Company Registration No. 10500200 (England and Wales)
ARK ESTATES DEVELOPMENT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
ARK ESTATES DEVELOPMENT LIMITED
COMPANY INFORMATION
Directors
H T Owen
A J Pettit
D McDonald
Dr P T Singh
(Appointed 7 June 2021)
Secretary
I S Perryment
Company number
10500200
Registered office
Spring Park
Westwells Road
Hawthorn
Corsham
Wiltshire
SN13 9GB
Auditor
UHY Hacker Young
Quadrant House
4 Thomas More Square
London
E1W 1YW
ARK ESTATES DEVELOPMENT LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 20
ARK ESTATES DEVELOPMENT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 1 -
The
Directors present
the strategic report for the year ended 30 June 2021.
STATEMENT IN ACCORDANCE WITH SECTION 172 OF THE COMPANIES ACT 2006
The Directors are required to make a statement which describes how they have acted in accordance with their duties to promote the success of the Company for the benefits of the members as a whole. These duties are set out in Section 172(1) of the Companies Act 2006 and are summarised below along with the actions undertaken by the Board.
The likely consequences of any decision in the long-term
The Directors insist on high operating standards and fiscal discipline and routinely engage with management and employees of the group to understand the underlying issues within the organisation. Additionally, the Board looks outside the organisation at macro factors affecting the business. The Directors consider all known facts when developing strategic decisions and long-term plans, taking into account their likely consequences for the Company. The Group has a well-established governance structure, and all key decisions are made in accordance with that process and, where required, are approved by the ultimate controlling party (Note 15).
The need to foster the company's business relationships with suppliers, customers, and others
Ark’s relationships with its customers is fundamental to the success of the business. We develop long-term relationships with our customers, engaging in frequent dialogue to discuss performance against our obligations and listen to their needs and plans to deliver world class services for their critical infrastructure.
Ark has developed strong partnerships with its suppliers to maintain relationships that are collaborative and mutually beneficial to all parties. We continue to work with partners who can deliver market leading products and services at high standards whilst developing innovation and efficiencies.
Engagement with debt holders and shareholders occur on an ongoing basis and as questions arise to ensure they are provided with timely and informative communications.
The impact of the company's operations on the community and the environment
The availability and resilience of the data centres is fundamental to delivering services to customers. The operations team work closely with customers and partners to define, document, test and implement best practice to enhance the efficiency and operations of the data centre facilities. Operational excellence is pivotal to the business and the data centres are certified by the British Standards Institute for Quality Management, Business Continuity, Information Security, Environmental Management Systems and Energy Management.
Ark’s core values are fundamental to the success of the business and are at the heart of everything we do. Ark considers the impact of its business operations and decisions on the community and the environment and directly engages with relevant parties where appropriate.
The desirability of the company maintaining a reputation for high standard of business conduct
Integrity is a core value for Ark. We support and provide guidance to all group employees so that they do the right thing, behave in an ethical manner and comply with all applicable legal or regulatory requirements in accordance with Ark's policies including, but not limited to, Anti-bribery and Corruption, Modern Slavery, Environmental and Energy Management. We also ensure that Ark's ISO management systems are fit for purpose, well maintained and appropriately controlled, audited, and improved to enable Ark to meet its contractual, certification, regulatory and legislative requirements.
ARK ESTATES DEVELOPMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 2 -
The need to act fairly between members of the company
The Board recognises its responsibilities under section 172 as outlined above and has acted at all times in a way consistent with promoting the success of the Company with regard to all stakeholders.
Business review
Ark Estates Development Limited was set up to deliver construction activities to related undertakings, and has development agreements in place with Ark Estates Cody Park Limited and Ark Estates Spring Park Limited.
T
he company has been active at both Cody Park and Spring Park during the year ended 30 June 2021, where projects have been delivered on time and in accordance with approved budgets. All contracted work was completed
prior to 30 June 2021, and there were no projects included in work in progress (see Note 9). The company will not undertake any new projects and, once all remaining financial obligations have been settled (see Note 11), the directors intend to wind the company up.
Key performance indicators
Financial indicators
The Board of Directors are therefore pleased to report the following financial results:
Non-financial indicators
Alongside the financial performance, the key performance indicators of the Company include;
The business plan of Ark is built around a long-term strategy and significant progress has been made during the year to 30 June 2021. During the current reporting period the group has secured new long-term contracts with customers from both public and private sectors across multiple industries including UK Government, Financial Services, Telecommunications, Cloud Providers and IT. The sales pipeline remains strong and further growth is expected through Ark’s existing customers, framework agreements and new customers.
Principal risk, uncertainties and dependencies
Principal risks faced by the Company are identified and monitored through a regular process that is reviewed by the Senior Leadership Team and presented to the Board of Directors. During the year ended 30 June 2021 the principal risks related to supply chain factors impacting build costs and build programmes. Following the completion of its construction activity, and the fact that no new projects are being undertaken by Ark Estates Development Limited, these principal risks are no longer considered applicable to the company. As at 30 June 2021, the company was debt free, had positive net assets and had sufficient working capital to meet all of its remaining financial obligations as they fall due.
ARK ESTATES DEVELOPMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 3 -
COVID-19
Despite the challenges presented by the pandemic, all of Ark’s facilities have remained open for business and will continue to do so due to its long-standing business continuity plans. The Company and its partners have pro-actively and intelligently planned our reaction to the various scenarios that it may present. Those plans are the outcome of tireless work by the Company with all of our partners and clients and we are grateful for the effort and positive engagement. We will continue to execute against those plans and adapt as needed but remain confident that we can meet the challenges before us.
Post balance sheet events
No other events have occurred since the balance sheet date, which significantly affect the Company.
H T Owen
Director
14 March 2022
ARK ESTATES DEVELOPMENT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 4 -
The directors present their annual report and financial statements for the year ended 30 June 2021.
Principal activities
The principal activity of the company is the design and construction of data centres and the provision of related services.
Results and dividends
The results for the year are set out on page 9.
No ordinary 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:
H T Owen
A J Pettit
D McDonald
S C Burrage
(Resigned 7 June 2021)
Dr P T Singh
(Appointed 7 June 2021)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Going concern
The company will not undertake any new projects and, once all remaining financial obligations have been settled, the directors intend to wind the company up. Accordingly, the going concern basis is no longer appropriate and the financial statements have been prepared on a basis other then going concern, as described in Note 1 to the financial statements.
Auditor
The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
ARK ESTATES DEVELOPMENT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 5 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect o
f the review of the business and the principal risks and uncertainties it faces.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
H T Owen
Director
14 March 2022
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ARK ESTATES DEVELOPMENT LIMITED
- 6 -
Opinion
We have audited the financial statements of Ark Estates Development Limited (the 'company') for the year ended 30 June 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2021 and of its loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter - financial statements prepared on a basis other than going concern
We draw your attention to note 1.2 to the financial statements which describes the directors' reasons why the financial statements have been prepared on a basis other than going concern. Our opinion is not modified in this respect.
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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ARK ESTATES DEVELOPMENT LIMITED
- 7 -
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'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ARK ESTATES DEVELOPMENT LIMITED
- 8 -
Based on our understanding of the company and the industry in which it operates, we identified that the
principal risks of non-compliance with laws and regulations related to the acts by the company, which were
contrary to applicable laws and regulations
such as those of ISO certification,
and we considered the extent to which non
-
compliance
might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the preparation of the financial statements such as the Companies
Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the principal risks were
related to inflated revenue.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, enquiries of management, and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non
-
compliance
with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we would become aware of it. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through
collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Julie Mellowes (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
14 March 2022
Chartered Accountants
Statutory Auditor
ARK ESTATES DEVELOPMENT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
- 9 -
2021
2020
Notes
£
£
Turnover
3
183,487,820
90,200,203
Cost of sales
(177,238,717)
(83,452,868)
Gross profit
6,249,103
6,747,335
Administrative expenses
(9,856)
(8,703)
Operating profit
6,239,247
6,738,632
Interest receivable and similar income
6
13,868
Interest payable and similar expenses
7
(8,331,054)
(9,949,846)
Loss before taxation
(2,091,807)
(3,197,346)
Tax on loss
8
Loss for the financial year
(2,091,807)
(3,197,346)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ARK ESTATES DEVELOPMENT LIMITED
BALANCE SHEET
AS AT 30 JUNE 2021
30 June 2021
- 10 -
2021
2020
Notes
£
£
£
£
Current assets
Stocks
9
125,671,763
Debtors
10
23,026,284
18,420,026
Cash at bank and in hand
423
11,143
23,026,707
144,102,932
Creditors: amounts falling due within one year
11
(19,475,098)
(136,036,076)
Net current assets
3,551,609
8,066,856
Capital and reserves
Called up share capital
12
100
100
Equity reserve
13
12,206,505
Profit and loss reserves
3,551,509
(4,139,749)
Total equity
3,551,609
8,066,856
The financial statements were approved by the board of directors and authorised for issue on 14 March 2022 and are signed on its behalf by:
H T Owen
Dr P T Singh
Director
Director
Company Registration No. 10500200
ARK ESTATES DEVELOPMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
- 11 -
Share capital
Equity reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 July 2019
100
8,822,656
(942,403)
7,880,353
Year ended 30 June 2020:
Loss and total comprehensive income for the year
-
-
(3,197,346)
(3,197,346)
Other movements
13
-
3,383,849
-
3,383,849
Balance at 30 June 2020
100
12,206,505
(4,139,749)
8,066,856
Year ended 30 June 2021:
Loss and total comprehensive income for the year
-
-
(2,091,807)
(2,091,807)
Other movements
13
-
(2,423,440)
-
(2,423,440)
Transfers
13
-
(9,783,065)
9,783,065
-
Balance at 30 June 2021
100
3,551,509
3,551,609
ARK ESTATES DEVELOPMENT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
- 12 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
16
27,625,280
(42,455,812)
Investing activities
Interest received
13,868
Net cash (used in)/generated from investing activities
-
13,868
Financing activities
Proceeds from borrowings
2,364,000
43,261,000
Repayment of borrowings
(30,000,000)
(1,714,740)
Net cash (used in)/generated from financing activities
(27,636,000)
41,546,260
Net decrease in cash and cash equivalents
(10,720)
(895,684)
Cash and cash equivalents at beginning of year
11,143
906,827
Cash and cash equivalents at end of year
423
11,143
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
- 13 -
1
Accounting policies
Company information
Ark Estates Development Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Spring Park, Westwells Road, Hawthorn, Corsham, Wiltshire, SN13 9GB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company will not undertake any new projects and, once all remaining financial obligations have been settled, the directors intend to wind the company up. Accordingly, the going concern basis is no longer appropriate and the financial statements have been prepared on a basis other then going concern.
true
No adjustments have been made to these financial statements as a result of the going concern assumption not being appropriate.
1.3
Turnover
Turnover is the total amount receivable by the company f
or the construction of data centre buildings
during the period, excluding VAT.
Turnover is recognised when a right to consideration has been obtained through the performance of contractual terms and conditions.
1.4
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 14 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
2
Judgements and key sources of estimation uncertainty
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. Judgements, estimates and assumptions have been made in relation to interest rates when calculating the fair value of intercompany loans (see notes 11 and 13). The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 17 -
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Construction of data centres
183,487,820
90,200,203
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
183,487,820
90,200,203
4
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,500
5,200
5
Employees
There were no employees during the year (2020: none) apart from the directors.
No directors' remuneration was paid in either the current year or prior year. The directors are remunerated by other group undertakings for which no allocations are made to the company.
6
Interest receivable and similar income
2021
2020
£
£
Interest on bank deposits
13,868
7
Interest payable and similar expenses
2021
2020
£
£
Interest payable to related undertakings (see note 11)
8,331,054
9,949,846
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 18 -
8
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Loss before taxation
(2,091,807)
(3,197,346)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(397,443)
(607,496)
Deferred tax movement not provided
397,443
607,496
Taxation charge for the year
-
9
Stocks
2021
2020
£
£
Work in progress
125,671,763
10
Debtors
2021
2020
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
23,026,284
15,989,710
Other debtors
2,430,316
23,026,284
18,420,026
Amounts due from group undertakings are unsecured, have no fixed date of repayment and are repayable on demand.
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 19 -
11
Creditors: amounts falling due within one year
2021
2020
£
£
Amounts owed to related undertakings
116,038,373
Trade creditors
1,973,659
13,974,667
Amounts owed to group undertakings
576,000
Taxation and social security
4,866,423
Other creditors
3,932,597
5,398,760
Accruals and deferred income
8,702,419
48,276
19,475,098
136,036,076
Amounts owed to related undertakings are owed to subsidiaries of Ark Capital Partners I LP Inc., the ultimate parent of Ark Estates Development Limited.
Amounts owed to group undertakings are unsecured, have no fixed date of repayment and are repayable on demand.
12
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
13
Equity reserve
At 30 June 2020 the Company had contractual intercompany loan arrangements of £116,038,373 which were not repayable on demand. These arrangements are presented in Note 11, which illustrates the fair value of the interest and principal payments over the term of the loan. The equity reserve as at 30 June 2020 of £12,206,505 represented the legal value of the intercompany loan arrangements that is not reflected within the value presented in Note 11. On 29 June 2021 the loan was novated to the company's fellow subsidiary undertakings, Ark Estates Spring Park Limited and Ark Estates Cody Park Limited, and there was a reserves transfer of £9,783,065 between the equity reserve and the profit and loss reserve.
14
Events after the reporting date
There have been no post balance sheet events requiring disclosure in the notes to the financial statements.
ARK ESTATES DEVELOPMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 20 -
15
Ultimate controlling party
The immediate parent company is
Ark
Group L
imited, a
company registered in the Isle of Man
and the ultimate parent undertaking is Ark Capital Partners I LP Inc., a limited partnership registered in the Isle of Man. The limited partnership is controlled by its partners.
Ark
Group Limited is the
parent undertaking of the
smallest
group of undertakings to consolidate these financial statements at 30 June 20
21
. The consolidated financial statements of Ark
Group Limited
are available from
its registered office at First Names House, Victoria Road, Douglas, Isle of Man, IM2 4DF
.
Ark Capital Partners I LP Inc. is the parent undertaking of the largest group of undertakings to consolidate these financial statements at 30 June 20
21
. The consolidated financial statements of Ark Capital Partners I LP Inc. are available from its general partner Goshawk GP Limited, F
irst Names House, Victoria Road,
Douglas, Isle of Man, IM
2 4DF
.
16
Cash generated from/(absorbed by) operations
2021
2020
£
£
Loss for the year after tax
(2,091,807)
(3,197,346)
Adjustments for:
Finance costs
8,331,054
9,949,846
Investment income
(13,868)
Movements in working capital:
Decrease/(increase) in stocks
125,671,763
(43,318,743)
Increase in debtors
(4,606,258)
(1,835,092)
Decrease in creditors
(99,679,472)
(4,040,609)
Cash generated from/(absorbed by) operations
27,625,280
(42,455,812)
17
Analysis of changes in net funds/(debt)
1 July 2020
Cash flows
Other non-cash changes
30 June 2021
£
£
£
£
Cash at bank and in hand
11,143
(10,720)
-
423
Borrowings excluding overdrafts
(116,038,373)
27,636,000
88,402,373
-
(116,027,230)
27,625,280
88,402,373
423
2021-06-30
2020-07-01
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