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Registered number: 01031651










Pentland Homes Limited










Annual report and financial statements

For the year ended 31 January 2023

 
Pentland Homes Limited
 

Company Information


Directors
P N Tory 
J N Tory 
D J Callister 
D B Eagle 
P Reed (appointed 27 July 2022)
P J Rosbrook (appointed 8 August 2022)
P J Kitchingman (appointed 3 October 2022)




Company secretary
P J Rosbrook



Registered number
01031651



Registered office
The Estate Office
Canterbury Road, Etchinghill

Folkestone

Kent

CT18 8FA




Independent auditors
Kreston Reeves LLP
Chartered Accountants & Statutory Auditor

37 St Margaret's Street

Canterbury

Kent

CT1 2TU




Bankers
Lloyds Bank Plc
43 Sandgate Road

Folkestone

Kent

CT20 1RZ




Solicitors
Thomson Snell & Passmore
Heathervale House

2-4 Vale Avenue

Tunbridge Wells

Kent

TN1 1DJ





 
Pentland Homes Limited
 

Contents



Page
Strategic report
 
1 - 3
Directors' report
 
4 - 6
Independent auditors' report
 
7 - 10
Statement of comprehensive income
 
11
Balance sheet
 
12
Statement of changes in equity
 
13
Notes to the financial statements
 
14 - 31


 
Pentland Homes Limited
 

Strategic report
For the year ended 31 January 2023

Introduction
 
The directors present their strategic report for the year ended 31 January 2023.

Business review
 
The main activity of the business was the building of new housing in the Southeast of England.
The housing market has undoubtedly slowed following the inflationary pressure in the economy. A number of factors have contributed to this including the war in Ukraine and the recovery from the Covid pandemic. The associated increase in interest rates and the removal of the Help to Buy have reduced the numbers of buyers in the market. 
The planning system continues to worsen, and this has had an impact on the results of the business. New site starts continue to slip and holding costs have increased with the rise in interest rates. 
Despite the economic backdrop the directors are pleased to report a small increase in operating profit of £0.32m (+23%) against the prior year.
The business restructuring is now complete costing £0.47m. Underlying operating profit would have been £2.2m before these exceptional costs. 
There have been signs of improvement in the housing market throughout the summer as buyers get used to the new level of interest rates with sales rates starting to improve on our existing sites. 
The delays in the planning system have impacted on our growth plans in the short term. Two larger sites have been acquired in the year in Sittingbourne (115 units) and New Romney (72 units). Both sites have outline permission and will contribute sales completions in 2026. 
The company is well positioned for significant  growth in the next five years. There is a new experienced management team, a full re-brand and design review has been completed and controls and systems have been tightened via the implementation of the COINs integrated housebuilding system.
The company and associated companies have a land bank of 2,750 units with 453 consented units, 202 of these units are due to commence build in the next 12 months.
Key Financial Performance Indicators

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Retention and development of staff is extremely important to the business. We have completed the rollout of a market leading incentive package that will help us retain and attract the best people in our industry. We are also implementing a management development programme for our middle managers.

Page 1

 
Pentland Homes Limited
 

Strategic report (continued)
For the year ended 31 January 2023

Principal risks and uncertainties
 
At the time of writing there is considerable uncertainty with rising inflation, increase in interest rates and the war in Ukraine hitting consumer confidence and resulting in a slowdown in the housing market. The company builds good quality housing that remains in short supply in the Southeast and we are confident that there will remain a demand for this. There are currently 3 sites in build with 6 new sites due to commence in the next year. The new sites benefit from outline planning permissions but are awaiting reserved matters approvals. 

Interest Rate Risk
 
At the time of writing the company has drawn £12m under its £25m Revolving Credit Facility (RCF) with Lloyds Bank. In June 2022 the directors took the decision to enter into an interest rate cap for £10m at a SONIA rate of 4%. The directors are satisfied that this provides adequate protection against future interest rate rises.

Liquidity Risk
 
The company is well funded with a strong balance sheet with shareholder funds at £29m and an available RCF facility of £25m. This leaves it in a strong position to deal with any downturn in the market and sufficient capital to pursue new land opportunities.

Directors' statement of compliance with duty to promote the success of the Company
 
Directors have acted and continue to act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
 
a)the likely consequences of any decision in the long term, 
b)the interests of the company's employees, 
c)the need to foster the company's business relationships with suppliers, customers and others, 
d)the impact of the company's operations on the community and the environment, 
e)the desirability of the company maintaining a reputation for high standards of business conduct, and 
f)the need to act fairly as between members of the company. 
 
In doing so, the directors have encouraged good relationships with all of its stakeholders, and in particular: 
 
with local communities during the planning stages of new developments, holding meetings to encourage contributions from local authorities, parish councils and the public
with local charities both directly and through the associated charitable foundation, to contribute to their valuable work -- the company will be building a hospice and will continue its close relationship with it in future;
with contractors on sites to ensure that the works have as little impact on local residents as practicable, with favourable responses both from the residents and the Considerate Contractors Scheme inspectors. Quarterly newsletters and information boards are provided for the larger sites;
with the local environment, maintaining "exceptional environmental policies, procedures and ecology measures" during pre-commencement, development and after the sites have been occupied, through the various site management companies;
with customers, as the company strives for excellence during the purchase process, at the time of occupation and afterwards through its customer care relationships. 
 
Page 2

 
Pentland Homes Limited
 

Strategic report (continued)
For the year ended 31 January 2023

The company is very aware of the valued contribution made by all of its staff and its contractors, and the directors ensure the highest levels of management commitment to encourage health, safety, skill and enthusiasm throughout the workforce. 


This report was approved by the board and signed on its behalf.



J N Tory
Director
Date: 3 October 2023

Page 3

 
Pentland Homes Limited
 

 
Directors' report
For the year ended 31 January 2023

The directors present their report and the financial statements for the year ended 31 January 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the company in the year under review was that of the development and sale of residential property. 

Results and dividends

The profit for the year, after taxation, amounted to £756,569 (2022 - £794,642).

A dividend of £Nil was recommended by the directors in the year (2022: £1,000,000). 

Page 4

 
Pentland Homes Limited
 

 
Directors' report (continued)
For the year ended 31 January 2023


Directors

The directors who served during the year were:

P N Tory 
J N Tory 
D J Callister 
A R Martin (resigned 24 January 2023)
D B Eagle 
S James (appointed 27 July 2022, resigned 31 October 2022)
P Reed (appointed 27 July 2022)
P J Rosbrook (appointed 8 August 2022)
P J Kitchingman (appointed 3 October 2022)
S R Coates (resigned 8 August 2022)
I J Hardman (resigned 31 March 2022)
M J Hart (resigned 26 July 2022)
K S Oki (resigned 17 October 2022)

Political contributions

The company made no political donations in the period

Future developments

The company has built up a land bank that will provide an increasing number of house sales in the future. Planning permission has been achieved for many existing owned sites, but the directors will consider purchasing new parcels of land for prompt development. 

Financial instruments

The company has the benefit of an interest rate cap contract to protect against significant interest rate increases. 

Research and development activities

The company continues to investigate alternative methods of construction, for improved build quality and efficiency of construction processes. 

Going concern

The activities of the company and the factors that are likely to affect its future development, financial position and risk management objectives are described in the Strategic Report.
 
The company has considerable financial resources and access to further funding, and the directors consider that the company is in a strong position to manage its business risks and to take advantage of the market conditions in the house building industry, which, despite Brexit and the coronavirus, seem to remain strong in the medium term. Consequently they continue to adopt the going concern basis in preparing the annual report and accounts.
 
The directors have reviewed the company's business and consider that there are no liabilities that have not been shown in the balance sheet. 

Engagement with suppliers, customers and others

Engagement with suppliers, customers and other other stakeholders is explained in the strategic report. 

Page 5

 
Pentland Homes Limited
 

 
Directors' report (continued)
For the year ended 31 January 2023

Matters covered in the Strategic report

Items required under Sch. 7 to be disclosed in the directors' report are set out in the strategic report in accordance with s.414C(11) CA 2006. 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

Under section 487(2) of the Companies Act 2006Kreston Reeves LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





J N Tory
Director
Date: 3 October 2023

Page 6

 
Pentland Homes Limited
 

 
Independent auditors' report to the members of Pentland Homes Limited
 

Opinion


We have audited the financial statements of Pentland Homes Limited (the 'Company') for the year ended 31 January 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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:


give a true and fair view of the state of the Company's affairs as at 31 January 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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 Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 7

 
Pentland Homes Limited
 

 
Independent auditors' report to the members of Pentland Homes Limited (continued)


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


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 Strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 4, 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.


Page 8

 
Pentland Homes Limited
 

 
Independent auditors' report to the members of Pentland Homes Limited (continued)


Auditors' 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 Auditors' 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:

Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of work in progress. Audit procedures performed by the company engagement team included:
 
Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations and fraud; and
Assessment of identified fraud risk factors; and
Challenging assumptions and judgements made by management in its significant accounting estimates; and
Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
Reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax and regulatory authorities; and
Review of internal controls and physical inspection of tangible assets susceptible to fraud or irregularity; and
Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and
Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.



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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
 
Page 9

 
Pentland Homes Limited
 

 
Independent auditors' report to the members of Pentland Homes Limited (continued)




As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:


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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


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 2006Our 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 Auditors' 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.





Mark Attwood FCCA (Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Canterbury

3 October 2023
Page 10

 
Pentland Homes Limited
 

Statement of comprehensive income
For the year ended 31 January 2023

2023
2022
Note
£
£

  

Turnover
 4 
51,451,089
55,377,170

Cost of sales
  
(45,822,162)
(52,256,436)

Gross profit
  
5,628,927
3,120,734

Administrative expenses
  
(3,445,909)
(3,243,156)

Exceptional administrative expenses
 14 
(469,043)
-

Other operating income
 5 
-
1,517,829

Operating profit
 6 
1,713,975
1,395,407

Interest receivable and similar income
 10 
60,357
2,669

Interest payable and similar expenses
 11 
(654,536)
(418,407)

Other finance income
  
-
14,457

Profit before tax
  
1,119,796
994,126

Tax on profit
 12 
(363,227)
(199,484)

Profit for the financial year
  
756,569
794,642

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 31 form part of these financial statements.

Page 11

 
Pentland Homes Limited
Registered number: 01031651

Balance sheet
As at 31 January 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
  
16,359
-

Tangible assets
 16 
1,456,915
1,110,445

  
1,473,274
1,110,445

Current assets
  

Stocks
 17 
31,894,754
37,087,577

Debtors: amounts falling due within one year
 18 
4,788,600
5,979,232

Cash at bank and in hand
 19 
4,694,200
5,246,083

  
41,377,554
48,312,892

Creditors: amounts falling due within one year
 20 
(13,471,471)
(20,979,437)

Net current assets
  
 
 
27,906,083
 
 
27,333,455

Total assets less current liabilities
  
29,379,357
28,443,900

Provisions for liabilities
  

Deferred tax
 22 
(181,232)
(75,005)

Other provisions
 23 
(72,661)
-

  
 
 
(253,893)
 
 
(75,005)

Net assets
  
29,125,464
28,368,895


Capital and reserves
  

Called up share capital 
 24 
15,664
15,664

Share premium account
 25 
3,309,814
3,309,814

Profit and loss account
 25 
25,799,986
25,043,417

  
29,125,464
28,368,895


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




J N Tory
Director
Date: 3 October 2023

The notes on pages 14 to 31 form part of these financial statements.

Page 12

 
Pentland Homes Limited
 

Statement of changes in equity
For the year ended 31 January 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 February 2021
15,664
3,309,814
25,248,775
28,574,253



Profit for the year
-
-
794,642
794,642

Dividends: Equity capital
-
-
(1,000,000)
(1,000,000)



At 1 February 2022
15,664
3,309,814
25,043,417
28,368,895



Profit for the year
-
-
756,569
756,569


At 31 January 2023
15,664
3,309,814
25,799,986
29,125,464


The notes on pages 14 to 31 form part of these financial statements.

Page 13

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

1.


General information

Pentland Homes Limited is a private company limited by share, incorporated in England and Wales with registration number 01031651. The address of its registered office is The Estate Office, Canterbury Road, Etchinghill, Folkestone, Kent, CT18 8FA.
The principal activity of the company in the year under review was that of the development and sale of residential property.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The financial statements are presented in pounds sterling and are rounded to the nearest pound.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Pentland Homes (Holdings) Limited as at 31 January 2023 and these financial statements may be obtained from Companies House.

Page 14

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

2.Accounting policies (continued)

 
2.3

Going concern

The activities of the company and the factors that are likely to affect its future development, financial position and risk management objectives are described in the Strategic Report.
The company has considerable financial resources and access to further funding, and the directors consider that the company is in a strong position to manage its business risks and to take advantage of the continuing market conditions in the house-building industry, which, despite Brexit and the war in Ukraine, seem to remain strong in the medium term. Consequently, they continue to adapt the going concern basis in preparing the annual report and accounts. 
The directors have reviewed the company's business and consider that there are no liabilities or significant events that have not been included and disclosed in the accounts.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Sale or residential units
In respect of sales and residential units, a contract is established through a formal purchase process that involves the exchange of contract via solicitors. Revenue from the sale of residential units is recognised at a point in time on legal completion where the Company has transferred to the buyer the control of the units.
Contract revenue
The Company acts as a main contractor on certain building projects, primarily on behalf of the housing associations where the Company must provide social housing units as part of its obligations under the planning consent or has sold the land to the housing association and entered into a construction contract to provide the completed units.
Revenue on construction contracts is recognised over time as the performance obligations are satisfied. The output method is used to measure the progress of the Company's performance over the duration of the contract. This is done through valuation surveys conducted by the Company and by the customer respectively who then agree the value of work completed The agreed valuation is used to determine the revenue to be recognised for the period. Where the outcome of a contract on which revenue is recognised over time cannot be estimated reliably, revenue is recognised to the extent of contract costs incurred.

Page 15

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

2.Accounting policies (continued)

 
2.5

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
2%
Plant and machinery
-
25%
Motor vehicles
-
20%
Office equipment
-
25%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.6

Stocks

Cost includes the purchase of sites, the cost of infrastructure and construction works, and legal and professional fees incurred during development prior to sale. Net realisable value is estimated based upon the future expected selling price, less estimated costs of completion and estimated costs to sell.

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Page 16

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

2.Accounting policies (continued)

 
2.9

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

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

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

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Page 17

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

2.Accounting policies (continued)


2.9
Financial instruments (continued)

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

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

 
2.10

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.11

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 18

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

2.Accounting policies (continued)

 
2.12

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 
2.13

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.14

Pensions

Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defines contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid to the Company has no further payment obligations. 
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.15

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.16

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.17

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

Page 19

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

2.Accounting policies (continued)

 
2.18

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.19

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.20

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following bases:

Computer software
-
20%

Page 20

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 
Key sources of estimation uncertainty 
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: 
 
i) Valuation of inventories
 
The company values inventories at the lower of cost and net realisable value. The net realisable value is based on the judgement of the probability that planning consent will be granted for each site. The company believes that based on directors' experience, planning consent will be given. If planning consent was not achieved than a provision may be required against inventories.
In applying the company's accounting policy for the valuation of inventories the directors are required to assess the expected selling price and costs to sell each of the plots or units that constitute the company's work in progress. Cost includes the cost of acquisition of sites, the cost of infrastructure and construction works, and legal and professional fees incurred during development prior to sale. Estimation of selling price is subject to significant inherent uncertainties, in particular the prediction of future trends in the market value of land. 
Whilst the directors exercise due care and attention to make reasonable estimates, taking into account all available information in estimating the future selling price, the estimates will, in all likelihood, differ from actual selling prices achieved in future periods and these differences may, in certain circumstances, be very significant. The critical judgement in respect of receipt of planning consent further increases the level of estimation uncertainty.
 
ii) Useful economic lives of tangible fixed assets 

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re­ assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and physical condition of the assets. 


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Property development and sale
42,096,135
52,355,914

Contract revenue
9,354,954
3,021,256

51,451,089
55,377,170


2023
2022
£
£

United Kingdom
51,451,089
55,377,170

51,451,089
55,377,170


Page 21

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

5.


Other operating income

2023
2022
£
£

Other operating income
-
1,517,829

-
1,517,829



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Other operating lease rentals
42,633
39,798

Restructuring costs
469,043
-


7.


Auditors' remuneration

2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
19,000
11,000


8.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,631,199
2,904,740

Social security costs
742,161
506,872

Cost of defined contribution scheme
50,793
95,528

4,424,153
3,507,140


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Production
27
29



Administration and support
26
28

53
57

Page 22

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
1,388,704
1,176,819

Company contributions to defined contribution pension schemes
21,810
58,204

1,410,514
1,235,023


During the year retirement benefits were accruing to 8 directors (2022 - 4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £397,204 (2022 - £330,962).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £110 (2022 - £NIL).

The value of the Company's contributions paid to a defined benefit pension scheme in respect of the highest paid director amounted to £110 (2022 - £NIL).


10.


Interest receivable

2023
2022
£
£


Other interest receivable
60,357
2,669

60,357
2,669


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
559,874
418,407

Other loan interest payable
94,662
-

654,536
418,407


12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
148,000
173,051

Adjustments in respect of previous periods
109,000
-


257,000
173,051

Page 23

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023
 
12.Taxation (continued)


Total current tax
257,000
173,051

Deferred tax


Origination and reversal of timing differences
106,227
26,433

Total deferred tax
106,227
26,433


Tax on profit
363,227
199,484

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,119,796
994,126


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
212,761
188,884

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
(5,402)
80,478

Capital allowances for year in excess of depreciation
(59,359)
(16,813)

Utilisation of tax losses
-
(79,498)

Adjustments to tax charge in respect of prior periods
109,000
-

Short-term timing difference leading to an increase (decrease) in taxation
106,227
26,433

Total tax charge for the year
363,227
199,484


Factors that may affect future tax charges

The main rate of corporation tax increased on 1 April 2023 to 25%, for companies with taxable profits above £250,000. Companies with taxable profits below £50,000 will continue to pay at 19%, and marginal relief will apply between these thresholds. This charge formed part of the Finance Bill 2021, which was substantively enacted on 24 May 2021, and is applicable at the reporting date. 

Page 24

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

13.


Dividends

2023
2022
£
£

Ordinary shares


Dividend on equity capital
-
1,000,000

-
1,000,000


14.


Exceptional items

2023
2022
£
£


Restructuring costs
469,043
-

469,043
-


15.


Intangible assets




Computer software

£



Cost


Additions
17,220



At 31 January 2023

17,220



Amortisation


Charge for the year on owned assets
861



At 31 January 2023

861



Net book value



At 31 January 2023
16,359



At 31 January 2022
-



Page 25

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

16.


Tangible fixed assets





Long-term leasehold property
Plant and machinery
Motor vehicles
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 February 2022
660,815
541,553
720,651
197,910
2,120,929


Additions
-
121,384
476,883
70,643
668,910


Disposals
-
(59,327)
(348,175)
(2,667)
(410,169)



At 31 January 2023

660,815
603,610
849,359
265,886
2,379,670



Depreciation


At 1 February 2022
51,032
375,889
434,106
149,457
1,010,484


Charge for the year on owned assets
10,200
95,585
92,056
33,245
231,086


Disposals
-
(46,203)
(269,683)
(2,929)
(318,815)



At 31 January 2023

61,232
425,271
256,479
179,773
922,755



Net book value



At 31 January 2023
599,583
178,339
592,880
86,113
1,456,915



At 31 January 2022
609,783
165,664
286,545
48,453
1,110,445


17.


Stocks

2023
2022
£
£

Work in progress
31,894,754
37,087,577

31,894,754
37,087,577


Page 26

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

18.


Debtors

2023
2022
£
£


Trade debtors
488,709
2,120,602

Amounts owed by joint ventures and associated undertakings
110,494
1,495,000

Other debtors
3,724,257
1,540,727

Prepayments and accrued income
465,140
822,903

4,788,600
5,979,232



19.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
4,694,200
5,246,083

4,694,200
5,246,083



20.


Creditors: Amounts falling due within one year

As restated
2023
2022
£
£

Bank loans
7,000,000
7,000,000

Trade creditors
867,289
2,707,780

Amounts owed to group undertakings
2,626,793
5,155,200

Other taxation and social security
93,883
3,513,978

Other creditors
1,807,721
1,911,753

Accruals and deferred income
1,075,785
690,726

13,471,471
20,979,437


Page 27

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

21.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
7,000,000
7,000,000


7,000,000
7,000,000


The company's bank, Lloyds Bank PLC, has legal charges over portions of land owned by the company as listed below: 
 
i) A fixed charge and negative pledge dated 25 July 2016 over properties of the company.
 
ii) A fixed and floating charge covering all property or undertaking of Pentland Homes Limited dated 2   August 2016. The charge contains negative pledge.
 
iii) A floating charge and negative pledge over land adjoining to New Street Farm, Great Chart, Ashford registered at the Land Registry under title number TT42532 was created on 23 August 2016. 
 
iv) A fixed and floating charge on land lying to the North of Canterbury Road, Lydden, Dover. The charge was created on 26/11/2018. The charge contains negative pledge.
 
v) A fixed and floating charge on land located on West Side of Stone Street, Stelling Minnis. The charge was created on 24/05/2019. The charge contains negative pledge.
 
vi) A fixed and floating charge on land on the North-West side of Elvington Lane, Hawkinge. The charge was created on 10/08/2022. The charge contains negative pledge. 
 
vii) A fixed and floating charge on on land lying to the North-East of Canterbury Road, Etchinghill. The charge was created on 07/09/2022. The charge contains negative pledge. 
viii) A fixed and floating charge on on land lying to the South East side of Cockered Lane, New Romney. The charge was created on 13/12/2022. The charge contains negative pledge.  
viiii) A fixed and floating charge on on land lying to the East side of Broad Street, Lyminge. The charge was created on 21/02/2023. The charge contains negative pledge. 
 
Other charges: 
Westerley Investments Limited have registered a legal charge on 14 May 2004 on freehold property Pound Farm, Kingsnorth, Ashford, Kent on all initial overage payments and further overage payments which may become due at any time within the Perpetuity Period. 
G H Dean & Co Limited have registered a legal charge dated 11 May 2023 on freehold property at Grovehurst Road, Sittingbourne. The charge contains a negative pledge.

Page 28

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

22.


Deferred taxation




2023


£






At beginning of year
(75,005)


Charged to profit or loss
(106,227)



At end of year
(181,232)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(181,232)
(75,005)

(181,232)
(75,005)


23.


Provisions




As restated
 
Customer care and cost to complete provisions

£





Charged to profit or loss
72,661



At 31 January 2023
72,661

Page 29

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

24.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



15,664 (2022 - 15,664) Ordinary shares shares of £1.00 each
15,664
15,664



25.


Reserves

Profit and loss account

The reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company's shareholders.


26.


Prior year adjustment

During the year the directors reviewed the position relating to associated company debt.  As the loans have been provided by associated entities without formal loan agreements it is deemed that these are therefore repayable on demand.  As such, these balances have been moved to creditors less than one year.
In addition, the prior year work in progress was reviewed by management and they noted that the financial statements were incorrectly overstated by an amount of £3,168,642 which had been included within provisions rather than forming part of stock. The prior year adjustment has been included within these financial statements reducing the work in progress balance from £40,256,219 to £37,087,577.


27.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the scheme and amounted to £50,793 (2022: £95,528). Contributions totaling £9,808 (2022: £10,286) were payable to the scheme at the balance sheet date.


28.


Commitments under operating leases

At 31 January 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
14,240
11,533

Later than 1 year and not later than 5 years
13,053
-

27,293
11,533

Page 30

 
Pentland Homes Limited
 

 
Notes to the financial statements
For the year ended 31 January 2023

29.


Transactions with directors

Following balances were outstanding at the year end: 
Loans payable to directors totalled £3k (2022: £3k). During the year the company paid interest of £Nil (2022: £Nil) on the loan. 
During the prior year the company sold motor vehicles totalling £42k to its directors. All of the had been paid in full and there was no balance outstanding at 31 January 2022.


30.


Related party transactions

The company is exempt from disclosing related party transactions between companies that are wholly
owned within the group.
Transactions with associated companies:
1) 1) Etchinghill Golf is owned by a charitable trust set up by the Tory Family Foundation. During the year following transactions occurred with the above businesses:
Etchinghill Golf charged costs of £29k (2022: £57k) to Pentland Homes Ltd.
During the prior year the company purchased properties for £3.75m from Etchinghill Golf. At the year end the company owed £Nil (2022: £Nil) to Etchinghill Golf.
2) JN Tory is director of Pentland Homes Limited and also controls Cave Hotels (UK) Ltd and Boughton Golf. During the year following transactions occurred with above entities:
Costs of £22k (2022: £Nil) recharged to Cave Hotels UK Ltd and costs of £120k (2022: £47k) recharged by Cave Hotels (UK) Ltd.
At the year end the company owed £10k (2022: £16k - owed by) to Cave Hotels (UK) Ltd.
3) P N Tory and J N Tory are both directors and shareholders of Pentland Properties Ltd and also
directors of Pentland Homes Ltd.
During the year the company provided £22.587m (2022: £39.05m) worth of goods and services to Pentland  Properties Ltd. A management charge of £340k (2022: £1.5m) was also charged by Pentland Homes Limited to Pentland Properties Limited.
At the year end, the company was owed £101k from Pentland Properties Ltd. (2022: Pentland Homes
owed Pentland Properties Ltd £3.3m)



31.


Controlling party

Pentland Homes (Holdings) Limited is the company's immediate and ultimate parent company. The company's accounts are consolidated into Pentland Homes (Holdings) Limited's group accounts. The consolidated accounts are available at parent company's registered office below: 
The Estate Office, Canterbury Road, Etchinghill, Folkestone, Kent, CT18 8FA.  
P N Tory and J N Tory are the ultimate controlling parties by virtue of their majority shareholding in the parent company. 

Page 31