Company Registration No. 03520125 (England and Wales)
LARKFLEET LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2022
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
LARKFLEET LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of income and retained earnings
8 - 9
Balance sheet
10
Notes to the financial statements
11 - 27
LARKFLEET LIMITED
COMPANY INFORMATION
Directors
HP Hick
KS Hick
Company number
03520125
Registered office
Larkfleet House
Falcon Way
Southfield Business Park
Bourne
Lincolnshire
PE10 0FF
Auditor
TC Group
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
LARKFLEET LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 1 -
The directors present the strategic report for the year ended 30 September 2022.
Fair review of the business
Following the restructuring referred to in the last period accounts to September 2021, the Company has concentrated upon some housing and other assets and claims which the Directors are confident will accrue significant benefits in the medium and long term.
The Company continues to be an important part of the Phoenix Sustainable Investment Group, but the branding and delivery of the Group will be concentrating on developing the Phoenix Renewable brand.
The Company has been impeded in its strategic progress and accounting function due to technical and other reasons. These issues continue to be addressed and it is hope to resolve them without redress through the Courts.
Consequent to these issues, there have been lost opportunities, but the assets and claims remain of significant attraction and value with success being delayed rather than lost.
Principal risks and uncertainties
The principal risk for the company is ensuring overtime that value is received for the related party debtors.
Price risk, credit risk, liquidity risk and cash flow risk
The company’s principal financial instruments comprise of loans to the group and related parties. The main purpose of the instruments is to finance the company’s operations.
Key performance indicators
The company's key financial and other performance indicators during the period were as follows:
Unit 2022 2021
Turnover £ 51,883 111,263,275
Gross profit margin % N/A 22
Profit/(loss) before tax £ (63,884) (4,449,592)
KS Hick
Director
26 March 2024
LARKFLEET LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2022.
Principal activities
The principal activity of the company is of property developers, consultants and project managers.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
HP Hick
KS Hick
T Roydon
(Resigned 6 December 2021)
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
KS Hick
Director
26 March 2024
LARKFLEET LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 3 -
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
LARKFLEET LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LARKFLEET LIMITED
- 4 -
Opinion
We have audited the financial statements of Larkfleet Limited (the 'company') for the year ended 30 September 2022 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 September 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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.
LARKFLEET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LARKFLEET LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the 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 and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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.
Auditor's 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 auditor's 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
LARKFLEET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LARKFLEET LIMITED
- 6 -
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor's report.
LARKFLEET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LARKFLEET LIMITED
- 7 -
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 an auditor's 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.
Mitchell Burden (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
30 March 2024
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
LARKFLEET LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 8 -
Year
Period
ended
ended
Continuing
Discontinued
30 September
Continuing
Discontinued
30 September
operations
operations
2022
operations
operations
2021
Notes
£
£
£
£
£
£
Turnover
3
51,883
-
51,883
-
111,263,275
111,263,275
Cost of sales
2,032,446
2,032,446
(1,639,890)
(84,916,772)
(86,556,662)
Gross profit
2,084,329
-
2,084,329
(1,639,890)
26,346,503
24,706,613
Administrative expenses
(2,181,158)
(2,181,158)
(2,162,313)
(12,550,986)
(14,713,299)
Other operating income
31,204
31,204
58,101
58,101
Operating (loss)/profit
4
(65,625)
-
(65,625)
(3,802,203)
13,853,618
10,051,415
Interest receivable and similar income
7
1,741
1,741
153,741
153,741
Interest payable and similar expenses
8
(14,254,748)
(14,254,748)
Amounts written off investments
9
-
-
-
(400,000)
-
(400,000)
Loss before taxation
(63,884)
(63,884)
(4,202,203)
(247,389)
(4,449,592)
Tax on loss
10
64,808
64,808
Loss for the financial year
(63,884)
(63,884)
(4,202,203)
(182,581)
(4,384,784)
LARKFLEET LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Year
Period
ended
ended
Continuing
Discontinued
30 September
Continuing
Discontinued
30 September
operations
operations
2022
operations
operations
2021
Notes
£
£
£
£
£
£
- 9 -
Retained earnings brought forward
13,278,555
18,721,353
Dividends
(1,058,014)
Retained earnings carried forward
13,214,671
13,278,555
LARKFLEET LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
11
12,656
Investment properties
12
906,000
400,000
Investments
13
33
550,881
918,689
950,881
Current assets
Stocks
16
3,696,398
645,872
Debtors
17
22,130,286
21,177,521
Cash at bank and in hand
240,158
26,066,842
21,823,393
Creditors: amounts falling due within one year
18
(7,550,564)
(3,275,423)
Net current assets
18,516,278
18,547,970
Net assets
19,434,967
19,498,851
Capital and reserves
Called up share capital
20
45,096
45,096
Capital redemption reserve
6,175,200
6,175,200
Profit and loss reserves
13,214,671
13,278,555
Total equity
19,434,967
19,498,851
The financial statements were approved by the board of directors and authorised for issue on 26 March 2024 and are signed on its behalf by:
KS Hick
Director
Company Registration No. 03520125
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 11 -
1
Accounting policies
Company information
Larkfleet Limited is a private company limited by shares incorporated in England and Wales. The registered office is Larkfleet House, Falcon Way, Southfield Business Park, Bourne, Lincolnshire, PE10 0FF.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Larkfleet Group Limited. These consolidated financial statements are available from its registered office, Larkfleet House, Falcon Way, Southfield Business Park, Bourne, Lincolnshire, PE10 0FF.
The company has taken advantage of the disclosures available to it, as a subsidiary company, in order not to prepare group accounts, despite being a parent company, on the basis that the financial statements of this company (and its subsidiaries) are consolidated in the financial statements of the parent group.
1.2
Going concern
The financial statements have been prepared on a going concern basis.true
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.3
Reporting period
The reporting period has changed resulting in the period being longer than one year. The reason for the change is to capture the group reconstruction. The comparative amounts presented in the financial statement including the notes are not entirely comparable as result of this change.
1.4
Turnover
Revenue
Revenue is recognised at legal completion in respect of the total proceeds of building and development. An appropriate proportion of revenue from construction contracts is recognised by reference to the stage of completion of contract activity. Revenue is measured at the fair value of consideration received or receivable and represents the amounts receivable for the property, net of discounts and VAT. Revenue is recognised at legal completion in respect of land sales. The sale proceeds of part exchange properties are not included in revenue.
Consultancy fees, management charges and car park and apartment rentals are accounted for on a receivable basis, net of VAT.
Construction contracts
Revenue is only recognised on a construction contract where the outcome can be estimated reliably. Variations to, and claims arising in respect of, construction contracts, are included in revenue to the extent that they have been agreed with the customer. Revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date. This is normally measured by surveys of work performed to date. Contracts are only treated as construction contracts where they have been specifically negotiated for the construction of a development or property. Where it is probable that the total costs on a construction contract will exceed total contract revenue, the expected loss is recognised as an expense in the profit and loss account immediately.
Amounts recoverable on construction contracts are included in debtors and stated at cost plus attributable profit less any foreseeable losses. Payments received on account for construction contracts are deducted from amounts recoverable on construction contracts.
Payments received in excess of amounts recoverable on construction contracts are included in creditors.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Motor vehicles
25% straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.6
Investment properties
Certain of the group's properties are held for long-term investment. Investment properties are accounted for in accordance with FRS 102, as follows:
(i) No depreciation is provided in respect of investment properties and they are revalued annually. The surplus or deficit on revaluation is transferred to the profit and loss account for the year.
(ii) No depreciation is provided in respect of leasehold investment properties where the lease has over 20 years to run.
This treatment as regards the group's investment properties may be a departure from the requirements of the Companies Act concerning the depreciation of fixed assets. However, these properties are not held for consumption but for investment and the directors consider that systematic annual depreciation would be inappropriate. The accounting policy adopted is therefore necessary for the financial statements to give a true and fair view. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 14 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Stocks
Stock is stated at the lower of cost and net realisable value. Land with planning includes undeveloped land and land under development and is recorded at cost. Work in progress comprises direct materials, labour costs, site overheads, associated professional charges and other attributable overheads. Net realisable value represents the estimated selling prices less all estimated costs of completion.
Investments in land without the benefit of a planning consent are recorded at cost. Regular reviews are carried out to identify any impairment in the value of the land considering the existing use value of the land and the likelihood of achieving a planning consent and the value thereof. Any amounts deemed irrecoverable are written off to the profit and loss account.
Expenditure relating to forward land, including options and fees, are held at cost. If the option expires or the Directors no longer consider it likely that the option will be exercised prior to the securing of planning permissions, the amount is written off to the profit and loss account.
Valuations which include an estimation of costs to complete and remaining revenues are carried out at regular intervals throughout the year, during which site development costs are allocated between units built in the current year and those to be built in future years. These assessments include a degree of inherent uncertainty when estimating the profitability of a site and in assessing any impairment provisions which may be required.
During the year the Board conducted a review of stock, land and work in progress. Write downs have been made where carrying value exceeds the lower of cost and net realisable value. The reviews were conducted on a site by site basis, using valuations that incorporated anticipated selling price and development cost movements, based on local management and the Board’s assessment of market conditions existing at the balance sheet date. If there are significant movements in UK house prices or development costs beyond management’s expectations then further impairments / reversals of previous write downs of stock, land and work in progress may be necessary.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 18 -
2
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates stated within the details of accounting policies elsewhere) have had the most significant effect on amounts recognised in the financial statements.
The main judgments included within the financial statements relate to work in progress balances held at the year end and released in the year. The balances held at the year end are reviewed for recoverability and where amounts are deemed irrecoverable are written off in the year, The level of future profitability is at times judged by the directors where not clear.
Costs released to the P&L in relation to the sale of houses are released based on projected margins for sites during the year. Margins are estimated by the directors based on the expected total costs for each site made up of costs incurred to date and further costs expected to be incurred in relation to each site.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Property developed
-
57,533,289
Management charges receivable
-
3,746,857
Short term property rentals
51,883
65,835
Land sales
-
1,860,879
Sale of land, WIP and stock
-
48,056,415
51,883
111,263,275
2022
2021
£
£
Other significant revenue
Interest income
1,741
153,741
Miscellaneous other operting income
-
58,101
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 19 -
4
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for non audit work
164,394
119,605
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
27,000
Depreciation of owned tangible fixed assets
844
119,953
Operating lease charges
-
84,897
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administration and support
-
80
Other departments
-
72
Total
152
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
132,493
6,751,863
Social security costs
53,140
827,251
Pension costs
401
129,014
186,034
7,708,128
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
43,833
1,863,733
Company pension contributions to defined contribution schemes
-
2,750
43,833
1,866,483
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
6
Directors' remuneration
(Continued)
- 20 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2021 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration
n/a
631,729
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Other interest income
1,741
153,741
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
-
14,253,960
Interest on finance leases and hire purchase contracts
-
788
14,254,748
9
Amounts written off investments
2022
2021
£
£
Other gains and losses
-
(400,000)
10
Taxation
2022
2021
£
£
Current tax
Adjustments in respect of prior periods
(64,808)
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
10
Taxation
(Continued)
- 21 -
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Loss before taxation
(63,884)
(4,449,592)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(12,138)
(845,422)
Tax effect of expenses that are not deductible in determining taxable profit
87,279
485,825
Group relief
31,513
Research and development tax credit
(64,808)
Tax decrease from other short-term timing differences
(57,743)
Effect of tax losses
29,210
Increase from tax losses for which no deferred tax asset was recognised
(75,141)
356,617
Taxation charge/(credit) for the year
-
(64,808)
Deferred tax
Deferred tax assets and liabilities
2022
Accelerated capital allowances - asset - £nil.
2021
Accelerated capital allowances - asset - £nil
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 22 -
11
Tangible fixed assets
Motor vehicles
£
Cost or valuation
At 1 October 2021
Additions
13,500
At 30 September 2022
13,500
Depreciation and impairment
At 1 October 2021
Depreciation charged in the year
844
At 30 September 2022
844
Carrying amount
At 30 September 2022
12,656
At 30 September 2021
12
Investment property
2022
£
Fair value
At 1 October 2021
400,000
Net gains or losses through fair value adjustments
506,000
At 30 September 2022
906,000
The market value of the investment properties has been arrived at on the basis of a valuation carried out by the directors. The historical cost of the investment properties are £899,830 (2021 - £899,830).
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 23 -
13
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
14
22
821
Investments in joint ventures
15
11
60
Unlisted investments
550,000
33
550,881
Movements in fixed asset investments
Shares in subsidiaries and joint ventures
Other investments
Total
£
£
£
Cost or valuation
At 1 October 2021 & 30 September 2022
881
550,000
550,881
Impairment
At 1 October 2021
-
-
-
Impairment losses
848
550,000
550,848
At 30 September 2022
848
550,000
550,848
Carrying amount
At 30 September 2022
33
-
33
At 30 September 2021
881
550,000
550,881
14
Subsidiaries
Details of the investments (including principle place of business of incorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Larkfleet Properties Limited
England & Wales
Dormant
Ordinary
100.00
Solar Steam Limited
England & Wales
Dormant
Ordinary
100.00
X House Limited
England & Wales
Dormant
Ordinary
100.00
Larkfleet Elevating House Limited
England & Wales
Dormant
Ordinary
100.00
The aggregate amount of capital and reserves at the end of the period for each dormant company above relates solely to the par value of each company's issued share capital.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 24 -
15
Joint ventures
Details of the company's joint ventures at 30 September 2022 are as follows:
Name of undertaking
Registered office
Nature of business
Interest
% Held
held
Direct
Berfeld Limited
England & Wales
Property development
Ordinary
50.00
ZPN Soft Limited
England & Wales
Business and domestic software development
Ordinary
50.00
16
Stocks
2022
2021
£
£
Work in progress
3,696,398
645,872
Work in progress includes interest capitalised of £nil (2021 - £nil).
17
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,782,744
Amounts owed by group undertakings
2,590,534
4,367,115
Other debtors
1,243,476
16,810,406
5,616,754
21,177,521
2022
2021
Amounts falling due after more than one year:
£
£
Other debtors
16,513,532
Total debtors
22,130,286
21,177,521
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 25 -
18
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
2,474,301
Amounts owed to group undertakings
4,653,153
1,030,690
Other creditors
403,110
2,182,174
Accruals and deferred income
20,000
62,559
7,550,564
3,275,423
19
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
401
129,014
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Contributions totalling £nil (2020 - £34,807) were payable to the scheme at the end of the period and are included in creditors.
20
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
42,846
42,846
42,846
42,846
Ordinary non voting shares of £1 each
2,250
2,250
2,250
2,250
45,096
45,096
45,096
45,096
21
Reserves
Share capital
Represents the nominal value of shares that have been issued.
Capital redemption reserve
Represents the value paid by the company in redeeming shares previously in issue.
Profit and loss account
Includes all current and prior period retained profit and losses, inclusive of cumulative unrealised gains and losses for assets shown at fair value at the balance sheet date.
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 26 -
22
Related party transactions
Remuneration of key management personnel
There were no further transactions with key management personnel other than those disclosed in the directors remuneration note or transactions with directors note.
Transactions with related parties
During the year the company entered into the following transactions with related parties:
During the period Joint Venture companies incurred purchases/charges with Larkfleet Limited of £nil (2021 - £nil).
During the period Joint Venture companies received loans from Larkfleet Limited of £nil (2021 - £11,114).
During the period Joint Venture companies incurred sales/recharges with Larkfleet Limited of £nil (2021 - £nil).
During the period Joint Venture companies made loans to Larkfleet Limited of £nil (2021 - £nil).
The amounts due from Joint Venture companies to Larkfleet Limited as at 30 September 2022 was £nil (2021 - £100,000).
The amounts due to Joint Venture companies from Larkfleet Limited as at 30 September 2022 was £nil (2021 - £nil).
During the period related companies incurred purchases/charges with Larkfleet Limited of £nil (2021 - £nil).
During the period related companies received loans from Larkfleet Limited of £1,872,414 (2021 - £3,749,158).
During the period related companies incurred sales/recharges with Larkfleet Limited of £nil(2021 - £529,699).
During the period related companies made loans to Larkfleet Limited of £135,649 (2021 - £710,645).
The amounts due from related companies to Larkfleet Limited as at 30 September 2022 was £16,513,532 (2021 -£15,477,081).
The amounts due to related companies from Larkfleet Limited as at 30 September 2022 was £304,863 (2021 - £304,847).
During the year, amounts totalling £128,205 (2021 - £1,828,927) were written off related party balances.
Other information
The company has taken advantage of exemptions available within FRS 102 to not disclose transactions with fellow group companies. Group accounts are prepared for Larkfleet Group Limited (the ultimate holding company) and are available from it’s registered office at Larkfleet House, Falcon Way, Bourne, PE10 0FF.
23
Directors' transactions
At the balance sheet date the amount due to the directors from Larkfleet Limited was £nil (2021 - £1,877,265).
At the balance sheet date the amount due from the directors to Larkfleet Limited was £nil (2021 - £nil).
LARKFLEET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 27 -
24
Ultimate controlling party
The company's immediate parent was Larkfleet Holdings Limited and on 30 October 2021 it changed to Larkfleet Group Limited, a company incorporated in England & Wales.
The ultimate parent is Phoenix Sustainable Investments Limited.
The most senior parent entity producing publicly available financial statements is Phoenix Sustainable Investments Limited. These financial statements are available upon request from its registered office address Larkfleet House, Falcon Way, Bourne, Lincolnshire, PE10 0FF.
The ultimate controlling party is KS Hick.
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