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Registration number: 01333821

Adstone Construction Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Adstone Construction Limited

Contents

Company Information

1

Strategic Report

2

Directors' Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 8

Profit and Loss Account

9

Statement of Comprehensive Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Statement of Cash Flows

13

Notes to the Financial Statements

14 to 23

 

Adstone Construction Limited

Company Information

Directors

J A Young

I Young

Registered office

Adstone House, Wassage Way
Hampton Lovett Industrial Estate
Droitwich
Worcestershire
WR9 0NX

Auditors

Bissell & Brown Midlands Ltd
Statutory Auditors
Charter House
56 High Street
Sutton Coldfield
West Midlands
B72 1UJ

 

Adstone Construction Limited

Strategic Report for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

Principal activity

The principal activity of the company is design, fabrication, shot blasting, painting and erection of structural steelwork for the construction industry.

Fair review of the business

The companies profit before tax for the year ended 31 December 2023 of £841,492 compared to a profit for the year ended 31 December 2022 of £1,654,221.

The company has a reduced turnover and profit in 2023 mainly due to the price constraints on contracts which has reduced the margin in the job. The company also suffered a £270k bad debt with the collapse of Readie Construction Limited.

The company has maintained adequate cash resources and retained profits to continue to support its future trading activities.

The company's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2023

2022

Turnover

£

13,215,143

17,702,719

Gross profit

£

2,948,069

3,311,649

Cash in hand

£

2,500,368

2,626,701

Principal risks and uncertainties

The director's consider that the principal risk to the operations of the group to be exposures arising from working on substantial contracts and the fluctuations in the timing of cash flows relating to these contracts. Care is taken during the negotiation of contract payment terms to alleviate working capital pressures as much as possible.

A further risk is the exposure to fluctuations in steel prices, particularly given many of the contracts are on a fixed price basis. Where possible pre-agreed prices and terms are negotiated with the main steel suppliers for contracted work.

There is a credit risk arising from exposure to customers defaulting on trade debts. The risk is minimised through tight credit control procedures and in only dealing with reputable clients.

These risks continue to be exacerbated in 2023 due to the impact of the Ukraine conflict on the UK and world economies.

The group meets its day to day working capital requirements primarily through significant cash held.

The group's forecasts and projections, taking account of reasonable potential changes in trading performance, show that the group should be able to operate within its current cash held for the foreseeable future.

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
J A Young
Director

 

Adstone Construction Limited

Directors' Report for the Year Ended 31 December 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors of the company

The directors who held office during the year were as follows:

J A Young

I Young

A L Stevens - Company secretary and director (ceased 31 January 2024)

Information included in the Strategic Report

The Company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Director's Report) Regulations 2013 to set out in the Company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

This includes a summary of the principal risks and uncertainties and an indication of future events.

Going concern

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, thus they continued to adopt the going concern basis of accounting in the preparation of annual financial statements.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

The auditors Bissell & Brown Midlands Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
J A Young
Director

 

Adstone Construction Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

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.

 

Adstone Construction Limited

Independent Auditor's Report to the Members of Adstone Construction Limited

Opinion

We have audited the financial statements of Adstone Construction Limited (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and European regulatory principles, and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company.

We considered the laws and regulations that have a direct impact on the financial statements of the Company, such as the Companies Act 2006 and UK tax legislation and equivalent local laws and regulations applicable to in-scope components.

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 original financial statements were authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

 

Adstone Construction Limited

Independent Auditor's Report to the Members of Adstone Construction Limited (continued)

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our 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 directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 4], 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 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.

Capability of the audit in detecting irregularities, including fraud

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and European regulatory principles, and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company.

 

We also considered those laws and regulations that have a direct impact on the financial statements of the Company, such as the Companies Act 2006 and UK tax legislation and equivalent local laws and regulations applicable to in-scope components.

 

We have also evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements including the risk of override of controls and determined that the principal risks are related to management bias in accounting estimates and judgemental areas of the financial statements.

 

Audit procedures performed by the engagement team included:

discussions with the Board of Directors and management, regarding consideration of known or suspected instances of non-compliance with laws and regulation and fraud

 

Adstone Construction Limited

Independent Auditor's Report to the Members of Adstone Construction Limited (continued)

evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities;

reviewing relevant meeting minutes including those of the Board of Directors;

identifying and testing journal entries based on risk criteria;

 

We designed our audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and testing transactions entered into outside of the normal course of the Company's business specifically in respect of acquisitions and disposals.

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a
going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

 

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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.

 

Adstone Construction Limited

Independent Auditor's Report to the Members of Adstone Construction Limited (continued)

......................................
John James Taheny (Senior Statutory Auditor)
For and on behalf of Bissell & Brown Midlands Ltd, Statutory Auditor

Charter House
56 High Street
Sutton Coldfield
West Midlands
B72 1UJ

31 May 2024

 

Adstone Construction Limited

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

13,215,143

17,702,719

Cost of sales

 

10,267,074

14,391,070

Gross profit

 

2,948,069

3,311,649

Administrative expenses

 

2,104,786

1,646,985

Other operating income

4

-

2,000

Operating profit

5

843,283

1,666,664

Other interest receivable and similar income

6

(12,407)

(951)

Interest payable and similar expenses

7

14,198

13,394

   

(1,791)

(12,443)

Profit before tax

 

841,492

1,654,221

Tax on profit

11

(136,514)

(253,678)

Profit for the financial year

 

704,978

1,400,543

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

Adstone Construction Limited

Statement of Comprehensive Income for the Year Ended 31 December 2023

2023
£

2022
£

Profit for the year

704,978

1,400,543

Total comprehensive income for the year

704,978

1,400,543

 

Adstone Construction Limited

(Registration number: 01333821)
Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

12

134,972

186,790

Current assets

 

Stocks

13

106,124

131,424

Debtors

14

2,177,872

3,369,621

Cash at bank and in hand

 

2,500,368

2,626,701

 

4,784,364

6,127,746

Creditors: Amounts falling due within one year

16

(2,973,973)

(5,020,093)

Net current assets

 

1,810,391

1,107,653

Total assets less current liabilities

 

1,945,363

1,294,443

Creditors: Amounts falling due after more than one year

16

(77,000)

(98,174)

Provisions for liabilities

17

(10,688)

(25,716)

Net assets

 

1,857,675

1,170,553

Capital and reserves

 

Called up share capital

4,750

4,750

Capital redemption reserve

250

250

Retained earnings

1,852,675

1,165,553

Shareholders' funds

 

1,857,675

1,170,553

Approved and authorised by the Board on 21 May 2024 and signed on its behalf by:
 

.........................................
J A Young
Director

 

Adstone Construction Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Capital redemption reserve
£

Retained earnings
£

Total
£

At 1 January 2022

4,750

250

1,336,434

1,341,434

Profit for the year

-

-

1,400,543

1,400,543

Dividends

-

-

(1,571,424)

(1,571,424)

At 31 December 2022

4,750

250

1,165,553

1,170,553


 

Share capital
£

Capital redemption reserve
£

Retained earnings
£

Total
£

At 1 January 2023

4,750

250

1,165,553

1,170,553

Profit for the year

-

-

704,978

704,978

Dividends

-

-

(17,856)

(17,856)

At 31 December 2023

4,750

250

1,852,675

1,857,675


 

 

Adstone Construction Limited

Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

704,978

1,400,543

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

51,818

49,438

Profit on disposal of tangible assets

-

(11,876)

Finance income

6

(12,407)

(951)

Finance costs

7

14,107

13,394

Income tax expense

11

136,514

253,678

 

895,010

1,704,226

Working capital adjustments

 

Decrease in stocks

13

25,300

61,669

Decrease/(increase) in trade debtors

14

1,191,749

(1,154,635)

(Decrease)/increase in trade creditors

16

(2,024,652)

2,701,999

Cash generated from operations

 

87,407

3,313,259

Income taxes paid

11

(173,228)

-

Net cash flow from operating activities

 

(85,821)

3,313,259

Cash flows from investing activities

 

Interest received

6

12,407

951

Acquisitions of tangible assets

-

(49,804)

Proceeds from sale of tangible assets

 

-

64,699

Net cash flows from investing activities

 

12,407

15,846

Cash flows from financing activities

 

Interest paid

7

(14,107)

(13,394)

Repayment of other borrowing

 

-

(254,034)

Payments to finance lease creditors

 

(20,956)

(39,455)

Dividends paid

(17,856)

(1,571,424)

Net cash flows from financing activities

 

(52,919)

(1,878,307)

Net (decrease)/increase in cash and cash equivalents

 

(126,333)

1,450,798

Cash and cash equivalents at 1 January

 

2,626,701

1,175,903

Cash and cash equivalents at 31 December

 

2,500,368

2,626,701

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
Adstone House, Wassage Way
Hampton Lovett Industrial Estate
Droitwich
Worcestershire
WR9 0NX
United Kingdom

These financial statements were authorised for issue by the Board on 21 May 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102
- 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £.

Going concern

The financial statements have been prepared on the going concern basis. In adopting the going concern basis for preparing the financial statements, the Directors have prepared cash flow forecasts for a period of 14 months from the date of approval of these financial statements which indicate that taking account of possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period.

The Company holds significant cash reserves.

The consolidated Adstone group maintains a strong statement of financial position including a substantial bank balance and limited external finance.

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Contract revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services under construction contracts

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the Company will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.
• judgements in applying this policy are outlined in note 3.

Tax

The tax expense for the period comprises corporation tax and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Fixture and Fittings

20% Straight line

Motor Vehicles

20% Straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

The cost of stock and work in progress comprises direct materials and, where direct labour costs and those overheads that have been incurred on a contract and charged to the profit at each stage of the contract completion.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.

 Recognition and measurement
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment.

Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.

 Impairment
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

3

Turnover

The analysis of the company's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Scrap steel sales

41,861

-

Rendering of services

13,173,282

17,702,719

13,215,143

17,702,719

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
£

2022
£

Miscellaneous other operating income

-

2,000

5

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

51,818

49,438

Profit on disposal of property, plant and equipment

-

(11,876)

6

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

12,407

951

7

Interest payable and similar expenses

2023
£

2022
£

Interest on obligations under finance leases and hire purchase contracts

14,107

13,394

Foreign exchange gains

91

-

14,198

13,394

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

1,457,901

1,731,844

Social security costs

158,698

198,823

Pension costs, defined contribution scheme

26,372

295,682

Other employee expense

2,636

808

1,645,607

2,227,157

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

41

44

Administration and support

12

12

53

56

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

40,307

186,700

Contributions paid to money purchase schemes

609

185,979

40,916

372,679

10

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

13,997

15,200


 

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

11

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

154,785

176,471

UK corporation tax adjustment to prior periods

(3,243)

-

151,542

176,471

Deferred taxation

Arising from origination and reversal of timing differences

(15,028)

77,207

Tax expense in the income statement

136,514

253,678

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated tax depreciation

-

10,688

-

10,688

2022

Asset
£

Liability
£

Accelerated tax depreciation

-

25,716

-

25,716

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

12

Tangible assets

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost or valuation

At 1 January 2023

106,227

182,446

288,673

At 31 December 2023

106,227

182,446

288,673

Depreciation

At 1 January 2023

73,872

28,011

101,883

Charge for the year

15,338

36,480

51,818

At 31 December 2023

89,210

64,491

153,701

Carrying amount

At 31 December 2023

17,017

117,955

134,972

At 31 December 2022

32,355

154,435

186,790

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

2023
£

2022
£

Motor vehicles

117,944

154,434

   

13

Stocks

2023
£

2022
£

Raw materials and consumables

106,124

131,424

14

Debtors

Current

2023
£

2022
£

Trade debtors

788,880

2,123,922

Other debtors

108,733

259,906

Prepayments

122,723

120,071

Gross amount due from customers for contract work

1,157,536

865,722

 

2,177,872

3,369,621

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

15

Cash and cash equivalents

2023
£

2022
£

Cash at bank

1,902,931

4,028

Short-term deposits

597,437

2,622,673

2,500,368

2,626,701

16

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

16.1

20,661

20,443

Trade creditors

 

1,353,936

2,826,994

Amounts due to related parties

1,312,556

1,712,072

Social security and other taxes

 

90,777

77,052

Other payables

 

7,337

144,825

Accruals

 

33,921

62,236

Corporation tax liability

11

154,785

176,471

 

2,973,973

5,020,093

Due after one year

 

Loans and borrowings

16.1

77,000

98,174

16.1

Loans and borrowings

Current loans and borrowings

2023
£

2022
£

Hire purchase contracts

20,661

20,443

Non-current loans and borrowings

2023
£

2022
£

Hire purchase contracts

77,000

98,174

17

Provisions for liabilities

Deferred tax
£

Total
£

At 1 January 2023

25,716

25,716

Additional provisions

(15,028)

(15,028)

At 31 December 2023

10,688

10,688

 

Adstone Construction Limited

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

18

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £26,372 (2022 - £295,682).

19

Share capital

Allotted, called up and fully paid shares

2023

2022

No.

£

No.

£

Ordinary of £1 each

4,750

4,750

4,750

4,750

       

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
Holders of the ordinary share capital have a right to vote and receive dividends.

20

Parent and ultimate parent undertaking

The company's immediate parent is Adstone Construction Group Limited, incorporated in England.