REGISTERED NUMBER: 02933452 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 May 2023 |
for |
ASSAEL ARCHITECTURE LIMITED |
REGISTERED NUMBER: 02933452 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 May 2023 |
for |
ASSAEL ARCHITECTURE LIMITED |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 May 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 3 |
Directors' Responsibilities Statement | 5 |
Report of the Independent Auditors | 6 |
Consolidated Income Statement | 9 |
Consolidated Other Comprehensive Income | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 17 |
ASSAEL ARCHITECTURE LIMITED |
Company Information |
for the Year Ended 31 May 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditors |
Dukes Court |
Duke Street |
Woking |
Surrey |
GU21 5BH |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Group Strategic Report |
for the Year Ended 31 May 2023 |
The directors present their strategic report of the company and the group for the year ended 31 May 2023. |
The 5th Five Year Business Plan, June 2022 - May 2027, directs the management to achieve pre-set goals. There will be occasions where targets will be exceeded, and some targets missed. The management has become experienced in both managing expansion and contraction. The business has not achieved some of the financial targets. Growth in turnover was not achieved and saw a small decline of 4.8% compared to the previous year. The Directors were pleased with the turnaround in profitability with a 31% increase in EBITDA and are cautiously optimistic that the resilience of the business will allow for a return to sustained growth and to achieve the targets set out in the five year plan. |
FAIR REVIEW OF THE BUSINESS |
The past financial year has been a period of business as usual with much of the fee income from existing clients. However, new living concepts like senior living and co-living are widening the client base. Investment in opportunities in Europe and the Middle East should generate significant fees in the future. Staff numbers were relatively static in this period. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The business has seen a number of projects delayed and some have subsequently been started. |
At some points during the year the bank loan covenants were breached whilst we continued to service the loan repayments in full. The bank remained supportive and during June 2023 provided the group additional bank loan finance of £635,000. The new loan agreement incorporated the existing loan of £240,000, bringing the total bank loan to £875,000. The loan has a five-year repayment term. |
Principal risks are explained further in the going concern note within accounting policies in note 2. |
DEVELOPMENT AND PERFORMANCE |
Architectural commissions have seen a tightening of profit margins which has led to variation work being closely monitored in order to gain additional fee income. Areas such as the provision of second staircases in new developments has seen a growth in income but have often led to a delay in projects commencing on site. The interiors and landscape divisions continue to establish their services and incomes. The Sydney office was closed at the beginning of the financial year and there are no plans to reopen it. We continue to win awards for design. |
KEY PERFORMANCE INDICATORS |
The Business Plan has set many targets that are measured with key performance indicators. Most targets have been met in this period. The firm submitted their application for B-Corp accreditation in March 2023. The practice continues to be accredited with quality management systems, including ISO 9001 and ISO 14001 and health and safety accreditation SSIP. |
ON BEHALF OF THE BOARD: |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Report of the Directors |
for the Year Ended 31 May 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 May 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of architectural services. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 May 2023. |
FUTURE DEVELOPMENTS |
The management is stable and committed to the growth of a sustainable profitable business. Staff turnover is low and many staff have been with the practice for more than ten years. Our reputation in the housing sector is strong and in particular, our research led approach with Private Rental Sector (PRS) business has generated significant fees. Continued research will expand our offering with a focus on later living and multi-generational living concepts. The future is looking relatively positive. Employee numbers are expected to increase in numbers during 2024. In 2023/24, the Directors are looking to expand with a more formal office in Bahrain and possibly in Saudi Arabia as well as a project office in Europe. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 June 2022 to the date of this report. |
Other changes in directors holding office are as follows: |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Report of the Directors |
for the Year Ended 31 May 2023 |
FINANCIAL INSTRUMENTS |
The group operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the group's activities. |
The group's principal financial instruments include basic financial instruments arising from the group's activities and bank overdrafts, loans and finance leases, the main purpose of which is to raise finance for the group's operations where required. In addition, the group has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. |
Liquidity risk |
The group manages its cash and borrowing requirements in order to maximise interest income and minimize interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business. |
Interest rate risk |
The group is exposed to fair value interest rate risk on its fixed borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. |
Foreign currency risk |
The group's principal foreign currency exposures arise from trading with overseas companies. This is however a rarity for this group and therefore the risk is minimal. |
Credit risk |
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary. |
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 group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Directors' Responsibilities Statement |
for the Year Ended 31 May 2023 |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
Report of the Independent Auditors to the Members of |
Assael Architecture Limited |
Opinion |
We have audited the financial statements of Assael Architecture Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report, the Report of the Directors and the Directors' Responsibilities Statement, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Assael Architecture Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Directors' Responsibilities Statement set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We identified the areas of greatest potential for risk for fraud were management override and revenue recognition for contracts straddling the year end. We selected a sample of revenue transactions at the year-end to perform detailed testing of Amounts recoverable on contracts. In relation to management override we selected a sample from the entire population of journals, identifying specific transactions which did not meet our expectations based on specific criteria, to investigate to gain an understanding and agree to source to documentation. We also performed analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Assael Architecture Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
Dukes Court |
Duke Street |
Woking |
Surrey |
GU21 5BH |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Consolidated |
Income Statement |
for the Year Ended 31 May 2023 |
31.5.23 | 31.5.22 |
Notes | £ | £ |
TURNOVER | 3 | 7,686,006 | 8,077,119 |
Administrative expenses | 7,362,192 | 7,824,919 |
323,814 | 252,200 |
Other operating income | - | 6,875 |
OPERATING PROFIT | 5 | 323,814 | 259,075 |
Interest receivable and similar income | 1,103 | 39 |
324,917 | 259,114 |
Interest payable and similar expenses | 6 | (50,747 | ) | 60,789 |
PROFIT BEFORE TAXATION | 375,664 | 198,325 |
Tax on profit | 7 | (32,248 | ) | (76,702 | ) |
PROFIT FOR THE FINANCIAL YEAR |
Profit attributable to: |
Owners of the parent | 407,912 | 275,027 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Consolidated |
Other Comprehensive Income |
for the Year Ended 31 May 2023 |
31.5.23 | 31.5.22 |
Notes | £ | £ |
PROFIT FOR THE YEAR | 407,912 | 275,027 |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
407,912 |
275,027 |
Total comprehensive income attributable to: |
Owners of the parent | 407,912 | 275,027 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Consolidated Balance Sheet |
31 May 2023 |
31.5.23 | 31.5.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 | 397,907 | 532,228 |
Investments | 10 | - | - |
397,907 | 532,228 |
CURRENT ASSETS |
Debtors | 11 | 3,646,239 | 3,371,156 |
Cash at bank and in hand | 532,914 | 952,645 |
4,179,153 | 4,323,801 |
CREDITORS |
Amounts falling due within one year | 12 | 1,948,391 | 2,026,743 |
NET CURRENT ASSETS | 2,230,762 | 2,297,058 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
2,628,669 |
2,829,286 |
CREDITORS |
Amounts falling due after more than one year |
13 |
(33,451 |
) |
(279,209 |
) |
PROVISIONS FOR LIABILITIES | 18 | (19,087 | ) | (34,808 | ) |
NET ASSETS | 2,576,131 | 2,515,269 |
CAPITAL AND RESERVES |
Called up share capital | 19 | 200,000 | 200,000 |
Retained earnings | 20 | 2,376,131 | 2,315,269 |
SHAREHOLDERS' FUNDS | 2,576,131 | 2,515,269 |
The financial statements were approved by the Board of Directors and authorised for issue on 24 November 2023 and were signed on its behalf by: |
J S Assael - Director |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Company Balance Sheet |
31 May 2023 |
31.5.23 | 31.5.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
Investments | 10 |
CURRENT ASSETS |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings | 20 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 215,762 | 38,512 |
The financial statements were approved by the Board of Directors and authorised for issue on |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 May 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 June 2021 | 200,000 | 2,040,242 | 2,240,242 |
Changes in equity |
Total comprehensive income | - | 275,027 | 275,027 |
Balance at 31 May 2022 | 200,000 | 2,315,269 | 2,515,269 |
Changes in equity |
Total comprehensive income | - | 407,912 | 407,912 |
Gift to AAL Employee |
Ownership Trustee | - | (347,050 | ) | (347,050 | ) |
Balance at 31 May 2023 | 200,000 | 2,376,131 | 2,576,131 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Company Statement of Changes in Equity |
for the Year Ended 31 May 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 June 2021 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 May 2022 |
Changes in equity |
Total comprehensive income | - |
Gift to AAL Employee |
Ownership Trustee | - | (347,050 | ) | (347,050 | ) |
Balance at 31 May 2023 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Consolidated Cash Flow Statement |
for the Year Ended 31 May 2023 |
31.5.23 | 31.5.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 366,112 | 34,693 |
Interest paid | (51,730 | ) | (62,386 | ) |
Finance costs paid | 102,477 | 1,597 |
Tax paid | 70,563 | 148,419 |
Net cash from operating activities | 487,422 | 122,323 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (47,286 | ) | (70,459 | ) |
Interest received | 1,103 | 39 |
Net cash from investing activities | (46,183 | ) | (70,420 | ) |
Cash flows from financing activities |
Loan repayments in year | (480,000 | ) | (480,000 | ) |
Capital repayments in year | (28,179 | ) | (19,211 | ) |
Amount withdrawn by directors | (5,741 | ) | - |
Gifts to AAL Employee Ownership Trustee | (347,050 | ) | - |
Net cash from financing activities | (860,970 | ) | (499,211 | ) |
Decrease in cash and cash equivalents | (419,731 | ) | (447,308 | ) |
Cash and cash equivalents at beginning of year |
2 |
952,645 |
1,399,953 |
Cash and cash equivalents at end of year | 2 | 532,914 | 952,645 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 May 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.5.23 | 31.5.22 |
£ | £ |
Profit before taxation | 375,664 | 198,325 |
Depreciation charges | 177,324 | 202,173 |
Loss on disposal of fixed assets | 4,284 | - |
Finance costs | (50,747 | ) | 60,789 |
Finance income | (1,103 | ) | (39 | ) |
505,422 | 461,248 |
(Increase)/decrease in trade and other debtors | (323,379 | ) | 38,773 |
Increase/(decrease) in trade and other creditors | 184,069 | (465,328 | ) |
Cash generated from operations | 366,112 | 34,693 |
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 May 2023 |
31.5.23 | 1.6.22 |
£ | £ |
Cash and cash equivalents | 532,914 | 952,645 |
Year ended 31 May 2022 |
31.5.22 | 1.6.21 |
£ | £ |
Cash and cash equivalents | 952,645 | 1,399,953 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.6.22 | Cash flow | At 31.5.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 952,645 | (419,731 | ) | 532,914 |
952,645 | (419,731 | ) | 532,914 |
Debt |
Finance leases | (103,458 | ) | 28,179 | (75,279 | ) |
Debts falling due within 1 year | (480,000 | ) | 240,000 | (240,000 | ) |
Debts falling due after 1 year | (240,000 | ) | 240,000 | - |
(823,458 | ) | 508,179 | (315,279 | ) |
Total | 129,187 | 88,448 | 217,635 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 May 2023 |
1. | STATUTORY INFORMATION |
Assael Architecture Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going concern |
The impact of the pandemic continues to be felt with most staff working in a hybrid way. This could result in reducing the size of the offices over the next two years and the directors will assess the options available before break clauses in 2025. Most of the group's services are for large institutions, housing associations or publicly quoted companies, so the risk of client insolvency is low. The group has obtained additional loan finance with the current provider post year end which is over a five year term. Some of the covenants on the group bank loan have been breached but the bank remains supportive. Whilst the directors recognise there is some uncertainty, they are satisfied that the group has adequate access to sources of funding to continue in operational existence for the foreseeable future. Accordingly, the group has adopted the going concern basis in preparing financial statements. |
Significant judgements and estimates |
In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions in areas where this information is not readily available from other sources. The estimates and assumptions are based on the historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The key source of estimation uncertainty is the recognition of turnover on long term contracts. This requires management judgement regarding the proportion of works completed at the balance sheet date. The value of work completed at the balance sheet date is assessed by reference to the actual contract costs at the balance sheet date compared to total budgeted costs to complete the contract. The reconcilability of all debtors, including amounts recoverable on long term contracts is reviewed by the directors at each balance sheet date to ensure no impairment is required. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. |
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (on delivery), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered. |
Tangible fixed assets |
Long leasehold | - |
Plant and machinery | - |
Fixtures and fittings | - |
Tangible fixed assets are stated at historical purchase cost less accumulated depreciation. Cost includes |
the original purchase price of the asset and the costs attributable to bringing the asset to working condition for its intended use. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all material 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. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Financial instruments |
The group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable. |
Cash and cash equivalents |
Cash and cash equivalents include cash in hand and deposits held at call with banks. |
Debtors |
Short term debtors are measured at transaction price, less any impairment. They are assessed for indicators of impairment at each reporting end date. |
Creditors |
Short term creditors are measured at the transaction price. Other financial liabilities, including loans and finance leases are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. |
Employee ownership trust |
The group established AAL Employee Ownership Trust to enable shares in the company to be held by the trustees for the benefit of the company's employees. Distributions made by the company are treated as gifts to the trust so the trust can meet its obligations. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by geographical market is given below: |
31.5.23 | 31.5.22 |
£ | £ |
United Kingdom | 7,633,277 | 7,738,300 |
Europe | 26,878 | - |
Middle East & Asia | 16,129 | 43,877 |
Australia | 9,722 | 294,942 |
7,686,006 | 8,077,119 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
4. | EMPLOYEES AND DIRECTORS |
31.5.23 | 31.5.22 |
£ | £ |
Wages and salaries | 4,371,502 | 4,664,233 |
Social security costs | 517,212 | 538,299 |
Other pension costs | 172,899 | 185,138 |
5,061,613 | 5,387,670 |
The average number of employees during the year was as follows: |
31.5.23 | 31.5.22 |
Employees and directors |
31.5.23 | 31.5.22 |
£ | £ |
Directors' remuneration | 879,638 | 1,099,860 |
Directors' pension contributions to money purchase schemes | 69,329 | 80,445 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 6 | 6 |
Information regarding the highest paid director is as follows: |
31.5.23 | 31.5.22 |
£ | £ |
Emoluments etc | 189,461 | 211,509 |
Pension contributions to money purchase schemes | 10,000 | - |
The directors represent the key management of the company. |
5. | OPERATING PROFIT |
The operating profit is stated after charging: |
31.5.23 | 31.5.22 |
£ | £ |
Other operating leases | 371,077 | 435,199 |
Depreciation - owned assets | 177,324 | 202,173 |
Loss on disposal of fixed assets | 4,284 | - |
Auditors' remuneration | 18,250 | 22,850 |
Auditors' remuneration for non audit work | 22,900 | 18,563 |
Foreign exchange differences | 29 | 191 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.5.23 | 31.5.22 |
£ | £ |
Bank interest | 35,562 | 43,756 |
Lease finance charges paid | 16,168 | 18,630 |
Bank charges | 4,415 | 3,758 |
Bad debts | (106,892 | ) | (5,355 | ) |
(50,747 | ) | 60,789 |
7. | TAXATION |
Analysis of the tax credit |
The tax credit on the profit for the year was as follows: |
31.5.23 | 31.5.22 |
£ | £ |
Current tax: |
UK corporation tax | (16,527 | ) | (61,645 | ) |
Deferred tax | (15,721 | ) | (15,057 | ) |
Tax on profit | (32,248 | ) | (76,702 | ) |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.5.23 | 31.5.22 |
£ | £ |
Profit before tax | 375,664 | 198,325 |
Profit multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
71,376 |
37,682 |
Effects of: |
Expenses not deductible for tax purposes | 12,006 | 13,688 |
Depreciation in excess of capital allowances | 11,546 | 12,384 |
Adjustments to tax charge in respect of previous periods | 1,630 | 10,064 |
Other timing differences | (480 | ) | 15,734 |
R&D tax credit | (119,875 | ) | (156,366 | ) |
Profits not subject to corporation tax | (8,451 | ) | (9,888 | ) |
Total tax credit | (32,248 | ) | (76,702 | ) |
8. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
9. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Long | Plant and | and |
leasehold | machinery | fittings | Totals |
£ | £ | £ | £ |
COST |
At 1 June 2022 | 920,248 | 1,197,683 | 334,500 | 2,452,431 |
Additions | - | 47,286 | - | 47,286 |
Disposals | - | (5,474 | ) | (824 | ) | (6,298 | ) |
At 31 May 2023 | 920,248 | 1,239,495 | 333,676 | 2,493,419 |
DEPRECIATION |
At 1 June 2022 | 524,079 | 1,078,969 | 317,155 | 1,920,203 |
Charge for year | 95,040 | 70,187 | 12,097 | 177,324 |
Eliminated on disposal | - | (1,864 | ) | (151 | ) | (2,015 | ) |
At 31 May 2023 | 619,119 | 1,147,292 | 329,101 | 2,095,512 |
NET BOOK VALUE |
At 31 May 2023 | 301,129 | 92,203 | 4,575 | 397,907 |
At 31 May 2022 | 396,169 | 118,714 | 17,345 | 532,228 |
Company |
Fixtures |
Long | Plant and | and |
leasehold | machinery | fittings | Totals |
£ | £ | £ | £ |
COST |
At 1 June 2022 |
Additions |
At 31 May 2023 |
DEPRECIATION |
At 1 June 2022 |
Charge for year |
At 31 May 2023 |
NET BOOK VALUE |
At 31 May 2023 |
At 31 May 2022 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
10. | FIXED ASSET INVESTMENTS |
In the opinion of the directors, the aggregate value of the company's investments in subsidiary undertakings is not less than the amount included in the balance sheet. |
The company owns 100% of the ordinary share capital of the following subsidiaries: |
Assael Interiors Limited (registered number 03034875) - procurement services |
Assael Architecture Gulf States Limited (registered number 05651535) - architectural services |
(previously Assael Architecture International Limited) |
Assael Architecture International Limited (registered number 12012396) - architectural services |
(previously Assael Architecture Europe Limited) |
Habitis Limited (registered number 12921472) - architectural services |
Assael Architecture UK Limited (registered number 13014199) - architectural services |
Assael Australia Pty Limited - consulting architectural services until ceased to trade June 2022. |
All subsidiaries are incorporated in the UK with the registered office address 123 Upper Richmond Road, Putney, London, SW15 2T, except Assael Australia Pty Limited which is registered in Australia with the registered office Floor 19, 207 Kent Street, Sydney, NSW 2000. |
Assael Architecture Limited has provided a parent guarantee to all its UK subsidiaries entitling them to exemption from audit under section 479A of the Companies Act 2006 for the year ended 31 May 2023, except Assael Architecture UK Limited. |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.5.23 | 31.5.22 | 31.5.23 | 31.5.22 |
£ | £ | £ | £ |
Trade debtors | 2,521,356 | 2,220,748 |
Amounts owed by group undertakings | - | - |
Amounts recoverable on contract | 873,399 | 818,864 |
Other debtors | 6,695 | 10,645 |
VAT | - | 53,974 | - | 53,974 |
Directors' current accounts | 5,741 | - | 5,741 | - |
Corporation tax recoverable | 18,151 | 72,187 |
Prepayments and accrued income | 220,897 | 194,738 |
3,646,239 | 3,371,156 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.5.23 | 31.5.22 | 31.5.23 | 31.5.22 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 14) | 240,000 | 480,000 |
Finance leases (see note 15) | 41,828 | 64,249 |
Trade creditors | 367,116 | 389,274 |
Amounts owed to group undertakings | - | - |
Social security and other taxes | 894,804 | 584,358 |
Other creditors | 70,678 | 76,675 |
Accruals and deferred income | 333,965 | 432,187 |
1,948,391 | 2,026,743 |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
31.5.23 | 31.5.22 | 31.5.23 | 31.5.22 |
£ | £ | £ | £ |
Bank loans (see note 14) | - | 240,000 |
Finance leases (see note 15) | 33,451 | 39,209 |
33,451 | 279,209 |
14. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
31.5.23 | 31.5.22 | 31.5.23 | 31.5.22 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 240,000 | 480,000 |
Amounts falling due between one and two | years: |
Bank loans - 1-2 years | - | 240,000 |
The loan and interest repayments are quarterly. The interest rate is 3 months LIBOR plus margin of 4% per annum. |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
15. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Finance leases |
31.5.23 | 31.5.22 |
£ | £ |
Net obligations repayable: |
Within one year | 41,828 | 64,249 |
Between one and five years | 33,451 | 39,209 |
75,279 | 103,458 |
Company |
Finance leases |
31.5.23 | 31.5.22 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Group |
Non-cancellable | operating leases |
31.5.23 | 31.5.22 |
£ | £ |
Within one year | 403,630 | 402,924 |
Between one and five years | 1,535,371 | 1,531,416 |
In more than five years | 948,296 | 1,327,615 |
2,887,297 | 3,261,955 |
Company |
Non-cancellable | operating leases |
31.5.23 | 31.5.22 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group | Company |
31.5.23 | 31.5.22 | 31.5.23 | 31.5.22 |
£ | £ | £ | £ |
Bank loans | 240,000 | 720,000 |
Allica Bank Limited hold a full form debenture comprising fixed and floating charges over the whole or substantially the whole of the business, assets and undertakings. |
17. | PENSION COMMITMENTS |
The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounts to £172,899 for the year (2022 - £185,138). There were £36,084 of contributions outstanding at the balance sheet date (2022 - £37,392). |
18. | PROVISIONS FOR LIABILITIES |
Group | Company |
31.5.23 | 31.5.22 | 31.5.23 | 31.5.22 |
£ | £ | £ | £ |
Deferred tax | 19,087 | 34,808 | 19,087 | 34,808 |
Group |
Deferred |
tax |
£ |
Balance at 1 June 2022 | 34,808 |
Credit to Income Statement during year | (15,721 | ) |
Balance at 31 May 2023 | 19,087 |
Company |
Deferred |
tax |
£ |
Balance at 1 June 2022 |
Credit to Statement of Comprehensive Income during year | ( |
) |
Balance at 31 May 2023 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.5.23 | 31.5.22 |
value: | £ | £ |
Ordinary | £1 | 200,000 | 200,000 |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
20. | RESERVES |
Group |
Retained |
earnings |
£ |
At 1 June 2022 | 2,315,269 |
Profit for the year | 407,912 |
Gift to AAL Employee |
Ownership Trustee | (347,050 | ) |
At 31 May 2023 | 2,376,131 |
Company |
Retained |
earnings |
£ |
At 1 June 2022 |
Profit for the year |
Gift to AAL Employee |
Ownership Trustee | (347,050 | ) |
At 31 May 2023 |
21. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to a director subsisted during the years ended 31 May 2023 and 31 May 2022: |
31.5.23 | 31.5.22 |
£ | £ |
J S Assael |
Balance outstanding at start of year | - | - |
Amounts advanced | 5,741 | - |
Amounts repaid | - | - |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 5,741 | - |
The directors loan was repaid in full post year end. |
22. | RELATED PARTY DISCLOSURES |
The directors represent the key management of the company and remuneration costs can be found in note 4. |
23. | POST BALANCE SHEET EVENTS |
On 22 June 2023 the company obtained additional bank loan finance of £635,000 from its current loan provider. The new loan agreement incorporated the existing loan of £240,000, bringing the total bank loan to £875,000. The loan has a five year repayment term. |
ASSAEL ARCHITECTURE LIMITED (REGISTERED NUMBER: 02933452) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
24. | ULTIMATE CONTROLLING PARTY |
The company's immediate and ultimate controlling party is the AAL Employee Ownership Trustee. |