170,050

Net cash used in financing activities
-
170,050

Net (decrease)/increase in cash and cash equivalents
(405)
405

Cash and cash equivalents at beginning of year
405
-

Cash and cash equivalents at the end of year
-
405


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
-
405

-
405


The notes on pages 20 to 26 form part of these financial statements.

Page 18

 
LOW CARBON CONSTRUCTION PLC
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2023



At 1 July 2022
Cash flows
£

£


405
(405)

The notes on pages 20 to 26 form part of these financial statements.

Page 19

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.


General information

Low Carbon Construction Plc is a public limited company incorporated in England & Wales. The registered office of the company is Faretec Building, Cams Hall Estate, Fareham, PO16 8UY.
The principal place of business and correspondence address is the same as the registered office.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The financial statements are presented in British Pounds (£), which is the company's functional and presentation currency. All financial information presented in Pounds has been rounded to the nearest decimal, as appropriate.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.

Page 20

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.2

Going concern

The financial statements have been prepared on a going concern basis.
As of 30 June 2023, the company had not commenced generating income and made a loss of £1.1m for the period, with net liabilities of £2.1m, including current assets of £21k.
The company's ability to continue as a going concern is contingent upon the successful raising of finance and the timely implementation of its five-year plan. The directors acknowledge that sustained losses beyond the year ending 30 June 2024, without the receipt of equity or bond funds, would necessitate the major shareholder reassessing the viability of the business plan's scale.
The company relies on extended credit from Low Carbon Construction Management Limited and interest-free loans provided by LCC Property Holdings Limited, pending the realisation of anticipated equity investment and/or a bond issue. The directors have agreed with Low Carbon Construction Management Limited to reduce the monthly fee charged from £167k, as contained within the 2021 business plan, to £90k until such time that the inward equity investment and/or Bond funds are sufficient to allow the business plan to be enacted at a faster pace as envisaged. This action has been executed and the company has received invoices exactly in line with this agreement helping to mitigate losses.
Over the next 12 months the directors consider that the business is likely to continue to suffer trading losses of circa £100k per month. This was envisaged within the original 5-year business plan and the revised 2024 5-year business plan will reflect such forecast. The directors continue to have the full support of the major shareholder in funding such losses regardless of the lack of the receipt of anticipated inward equity/Bond monies over the last trading period.
LCC Property Holdings Limited, a 90% shareholder, is well aware of the content of the 5-year business plan as well as of the revisions being discussed currently and is content to continue to fund the anticipated losses. The directors continue to consider there is little to no risk of the company being unable to continue as a going concern for the foreseeable future.
However, it is noted that the successful raising of finance, the implementation of the business plan, and the start of revenue generation from the year ending 30 June 2025 constitute material uncertainties that may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include any adjustments that would result if the company was unable to continue as a going concern.
The directors and the company's regulated financial introducer remain positive about the company's ability to raise substantial funds via either an equity or bond issue during the year ending 30 June 2024.
The financial statements have therefore been prepared on the basis that the company is a going concern, and the directors believe that it is appropriate to do so. This belief takes into consideration the aforementioned uncertainties and their potential impact on the company's ability to continue its operations in the foreseeable future.

Page 21

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.3

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.4

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.5

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.6

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of Financial Position 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.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Page 22

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)


2.6
Financial instruments (continued)

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Page 23

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)


2.6
Financial instruments (continued)

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
13,000
13,000

Fees payable to the Company's auditors and their associates in respect of:

All non-audit services not included above
2,500
2,500


4.


Employees

Staff costs were as follows:





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


        2023
        2022
            No.
            No.







Admin and management
2
2

Page 24

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

5.


Debtors

2023
2022
£
£


Other debtors
21,419
19,837

21,419
19,837



6.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
-
405

-
405



7.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
168,331
846,711

Amounts owed to group undertakings
1,964,253
173,970

Accruals and deferred income
15,500
15,500

2,148,084
1,036,181



8.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
-
405




9.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



550,817 (2022 - 550,817) Ordinary shares of £0.10 each
55,082
55,082
Page 25

 
LOW CARBON CONSTRUCTION PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

9.Share capital (continued)




10.


Reserves

Share premium account

In addition to the nominal value of shares issued, the company received a premium of £114,968 on the issue of shares. The total amount received from the issue of shares was £170,050 (£55,082 in nominal value plus £114,968 in share premium). The share premium is recorded in a non-distributable reserve, the 'Share Premium Account'.


11.


Related party transactions

The following is a summary of transactions that were carried out with related parties:
LCC Property Holdings Ltd (LCCPH): 
On incorporation, LCC Property Holdings Limited (LCCPH), subscribed for 500,000 ordinary shares at £0.10 each. This entity is the parent company of Low Carbon Construction Plc (LCC Plc) and holds majority of the issued share capital. 
During the period, LCCPH advanced loan of £1.79m to the company. The loan is interest-free, unsecured, and repayable on demand. At the year end the company owed £1.96m (2022: £173k) to LCCPH.
Low Carbon Construction Management Ltd (LCCM): 
This entity is controlled by Mr Simon C Allso, the original inventor of the Low Carbon Construction Offsite/Onsite system. Bridgette Farrow, who is also a director of LCC Plc, is a sole director of this company. During the year, LCCM charged management fee of £1.08m (2022: £1.08m) to LCC Plc. At the year end, the company owed £170k (2022: £847k) to LCCM. The balance is repayable on demand and there is no interest due.
Directors:
On incorporation the Directors subscribed for a total of 25,000 ordinary shares at £0.10 each.

 
Page 26