Fair review of the Business
The group’s principal trading activity during the year continued to be that of dealing in residential properties under the Webuyanyhome brand, together with managing a portfolio of properties which are let to tenants on commercial rents.
Management undertook a review of processes and procedures across the business and took actions to strengthen these and especially in the valuation of properties being considered for purchase given the anticipated softening of the housing market. Management also identified some matters where improvements were required to third party corroboration of property values prior to purchase and to procedures relating to the use of digital marketing services. Management has continued its work on these matters and has commissioned a specialist third party firm to assess any potential contingent VAT liability relating to the purchase of digital marketing services and its practice of recharging costs across the group to ensure that any liability arising is appropriately reflected. It is not currently possible to quantify either the amount or timing of any liability that may be determined.
No fair value gains arose on the investment properties in the year. The Group reported a Profit before Tax of £1,254,164 (2021: £3,273,806).
The trading stock at year end reflects the level of trading for the year as well as the typical purchase price of properties acquired. The number of properties held at period end was in line with expectations. Trading stock is held at the lower of cost or net realisable value.
The Company faces a number of business risks and uncertainties which the Director considers with the management team on a regular basis whilst assessing the trading performance of the business. The table below sets out the key risks that have been identified together with the Company’s approach to mitigating those risks.
Risk |
| Impact on Company |
| Mitigation |
Uncertainty around UK residential housing market
New entrants to the market
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Volatility in the housing market and general decrease in the property values could deteriorate Group’s profits due to decreased property resale value.
Increased competition for those customers who need a faster sale and are prepared to accept a discount to market value could limit opportunities to purchase properties leading in turn to turnover and gross profit being suppressed.
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Management introduced stricter buying criteria, ensuring protection and maintenance of profit margins. Property valuation was based on pre covid levels to ensure prudence was applied. Weekly stock review was introduced.
The Director continuously seeks to trial and introduce new commercial and marketing initiatives to ensure the Company retains its leading position in the market. |
Shortage of suitably trained employees
|
|
A shortage of sufficiently experienced employees could reduce capacity to progress leads and hence adversely impact the volume of residential property purchases.
|
|
Management continuously reviews the performance of key staff and assesses the need to recruit additional employees in advance of expected shortages. Management works closely with staff to promote their development and progression, helping to promote longer tenure.
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|
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The Director of the Company recognizes its responsibility to maintain high standards of business conduction and to recognize the impact on all stakeholders when making business decisions including the long-term impact of these decisions. The management team meets monthly, to consider key business decisions.
The analysis of how it has exercised its duty to promote the long-term success of the company is set out below.
Consequences of decision in the long term
When making key business decisions, the management team consider the longer-term impact of these decisions on all stakeholders
Key investment decisions normally include a financial model extending to 5 years to ensure the long-term financial impacts are considered.
Consideration of longer-term risks are set out in Principal Risks and Uncertainties.
Interests of the company's employees
The Director has implemented a full suite of employment policies including an equality of opportunity policy to safeguard the interests of all employees. The Director has implemented a suite of training programmes to ensure all employees have the skills required to perform their duties and develop their careers.
Business relationships with suppliers, customers and others
The Director has implemented a customer feedback framework. This includes surveys and responding to positive and negative feedback. The Director ensures that actions are developed to address feedback from customers.
The Director has facilitated a fortnightly payment run process to maximise the number of supplier invoices that are paid on time.
Impact on the community and the environment
When considering projects, the Directors include an assessment of the impact on the environment and how this could be reduced.
Maintaining a reputation for high standards of business conduct
The Director sponsors a culture of compliance and ensure there are policies, procures and training in all key areas of compliance.
Acting fairly between members of the Company
The Director ensures consistent communication on all matters of the Group to all members.
On behalf of the board
The director presents his annual report and financial statements for the period ended 31 December 2022.
The results for the period are set out on page 9.
Ordinary dividends were paid amounting to £1,075,433. The director does not recommend payment of a further dividend.
The director who held office during the period and up to the date of signature of the financial statements was as follows:
The Company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are conducted in Sterling. The Company does not enter into any formally designated hedging arrangements.
The nature of the Company’s activities mean it does not commit a material level of resources to research and development.
The Director believes that the market for trading in residential properties will continue to offer a plentiful supply of opportunities whilst remaining competitive. The market discontinuity caused by the September 2022 mini budget provided a challenge to the business model to operate and be profitable in a downward market. The business responded by adjusting the discounts it offers to maintain the profit levels. The Director believes that the Company has developed a leading position in the market and is in a good financial position such that, by professionally managing the risks identified, the business will and has continued to perform profitably. With a continuous focus on introducing new commercial initiatives, recruiting and training quality employees, trialling new marketing opportunities and ensuring sound financial management, the Director is confident in the Company’s ability to maintain and build on its performance.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
We have audited the financial statements of ECX Investments Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
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 director's 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. However, because not all future events or conditions can be predicted this statement is not a guarantee as to the group’s and parent company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
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 director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
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. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the group and parent company through discussions with directors and other management, and from our commercial knowledge and experience of the property sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group and parent company including, but not limited to, the Companies Act 2006 and taxation legislation.
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
understanding the business model as part of the control and business environment;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations and;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence and enquiring with the company of actual and potential non-compliance with laws and regulations.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud 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.
Use of our report
This report is made solely to the group and parent 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.
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 is £4,911,946.
ECX Investments Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 30 City Road, London, EC1Y 2AB.
The group consists of ECX Investments Ltd and all of its subsidiaries.
The subsidiaries are exempt from the requirement of the Companies Act 2006 relating to the audit of individual accounts by virtue of section 479A on the basis that they are subsidiary undertakings and their parent undertaking is established under the law of an EEA State.
Furthermore all members of the parent undertaking ECX Investments Ltd have agreed to the exemption in respect of the financial year ended 31 December 2022 and ECX Investments Ltd has agreed to give a guarantee under section 479A in respect of that year.
The parent company's financial statements make up the period from 11 November 2021 to 31 December 2022. For consolidated accounts the accounting period, the parent company's accounting period was aligned with the immediate parent's accounting period (Kazai Capital Limited) being1 January 2022 to 31 December 2022.
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 investment properties at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company ECX Investments Ltd together with all entities controlled by the parent company (its subsidiaries). On 10 January 2022, ECX Investments Ltd acquired the entire share capital of Kazai Capital Limited, registered office 30 City Road, London, EC1Y 2AB by way of a share for share exchange. The consolidated accounts reflect the consolidated position as if the company had been in existence throughout the previous period in order to give a true and fair view of the group affairs.
The introduction of a new holding company constitutes a Group reconstruction and has been accounted for using the merger accounting principles in accordance with paragraphs 19.27 to 19.32 of FRS 102 "the Financial Reporting Standard applicable in the UK and Republic of Ireland".
All financial statements are made up to 31 December 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.
The parent company's financial statements make up the period from 11 November 2021 to 31 December 2022, the parent company was dormant until 10 January 2022. For consolidated accounts the accounting period, the parent company's accounting period was aligned with the immediate parent's accounting period (Kazai Capital Limited) being 1 January 2022 to 31 December 2022.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for residential properties sold in the normal course of business. The fair value of consideration takes into account discounts for sale.
Revenue from the sale of properties is recognised when the significant risks and rewards of ownership of the properties have passed to the buyer (usually when completion takes place and title has passed), 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.
Other income represents non refundable deposits which are received from potential buyers in order to reserve a property they wish to buy. These deposits are recognised as income at the point that the buyer decides not to proceed. Rental income is recognised on a straight line basis over the term of the lease and also included within other income. Amounts invoiced in advance are deferred accordingly and recognised in the period to which they relate.
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 profit and loss account.
The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Investments in listed investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in profit or loss. Transaction costs are expensed to profit or loss as incurred.
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.
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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet 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, 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.
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.
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.
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, including creditors, bank loans and loans from fellow group companies, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax 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 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rental income 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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Investment Income
Facility fees from loan investments are recognised on a uniform basis over the period the loan is made available to the borrower.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
On 1 April 2023, the main rate of tax has increased from 19% to 25%. The deferred tax liabilities reflect this rate.
The 2022 valuations were made by the director, on an open market value based on existing use.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Included within amounts due from group undertakings are loan balances that are unsecured, interest free, have no fixed date of repayment and repayable on demand.
Included within other debtors are loan balances totalling £1,117,628 (2021: £3,548,979) that are unsecured, interest free, have no fixed date of repayment and repayable on demand.
Included within other debtors is a loan balance of £748,946 (2021: £Nil). During the year, the company received facility fees totalling £301,908 (2021: £Nil) for providing this loan facility. No interest is charged on this loan facility.
Included within other debtors is a loan balance of £26,143 (2021: £Nil). During the year, the company received facility fees totalling £466,803 (2021: £Nil) for providing this loan facility. No interest is charged on this loan facility.
Included within other debtors is a loan balance of £1,322,364 (2021: £Nil). During the year, the company received facility fees, processing fees and interest totalling £270,889 (2021: £Nil) for providing this loan facility. No interest is charged on this loan facility.
Included within other debtors is a loan balance of £2,080,000 (2021: £Nil). During the year, the company received facility fees at a fixed margin totalling £30,000 (2021: £Nil) for providing this loan facility. No interest is charged on this loan facility.
Included within other debtors is a loan balance of £300,000 (2021: £Nil). During the year, the company received facility fees totalling £8,000 (2021: £Nil) for providing this loan facility. No interest is charged on this loan facility.
Included within other debtors is a loan balance of £100,000 (2021: £Nil). During the year, the company received facility fees totalling £1,000 (2021: £Nil) for providing this loan facility. No interest is charged on this loan facility.
Included in other debtors is loan held at fair value totalling £2,572,917 (2021: £564,760). The performance fee receivable on this loan facility is directly attributable to the underlying investments held by the borrower.
Included within amounts due to group undertakings are loan balances that are unsecured, interest free and repayable on demand.
Included within other creditors are loan balances totalling £3,310,042 (2021: £685,863) that are unsecured, interest free and repayable on demand.
HWSIL Finance Co Limited
The company's wholly owned subsidiary Asus Investments Limited has loans of £9.4m from HWSIL Finance Co Limited, which has been secured on the assets of Asus Investments Limited. Kazai Capital Limited acts as a cross guarantor of the loan. The loans from HWSIL Finance Co Limited are repayable at an interest rate of 6.00%. The loan was due to be repaid on 30 September 2023 and was refinanced on 27 September 2023.
Money & Co
There are seven facilities within this balance, interest rates range between 7% and 8%. Three of the facilities are repaid on a monthly basis until March and October 2022, and four facilities are repaid at the end of the Term and repayment dates range between October 2023, April 2024 and June 2024.
Together Commercial Finance Ltd
The company's wholly owned subsidiaries Proffered Limited and Ferrybridge Capital Limited have loans of £2,223,245 and £168,700 respectively from Together Commercial Finance Ltd. The loans are repayable at a monthly interest rate of 0.55% and 4.49% per annum respectively. All of the facilities are repaid at the end of the Term and repayment dates up to November 2026.
Aldermore
The company's wholly owned subsidiary Ferrybridge Capital Limited has a loan totalling £543,750. The loan from Aldermore is repayable at an interest rate of 3.88% for the first 5 years and a variable rate of SONIA plus 2.68% thereafter. The loan is due to be repaid in June 2025.
The Mortgage Lender
The company's wholly owned subsidiary Ferrybridge Capital Limited has loans totalling £462,203. The loans from The Mortgage Lender are repayable at an interest rate ranging between 3.65% and 3.75% for the first 5 years and a variable rate of SONIA plus 4.96% thereafter. The loans are due to be repaid in May 2036 and June 2036.
Foundation Home Loans
The company's wholly owned subsidiary Ferrybridge Capital Limited has loans totalling £462,203. The loans from The Mortgage Lender are repayable at an interest rate of 4.99% for the first 5 years and a variable rate of 5.69% thereafter. The loans are due to be repaid in October 2047.
Kent Reliance
The company's wholly owned subsidiary Ferrybridge Capital Limited has a loan totalling £125,606. The loan from Kent Reliance is repayable at an interest rate of 3.65% for the first 5 years and a variable rate of SONIA plus 6.08% thereafter. The loan is due to be repaid in August 2036.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
There is a single class of Ordinary shares. There are no restrictions on the distribution of dividends and repayment of capital.
Other reserves
Other reserves relate to non-distributable reserves arising from revaluation of investment property less deferred tax.
Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.
The group is a guarantor for the PTP Group Ltd lease at St Mary Axe.
During the year management identified some matters in relation to procedures relating to the use of digital marketing services within the group. As a result management commissioned a specialist third party firm to assess any potential contingent VAT liability relating to the purchase of digital marketing services and its practice of recharging costs across the group to ensure that any liability arising is appropriately reflected. It is not currently possible to quantify either the amount or timing of any liability that may be determined.
ECX Investments Limited has agreed to guarantee all outstanding liabilities of its subsidiary undertaking Asus Investments Limited, Ferrybridge Capital Limited, Proffered Limited, Sold (Residential) Limited, ECX Leasingham Ltd and LC Capital Limited under section 479c of the Companies Act 2006 in respect of the year ended 31 December 2022, as part of the conditions to claim exemption from audit.
The group owns 13 investments properties for rental purposes (2021: 11). The operating leases represent leases to third parties. The leases are negotiated over terms ranging from 6 months to 3 years and rentals are fixed for these periods.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
During the period the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
During the period, the group paid dividends to associates totalling £1,075,433 (2021: £721,334).
The company has taken advantage of the exemption available in FRS 102 "Related party disclosures" whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
Dividends totalling £0 (2021 - £399,901) were paid in the period in respect of shares held by the company's directors.