The director presents the strategic report for the year ended 31 March 2023.
The results for the year and the financial position at the year-end were broadly in line with expectations and were very much in line with the results achieved in the previous year to March 2022. The aftershock of the pandemic continued to affect the business in terms of slippage in programmes (both on site and in preconstruction stage) and reduced planned spend by our public sector clients due to Government budget constraints. In addition to this we continued to face unprecedented and sustained periods of hyper-inflation in the prices for construction raw materials and energy. Despite these challenges we still returned turnover and profit to pre-pandemic levels, demonstrating the efficiency and profit-making attributes of the business and our valued staff and supply chains.
Our aim is to present a balanced and comprehensive review of the development and performance of our business during the reported year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of the risks, challenges, opportunities and uncertainties we face.
The group's core business remains as the construction, refurbishment and planned maintenance of major public sector and commercial buildings and the development and construction of speculative housing for sale, together with new affordable housing for the public sector. The majority of our turnover in construction continues to be derived from Framework projects, two stage tendering and partnership working which allow us to negotiate better terms in relation to pricing and programme risk. Over the year we have won new Framework opportunities and successfully renewed others. We of course cannot rely solely on this and therefore we actively pursue further development opportunities for our Homes Division by acquiring sites for planned development in Angus and East Lothian for late 2023 / early 2024. Our Estimating Department continues to price projects at a volume consistent with the last 24 months with strong opportunities arising in different markets such as education, healthcare and retail. RAAC structural remedial work and energy efficiency retrofit projects are a growing sector for the business going forward.
We continually look for operational efficiencies and productivity improvements across the business with effective use of our ongoing investment in processes, Quality Management, strong Health and Safety and Project Management software.
We remain committed to our corporate responsibility to reduce our environmental footprint, working closely with our partners to integrate sustainability in all areas of our business.
The risks facing the group are those for the construction industry generally, such as ongoing price inflation for our materials; labour and skills shortage and the ongoing impact of budget restrictions following the pandemic. Other risks affecting the business include upward pressure on wages and salaries due to the cost-of-living crisis, rising utility costs following Russia’s invasion of Ukraine, increasing regulatory burdens on construction and UK interest rate rises, adversely affecting activity across the industry.
Controlled growth and the ability to flex our group size to reflect trade volumes is critical to successfully maintaining control of our overheads and outgoings whilst at the same time protecting our forecast margin.
I consider that the financial position of the company at the year-end is healthy and reserves remain positive with a strong forward order book across a wide range of project sectors.
Turnover has decreased by 6.5%, however an increase in gross profit percentage from 12.94% to 13.1%. After taxation, reserves have increased by £208,580. Return on capital employed was 14.4% (2022 – 39.7%). This is calculated as profit/(loss) after tax divided by net assets.
The company’s operations expose it to a variety of risks that include price risk and credit risk. The company’s profitability is affected by price fluctuations in raw materials and labour used in the construction of its products. The company continually monitors the price and availability of materials and labour and, where possible, agrees prices annually with suppliers.
The Company’s financial assets are its cash and trade debtors. All cash is held with financial institutions with high credit ratings therefore the credit risk on liquid funds is limited. The company’s credit risk is primarily attributable to its trade debtors. The company contracts with a combination of public sector bodies and private commercial institutions on its various projects. To mitigate the risk of default of any of its customers, the company reviews cash balances due on a weekly basis as part of updating its cash flow forecast.
Managing Director of Hadden Construction Limited, Steven Brady, resigned on 15 February 2024 and the impact of his departure has been minimised by the return of the group’s former Managing Director and current chairman, Scott Hadden, to the role.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 March 2023.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a dividend.
We have audited the financial statements of Hadden Construction Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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
Based on our audit procedures and the information gathered during our examination, the financial statements have been prepared on a going concern basis. However, we draw attention to Note 1.3 to the financial statements, which describes the existence of a material uncertainty related to subsidiary's working capital cash flow.
The directors of the subsidiary are in the process of securing further contracts and negotiating with existing contracts to address the material uncertainty and support the entity’s ability to continue as a going concern.
While we have obtained sufficient appropriate audit evidence regarding the entity's ability to continue as a going concern, the outcome of the material uncertainty casts significant doubt on the entity's ability to operate without interruption. Therefore, the financial statements may not be indicative of the entity's financial position and results of operations should the material uncertainty materialise adversely.
In forming our conclusion, we have considered the implications of the material uncertainty on the entity's ability to continue as a going concern. However, our opinion is not modified in respect of this matter.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.
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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept 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.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates;
We identified the laws and regulations applicable to the company through discussions with management and through our own knowledge of the industry.
We enquired with management about their own identification and assessment of the risk of irregularities;
We considered the opportunities that may exist within the organisation for fraud and identified the greatest risk in relation to revenue recognition, valuation of work in progress, management override of internal controls and accuracy of consolidation adjustments. Our audit procedures to respond to these risks included, but were not limited to;
Reviewing the financial statement disclosure and testing of financial statement balances to supporting documentation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries with management, review of meeting minutes and inspecting legal correspondence;
We communicated relevant identified laws and regulations and potential fraud risks to all members of the engagement team and remained alert to any indications of fraud or non-compliance throughout the audit.
We performed analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatements due to fraud;
Testing journal entries to identify unusual transactions and evaluated the underlying rationale;
Evaluating evidence of any bias by the directors that may represent a material misstatement by comparing accounting estimates to the underlying supporting documentation and assessing the rationale applied;
Testing of consolidation adjustments, ensuring appropriate reconciliation and elimination of inter-group balances.
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. As a result of these, we considered the opportunities that may exist within the organisation for fraud and audit procedures were designed in response to the risks identified, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve, for example, forgery, deliberate concealment, or collusion.
As part of an audit in accordance with ISAs (UK), professional judgement was exercised, and professional scepticisms was maintained throughout the audit.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 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.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £4,108 (2022 - £3,835 loss).
Hadden Construction Holdings Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 1 Maiden Place, Aberuthven, Perthshire, PH3 1EL.
The group consists of Hadden Construction Holdings Limited and all of its subsidiaries.
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.
The consolidated group financial statements consist of the financial statements of the parent company Hadden Construction Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
These financial statements are prepared on the going concern basis. The director has a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the director is aware of a certain material uncertainty which may cause doubt on the company's ability to continue as a going concern. The directors of subsidiary company, Hadden Construction Limited, are aware of a certain material uncertainty as a result of pressures on working capital which may cause doubt on the subsidiary company's ability to continue as a going concern The directors of the subsidiary have assessed the situation and are putting measures in place to ease pressure on the company's working capital. Due to a combination of a period of rapidly rising interest rates in 2023, high inflation in the double-digits and a cost of living crisis around energy bills, various contracts were delayed which was impossible to predict, however these contracts have now commenced. The impact of these delays put pressure on working capital resources however the directors have taken steps to address these challenges and believe the business is well placed to grow in 2024.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), 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.
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The directors have not provided a charge for depreciation on heritable property as they consider that its value remains at least equal to the valuation supplied in October 2021 by Graham + Sibbald.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. 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 group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, 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.
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 group after deducting all of its 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.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable.
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The Group's work in progress is calculated using valuations prepared by independent third party Quantity Surveyors. The valuations are based on the percentage on each property completion stage at the year end.
If there are significant movements in UK house prices or development costs, beyond management's reasonably possible expectations, then impairments of work in progress may be necessary.
The Group carries a provision of £75,452 (2022 - £286,541) based on management's best estimates of the expected loss on an onerous contract.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Reversals of previous impairment losses have been recognised in profit or loss as follows:
The Group recognised an impairment reversal related to a specific contract item due to the development interest associated with the land on which it is situated.
The impairment reversal resulted from a reassessment of the recoverable amount of the item, which was previously impaired due to abnormal rectification costs. Subsequent to the impairment, the Group identified development opportunities related to the land on which the land is located, leading to an increase in its recoverable amount.
The reversal of impairment is directly attributable to the Group's updated assessment of the future economic benefits associated with the development interest in the land. Management has reassessed the recoverable amount based on the latest information available regarding the potential development plans, market conditions, and other relevant factors.
It is important to note that the impairment reversal does not result in the carrying amount of the inventory item exceeding its original cost. The reversal is recognised to the extent that it does not exceed the carrying amount that would have been determined, had no impairment been recognised previously.
Negative goodwill has arisen on the acquisition of 56.51% shareholding in Hadden Construction Limited on 8th January 2018. This was a result of the asset acquisition exceeding the purchase price.
The directors have adopted the policy to amortise over the useful economic life, 20% reducing balance per annum.
The carrying value of land and buildings comprises:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
A revaluation of the freehold property, on the basis of open market value, was undertaken on 12 October 2021 by Graham + Sibbald, Chartered Surveyors. No further addition to the revaluation was considered appropriate in the year under review. No provision has been made in the accounts for the liability to corporation tax that would arise if the property was disposed of at the revalued amount. Land valued at £50,000 is included within land and buildings.
Freehold land and buildings with a carrying amount of £1,160,000 (2022 - £1,160,000) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
Details of the company's subsidiaries at 31 March 2023 are as follows:
The long-term loans are secured by a bond and floating charge over the assets of the company and a standard security over land southeast of A824 at Maindenplain House, Aberuthven and over Rawes Farm Steading, Longforgan and over unit 2-3 Aberuthven Enterprise Park, Auchterarder and over subjects on southwest side, Constarry Road, Kilsyth, Glasgow, G65 9HF.
The bank loan is due to expire on 30 March 2026 and 16 July 2035 and carries an interest rates of 3.2155% and 3.3% above base rate, respectively per annum.
CBIL borrowings are due to expire on 14 May 2026 and 17 December 2024 and carries an interest rate of 3.3% above base rate and 5.0%, respectively per annum.
Unsecured loan notes have no interest payable during the term of the loan notes. Repayments are to be made in equal instalments with the final instalment falling due January 2023.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
In accordance with the requirements of Section 21 of FRS102 the company has made a total provision of £75,452 (2022 - £286,541) in respect of a long term contract which is deemed to be onerous.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
Arch Homes Ltd, a company of which Scott Hadden is a director, was granted a loan facility of £5,277 (2022: £4,774) which remains outstanding at the end of the year.
Hadden Construction Limited received a final distribution from Coalsnaughton NHT 2012 LLP, amounting to £160,000 was received in the year. The distribution repaid the long term loan to the partnership of £10,536, the balance remaining balance of interest of £1,225 and a further loan balance of £7,226.
HG Abernethy Ltd, a company controlled by Scott Hadden, director, was granted a loan facility of £54,362 (2022: £2,226) which remains outstanding at the end of the year. During the year, payments of £1,680,120 (2022: £946,394) were received in relation to services rendered.
Glenluie Green Ltd, a company controlled by Scott Hadden, director, was granted a loan facility of £26 (2022: £13) which remains outstanding at the end of the year. During the year, payments of £1,358,492 (2022: £1,492,301) were received in relation to services rendered.
Hadden Construction Limited is engaged in a property construction project on behalf of Director, Scott Hadden. Payments on account amount to £755,000 and the balance is included within Debtors, Amounts owed by contract customers.