Company registration number NI033813 (Northern Ireland)
UNION ARCH PROPERTIES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
UNION ARCH PROPERTIES PLC
COMPANY INFORMATION
Directors
Mr H Moore
Mr T L McNeill
Mr L Cubitt
Mr C D W Dougan
Mr G C Henderson
Mr D A Mahon
Secretary
Mr C D W Dougan
Company number
NI033813
Registered office
Jalna
151 Ardvarney Road
Drumbane
Kesh
Co Fermanagh
BT93 1SQ
Auditor
GMcG PORTADOWN
17 Mandeville Street
Portadown
Craigavon
Co Armagh
BT62 3PB
Bankers
Danske Bank
Main Street
Kesh
Co Fermanagh
BT93 1TS
Solicitors
Nelson Singleton
21 Gallows Street
Dromore
Co Down
BT25 1BG
UNION ARCH PROPERTIES PLC
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 12
Group statement of comprehensive income
13
Group statement of financial position
14
Company statement of financial position
15
Group statement of changes in equity
16
Company statement of changes in equity
17
Group statement of cash flows
18
Company statement of cash flows
19
Notes to the financial statements
20 - 38
UNION ARCH PROPERTIES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -

The directors present the strategic report for the year ended 31 March 2022.

Fair review of the business

The directors are satisfied with the performance of the group and company in the year and its position at the year end. The group holds properties for both investment and trading purposes. Investment properties consist of two commercial properties used in retail and are leased to tenants until 2030, albeit with an agreed break clause during 2025. These properties are held within the group for long term capital appreciation and rental return. In respect of properties held for trading purposes, the group held seven properties during the year. The trading properties held are all commercial in nature and are held with the intention of sale. The commercial use of these properties ranges from two small retail units, a warehouse facility, a commercial yard, an office and a shopping centre.

In relation to the group’s properties, the Board of directors continues to monitor the local property market within Northern Ireland and to seek sale opportunities for its trading properties. The Board has no immediate plans to add to the group’s properties.

 

At 31 March 2022 the group had property assets of £5,055,664, debt financing of £871,962 and net assets of £4,271,756. The Board is pleased to note this reflects a decrease of £200,236 in debt finance and increases in property assets of £53,000 and net assets of £312,983. The Board’s aim is to continue to service and reduce the debt finance of the group from income.

Key performance indicators, as disclosed below, are in line with the Board's expectations. Favourable results can be seen in the increase in profit before tax compared to that of the previous year, together with an increase in operational cash flow. Investment properties were fully let and although rental return on trading properties is not the key aim of holding such properties, the occupancy rate detailed below shows only 2 units vacant in the period. Although arrears as a percentage of rental and service debts has increased, this is not unexpected due to tenants being impacted by the covid-19 pandemic. The directors recognise the difficulties facing some of the group's tenants and continue to support them by engaging with them and taking a longer term view in relation to rental arrears.

 

The directors are hopeful of achieving similar results in the forthcoming year.

Development and performance

There were no significant developments within the group's activities or its performance in the year.

 

In the year under review, as noted above, the group held two properties for investment purposes together with a small number of properties held for trading purposes. Both of the group’s investment properties were fully occupied and rented under leases that are non cancellable until 2025. The investment properties are carried at an unchanged valuation from that of the prior year, being £2,000,000. The market for similar properties has remained positive in Northern Ireland with no marked changes to the conditions seen in the last few years. The valuations carried in the financial statements reflect a yield of 8.5% for each property and this is considered to be in line with similar properties.

 

There were no sales or further purchases in relation to the group’s properties held for trading purposes, however these properties did contribute to the group’s performance by returning rental income in the year. In addition, there was a slight upward movement in the carrying amount of trading properties held at 31 March 2022. Trading properties are stated in the statement of financial position at the lower of cost or net realisable value, that being estimated selling price, less costs to complete and sell. Four properties are held at net realisable value as the estimated selling price is considered to be less than their original cost. Two of these properties showed an improvement in their estimated selling price at 31 March 2022, resulting in an uplift in carrying value of £53,000.

 

In the year to 31 March 2022 turnover remained consistent with that of the prior year whilst operating and net profit before tax showed a slight increase.

 

As referred to above, the Board continue to monitor the local property market within Northern Ireland with a view to seeking sale opportunities for the group’s trading properties and, although there are no plans to expand the group’s property portfolio, the Board is always open to fully considering any opportunity that might improve the group’s performance or asset position.

UNION ARCH PROPERTIES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
Key performance indicators

The group's key performance indicators are as follows:

 

                         2022         2021

                        

 

Turnover                        £513,671    £524,969

Profit on ordinary activities before tax        £442,894    £370,800

Operational cash flow                £318,697    £283,890

 

Occupancy rates on investment properties         100%         100%

Occupancy rates on trading properties         90%         95%

Arrears as a % of rental and service charge debtors 50%          38%

Principle risk and uncertainties

Performance in the sector is affected by general economic conditions and specific sectoral factors such as interest rates, property values and property rental values. Also the directors consider that maintaining relationships and facilities with its bankers to ensure finance is available when required to purchase new stocks is important. The Board of directors carries out regular strategic reviews including assessments of market trends and forecasts.

 

Environment

The group recognises its corporate responsibility to carry out its operations whilst minimising environmental impacts. The directors' continued aim is to comply with all applicable environmental legislation, prevent pollution and reduce waste wherever possible.

 

Health and Safety

The group is committed to achieving the highest practical standards in health and safety management and strives to make all premises safe environments for employees and customers alike.

 

Financial risk management

The group's operations expose it to financial risks that include the effects of changes in credit risk, liquidity risk and interest rate cash flow risk. The group has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the group by monitoring the level of risk which it faces. Given the size of the group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board.

 

Credit risk

The group has implemented policies that require appropriate credit checks on potential tenants before contracts are agreed. The amount of exposure to individual tenants is subject to a limit which is reassessed regularly by the Board. Due to the covid-19 pandemic the directors recognise an increase in credit risk in relation to existing tenants operations and their ability to pay rents and service charges. Adding to this, during the pandemic, restrictions were placed on landlords regarding potential action on rental arrears and this has also led to an increase in credit risk in the immediate future.

 

Liquidity risk

The group maintains a mixture of finance that is designed to ensure the group has sufficient available funds for operations and any planned expansions and development of properties.

UNION ARCH PROPERTIES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
Financial instruments and interest rate risk

The group has both interest bearing assets and interest bearing liabilities. Interest bearing assets include only cash balances, all of which earn interest. Interest bearing liabilities qualify as basic financial instruments and relate to bank loans and overdrafts on which the group pays variable rates of interest. The group has a policy of maintaining a quantum of debt at variable rates and further detail of these can be found at note 20 of the financial statements. All loans subject to variable interest rates are due to be fully repaid by the group within the next 2 years. Given recent increases in interest rates by the Bank of England, there is some uncertainty in relation to the future interest charges due to be incurred by the group, however, this uncertainty is short term given the maturity of such loans.

 

Future funding

The group is financed through long term loans. Any short term working capital requirement is funded through the group's overdraft facility.

 

Other risks and uncertainties

The group's operating environment continues to be impacted, to a degree, by the coronavirus pandemic in relation to its tenants' business activities. Similarly tenants business operations have been affected by energy costs and this could also present an indirect risk to the group in relation to their ability to continue in business and pay rents and service charges as they fall due. This creates short term risk which the directors are fully cognisant of.

Section 172 Statement

The directors recognise their duty to act, in good faith, in order to promote the success of the group and company for the benefit of its members as a whole, and in doing so, having due regard (amongst other matters) to:

 

 

 

 

 

 

 

The group and company's key stakeholders are considered to be:

 

 

 

 

 

The directors strive to understand the interests of its stakeholders and the impact of decisions on them and do this by continued engagement.

UNION ARCH PROPERTIES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 4 -
Principal decisions in the year

The directors monitored the performance of the group closely during the year to ensure any adverse effects of the coronavirus pandemic on the group's key stakeholders were mitigated as far as possible. No significant changes were made in respect of the groups underlying investments and activities.

On behalf of the board

David Mahon
Mr D A Mahon
Director
17 August 2022
UNION ARCH PROPERTIES PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 5 -

The directors present their annual report and financial statements for the year ended 31 March 2022.

Principal activities

The principal activity of the company and group continued to be that of dealing in property and holding investments for return.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr H Moore
Mr T L McNeill
Mr L Cubitt
Mr C D W Dougan
Mr G C Henderson
Mr D A Mahon
Results and dividends

The results for the year are set out on page 13.

No ordinary dividends were paid. Dividends of £83,475 were declared after the year end.

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

UNION ARCH PROPERTIES PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 6 -
Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
David Mahon
Mr D A Mahon
Director
17 August 2022
UNION ARCH PROPERTIES PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF UNION ARCH PROPERTIES PLC
- 7 -
Opinion

We have audited the financial statements of Union Arch Properties PLC (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2022 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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.

UNION ARCH PROPERTIES PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNION ARCH PROPERTIES PLC
- 8 -

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The 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:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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:

UNION ARCH PROPERTIES PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNION ARCH PROPERTIES PLC
- 9 -
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.

UNION ARCH PROPERTIES PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNION ARCH PROPERTIES PLC
- 10 -
Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing potential risks of material misstatement in respect of irregularities, including fraud and non-compliances with laws and regulations, we considered the following:

As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud in income recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, and local tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

UNION ARCH PROPERTIES PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNION ARCH PROPERTIES PLC
- 11 -
Audit response to risks identified

Our procedures to respond to the risks identified included the following:

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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. In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

UNION ARCH PROPERTIES PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNION ARCH PROPERTIES PLC
- 12 -

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Gillian Johnston
Ms Gillian Johnston ACA (Senior Statutory Auditor)
For and on behalf of GMcG PORTADOWN
17 August 2022
Chartered Accountants
Statutory Auditor
17 Mandeville Street
Portadown
Craigavon
Co Armagh
BT62 3PB
UNION ARCH PROPERTIES PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
- 13 -
2022
2021
Notes
£
£
Turnover
3
513,671
524,969
Cost of sales
50,184
456
Gross profit
563,855
525,425
Administrative expenses
(82,019)
(109,093)
Operating profit
6
481,836
416,332
Share of profits of associates
2,659
746
Interest receivable and similar income
7
199
500
Interest payable and similar expenses
8
(43,658)
(51,570)
Amounts written back on investments
9
1,858
4,792
Profit before taxation
442,894
370,800
Tax on profit
11
(129,911)
(69,315)
Profit for the financial year
23
312,983
301,485
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.
UNION ARCH PROPERTIES PLC
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2022
31 March 2022
- 14 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,000,950
2,000,040
Investments
13
216,138
211,621
2,217,088
2,211,661
Current assets
Stocks
16
3,055,664
3,002,664
Debtors
17
170,026
177,476
Cash at bank and in hand
135,997
18,524
3,361,687
3,198,664
Creditors: amounts falling due within one year
18
(882,241)
(891,312)
Net current assets
2,479,446
2,307,352
Total assets less current liabilities
4,696,534
4,519,013
Creditors: amounts falling due after more than one year
19
(187,859)
(380,182)
Provisions for liabilities
Deferred tax liability
21
236,919
180,058
(236,919)
(180,058)
Net assets
4,271,756
3,958,773
Capital and reserves
Called up share capital
22
1,669,500
1,669,500
Share premium account
23
7,917
7,917
Profit and loss reserves
23
2,594,339
2,281,356
Total equity
4,271,756
3,958,773
The financial statements were approved by the board of directors and authorised for issue on 17 August 2022 and are signed on its behalf by:
17 August 2022
David Mahon
Mr D A Mahon
Director
UNION ARCH PROPERTIES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
31 March 2022
- 15 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,000,950
2,000,040
Investments
13
2,407,235
2,396,966
4,408,185
4,397,006
Current assets
Stocks
16
1,295,664
1,242,664
Debtors
17
41,789
62,303
Cash at bank and in hand
37,503
3,809
1,374,956
1,308,776
Creditors: amounts falling due within one year
18
(923,082)
(1,020,585)
Net current assets
451,874
288,191
Total assets less current liabilities
4,860,059
4,685,197
Creditors: amounts falling due after more than one year
19
(187,859)
(380,182)
Net assets
4,672,200
4,305,015
Capital and reserves
Called up share capital
22
1,669,500
1,669,500
Share premium account
23
7,917
7,917
Profit and loss reserves
23
2,994,783
2,627,598
Total equity
4,672,200
4,305,015

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £367,185 (2021 - £300,739).

The financial statements were approved by the board of directors and authorised for issue on 17 August 2022 and are signed on its behalf by:
17 August 2022
David Mahon
Mr D A Mahon
Director
Company Registration No. NI033813
UNION ARCH PROPERTIES PLC
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 16 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2020
1,669,500
7,917
1,979,871
3,657,288
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
301,485
301,485
Balance at 31 March 2021
1,669,500
7,917
2,281,356
3,958,773
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
312,983
312,983
Balance at 31 March 2022
1,669,500
7,917
2,594,339
4,271,756
UNION ARCH PROPERTIES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 17 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2020
1,669,500
7,917
2,326,859
4,004,276
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
300,739
300,739
Balance at 31 March 2021
1,669,500
7,917
2,627,598
4,305,015
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
367,185
367,185
Balance at 31 March 2022
1,669,500
7,917
2,994,783
4,672,200
UNION ARCH PROPERTIES PLC
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
- 18 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
437,597
372,279
Interest paid
(43,658)
(51,570)
Income taxes paid
(75,242)
(36,819)
Net cash inflow from operating activities
318,697
283,890
Investing activities
Purchase of tangible fixed assets
(1,187)
-
Interest received
199
500
Net cash (used in)/generated from investing activities
(988)
500
Financing activities
Repayment of borrowings
-
100
Repayment of bank loans
(227,028)
(298,246)
Net cash used in financing activities
(227,028)
(298,146)
Net increase/(decrease) in cash and cash equivalents
90,681
(13,756)
Cash and cash equivalents at beginning of year
(25,067)
(11,311)
Cash and cash equivalents at end of year
65,614
(25,067)
Relating to:
Cash at bank and in hand
135,997
18,524
Bank overdrafts included in creditors payable within one year
(70,383)
(43,591)
UNION ARCH PROPERTIES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
- 19 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
190,953
234,638
Interest paid
(43,082)
(51,570)
Income taxes paid
(40,185)
(21,019)
Net cash inflow from operating activities
107,686
162,049
Investing activities
Purchase of tangible fixed assets
(1,187)
-
0
Interest received
199
500
Dividends received
127,232
127,232
Net cash generated from investing activities
126,244
127,732
Financing activities
Repayment of borrowings
-
100
Repayment of bank loans
(227,028)
(298,246)
Net cash used in financing activities
(227,028)
(298,146)
Net increase/(decrease) in cash and cash equivalents
6,902
(8,365)
Cash and cash equivalents at beginning of year
(39,782)
(31,417)
Cash and cash equivalents at end of year
(32,880)
(39,782)
Relating to:
Cash at bank and in hand
37,503
3,809
Bank overdrafts included in creditors payable within one year
(70,383)
(43,591)
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 20 -
1
Accounting policies
Company information

Union Arch Properties PLC (“the company”) is a public limited company domiciled and incorporated in Northern Ireland. The registered office is Jalna, 151 Ardvarney Road, Drumbane, Kesh, Co Fermanagh, BT93 1SQ.

 

The group consists of Union Arch Properties PLC and all of its subsidiaries.

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 amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include of investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Union Arch Properties PLC together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 March 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

 

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies (Continued)
- 21 -
1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of properties is recognised when the significant risks and rewards of ownership of the properties have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Equipment
- 20% reducing balance

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
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies (Continued)
- 22 -

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
Impairment of fixed assets

At each reporting period 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Stocks

Stocks consist of properties for resale. These properties are held as trading property stocks as they are held with the intention for sale rather than being held primarily for rental return or capital appreciation.

 

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct purchases and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies (Continued)
- 23 -

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.

1.10
Cash at bank and in hand

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.

1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

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 group 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.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies (Continued)
- 24 -
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 group 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.13
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.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies (Continued)
- 25 -
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 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 if, and only if, there is 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.

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 stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 26 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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 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.

Critical judgements

The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.

Fixed asset investments

Fixed asset investments are investments held by the group in unlisted entities. As the fair value of these investments cannot be measured reliably, these investments are recognised at cost less impairment. The directors consider the latest financial information available for underlying investments when considering whether indicators of impairment exist. Where such indicators exist the directors assess the recoverable amount of the asset. The assessment of recoverable amount involves a degree of judgement and uncertainty when considering the potential selling price of an investment.

Investment property

At each balance sheet date investment property is remeasured to fair value. As disclosed at note 12 the assessment of the fair value took account of valuations performed by external property consultants, Osborne King. The directors reassessed these in the light of changes in the commercial property market in Northern Ireland and considered transactions in any similar properties. Assessing the fair value of investment property therefore involves some judgement and estimation uncertainty the extent of which can depend on the level of transactions in the property market of similar properties.

Stock

At each balance sheet date trading stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its estimated selling price less costs to sell. The assessment of the selling price involves considering the local property market and recent similar transactions. The estimation of any impairment of such stock therefore involves some estimation uncertainty, the extent of which can depend on the level of comparable transactional activity in the property market.

 

Classification of property

Property owned by the group is classified as either investment property or trading stock. Classification depends upon whether the property is judged to be held primarily for long term rental return and for capital appreciation, in which case it is classified as in investment property, or held for resale, in which case it is classified as trading stock.

Debtors

Short term debtors are measured at transaction price, less any impairment. Impairment of such debtors involves some estimation uncertainty.

Taxation

Judgements are made in relation to the calculation of certain aspects of the year end tax provisions and the respective tax charge. The directors used external professional advice to support the year end provisions and tax charge.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 27 -
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Rental income and service charges
513,671
524,969
The whole of the turnover arose in the United Kingdom.
4
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
6,465
6,200
For other services
Taxation compliance services
800
800
Other taxation services
1,500
1,500
All other non-audit services
4,500
4,500
6,800
6,800
5
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
1
1
1
1

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
15,000
15,005
15,000
15,005
6
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
237
10
Loss on disposal of tangible fixed assets
40
-
0
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 28 -
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Other interest income
199
500
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
22,804
31,211
Other finance costs:
Other interest
20,854
20,359
Total finance costs
43,658
51,570
9
Amounts written off investments
2022
2021
£
£
Reversal of impairment of other fixed asset investments
1,858
4,792
10
Impairments

The group's fixed asset equity investments are not publicly traded and fair value cannot otherwise be measured reliably. These investments are therefore stated at cost less impairment. The impairment losses in respect of financial assets are recognised in other gains and losses in the income statement.

Reversals of impairment losses arising in previous years have been recognised in profit or loss as follows:

2022
2021
Notes
£
£
In respect of:
Fixed asset investments
13
1,858
4,792
Recognised in:
Amounts written back on investments
1,858
4,792
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 29 -
11
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
73,050
69,315
Deferred tax
Changes in tax rates
56,861
-
0
Total tax charge
129,911
69,315
2022
2021
£
£
Profit before taxation
442,894
370,800
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
84,150
70,452
Tax effect of expenses that are not deductible in determining taxable profit
(710)
(1,052)
Tax effect of utilisation of tax losses not previously recognised
(10,217)
-
0
Effect of change in corporation tax rate
56,861
-
Timing differences
(173)
(85)
Taxation charge
129,911
69,315
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 30 -
12
Tangible fixed assets
Group
Investment property
Equipment
Total
£
£
£
Cost
At 1 April 2021
2,000,000
840
2,000,840
Additions
-
0
1,187
1,187
Disposals
-
0
(840)
(840)
At 31 March 2022
2,000,000
1,187
2,001,187
Depreciation and impairment
At 1 April 2021
-
0
800
800
Depreciation charged in the year
-
0
237
237
Eliminated in respect of disposals
-
0
(800)
(800)
At 31 March 2022
-
0
237
237
Carrying amount
At 31 March 2022
2,000,000
950
2,000,950
At 31 March 2021
2,000,000
40
2,000,040
Company
Investment property
Equipment
Total
£
£
£
Cost
At 1 April 2021
2,000,000
840
2,000,840
Additions
-
0
1,187
1,187
Disposals
-
0
(840)
(840)
At 31 March 2022
2,000,000
1,187
2,001,187
Depreciation and impairment
At 1 April 2021
-
0
800
800
Depreciation charged in the year
-
0
237
237
Eliminated in respect of disposals
-
0
(800)
(800)
At 31 March 2022
-
0
237
237
Carrying amount
At 31 March 2022
2,000,000
950
2,000,950
At 31 March 2021
2,000,000
40
2,000,040
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
12
Tangible fixed assets (Continued)
- 31 -

The fair value of investment property has been arrived at by the directors at 31 March 2022. When assessing the fair value of investment property the directors took account of external valuations carried out in January 2020 by Osborne King, Commercial Property Consultants and Chartered Surveyors, who are not connected with the company, together with general changes to the local property market and recent property transactions within that market. The fair value valuation was made on an open market value basis by reference to yields attained on similar properties within the market and also market evidence of transaction prices for similar properties. For the purposes of considering transaction prices for similar properties the directors have assumed that a potential purchaser will not pay more for a property than it would to purchase a comparable substitute property.

 

There is no difference in respect of the comparable carrying amount for investment property, if stated under historic cost. The historic cost of investment property is £2,090,125, with an aggregate accumulated impairment loss of £90,125, resulting in a carrying amount under historic cost of £2,000,000.

13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
2,202,572
2,194,161
Other investments
216,138
211,621
204,663
202,805
216,138
211,621
2,407,235
2,396,966
Movements in fixed asset investments
Group
Shares in associates and other investments
£
Cost or valuation
At 1 April 2021
211,621
Amounts written back on other investments
1,858
Share of profit in associates
2,659
At 31 March 2022
216,138
Carrying amount
At 31 March 2022
216,138
At 31 March 2021
211,621
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
13
Fixed asset investments (Continued)
- 32 -
Movements in fixed asset investments
Company
Shares in subsidiaries
Shares in associates and other investments
Total
£
£
£
Cost or valuation
At 1 April 2021
2,194,161
202,805
2,396,966
Impairment reversal
8,411
1,858
10,269
At 31 March 2022
2,202,572
204,663
2,407,235
Carrying amount
At 31 March 2022
2,202,572
204,663
2,407,235
At 31 March 2021
2,194,161
202,805
2,396,966
14
Associates

Details of associates at 31 March 2022 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Sally McNally's Enterprises Ltd
Northern Bank House, Main Street, Kesh, Couty Fermanagh, BT93 1TF
Ordinary
20

The company's profit, based on the latest financial information available, that being the year ended 31 January 2021, amounted to £10,634 (2020 - £2,980). The company's share capital and reserves as at 31 January 2021 amounted to £53,526 (2020 - £42,981).

15
Subsidiaries

Details of the company's subsidiaries at 31 March 2022 are as follows:

Name of undertaking
Registered Address
Class of
% Held
shares held
Direct
Ballyrawer Estates Limited
Jalna 151 Ardvarney Road, Drumbane, Kesh, Co. Fermanagh, BT93 1SQ
Ordinary
100.00
16
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Properties held for resale
3,055,664
3,002,664
1,295,664
1,242,664

The total value of properties held for resale pledged as security amounted to £3,055,664 (2021 - £3,002,664).

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 33 -
17
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
131,692
121,841
3,455
6,668
Other debtors
38,334
55,635
38,334
55,635
170,026
177,476
41,789
62,303
18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans and overdrafts
20
271,915
279,828
271,915
279,828
Other borrowings
20
412,188
412,188
412,188
412,188
Amounts owed to group undertakings
-
0
-
0
136,591
214,826
Corporation tax payable
108,931
111,123
59,420
58,373
Other taxation and social security
33,237
20,930
8,429
9,098
Other creditors
-
0
10,500
-
0
10,500
Accruals and deferred income
55,970
56,743
34,539
35,772
882,241
891,312
923,082
1,020,585

Bank loans and overdrafts are secured as described in note 20.

19
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans and overdrafts
20
187,859
380,182
187,859
380,182

Bank loans and overdrafts are secured as described in note 20.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 34 -
20
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
389,391
616,419
389,391
616,419
Bank overdrafts
70,383
43,591
70,383
43,591
Other borrowings
412,188
412,188
412,188
412,188
871,962
1,072,198
871,962
1,072,198
Payable within one year
684,103
692,016
684,103
692,016
Payable after one year
187,859
380,182
187,859
380,182

Bank loans and overdrafts are secured by way of a charge over the group's investment properties and all of the group's trading properties. The total carrying value of the trading properties given as security was £3,055,664.

Other borrowings consist of loans that are repayable on demand. These borrowings are unsecured and interest is payable at 5%.

 

Bank borrowings, other than overdrafts, consist of five loans. Interest on loans of £16,659 maturing within one year is charged at a variable rate of Bank of England base rate plus 1%; loans of £330,613 with a final maturity between one and two years, are charged at a variable rate of Bank of England base rate plus 4.5%; loans of £42,119 with a final maturity of between four and five years, carry a fixed rate of interest rate of 2.5%.

 

The group's and company's commitment in respect of the repayment of bank loans, excluding interest, at 31 March 2022 is as follows:

 

          £

Repayments due in less than one year      201,532

Repayments due in one to two years     167,058

Repayments due in two to five years      20,801

             ═══════

21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
£
£
Property held for resale
236,919
180,058
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
21
Deferred taxation (Continued)
- 35 -
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 April 2021
180,058
-
Effect of change in tax rate - profit or loss
56,861
-
Liability at 31 March 2022
236,919
-

 

The deferred tax provision has been made in relation to one of the group's properties held for resale. The deferred tax provided will crystallise when this property is sold. The increase in deferred tax in the year is as a result of an increase in future corporation tax rates from 19% to 25%, due to take effect on 1 April 2023.

 

At the balance sheet date there exists a deferred tax asset of £74,407 (2021 - £66,258) at a corporation tax rate of 25% (2021 - 19%). The deferred tax asset arises in respect of unutilised tax losses. In accordance with FRS102 this asset as not been recognised.

22
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,669,500
1,669,500
1,669,500
1,669,500
23
Reserves
Share premium

This reserve records the amount above the nominal value for shares sold, less transaction costs.

 

Profit and loss account

This reserve records retained earnings and accumulated losses.

 

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 36 -
24
Operating lease commitments
Lessor

The company owns two investments properties for rental purposes. Rental income earned during the year was £180,494. The properties have committed tenants and have lease terms of 25 years in place to 2030, with a tenant only break option at year 20 of the term. Rentals are subject to five-yearly upward only rent reviews at either 2.5% or prevailing market rates. There are no options in place for either party to extend the lease terms.

 

Four properties held for resale have leases in place with tenants. The lease terms for these properties vary from 3 to 20 years, with the latest expiry date being 31 July 2032. One lease which has a 10 year term in place to 2030, also has a tenant's option to break at the end of year 5. No other leases have such a clause in place. There are also no options available for either party to extend the lease terms.

At the reporting end date the group had contracted with tenants for the following minimum lease payments in relation to investment properties.

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
180,494
180,494
180,494
180,494
Between two and five years
345,947
526,441
345,947
526,441
526,441
706,935
526,441
706,935
At the reporting date the group had contracted with tenants for the following lease payments in relation to properties held for resale.
Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
99,144
147,950
33,167
36,500
Between two and five years
250,603
312,714
59,875
93,042
In over five years
275,154
312,187
-
-
624,901
772,851
93,042
129,542
25
Events after the reporting date

After the reporting date Union Arch Properties PLC declared dividends of £83,475. The dividends have not been recognised as liabilities at 31 March 2022.

UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 37 -
26
Related party transactions

At the year end, the company owed a director of the company £15,000. Interest is charged at 5% on the outstanding balance and there are no formal terms of repayment.

 

No other transactions are noted to have taken place which would be required to be disclosed under the Companies Act 2006 or FRS 102.

27
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
312,983
301,485
Adjustments for:
Share of results of associates and joint ventures
(2,659)
(746)
Taxation charged
129,911
69,315
Finance costs
43,658
51,570
Investment income
(199)
(500)
Loss on disposal of tangible fixed assets
40
-
Depreciation and impairment of tangible fixed assets
237
10
Other gains and losses
(1,858)
(4,792)
Movements in working capital:
Increase in stocks
(53,000)
-
Decrease/(increase) in debtors
7,450
(60,996)
Increase in creditors
1,034
16,933
Cash generated from operations
437,597
372,279
28
Cash generated from operations - company
2022
2021
£
£
Profit for the year after tax
367,185
300,739
Adjustments for:
Taxation charged
41,232
35,883
Finance costs
43,082
51,570
Investment income
(127,431)
(127,732)
Loss on disposal of tangible fixed assets
40
-
Depreciation and impairment of tangible fixed assets
237
10
Other gains and losses
(10,269)
(20,085)
Movements in working capital:
Increase in stocks
(53,000)
-
Decrease in debtors
20,514
4,832
Decrease in creditors
(90,637)
(10,579)
Cash generated from operations
190,953
234,638
UNION ARCH PROPERTIES PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 38 -
29
Analysis of changes in net debt - group
1 April 2021
Cash flows
31 March 2022
£
£
£
Cash at bank and in hand
18,524
117,473
135,997
Bank overdrafts
(43,591)
(26,792)
(70,383)
(25,067)
90,681
65,614
Borrowings excluding overdrafts
(1,028,607)
227,028
(801,579)
(1,053,674)
317,709
(735,965)
30
Analysis of changes in net debt - company
1 April 2021
Cash flows
31 March 2022
£
£
£
Cash at bank and in hand
3,809
33,694
37,503
Bank overdrafts
(43,591)
(26,792)
(70,383)
(39,782)
6,902
(32,880)
Borrowings excluding overdrafts
(1,028,607)
227,028
(801,579)
(1,068,389)
233,930
(834,459)
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