Company registration number 12006041 (England and Wales)
ACRE 1217 LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
ACRE 1217 LIMITED
COMPANY INFORMATION
Directors
G W Lynn
D J Norman
Company number
12006041
Registered office
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
Auditor
HW Fisher Audit
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
ACRE 1217 LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group statement of financial position
9
Group statement of changes in equity
10
Group statement of cash flows
11
Notes to the group financial statements
12 - 31
Parent company statement of financial position
32
Parent company statement of changes in equity
33
Notes to the parent company financial statements
34 - 36
ACRE 1217 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The directors present the strategic report for the year ended 31 July 2024.
Fair review of the business
The principal activity of the company is that of a holding company to a group whose principal activity is that of a building contractor.
The business operates in two key areas, Construction and Partnership Housing, and undertakes projects ranging from £1m to £17m.
Construction projects contribute £21m turnover across a wide range of sectors including education, health, cathedrals and churches, leisure and conservation and restoration works.
In addition to the Construction arm of the business, Partnership housing provides a package deal turnkey service to Housing Associations and Developers and delivers £11.4m contribution to the turnover of the business.
Due to the varied nature and type of work we do, the Client base is very wide ranging. This has been a deliberate strategy which has continued to pay dividend in the uncertain times we have seen over recent years. Our strategy has meant that we are well placed to diversify and be flexible across a variety of sectors. Although 2023/2024 was a further challenging year following the Brexit and Covid legacies, war and high inflation, the outlook for 2024/2025 is more positive. Our forward order workbook means that we have increased our turnover budget for the year to £58m with £52m secured for the current financial year and a further £19m for 2025/2026. We have a good cash balance with zero debt.
We have a management team with expertise and a proven track record of delivery, and we will continue to adopt the ethos of promoting within. There has also been a focus on Social Value, by embarking on the social value journey the business not only contributes to social progress but also enhances employee and client engagement.
Principal risks and uncertainties
The business is well financed, and the Directors are confident that it is well placed to deal with internal and external risk factors.
Economic and Workload Uncertainties
We recognise the main uncertainties and risks to our forward workload and profit margins are dictated by market conditions which continue to be challenging.
We continue to monitor the situation in these areas to protect and mitigate the potential impact on the business and where necessary we have reduced our overhead to align with turnover whist maintaining the capabilities of the business.
Financial Risk Management
The Company monitors cash flow continuously to maintain a good level of liquidity and strict credit control policies are in place. It is our policy to pay all suppliers on time or before, wherever possible.
The group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
The group's principal financial assets are cash and trade debtors. The credit risk associated with the cash balances is limited. Credit risk in debtors is managed through the application of credit control procedures including measures such as setting credit limits. The company has no borrowings so no interest rate risk.
Financial performance is closely monitored through the combination of monthly reporting both at individual contract level and overall profitability. The Board of Directors review all key financial data monthly.
Other Risks
We continue to review security across our IT systems and have Cyber Essentials accreditation.
ACRE 1217 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
Health Safety and the Environment
Health and Safety is integral to our business activities, and we recognise and understand our responsibilities. We adhere to legislation including the Health and Safety at Work Act 1974, are compliant with ISO 45001, 14001, 9001 and registered with CHAS.
We strive for continuous improvement in our standards and aim to achieve a safe, risk-free working environment. We have produced a comprehensive Health and Safety Policy, and all management and site staff receive full training, which is constantly monitored and updated, and refresher courses undertaken. Our policy is reviewed annually and revised to reflect any changes in legislation.
As a business we expect our employees, subcontractors, and suppliers to comply with our Health and Safety Policy and to take individual responsibility to ensure that work is carried out to a high standard, without risk to themselves or others. Consultation with employees, clients and our external consultants is an important part of our practices, and it is through this process that we set targets to monitor our methods and performance. RoSPA Gold was once again awarded in 2022 in recognition of our continued success and improvement for our Health and Safety performance.
Development and performance
The statement of financial position shows that the group’s financial position at the period end is strong in terms of net assets and liquidity.
Key performance indicators
Our Financial key performance indicators are:
Revenue measure – The strength of revenue is important and is constantly monitored by the Directors but profit is valued ahead of revenue:
• Revenue £31,798,291 (2023: £33,384,928)
Profit measure – both gross margin and operating margin and important measures
• Gross profit £3,611,119 (2023: £3,404,680)
• Operating profit £214,662 (2023: operating loss of £187,859)
Cash measure – Cash and cash equivalents balance of the business is a measure of the strength of the balance sheet and confirms that the business has the funds required to return to increased levels of turnover.
• Net Cash balance £2,328,085 (2023: £2,535,110)
Cash has held at the previous years level, but following then end of the financial year we have had positive movement in our final account positions so the cash balance post year-end has increased to £4.1m which excludes £1m of cash invested in property for future development.
D J Norman
Director
28 April 2025
ACRE 1217 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 July 2024.
Principal activities
The principal activity of the group continued to be that of building contracting.
The principal activity of the company is that of a holding company.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £50,000. The directors do not recommend payment of a further dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G W Lynn
D J Norman
Research and development
The company continues to be actively engaged in the research and development of new systems, processes and techniques in the construction industry.
Statement of disclosure to auditor
Each director in office at the date of approval of this annual report confirms that:
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and
the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
Financial risk management
For details please refer to strategic report.
On behalf of the board
D J Norman
Director
28 April 2025
ACRE 1217 LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the group financial statements in accordance UK-adopted International Accounting Standards (IASs) and have also chosen to prepare the parent company financial statements in accordance with Financial Reporting Standard (FRS) 101 'Reduced Disclosure Framework'. 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 the group financial statements, International Accounting Standard 1 requires that directors:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in UK-adopted IAS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
make an assessment of the group's ability to continue as a going concern.
In preparing the parent company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether FRS 101 Reduced Disclosure Framework has 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 group's and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ACRE 1217 LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ACRE 1217 LIMITED
- 5 -
Opinion
We have audited the financial statements of Acre 1217 Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 July 2024 which comprise the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group statement of cash flows and the group and parent company notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 July 2024 and of the group's profit for the year then ended;
the group financial statements have been properly prepared in accordance with UK adopted International Accounting Standards and the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ACRE 1217 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACRE 1217 LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the group and company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The group and company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the group and company. We determined that the following were most relevant: IFRS, Companies Act 2006 and Health and Safety Act.
We considered the incentives and opportunities that exist in the group and company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the group and company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
ACRE 1217 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACRE 1217 LIMITED
- 7 -
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to the carrying value of investments in subsidiaries in parent company/possible impairment, aftercare and defect provisions, legal provisions, revenue recognition including accrued and deferred income and recoverable values of recognised receivables.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Testing revenue, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank balances.
Performing physical verification of key assets and stock items.
Documenting and verifying all significant related party and consolidated balances and transactions.
Reviewing documentation such as the group and company’s board minutes, correspondence with solicitors, for discussions of irregularities including fraud.
Testing all material consolidation adjustments.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditors responsibilities. 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.
Tanya Craft (Senior Statutory Auditor)
For and on behalf of HW Fisher Audit
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
28 April 2025
ACRE 1217 LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 8 -
2024
2023
Notes
£
£
Revenue
4
31,798,291
33,384,928
Cost of sales
(28,187,172)
(29,980,248)
Gross profit
3,611,119
3,404,680
Other operating income
42,071
10,378
Administrative expenses
(3,438,528)
(3,602,917)
Operating profit/(loss)
5
214,662
(187,859)
Investment revenues
9
44,356
113,751
Finance costs
10
(4,805)
(30,808)
Profit/(loss) before taxation
254,213
(104,916)
Income tax income
11
22,935
130,457
Profit and total comprehensive income for the year
277,148
25,541
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
ACRE 1217 LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
- 9 -
2024
2023
Notes
£
£
Non-current assets
Property, plant and equipment
13
462,943
991,932
Trade receivables
16
452,168
524,989
915,111
1,516,921
Current assets
Inventories
15
2,015,116
1,329,677
Trade and other receivables
16
8,824,186
6,955,207
Current tax recoverable
157,173
Cash and cash equivalents
2,328,085
2,535,110
13,167,387
10,977,167
Current liabilities
Trade and other payables
20
10,149,916
8,183,453
Current tax liabilities
16,275
45
Lease liabilities
18
23,861
104,272
Provisions
19
165,881
463,065
10,355,933
8,750,835
Net current assets
2,811,454
2,226,332
Non-current liabilities
Trade and other payables
20
154,921
335,686
Lease liabilities
18
-
23,861
Deferred tax liabilities
21
19,975
59,185
174,896
418,732
Net assets
3,551,669
3,324,521
Equity
Called up share capital
23
180
180
Share premium account
1,684,987
Retained earnings
3,551,489
1,639,354
Total equity
3,551,669
3,324,521
The financial statements were approved by the board of directors and authorised for issue on 28 April 2025 and are signed on its behalf by:
D J Norman
Director
Company registration number 12006041 (England and Wales)
ACRE 1217 LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
Share capital
Share premium account
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 August 2022
180
1,684,987
1,619,813
3,304,980
Year ended 31 July 2023:
Profit and total comprehensive income
-
-
25,541
25,541
Transactions with owners:
Dividends
12
-
-
(6,000)
(6,000)
Balance at 31 July 2023
180
1,684,987
1,639,354
3,324,521
Year ended 31 July 2024:
Profit and total comprehensive income
-
-
277,148
277,148
Transactions with owners:
Dividends
12
-
-
(50,000)
(50,000)
Reduction in shares
23
(1,684,987)
1,684,987
Balance at 31 July 2024
180
3,551,489
3,551,669
ACRE 1217 LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
31
(596,435)
(3,576,715)
Interest paid
(4,805)
(30,808)
Income taxes refunded
157,128
Net cash outflow from operating activities
(444,112)
(3,607,523)
Investing activities
Purchase of property, plant and equipment
(118,997)
(99,588)
Proceeds from disposal of property, plant and equipment
466,000
16,564
Interest received
44,356
113,751
Net cash generated from investing activities
391,359
30,727
Financing activities
Payment of lease liabilities
(104,272)
(87,076)
Dividends paid to equity shareholders
(50,000)
(6,000)
Net cash used in financing activities
(154,272)
(93,076)
Net decrease in cash and cash equivalents
(207,025)
(3,669,872)
Cash and cash equivalents at beginning of year
2,535,110
6,204,982
Cash and cash equivalents at end of year
2,328,085
2,535,110
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
1
Accounting policies
Company information
Acre 1217 Limited is a private company limited by shares incorporated in England and Wales. The registered office is Acre House, 11-15 William Road, London, United Kingdom, NW1 3ER. The company's principal activities and nature of its operations are disclosed in the directors' report.
The group consists of Acre 1217 Limited and all of its subsidiaries.
1.1
Accounting convention
The financial statements have been prepared in accordance with UK-adopted International Accounting Standards (IASs) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.
The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The material accounting policies adopted are set out below.
1.2
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Acre 1217 Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 July 2024. 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.
Subsidiaries are entities that are controlled by the Group. Control is achieved when the Group has the power to govern the financial and operating policies of an entity so as to obtain economic benefit from its activities. 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
1.3
Going concern
The financial statements have been prepared on a going concern basis as despite the challenges to the wider UK economy we maintain a strong balance sheet and cash balance with no borrowings.true
The business meets its day to day working capital requirements with its own cash reserves with a cash balance as of the 31st January 2025 of £5.1m.
Despite a downturn in turnover for 2023/2024 we are forecasting this to increase in 2024/2025 and are seeing good opportunities coming through our pipelines with some two stage negotiated works and we also secured places on the Procure Partnership framework. Our current secured workload for 2024/2025 is £54m with a further £25m secured for 2025/2026.
In assessing the appropriateness of applying the going concern basis in the preparation of the financial statements, the directors have considered the business liquidity and cashflow forecasts and believe there is sufficient resources to continue in operational existence for the foreseeable future.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 13 -
1.4
Revenue
Revenue is the amount derived from ordinary activities stated after trade discounts, other sales taxes and net of VAT.
Revenue arises from increases in valuations on contracts and is normally determined by external valuations. It is the gross value of work carried out for the period to the balance sheet date (including retentions) but excludes claims until they are actually certified. Revenue is recognised when it transfers control to a customer.
Profit on contracts is calculated in accordance with accounting standards and industry practice. Industry practice is to assess the estimated final outcome of each contract and recognise the profit based upon the percentage of completion of the contract at the relevant date. The assessment of the final outcome of each contract is determined by regular review of the revenues and costs to complete that contract. Consistent contract review procedures are in place in respect of contract forecasting.
The general principles for profit recognition are as follows:
• Profits on other contracts are recognised on a percentage of completion basis when the contract’s outcome can be estimated reliably;
• Provision is made for losses incurred or foreseen in bringing the contract to completion as soon as they become apparent;
• Where the outcome of a contract cannot be estimated reliably, contract costs are recognised as expenses in the period in which they are incurred and contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable.; and
• Variations and compensation events are included in forecasts to completion when they can be measured reliably and its receipt is considered probable.
Amounts recoverable on long term contracts, which are included in debtors, are stated at the net sales value of the work completed after provision for contingencies and anticipated future losses on contracts, less amounts received as progress payments on account. Excess payments are included in creditors as payments on account.
1.5
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Asset held for sale
50 years straight line
Fixtures and fittings
15% reducing balance
Plant and equipment
15% - 33.33% on cost or reducing balance
Motor vehicles
25% reducing balance
Right of use asset
Over the life of the lease
Cycles
1 year straight line
IT & Software
3 years straight line
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 income statement.
1.6
Impairment of tangible assets
At each reporting end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -
1.7
Inventories
Inventories are stated at the lower of cost and net realisable value. Work in progress is valued on the basis of cost of materials, labour and direct site expenses plus an appropriate proportion of overhead expenses less progress payments received, adjusted for realised profits where appropriate.
Development property, which is property held for development and future sale, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at the lower of cost and net realisable value.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held with banks.
1.9
Financial assets
Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
The group's financial assets include trade and trade receivables at amortised cost. The group holds no financial assets at fair value.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
The Group assess on a forward looking basis the expected credit loss associated with its financial assets. The impairment methodology depends on whether there has been a significant increase in credit risk.
The Expected Credit Loss model has not been applied to the trade and trade receivables balances as the directors have no expectation of impairment of these balances. No impairment losses have been recognised during the period.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
1.10
Financial liabilities
The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as 'other financial liabilities'.
The group's financial liabilities include trade and other payables and borrowings at amortised cost. The company holds no financial liabilities at fair value.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.
1.11
Equity instruments
Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax from the proceeds.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
1.13
Provisions
Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event and it is probable that the group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the group's estimate of the amount expected to be payable under a residual value guarantee; or the group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 17 -
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, leases of low-value assets including IT equipment or for leases of storage space that have a lease term of 12 months or less. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.17
The directors consider that the group has only one reporting segment for the year ended 31 July 2024 and 31 July 2023. Accordingly, no segmental analysis is considered necessary.
2
Adoption of new and revised standards and changes in accounting policies
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following Standard and Interpretations relevant to the group, which have not yet been applied in these financial statements, were in issue but not yet effective:
Lack of Exchangeability (Amendments to IAS 21 from 1 January 2025)
Clarifies the determination of whether a currency is exchangable into another currency, and the spot exchange rate to use when it is not.
Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7 from 1 January 2026)
Clarifies the following:
1. The date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system.
2. Further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion.
3. New disclosures for certain instruments with contractual terms that can change cash flows (e.g. linked to the achievement of environment, social and governance targets).
4. Disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).
Presentation and Disclosure in Financial Statements( IFRS 18 from 1 January 2027)
Replaces IAS 1, with a focus on updates to the statement of profit or loss. Key concepts include,stucture and required disclosures around key performance measures that a reported outside an entity's financial statements (e.g. management-defined prformance measures).
Subsidiaries without Public Accountability Disclosures (IFRS 19 from 1 January 2027)
Clarifies the reduced disclosure requirements if deemed an 'eligible subsidiary'. An subsidiary is deemed eligible if it does not have public accountability and it has an ultimate or immediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards.
The group does not yet expect to early adopt any of the above standards, amendments or interpretations. The group has not yet completed its full evaluation of the effect of adopting these standards. The amendment to IAS 37 are applicable for the loss making construction contracts, the group already brings into account directly related costs but are assessing further to ensure no amendments to current practice.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 18 -
3
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Carrying value of the group's right-of-use assets
The group leases office space. The asset and liability arising from this lease arrangement are initially measured on a present value basis with the lease payments discounted based on the group's estimated incremental cost of borrowing. The directors have determined that a discount rate of 10.4% per annum is appropriate to discount the lease payments under the lease.
The group has calculated the right-of-use asset using the full term of the lease.
The carrying value of the group's right-of-use asset and lease liabilities at the reporting date are detailed in note 13.
Recoverable value of recognised receivables
The recoverability of trade and other receivables, including those long term receivables, is regularly reviewed in the light of available economic information specific to each receivable and provisions are recognised for balances considered to be irrecoverable. As at the reporting date the balances considered to be irrecoverable were £50,890 (2023: £51,890).
Provisions
Provisions are liabilities of uncertain timing or amount and therefore in making a reliable estimate of the amount and timing of liabilities judgement is applied and re-evaluated at each reporting date. As at the reporting date the provisions were £165,881 (2023: 463,065).
Revenue recognition
The directors recognise profits on contracts on a percentage of completion basis when the contracts outcome can be reliably estimated, expenditure on contracts is recognised in line with percentage completion.
For loss making projects a provision is made for the full anticipated loss as soon as it is identified by management. Management exercise their judgment in considering when a loss position is identified.
Accruals and deferred income
Income certified at a point not coterminous with the year-end is accrued or deferred on the basis of the amount of work completed over the certified period as estimated by the directors. The directors exercise their judgment in determining the completed work position as at year end based on their work schedule.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
3
Critical accounting estimates and judgements
(Continued)
- 19 -
Key sources of estimation uncertainty
Revenue and profit recognition
In order to assess the appropriateness of the revenue, accrued expenditure and profit recognition in respect of construction contracts the group is required to make estimations of sales prices, costs and margins expected on long term contracts. The directors assess the expected scope of work, contract programmes, maintenance and defect liabilities and expected changes in costs. The revenues and expenditure recognised are highly sensitive to the assumptions used and the directors therefore also consider whether there has been a sustained change in market conditions and the wider economic environment existing at the reporting date.
Aftercare and defect provisions
Aftercare and defect provisions are recognised in the financial statements at the estimated future expenditure required to settle the aftercare obligations. As at the reporting date the aftercare and defect provisions were £195,890 (2023: £629,230).
Provisions
Provisions are recognised when the group has a present legal obligation or constructive obligation as a result of a past event, and where it is probably that an outflow will be required to settle the obligation and the amount can be reliably estimated.
Contract accruals
The contract accruals are recognised to align the project margins as per the underlying contract budgets, which include the directors best estimates of the work undertaken and required by each subcontractor to project completion. As at the reporting date the contract accruals were £5,657,073 (2023: £3,813,845).
4
Revenue
2024
2023
£
£
Revenue analysed by class of business
Contracts with customers (turnover recognised over time)
31,798,291
33,384,928
2024
2023
£
£
Revenue analysed by geographical market
United Kingdom
31,798,291
33,384,928
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as at the end of the reporting period are £58,660,853 (2023: £27,571,326).
5
Operating profit
2024
2023
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Depreciation of property, plant and equipment
167,599
294,103
Profit on disposal of property, plant and equipment
(19,572)
(5,000)
Cost of inventories recognised as an expense
27,980,536
29,737,043
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 20 -
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company's subsidiaries
111,002
53,751
For other services
Other services
11,024
18,720
7
Employees
The average monthly number of persons (including directors) employed by the group during the year was:
2024
2023
Number
Number
Administration staff
19
20
Construction staff
70
76
Total
89
96
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
6,474,721
6,472,548
Social security costs
703,854
732,408
Pension costs
334,373
327,935
7,512,948
7,532,891
8
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
310,013
328,250
Company pension contributions to defined contribution schemes
23,142
37,371
333,155
365,621
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
8
Directors' remuneration
(Continued)
- 21 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
161,554
161,015
Company pension contributions to defined contribution schemes
15,393
26,762
The number of directors whom retirement benefits are accruing under defined benefit contribution schemes amounted to 2 (2023: 2).
9
Investment income
2024
2023
£
£
Interest income
Financial instruments measured at amortised cost:
Bank deposits
38,488
113,273
Loans and receivables
5,459
-
Other interest income on financial assets
409
478
Total interest revenue
44,356
113,751
10
Finance costs
2024
2023
£
£
Interest on bank overdrafts and loans
85
1,761
Interest on lease liabilities
4,720
29,047
Total interest expense
4,805
30,808
11
Income tax expense
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
16,275
(70,662)
Deferred tax
Origination and reversal of temporary differences
(39,210)
(59,795)
Total tax (credit)
(22,935)
(130,457)
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
11
Income tax expense
(Continued)
- 22 -
The charge for the year can be reconciled to the loss per the income statement as follows:
2024
2023
£
£
Profit/(loss) before taxation
254,213
(104,916)
Expected tax charge/(credit) based on a corporation tax rate of 25.00% (2023: 21.00%)
63,553
(22,032)
Effect of expenses not deductible in determining taxable profit
11,246
1,737
Effect of change in UK corporation tax rate
-
(4,728)
Research and development tax credit
16,275
(70,662)
Deferred tax adjustments in respect of prior years
(100,020)
(907)
Group dividend income
50,000
(37,414)
Fixed asset differences
(4,380)
(88)
Other movements
(59,609)
3,637
Taxation credit for the year
(22,935)
(130,457)
12
Dividends
2024
2023
2024
2023
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Interim dividend paid
277.00
33.00
50,000
6,000
13
Property, plant and equipment
Asset held for sale
Plant and equipment
Fixtures and fittings
Motor vehicles
Right of use asset
Total
£
£
£
£
£
£
Cost
At 1 August 2022
442,478
1,198,731
31,597
529,578
319,695
2,522,079
Additions
26,183
73,405
99,588
Disposals
(2,920)
(48,520)
(51,440)
At 31 July 2023
442,478
1,221,994
31,597
554,463
319,695
2,570,227
Additions
42,118
76,879
118,997
Disposals
(442,478)
(104,724)
(31,597)
(17,940)
(596,739)
At 31 July 2024
1,159,388
613,402
319,695
2,092,485
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
13
Property, plant and equipment
Asset held for sale
Plant and equipment
Fixtures and fittings
Motor vehicles
Right of use asset
Total
£
£
£
£
£
£
(Continued)
- 23 -
Accumulated depreciation and impairment
At 1 August 2022
849,178
293,010
181,880
1,324,068
Charge for the year
133,665
31,597
67,590
61,251
294,103
Eliminated on disposal
(1,875)
(38,001)
(39,876)
At 31 July 2023
980,968
31,597
322,599
243,131
1,578,295
Charge for the year
43,261
63,087
61,251
167,599
Eliminated on disposal
(70,765)
(31,597)
(13,990)
(116,352)
At 31 July 2024
953,464
371,696
304,382
1,629,542
Carrying amount
At 31 July 2024
-
205,924
-
241,706
15,313
462,943
At 31 July 2023
442,478
241,026
-
231,864
76,564
991,932
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2024
2023
£
£
Net values at the year end
Right of use asset
15,313
76,564
Depreciation charge for the year
Right of use asset
61,251
61,251
14
Contracts with customers
2024
2023
2023
Period end
Period end
Period start
£
£
£
Contract assets
3,172,166
2,644,603
3,090,928
Contract liabilities
Period end
Period end
Period start
£
£
£
5,852,963
4,240,844
9,302,658
The contract asset and liability figure in 2024 is greater than 2023 as a result of the increased pipeline in 2025. The figure at the end of 2023 was lower than previously as there were less on-going contracts as a result of a reduction in turnover.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
15
Inventories
2024
2023
£
£
Work in progress
2,015,116
140,248
Development property
-
1,189,429
2,015,116
1,329,677
16
Trade and other receivables
Current
Non-current
2024
2023
2024
2023
£
£
£
£
Trade receivables
5,565,612
4,207,649
452,168
524,989
Provision for bad and doubtful debts
(50,890)
(51,890)
-
-
5,514,722
4,155,759
452,168
524,989
Contract assets (note14)
3,172,166
2,644,603
-
-
Other receivables
9,980
53,764
-
-
Prepayments
127,318
101,081
-
-
8,824,186
6,955,207
452,168
524,989
17
Trade receivables - credit risk
Fair value of trade receivables
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
Movement in the allowances for doubtful debts
2024
2023
£
£
Balance at 1 August 2023 and at 31 July 2024
50,890
51,890
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 25 -
18
Lease liabilities
2024
2023
Maturity analysis
£
£
Within one year
23,861
94,351
In two to five years
-
23,862
Total undiscounted liabilities
23,861
118,213
Future finance charges and other adjustments
-
(7,305)
Lease liabilities in the financial statements
23,861
110,908
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2024
2023
£
£
Current liabilities
23,861
104,272
Non-current liabilities
-
23,861
23,861
128,133
2024
2023
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
4,720
29,047
Leases relating to land and buildings recognised under IFRS 16 relate to rentals payable by the group for its business premises. The lease term ends on 24 September 2024. There are no contingent rent, renewal or purchase options and escalation clauses in the lease agreement. There are no significant restrictions imposed by lease arrangements.
The group holds three motor vehicle leases of low-value. The lease terms end between April 2026 and June 2026. There are no contingent rent, renewal or purchase options and escalation clauses in the lease agreement. There are no significant restrictions imposed by lease arrangements.
Details on the right-of-use asset can be found in note 13 of the accounts. Additionally, note 24 of the accounts includes details of low value assets, as well as the short-lease relating to rental of storage space.
19
Provisions for liabilities
2024
2023
£
£
Provisions
165,881
463,065
All provisions are expected to be settled within 12 months from the reporting date.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
19
Provisions for liabilities
(Continued)
- 26 -
Movements on provisions:
£
At 1 August 2023
463,065
Additional provisions in the year
161,724
Utilisation of provision
(458,908)
At 31 July 2024
165,881
Provisions relate to on-going projects with disputed sub contractor fees, estimations of costs to complete and other issues causing costs to be uncertain.
20
Trade and other payables
Current
Non-current
2024
2023
2024
2023
£
£
£
£
Trade payables
3,431,775
3,311,844
154,921
335,686
Preference dividends payable
10,000
Accruals
6,050,915
4,521,079
Social security and other taxation
600,483
241,701
Other payables
66,743
98,829
10,149,916
8,183,453
154,921
335,686
Some costs under the contracts that have been provided for in full are under dispute and the directors are attempting to recover some of these amounts through an ongoing insurance claim, the outcome of which is not yet certain.
21
Deferred taxation
Liabilities
2024
2023
£
£
Deferred tax balances
19,975
59,185
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
21
Deferred taxation
(Continued)
- 27 -
Accelerated Capital Allowances
£
Liability at 1 August 2022
118,980
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(59,795)
Liability at 1 August 2023
59,185
Deferred tax movements in current year
Charge/(credit) to profit or loss
(39,210)
Liability at 31 July 2024
19,975
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
334,373
327,935
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares A of £1 each
90
90
90
90
Ordinary shares B of £1 each
90
90
90
90
180
180
180
180
The Ordinary A shares and Ordinary B shares rank pari passu in terms of dividends and voting rights.
24
Other leasing information
Lessee
2024
2023
Land and buildings
£
£
Within one year
24,440
24,440
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
24
Other leasing information
(Continued)
- 28 -
2024
2023
Leases apart from land and buildings
£
£
Within one year
12,070
12,070
Between two and five years
9,434
21,505
21,504
33,575
The land and buildings lease is in relation to rental of storage space and is a short-term lease of less than 12 months. Leases apart from land and buildings includes leases of low value motor vehicles, machinery and IT equipment. Accordingly, these leases have not been recognised as right of use assets.
Information relating to lease liabilities is included in note 18.
25
Financial commitments, guarantees and contingent liabilities
There is a fixed charge on all freehold, leasehold and book debts and other assets of the group. A bank also has a floating charge over all other assets of the group. The group has unlimited contingent liabilities in respect of composite guarantees of performance bonds entered into in the normal course of business. The directors consider the likelihood of loss to be remote.
26
Financial risk management and treasury policies
The group manages financial risks through its risk management function. Financial risks are risks arising from financial instruments to which the group is exposed during or at the end of the reporting period. Financial risk comprises market risk, credit risk and liquidity risk. The primary objectives of the financial risk management function are to establish risk limits, and then ensure that exposure to risk stays within these limits.
The board is ultimately responsible for the development and oversight of the group's risk management policies and overall framework.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 29 -
27
Liquidity risk
The table below analyses the group's liabilities measured at amortised cost, which will be settled on a net basis, to show the maturity of the group's liabilities based on the remaining period at the Consolidated Statement of Financial Position date to the current contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. The fair value of the balances due within 12 months is equal to their carrying balances as the impact of discounting is not significant.
Less than 1 year
1 – 5 years
Total
£
£
£
At 31 July 2023
Trade and other payables
8,183,453
335,686
8,519,139
Lease liabilities
94,351
23,862
118,213
8,277,804
359,548
8,637,352
At 31 July 2024
Trade and other payables
10,149,196
154,921
10,304,117
Lease liabilities
23,861
-
23,861
10,173,057
154,921
10,327,978
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The group’s approach is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed circumstances. All financial liabilities are covered by the group’s bank balances and short term recoverable debtors, giving confidence that funds will be available to settle liabilities as they fall due. The board monitors liquidity risk on an on-going basis.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 30 -
28
Credit risk
Except as detailed below, the carrying amount of financial assets measured at amortised cost recorded in the financial statements, which is net of impairment losses, represents the group's maximum exposure to credit risk.
Maximum credit risk
2024
2023
£
£
Trade and other receivables
8,691,409
6,854,126
Cash and cash equivalents
2,328,085
2,535,110
The group does not hold any collateral or other credit enhancements to cover this credit risk.
The group has applied the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that is has entered into with the group. Credit risk of financial assets is reflected in the carrying value of these assets being set to their fair value. The board monitors the placement of cash balances on an on-going basis. All cash is place with reputable institutions.
The group has a strong track history with its debtors and therefore credit risk from lack of recoverability is minimal. As such, there have been no adjustments to the debtors position on the basis the group expect to recover in full.
29
Capital risk management
The directors consider the group and company’s capital to comprise share capital, share premium and accumulated profits stated on the statement of financial position. The group and company’s objectives when managing capital are to safeguard the group and company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The group and company manages capital by regularly monitoring its current and expected liquidity requirements. The group uses its capital to support the growth of the business. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends to its shareholders in line with availability of working capital to ensure the group does not see a shortfall in cash as a result of paying out these dividends.
30
Market price risk
Market risk is the risk the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The group’s market risk arises from open positions in interest bearing assets and liabilities, to the extent they are exposed to general and specific market movements. Management set limits on the exposure to interest rate risk that may be acceptable, however, the use of this approach does not prevent losses outside of these limits in the event of more significant market movements. The group also monitors closely the supply chain issues faced within the section, measures are taken to minimise the market price risk including seeking contractual protection, early involvement wherever possible with customers, the supply chain and tracking of key material pricing. Furthermore, margins are calculated based on estimated subcontractor and material costs, and therefore material costs are subject to market risk fluctuations.
Interest rate risk is the risk arising from unexpected or untoward movements in interest rates. The group’s monetary assets which attract interest rate risk are bank balances which are held at a floating rate, the interest is not material to the financial statements.
The group does not have any exposure to foreign exchange risk as all material purchases and sales are made in GBP.
ACRE 1217 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 31 -
31
Cash absorbed by group operations
2024
2023
£
£
Profit/(loss) for the year before taxation
254,213
(104,916)
Adjustments for:
Finance costs
4,805
30,808
Investment income
(44,356)
(113,751)
Loss/(gain) on disposal of property, plant and equipment
14,387
(5,000)
Depreciation and impairment of property, plant and equipment
167,599
294,103
(Decrease)/increase in provisions
(297,184)
148,422
Movements in working capital:
Increase in inventories
(685,439)
(313,385)
(Increase)/decrease in contract assets
(527,563)
446,325
(Increase)/decrease in trade and other receivables
(1,268,595)
3,227,010
Increase/(decrease) in trade and other payables
1,785,698
(7,186,331)
Cash absorbed by operations
(596,435)
(3,576,715)
32
Analysis of changes in net funds
1 August 2023
Cash flows
31 July 2024
£
£
£
Cash at bank and in hand
2,535,110
(207,025)
2,328,085
Obligations under finance leases
(128,133)
104,272
(23,861)
2,406,977
(102,753)
2,304,224
1 August 2022
Cash flows
31 July 2023
Prior year:
£
£
£
Cash at bank and in hand
6,204,982
(3,669,872)
2,535,110
Obligations under finance leases
(215,209)
87,076
(128,133)
5,989,773
(3,582,796)
2,406,977
ACRE 1217 LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
- 32 -
2024
2023
Notes
£
£
£
£
Non-current assets
Investments
35
3,900,002
3,885,067
Current assets
Trade and other receivables
38
100
100
Current liabilities
39
(3,611,660)
(2,200,000)
Net current liabilities
(3,611,560)
(2,199,900)
Total assets less current liabilities
288,442
1,685,167
Equity
Called up share capital
40
180
180
Share premium account
1,684,987
Retained earnings
288,262
Total equity
288,442
1,685,167
As permitted by trues408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £1,346,725 (2023 - £6,000 profit).
The financial statements were approved by the board of directors and authorised for issue on 28 April 2025 and are signed on its behalf by:
D J Norman
Director
Company Registration No. 12006041
ACRE 1217 LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 33 -
Share capital
Share premium account
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 August 2022
180
1,684,987
1,685,167
Year ended 31 July 2023:
Profit and total comprehensive income
-
-
6,000
6,000
Transactions with owners:
Dividends
-
-
(6,000)
(6,000)
Balance at 31 July 2023
180
1,684,987
1,685,167
Year ended 31 July 2024:
Loss and total comprehensive income
-
-
(1,346,725)
(1,346,725)
Transactions with owners:
Dividends
-
-
(50,000)
(50,000)
Reduction in shares
40
(1,684,987)
1,684,987
Balance at 31 July 2024
180
288,262
288,442
ACRE 1217 LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 34 -
33
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Carrying value of investments in subsidiary undertaking
The company's investments in subsidiary undertakings are set out in note 36.
An estimate of the collectable amounts from subsidiary undertakings is made in consideration of the requirement to recognise impairment losses against the asset. At the reporting date, accumulated impairment losses in respect of investments in subsidiary undertakings amounted to £3,885,067.
34
Accounting policies
Company information
Acre 1217 Limited is a private company limited by shares incorporated in England and Wales. The registered office is Acre House, 11-15 William Road, London, United Kingdom, NW1 3ER. The company's principal activities and nature of its operations are disclosed in the directors' report.
34.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101), in accordance with applicable accounting standards and 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 company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of key management personnel compensation;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date.
34.2
Going concern
The financial statements have been prepared on a going concern basis as despite the challenges to the wider UK we maintain a strong balance sheet with no borrowings.
In assessing the appropriateness of applying the going concern basis in the preparation of the financial statements the directors believe there is sufficient resources in the group to continue in operational existence for the foreseeable future.
ACRE 1217 LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
34
Accounting policies
(Continued)
- 35 -
34.3
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The cost of the investment includes transaction costs. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
35
Investments
Current
Non-current
2024
2023
2024
2023
£
£
£
£
Investments in subsidiaries
3,900,002
3,885,067
Fair value of financial assets carried at amortised cost
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Investment in subsidiary undertakings
Details of the company's principal operating subsidiaries are included in note 36.
Movements in non-current investments
Shares in subsidiaries
£
Cost or valuation
At 1 August 2023
3,885,067
Additions
3,900,002
Impairment
(3,885,067)
At 31 July 2024
3,900,002
Carrying amount
At 31 July 2024
3,900,002
At 31 July 2023
3,885,067
36
Employees
The company had no employees in the year or previous year.
ACRE 1217 LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 36 -
37
Subsidiaries
Details of the company's subsidiaries at 31 July 2024 are as follows:
Name of undertaking
Address
Principal activities
Class of
% Held
shares held
Direct
Indirect
Acre 1175 Limited
1
Holding company
Ordinary
100.00
-
Buxton Holdings Limited
2
Holding company
Ordinary
100.00
-
Buxton Building Contractors Limited
2
Contracting company
Ordinary
100.00
-
Buxworth Homes London Limited
2
Dormant holding company
Ordinary
0
100.00
64 Offley Road Limited
2
Dormant company
Ordinary
0
100.00
301 Green Lane Limited
2
Dormant company
Ordinary
0
100.00
40 Welcomes Road Limited
2
Dormant company
Ordinary
0
100.00
Registered office addresses (all UK unless otherwise indicated):
1
Acre House, 11-15 William Road, London, NW1 3ER
2
Cedar House, 91 High Street, Caterham, Surrey, CH3 5UX
38
Trade and other receivables
2024
2023
£
£
Other receivables
100
100
39
Trade and other payables
2024
2023
£
£
Amounts owed to subsidiary undertakings
3,611,660
2,200,000
40
Share capital
Refer to note 23 of the group financial statements.
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