Company registration number 05474753 (England and Wales)
PROUDREED REAL ESTATE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PROUDREED REAL ESTATE LIMITED
COMPANY INFORMATION
Directors
Mr C MacDonald-Hall
Mr J C Smith
Mr J A Fife
Mr N M Smith
(Appointed 10 June 2022)
Mr S S MacDonald-Hall
(Appointed 10 June 2022)
Secretary
Mrs R L Edwards
Company number
05474753
Registered office
24 Park Road South
Havant
United Kingdom
PO9 1HB
Auditor
Azets Audit Services
24 Park Road South
Havant
Hampshire
United Kingdom
PO9 1HB
Business address
School Farm Offices
Lockerley
Romsey
Hampshire
United Kingdom
SO51 0JH
PROUDREED REAL ESTATE LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 19
PROUDREED REAL ESTATE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

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

Directors

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

Mr C MacDonald-Hall
Mr J C Smith
Mr J A Fife
Mr N J Burgess
(Resigned 23 May 2022)
Mr J A Diamond
(Resigned 30 April 2022)
Mr N M Smith
(Appointed 10 June 2022)
Mr S S MacDonald-Hall
(Appointed 10 June 2022)
Auditor

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr J C Smith
Director
5 October 2023
PROUDREED REAL ESTATE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

PROUDREED REAL ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PROUDREED REAL ESTATE LIMITED
- 3 -
Opinion

We have audited the financial statements of Proudreed Real Estate Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 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 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.

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:

PROUDREED REAL ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PROUDREED REAL ESTATE LIMITED
- 4 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in 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:

 

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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

PROUDREED REAL ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PROUDREED REAL ESTATE LIMITED
- 5 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Mr Richard Hutchinson (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
9 October 2023
Chartered Accountants
Statutory Auditor
24 Park Road South
Havant
Hampshire
United Kingdom
PO9 1HB
PROUDREED REAL ESTATE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
2022
2021
Notes
£'000
£'000
Turnover
3
7,836
6,428
Cost of sales
(1,942)
(1,441)
Gross profit
5,894
4,987
Administrative expenses
1,001
(187)
Other operating (expenses)/income
(13,138)
9,293
Operating (loss)/profit
5
(6,243)
14,093
Interest receivable and similar income
7
3
1
Interest payable and similar expenses
8
(543)
(238)
(Loss)/profit before taxation
(6,783)
13,856
Tax on (loss)/profit
9
2,295
(4,048)
(Loss)/profit for the financial year
(4,488)
9,808
PROUDREED REAL ESTATE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 7 -
2022
2021
Notes
£'000
£'000
£'000
£'000
Fixed assets
Investment properties
10
85,617
87,939
Current assets
Stocks
11
416
122
Debtors
12
3,634
2,207
Cash at bank and in hand
2,324
2,217
6,374
4,546
Creditors: amounts falling due within one year
14
(5,213)
(4,345)
Net current assets
1,161
201
Total assets less current liabilities
86,778
88,140
Creditors: amounts falling due after more than one year
15
(18,442)
(9,542)
Provisions for liabilities
Deferred tax liability
18
2,440
5,708
(2,440)
(5,708)
Net assets
65,896
72,890
Capital and reserves
Called up share capital
19
10,000
10,000
Non-distributable profits reserve
20
3,609
13,681
Distributable profit and loss reserves
52,287
49,209
Total equity
65,896
72,890

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 5 October 2023 and are signed on its behalf by:
Mr J C Smith
Director
Company Registration No. 05474753
PROUDREED REAL ESTATE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
Share capital
Non-distri-butable profits
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
£'000
Balance at 1 January 2021
10,000
7,889
45,193
63,082
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
9,808
9,808
Transfers
-
5,792
(5,792)
-
Balance at 31 December 2021
10,000
13,681
49,209
72,890
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(4,488)
(4,488)
Dividends
-
-
(2,506)
(2,506)
Transfers
-
(10,072)
10,072
-
Balance at 31 December 2022
10,000
3,609
52,287
65,896
PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
1
Accounting policies
Company information

Proudreed Real Estate Limited is a private company limited by shares incorporated in England and Wales. The registered office is 24 Park Road South, Havant, United Kingdom, PO9 1HB.

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 £'000

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

This 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:

 

 

The financial statements of the company are consolidated in the financial statements of Proudreed Limited. These consolidated financial statements are available from its registered office, 24 Park Road South, Havant, PO9 1HB.

The financial statements relate to Proudreed Real Estate Limited as an individual entity.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

 

The company's forecasts and projections have been prepared taking into account the potential effects of the current conflict in Ukraine on the results and they continue to show that the company will continue to trade profitably in the coming year.

 

The directors therefore have a reasonable expectation that the company will have positive cash flows for the foreseeable future and as a result the going concern basis of accounting has been adopted.

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 10 -
1.3
Turnover

Turnover is the total amount receivable by the company for rental income and the provision of related services, excluding VAT and trade discounts. The total from each lease is recognised on a straight line basis over the period of the lease.

 

Revenue is mainly derived from leasing out units within the company's investment properties. Rental charges are spread over the period of the lease on a straight line basis. Any lease incentives provided to tenants are spread over the term of the lease on a straight line basis.

 

Other income is received from ancillary services which the company perform and include the following:

 

Insurance is obtained and recharged to tenants and this is recognised over the period of the insurance.

 

Management fees are charged in respect of asset management services performed in respect of certain properties.

1.4
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.

 

The fair value of the investment properties is based on the valuation performed by an independent valuation expert at the reporting date. The valuer has prepared their valuation in accordance with the Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors and in compliance with FRS 102.

 

Investment properties held under a leasehold title where substantially all the risk and rewards of ownership of the asset have passed to the company are capitalised in the balance sheet. A corresponding liability is recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments in the balance sheet. Lease payments are apportioned between the reduction of the lease liability and finance charges in the profit and loss account so as to achieve a constant rate of interest on the remaining balance of the liability.

1.5
Stocks

Work in progress is valued at the lower of cost and selling price less costs to sell.

 

Cost includes materials and labour together with an attributable proportion of overhead expenses.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.7
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 11 -
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.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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.

1.8
Equity instruments

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

1.9
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.10
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. 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 (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Leases

Determine whether leases entered into by the company either as lessor or a lessee are operating leases or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 13 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Investment Property

Investment properties are valued annually at market rate by an independent professional valuer. The valuation is prepared in accordance with the Appraisal and Valuation standards published by the Royal Institute of Chartered Surveyors. Changes in market value are recognised in the profit and loss for the year. Please see Investment Property note.

3
Turnover and other revenue
2022
2021
£'000
£'000
Turnover analysed by class of business
Rental Income
7,408
6,110
Property Services
428
318
7,836
6,428
2022
2021
£'000
£'000
Other revenue
Interest income
3
1
Insurance proceeds
121
290
Gain on revaluation of investment property
-
9,003
4
Exceptional item
2022
2021
£'000
£'000
Expenditure
Exceptional item
-
151

Included within administrative expenses in the prior year is £151,000 in respect of a lease break clause paid in connection with the part-sale of one of the investment properties held.

5
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£'000
£'000
Fees payable to the company's auditor for the audit of the company's financial statements
13
12
Profit on disposal of tangible fixed assets
(1,446)
(427)
Operating lease charges
142
129

The value of investment properties as at 31 March 2023 has fallen by £13,247,000 which has contributed towards an overall loss of £6,783,000. If investment properties that were held in the prior year remained at the same value this would have resulted in an overall profit of £6,464,000.

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
6
Employees

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

2022
2021
Number
Number
5
5
7
Interest receivable and similar income
2022
2021
£'000
£'000
Interest income
Interest on bank deposits
3
1
8
Interest payable and similar expenses
2022
2021
£'000
£'000
Interest on bank overdrafts and loans
477
51
Interest payable to group undertakings
34
155
Other interest on financial liabilities
32
32
543
238
9
Taxation
2022
2021
£'000
£'000
Current tax
UK corporation tax on profits for the current period
972
927
Deferred tax
Origination and reversal of timing differences
(3,267)
3,121
Total tax (credit)/charge
(2,295)
4,048
PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Taxation
(Continued)
- 15 -

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£'000
£'000
(Loss)/profit before taxation
(6,783)
13,856
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(1,289)
2,633
Tax effect of expenses that are not deductible in determining taxable profit
55
28
Tax effect of income not taxable in determining taxable profit
(23)
(57)
Under/(over) provided in prior years
29
27
Deferred tax provided at 25%
(796)
1,374
Chargeable gains
3
43
Profit on disposals of assets not qualifying for tax allowances
(274)
-
0
Taxation (credit)/charge for the year
(2,295)
4,048
10
Investment property
Freehold
Long
Property
Leasehold
Total
£'000
£'000
£'000
Fair value
At 1 January 2022
71,503
16,436
87,939
Additions through external acquisition
11,363
26
11,389
Disposals
(387)
(77)
(464)
Net gains or losses through fair value adjustments
(10,914)
(2,333)
(13,247)
At 31 December 2022
71,565
14,052
85,617

If investment properties had not been revalued they would have been stated at a historical cost of £79,467,000 (2021 - £68,322,000).

 

The fair value of investment property is made up of £84,075,000 which was valued by the directors following a valuation by Jones Lang LaSalle Limited, professionally qualified external valuers, on the 31 December 2022. In addition to this £1,542,000 has been capitalised in connection with head rent.

 

It is believed that the company have extensive knowledge and experience within the property industry and specifically the sectors in which Proudreed Real Estate Limited own properties. Based on this it is felt that the company are qualified to carry out the review.

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
11
Stocks
2022
2021
£'000
£'000
Work in progress
416
122
12
Debtors
2022
2021
Amounts falling due within one year:
£'000
£'000
Trade debtors
1,253
927
Corporation tax recoverable
-
0
317
Amounts owed by group undertakings
4
-
0
Other debtors
1,664
688
Prepayments and accrued income
713
275
3,634
2,207
13
Cash at bank

Included within cash at bank and in hand is an amount of £344,000 (2021 - £293,000) which comprises deposits held on behalf of tenants. These are held in accordance with the provisions of the individual leases with the tenants which require that the company holds an amount corresponding to those deposits in a separate bank account. These funds are not for use by the company. A corresponding amount is included within other creditors.

14
Creditors: amounts falling due within one year
2022
2021
Notes
£'000
£'000
Other borrowings
16
-
0
800
Trade creditors
1,019
311
Amounts owed to group undertakings
6
76
Corporation tax
278
-
0
Other taxation and social security
423
422
Other creditors
1,166
1,320
Accruals and deferred income
2,321
1,416
5,213
4,345
PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£'000
£'000
Bank loans and overdrafts
16
16,900
2,000
Obligations under finance leases
17
1,542
1,542
Other borrowings
16
-
0
6,000
18,442
9,542
16
Loans and overdrafts
2022
2021
£'000
£'000
Bank loans
16,900
2,000
Loans from group undertakings
-
0
6,800
16,900
8,800
Payable within one year
-
0
800
Payable after one year
16,900
8,000

The bank loan is a single currency term facility agreement entered into with Barclays Bank plc. The bank hold a fixed and floating charge over properties valued at £52,925,000, included within investment property.

17
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£'000
£'000
Within one year
32
32
In two to five years
127
127
In over five years
7,576
7,608
7,735
7,767
Less: future finance charges
(6,193)
(6,225)
1,542
1,542

The finance lease is in relation to head rent payable on an investment property.

 

The note above details the actual payments to be made. Within the accounts the payments have been discounted to net present value using a market rate of interest. Included in other creditors due in more than one year there is a balance of £1,542,000 in respect of the above discounted finance lease.

 

There is another finance lease on the leasehold property known as Thornaby. Lease payments are contingent on rental income generated from the site and therefore cannot be guaranteed or estimated with enough accuracy to be included within the figures above. The lease runs until 31 Mar 2158 and the rental charge for 2022 relating to this property was £142,000 (2021 - £129,000).

PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
18
Deferred taxation

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

Liabilities
Liabilities
2022
2021
Balances:
£'000
£'000
Accelerated capital allowances
(101)
(101)
Investment property
2,541
5,809
2,440
5,708
2022
Movements in the year:
£'000
Liability at 1 January 2022
5,708
Credit to profit or loss
(3,268)
Liability at 31 December 2022
2,440

Deferred tax of £18,000 is expected to reverse in the next 12 months, in respect of accelerated capital allowances that are expected to mature within the same period.

19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary Shares of £'0001 each
10,000,100
10,000,100
10,000
10,000

All shares carry equal voting rights and rights to participate in any distribution.

20
Non-distributable profits reserve
2022
2021
£'000
£'000
At the beginning of the year
13,681
7,889
Movement in fair value
(10,072)
5,792
At the end of the year
3,609
13,681
PROUDREED REAL ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
21
Operating lease commitments
Lessor

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2022
2021
£'000
£'000
Within one year
5,980
4,449
Between two and five years
13,295
9,394
In over five years
19,396
16,949
38,671
30,792
22
Related party transactions

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related transactions with wholly owned subsidiaries within the group.

 

During the year Proudreed Real Estate Limited paid invoices in respect of work carried out by a company under common control totalling £368,000 (2021 - £79,000).

23
Ultimate controlling party

Proudreed Limited is regarded by the directors as being the company's ultimate parent company. The company's registered office is 24 Park Road South, Havant, PO9 1HB

The company is controlled jointly by Mr J C Smith and Mr C MacDonald-Hall.

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