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Registration number: 02147081

Challenge Fencing Limited

Annual Report and Financial Statements

for the year ended 30 November 2023

 

Challenge Fencing Limited

Contents

Statement of Financial Position

1

Notes to the Financial Statements

2 to 13

 

Challenge Fencing Limited

(Registration number: 02147081)
Statement of Financial Position
30 November 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

4

964,001

985,008

Investment property

5

1,718,140

1,718,140

 

2,682,141

2,703,148

Current assets

 

Stocks

6

393,485

494,297

Debtors

7

6,004,881

6,076,404

Cash at bank and in hand

 

516,619

790,728

 

6,914,985

7,361,429

Creditors: Amounts falling due within one year

8

(697,320)

(788,210)

Net current assets

 

6,217,665

6,573,219

Total assets less current liabilities

 

8,899,806

9,276,367

Creditors: Amounts falling due after more than one year

8

(5,312,173)

(5,191,372)

Provisions for liabilities

-

(19,124)

Net assets

 

3,587,633

4,065,871

Capital and reserves

 

Called up share capital

100

100

Retained earnings

3,587,533

4,065,771

Shareholders' funds

 

3,587,633

4,065,871

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the directors have not delivered to the registrar a copy of the Profit and Loss Account.

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

.........................................
A Stewart-Clark
Director

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 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:
50 Station Road
Stoke D'abernon
Cobham
Surrey
KT11 3BN

These financial statements were authorised for issue by the Board on 21 August 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 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

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 prepared in sterling, which is the functional currency of the entity.

Going concern

The financial statements have been prepared on a going concern basis as the directors believe that no material uncertainties exist. The directors have considered the level of reserves held and the expected level of income and expenditure for 12 months from authorising these financial statements. The budgeted income and expenditure is sufficient with the level of reserves for the company to be able to continue as a going concern.

Audit Report

The Independent Auditor's Report was unqualified. The name of the Senior Statutory Auditor who signed the audit report on 21 August 2024 was Matthew Hodson BSc FCA, who signed for and on behalf of Hodson & Co.

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

.........................................

Judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions:

Management is required to make key decisions and judgements in the process of applying the Company's accounting policies. The most significant areas where such judgements have been necessary is the valuation of investment properties. Where judgement has been applied, the key factors taken into consideration are disclosed in the accounting policies and the appropriate note in these financial statements.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Tax

The tax expense for the period comprises 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.

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

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

Freehold property

over 50 years

Short leasehold property

over 14 years

Plant and machinery

20% reducing balance

Fixtures, fittings and equipment

33% reducing balance

Motor vehicles

25% reducing balance

Investment property

Investment property is recognised at fair value according to the fair value model, which reflects market conditions at end of the reporting period. Gains or losses resulting from a change in the fair value of investment property are recognised in the income statement in the year they arise.

Business combinations

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In November 2021 the Company undertook a group restructure, at which point Humbie Farm Limited, and Titan Garden Buildings Ltd, both subsidiaries of the company, sold their shares to Providence Place Ltd, which then became the parent Company of the group.

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.

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.

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

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 in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

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.

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.

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 33 (2022 - 38).

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

4

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Other tangible assets
£

Total
£

Cost or valuation

At 1 December 2022

923,668

267,581

235,523

248,795

1,675,567

Additions

-

20,035

-

-

20,035

Disposals

-

-

-

(61,190)

(61,190)

At 30 November 2023

923,668

287,616

235,523

187,605

1,634,412

Depreciation

At 1 December 2022

52,542

218,621

210,343

209,053

690,559

Charge for the year

3,753

18,520

6,295

7,831

36,399

Eliminated on disposal

-

-

-

(56,547)

(56,547)

At 30 November 2023

56,295

237,141

216,638

160,337

670,411

Carrying amount

At 30 November 2023

867,373

50,475

18,885

27,268

964,001

At 30 November 2022

871,126

48,960

25,180

39,742

985,008

Included within the net book value of land and buildings above is £867,373 (2022 - £871,126) in respect of freehold land and buildings and £Nil (2022 - £Nil) in respect of short leasehold land and buildings.
 

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

5

Investment properties

2023
£

At 1 December

1,718,140

At 30 November

1,718,140

The 2023 valuation was undertaken by the director, at open market value and the director is satisfied that the current open market value is not materially different from the value included within the financial statements.

The historical cost is £1,718,140 (2022: £1,718,140)

6

Stocks

2023
£

2022
£

Other inventories

393,485

494,297

7

Debtors

Current

Note

2023
£

2022
£

Trade debtors

 

44,850

64,709

Amounts owed by related parties

12

5,909,635

5,891,455

Prepayments

 

7,298

80,626

Other debtors

 

43,098

39,614

   

6,004,881

6,076,404

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

8

Creditors

Creditors: amounts falling due within one year

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

9

201,445

239,650

Trade creditors

 

194,440

248,738

Taxation and social security

 

65,135

85,325

Accruals and deferred income

 

176,404

149,965

Other creditors

 

59,896

64,532

 

697,320

788,210

Creditors include bank loans and overdrafts which are secured of £201,445 (2022 - £239,650)

The National Westminster Bank has a charge over the property 215-223 Sutton Road, Maidstone. The charge is dated 13 November 2007.

The National Westminster Bank has a legal charge over the property, The Shed Factory, Portsmouth Road, Ripley, Surrey. The charge is dated 9 August 2010.

The National Westminster Bank has a legal charge over the property, Lucas Green Nurseries, Lucus Green, West End, Woking, GU24 9LY. The charge is dated 30 April 2021.

The Agricultural Mortgage Corporation PLS (AMC) has a legal charge over the property Humbie Farm, Kirkliston, West Lothian, EH29 9EG.

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

Creditors: amounts falling due after more than one year

Note

2023
£

2022
£

Due after one year

 

Loans and borrowings

9

4,303,778

4,467,019

Other non-current financial liabilities

 

1,008,395

724,353

 

5,312,173

5,191,372

2023
£

2022
£

Due after more than five years

After more than five years by instalments

3,497,997

3,508,419

-

-

Creditors include bank loans and overdrafts which are secured of £4,303,778 (2022 - £4,467,019).

9

Loans and borrowings

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

4,303,778

4,467,019

2023
£

2022
£

Current loans and borrowings

Bank borrowings

201,445

239,650

Included in the loans and borrowings are the following amounts due after more than five years:

Bank loans and overdrafts after five years

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

NatWest bank loan of £1,160,000. The bank loan is repayable over 120 months from October 2019. Interest is charged at 2.61% over base. At 30 November 2023 £59,159 (2022 £74,650) is due in less than 1 year and £890,078 (2022 £933,747) is due after more than 1 year.

NatWest bank loan of £1,400,000. The bank loan is repayable over 240 months from April 2021. Interest is charged at 2.65% over base. At 30 November 2023 £44,152 (2022 £60,000) is due in less than 1 year and £1,216,137 (2022 £1,244,442) is due after more than 1 year.


AMC bank loan of £1,295,419. The bank loan is repayable over 76 months from April 2019. Interest is charged at 1.9% over base. At 30 November 2023 £40,953 (2022 £63,000) is due in less than 1 year and £1,112,840 (2022 £1,131,745) is due after more than 1 year.


AMC bank loan of £1,296,374. The bank loan is repayable over 76 months from April 2019. Interest is charged at 3.05% over base. At 30 November 2023 £57,180 (2022 £42,000) is due in less than 1 year and £1,084,725 (2022 £1,157,085) is due after more than 1 year.

10

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

72,917

27,500

Later than one year and not later than five years

487,500

487,500

Later than five years

347,500

432,500

907,917

947,500

The amount of non-cancellable operating lease payments recognised as an expense during the year was £139,129 (2022 - £115,718).

11

Financial commitments, guarantees and contingencies

Amounts disclosed in the statement of financial position

Included in the statement of financial position are financial commitments of £2,295,697 (2022 - £2,393,830). The company has bank loans with The Agricultural Mortgage Corporation PLC which are secured on Humbie Farm, Kirkliston, West Lothian, EH29 9EG on behalf of group company Humbie Farm Ltd.

12

Related party transactions

Summary of transactions with other related parties

Loan transactions with group companies:
 

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

Loans to related parties

2023

Group companies
£

Total
£

At start of period

5,891,455

5,891,455

Advanced

172,426

172,426

Repaid

(154,246)

(154,246)

At end of period

5,909,635

5,909,635

2022

Parent
£

Other related parties
£

Total
£

At start of period

100

6,079,661

6,079,761

Advanced

-

(300,268)

(300,268)

Repaid

(100)

112,062

111,962

At end of period

-

5,891,455

5,891,455

Loans from related parties

2023

Group companies
£

Total
£

At start of period

724,353

724,353

Advanced

724,786

724,786

Repaid

(440,744)

(440,744)

At end of period

1,008,395

1,008,395

2022

Group companies
£

Total
£

At start of period

186,105

186,105

Advanced

953,184

953,184

Repaid

(414,936)

(414,936)

At end of period

724,353

724,353

 

Challenge Fencing Limited

Notes to the Financial Statements
for the year ended 30 November 2023

13

Parent and ultimate parent undertaking

The ultimate controlling party by virtue of owning 100% shares in Providence Place Ltd is Alex Stewart-Clark.

 The company's immediate parent is Providence Place Ltd, incorporated in England & Wales.

 

The parent of the smallest (and largest) group in which these financial statements are consolidated is Providence Place Ltd, incorporated in England & Wales. The address of Providence Place Ltd is Sinclaire Cottage, Portsmouth Road, Ripley, Woking, Surrey, GU23 6EW.