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COMPANY REGISTRATION NUMBER: 10375624
CITU GROUP LTD
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
30 December 2022
CITU GROUP LTD
CONSOLIDATED FINANCIAL STATEMENTS
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
CONTENTS
PAGES
Officers and professional advisers
1
Strategic report
2 to 3
Directors' report
4 to 5
Independent auditor's report to the members
6 to 9
Consolidated statement of comprehensive income
10
Consolidated statement of financial position
11
Company statement of financial position
12
Consolidated statement of changes in equity
13
Company statement of changes in equity
14
Consolidated statement of cash flows
15
Notes to the consolidated financial statements
16 to 26
CITU GROUP LTD
OFFICERS AND PROFESSIONAL ADVISERS
THE BOARD OF DIRECTORS
C A Thompson
J Wilson
COMPANY SECRETARY
F W N Stride
REGISTERED OFFICE
The Place
4 Central Place, Clarence Road
Climate Innovation District
Leeds
England
LS10 1FB
AUDITOR
Wine & Co
Chartered accountants & statutory auditor
20-22 Bridge End
Leeds
LS1 4DJ
CITU GROUP LTD
STRATEGIC REPORT
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
INTRODUCTION
The directors present their strategic report together with the audited financial statements for the year ended 31 December 2022.
BUSINESS REVIEW
With the growing urgency of taking action against climate change, Citu remain focused on developing innovative methods of delivering energy efficient homes and places that vastly reduce embodied and operational carbon as well as provide many other social and environmental benefits. The Citu group of companies has a principal product, which is the creation of great places in urban locations that are in need of regeneration. The group comprises a vertically integrated model that combines design, manufacturing, delivery and fit-out to deliver energy efficient homes and towards our purpose of accelerating the transition to zero-carbon cities. Demand for the homes and product have generally remained strong during the first half of 2022 as the awareness of the developments has increased and the projects begin to mature into completed places. However, market uncertainty and rising interest rates has slowed the demand for new housing with sales numbers dropping in the year. There were 46 plot sales completing compared to 60 in 2021 (-23%), with the additional sales expected in 2023. Contrarily sales prices continued to rise during the year with sales values up around 8%. The delivery and manufacturing elements of the business continued to make good progress with further investment into people and processes that has improved productivity, cost and quality in the housing that are delivered as well as continuously reducing the carbon content. For apartments over 18m tall, a light gauge steel frame system is used. The first project to deliver this method is Aire Lofts in Leeds and this project has been hit by several delays in connection with the supply chain and ensuring that we achieve the right levels of air tightness. Various lessons have been learned for future projects, but the impact on 2022 has been to delay sales and consume additional management resources. Inflationary pressures across the supply chain have also impacted on costs, which are compounded by increased cost of finance due to interest rate rises. The additional income from increased sales values in the year were able to broadly absorb the increase in costs. Citu is increasingly becoming recognised for place making and innovating, with the business nominated for a number of awards and winning both Timber Frame Project of the Year and Private Housing Project of the Year at the Structural Timber Awards 2022, House Builder of the Year at the Yorkshire Property Industry Awards 2022 and Private Housing Project of the Year at the Offsite Awards 2022, and becoming a finalist for Great Street (Solar Avenue) at the Academy of Urbanism 2022 awards.
PRINCIPAL RISKS AND UNCERTAINTIES
Further interest rate rises prove a constant threat to the demand for new homes. Alternative markets for housing, other than owner occupiers presents opportunities to mitigate sales risk as well as improve the diversity of housing tenure in our developments. Increasing interest rates cause increased costs across some of our developments. Others are on fixed rate loan deals, which, once they mature will inevitably be funded on higher interest rates. Around 70% of our finance costs are on fixed interest rates.
KEY FINANCIAL PERFORMANCE INDICATORS
The key financial performance indicators are considered to be those that communicate the financial performance of the company as a whole. These are turnover and gross margin. Turnover was £15,736,288 (2021: £17,072,438). Gross profit was 44.25% (2021: 36.68%). Gross profit margin is calculated as gross profit divided by turnover. The balance sheet shows that the group had net assets of £1.098m at the year end. However, this includes work in progress of £63.251m at historical cost which had a market value of £97.978m. If permitted by accounting standards, this revaluation uplift would increase the balance sheet by £34.727m from a net asset position of £1.098m to a net asset position of £35.825m (£42.294m – 2021).
FUTURE DEVELOPMENTS
Continued investment in new sites is important for the long-term success of the business. Three new sites are in the process of being acquired, which will provide an additional £300m to the future pipeline of Citu.
This report was approved by the board of directors on 22 November 2023 and signed on behalf of the board by:
C A Thompson
Director
Registered office:
The Place
4 Central Place, Clarence Road
Climate Innovation District
Leeds
England
LS10 1FB
CITU GROUP LTD
DIRECTORS' REPORT
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
The directors present their report and the consolidated financial statements of the group for the period ended 30 December 2022 .
DIRECTORS
The directors who served the company during the period were as follows:
C A Thompson
J Wilson
DIVIDENDS
The directors do not recommend the payment of a dividend.
FINANCIAL INSTRUMENTS
The company's principal financial instruments comprise bank balances, bank loans, trade creditors, trade debtors, and loans to the company. The main purpose of these instruments is to raise funds for the company's operation and to finance the company's operations.
Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the accounting instruments concerned is shown below.
In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of bank loans at floating rates of interest.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the strategic report, directors' report and the consolidated financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare consolidated financial statements for each financial period. Under that law the directors have elected to prepare the consolidated 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 consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and the profit or loss of the group for that period. In preparing these consolidated financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the consolidated 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. AUDITOR
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 22 November 2023 and signed on behalf of the board by:
C A Thompson
Director
Registered office:
The Place
4 Central Place, Clarence Road
Climate Innovation District
Leeds
England
LS10 1FB
CITU GROUP LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CITU GROUP LTD
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
OPINION
We have audited the consolidated financial statements of Citu Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 December 2022 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the consolidated financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 30 December 2022 and of the group's profit for the period then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the consolidated 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 consolidated financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the consolidated financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the consolidated 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 consolidated financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the consolidated 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. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in 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 there is a material misstatement in the consolidated financial statements or a material misstatement of the other information. 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 the audit:
- the information given in the strategic report and the directors' report for the financial period for which the consolidated financial statements are prepared is consistent with the consolidated 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 group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company consolidated 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, the directors are responsible for the preparation of the consolidated 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated 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: Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error. We consider that our audit procedures are designed and carried out to give a reasonable expectation that material misstatements resulting from fraud would be discovered. 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 consolidated 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 on the effectiveness of the group'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 group's or the parent 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 auditor’s report to the related disclosures in the consolidated 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 auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 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 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.
JEFFREY WINE
(Senior Statutory Auditor)
For and on behalf of
Wine & Co
Chartered accountants & statutory auditor
20-22 Bridge End
Leeds
LS1 4DJ
22 November 2023
CITU GROUP LTD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
Note
£
£
TURNOVER
4
15,736,288
17,072,438
Cost of sales
( 8,773,428)
( 10,809,663)
-------------
-------------
GROSS PROFIT
6,962,860
6,262,775
Distribution costs
( 115,189)
Administrative expenses
( 5,469,946)
( 2,521,363)
Other operating income
5
84,797
27,845
------------
------------
OPERATING PROFIT
6
1,462,522
3,769,257
Other interest receivable and similar income
10
316
Interest payable and similar expenses
11
( 881,070)
( 1,130,714)
------------
------------
PROFIT BEFORE TAXATION
581,768
2,638,543
Tax on profit
12
( 399,966)
233,567
---------
------------
PROFIT FOR THE FINANCIAL PERIOD AND TOTAL COMPREHENSIVE INCOME
181,802
2,872,110
---------
------------
Profit for the financial period attributable to:
The owners of the parent company
86,270
2,788,230
Non-controlling interests
95,532
83,880
---------
------------
181,802
2,872,110
---------
------------
All the activities of the group are from continuing operations.
CITU GROUP LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 December 2022
30 Dec 22
31 Dec 21
Note
£
£
FIXED ASSETS
Tangible assets
13
6,250,879
5,855,389
CURRENT ASSETS
Stocks
15
63,250,552
37,392,156
Debtors
16
2,004,971
3,612,102
Cash at bank and in hand
727,515
1,400,470
-------------
-------------
65,983,038
42,404,728
CREDITORS: amounts falling due within one year
18
( 4,415,035)
( 18,825,879)
-------------
-------------
NET CURRENT ASSETS
61,568,003
23,578,849
-------------
-------------
TOTAL ASSETS LESS CURRENT LIABILITIES
67,818,882
29,434,238
CREDITORS: amounts falling due after more than one year
19
( 66,327,482)
( 28,524,806)
PROVISIONS
21
( 393,170)
6,796
-------------
-------------
NET ASSETS
1,098,230
916,228
-------------
-------------
CAPITAL AND RESERVES
Called up share capital
25
200
200
Profit and loss account
918,618
832,148
---------
---------
EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT COMPANY
918,818
832,348
NON-CONTROLLING INTERESTS
179,412
83,880
------------
---------
1,098,230
916,228
------------
---------
These consolidated financial statements were approved by the board of directors and authorised for issue on 22 November 2023 , and are signed on behalf of the board by:
C A Thompson
Director
Company registration number: 10375624
CITU GROUP LTD
COMPANY STATEMENT OF FINANCIAL POSITION
30 December 2022
30 Dec 22
31 Dec 21
Note
£
£
FIXED ASSETS
Investments
14
500
500
CURRENT ASSETS
Debtors
16
16,537,140
13,016,602
Cash at bank and in hand
24,788
259,971
-------------
-------------
16,561,928
13,276,573
CREDITORS: amounts falling due within one year
18
( 17,827,512)
( 17,832,417)
-------------
-------------
NET CURRENT LIABILITIES
( 1,265,584)
( 4,555,844)
------------
------------
TOTAL ASSETS LESS CURRENT LIABILITIES
( 1,265,084)
( 4,555,344)
CREDITORS: amounts falling due after more than one year
19
( 4,232,112)
PROVISIONS
21
347,716
------------
------------
NET LIABILITIES
( 5,497,196)
( 4,207,628)
------------
------------
CAPITAL AND RESERVES
Called up share capital
25
200
200
Profit and loss account
( 5,497,396)
( 4,207,828)
------------
------------
SHAREHOLDERS DEFICIT
( 5,497,196)
( 4,207,628)
------------
------------
The loss for the financial period of the parent company was £ 1,289,568 (2021: £ 933,653 ).
These consolidated financial statements were approved by the board of directors and authorised for issue on 22 November 2023 , and are signed on behalf of the board by:
C A Thompson
Director
Company registration number: 10375624
CITU GROUP LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
Called up share capital
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
AT 1 JANUARY 2021
200
( 1,956,082)
( 1,955,882)
( 1,955,882)
Profit for the period
2,788,230
2,788,230
83,880
2,872,110
----
------------
------------
--------
------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
2,788,230
2,788,230
83,880
2,872,110
AT 31 DECEMBER 2021
200
832,348
832,548
83,880
916,428
Profit for the period
86,270
86,270
95,532
181,802
----
------------
------------
--------
------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
86,270
86,270
95,532
181,802
----
------------
------------
---------
------------
AT 30 DECEMBER 2022
200
918,618
918,818
179,412
1,098,230
----
------------
------------
---------
------------
CITU GROUP LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
Called up share capital
Profit and loss account
Total
£
£
£
AT 1 JANUARY 2021
200
( 3,274,175)
( 3,273,975)
Loss for the period
( 933,653)
( 933,653)
----
------------
------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
( 933,653)
( 933,653)
AT 31 DECEMBER 2021
200
( 4,207,828)
( 4,207,628)
Loss for the period
( 1,289,568)
( 1,289,568)
----
------------
------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
( 1,289,568)
( 1,289,568)
----
------------
------------
AT 30 DECEMBER 2022
200
( 5,497,396)
( 5,497,196)
----
------------
------------
CITU GROUP LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
30 Dec 22
31 Dec 21
Note
£
£
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the financial period
181,802
2,872,110
Adjustments for:
Depreciation of tangible assets
200,965
73,494
Fair value adjustment of investment property
( 275,000)
( 159,540)
Government grant income
( 27,845)
Other interest receivable and similar income
( 316)
Interest payable and similar expenses
881,070
1,130,714
Loss on disposal of tangible assets
34,147
8,340
Tax on loss
399,966
( 233,567)
Accrued (income)/expenses
( 757)
707,930
Changes in:
Stocks
( 25,858,396)
( 9,325,690)
Trade and other debtors
1,607,131
379,880
Trade and other creditors
( 14,424,690)
( 6,755,145)
-------------
-------------
Cash generated from operations
( 37,254,078)
( 11,329,319)
Interest paid
( 881,070)
( 1,130,714)
Interest received
316
Tax paid
( 8)
-------------
-------------
Net cash used in operating activities
( 38,134,832)
( 12,460,041)
-------------
-------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tangible assets
( 357,873)
( 1,150,950)
Proceeds from sale of tangible assets
2,271
502,290
-------------
-------------
Net cash used in investing activities
( 355,602)
( 648,660)
-------------
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
37,782,145
13,693,328
Proceeds from loans from group undertakings
( 81,892)
46,464
Government grant income
27,845
Payments of finance lease liabilities
59,346
101,535
-------------
-------------
Net cash from financing activities
37,759,599
13,869,172
-------------
-------------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
( 730,835)
760,471
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
1,400,470
639,789
------------
------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD
17
669,635
1,400,260
------------
------------
CITU GROUP LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
PERIOD FROM 1 JANUARY 2022 TO 30 DECEMBER 2022
1. GENERAL INFORMATION
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is The Place, 4 Central Place, Clarence Road, Climate Innovation District, Leeds, LS10 1FB, England.
2. STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. ACCOUNTING POLICIES
Basis of preparation
he financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The consolidated financial statements consolidate the consolidated financial statements of Citu Group Ltd and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the period are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover comprises revenue recognised by the group in respect of development properties sold, services provided, and rents received, exclusive of Value Added Tax. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
Variable, depending on type of asset
Fixtures and fittings
-
Variable, depending on type of asset
Motor vehicles
-
33% straight line
Computer Equipment
-
Variable, depending on type of asset
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.
Financial instruments
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 entity after deducting all of its financial liabilities.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. TURNOVER
Turnover arises from:
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Rendering of services
106,499
Property sales
15,125,506
16,614,528
Rental income
504,283
457,910
-------------
-------------
15,736,288
17,072,438
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. OTHER OPERATING INCOME
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Government grant income
27,845
Other operating income
84,797
--------
--------
84,797
27,845
--------
--------
6. OPERATING LOSS
Operating profit or loss is stated after charging/crediting:
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Depreciation of tangible assets
200,965
73,494
Loss on disposal of tangible assets
34,147
8,340
Fair value adjustments to investment property
( 275,000)
( 159,540)
Impairment of trade debtors
(1,325)
91,769
Foreign exchange differences
( 514)
---------
---------
7. AUDITOR'S REMUNERATION
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Fees payable for the audit of the consolidated financial statements
55,000
23,450
--------
--------
Fees payable to the company's auditor and its associates for other services:
Taxation compliance services
7,950
Taxation advisory services
1,500
Other non-audit services
17,520
--------
--------
26,970
--------
--------
8. STAFF COSTS
The average number of persons employed by the group during the period, including the directors, amounted to:
30 Dec 22
31 Dec 21
No.
No.
Production staff
67
Administrative staff
44
192
Management staff
2
2
----
----
113
194
----
----
The aggregate payroll costs incurred during the period, relating to the above, were:
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Wages and salaries
4,960,299
3,518,154
Social security costs
162,439
351,669
Other pension costs
111,638
113,592
------------
------------
5,234,376
3,983,415
------------
------------
9. DIRECTORS' REMUNERATION
The directors' aggregate remuneration in respect of qualifying services was:
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Remuneration
162,665
189,000
Company contributions to defined contribution pension plans
2,079
2,970
---------
---------
164,744
191,970
---------
---------
10. OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Interest on cash and cash equivalents
316
----
----
11. INTEREST PAYABLE AND SIMILAR EXPENSES
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Interest on banks loans and overdrafts
865,022
129,412
Interest on obligations under finance leases and hire purchase contracts
16,048
27,496
Other loan interest payable
973,417
Other interest payable and similar charges
389
---------
------------
881,070
1,130,714
---------
------------
12. TAX ON LOSS
Major components of tax expense/(income)
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Current tax:
UK current tax income
210
R & D claim
( 202)
----
----
Total current tax
8
----
----
Deferred tax:
Origination and reversal of timing differences
399,966
( 233,575)
---------
---------
Tax on loss
399,966
( 233,567)
---------
---------
Reconciliation of tax expense/(income)
The tax assessed on the profit on ordinary activities for the period is higher than (2021: lower than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
Period from
1 Jan 22 to
Year to
30 Dec 22
31 Dec 21
£
£
Profit on ordinary activities before taxation
581,768
2,638,543
---------
------------
Profit on ordinary activities by rate of tax
110,536
501,323
Effect of expenses not deductible for tax purposes
591
8,086
Effect of capital allowances and depreciation
( 43,576)
Utilisation of tax losses
245,750
( 776,890)
Other differences leading to an increase/(decrease) in the tax charge
86,665
33,914
---------
------------
Tax on loss
399,966
( 233,567)
---------
------------
13. TANGIBLE ASSETS
Group
Investment property
Plant and machinery
Fixtures and fittings
Motor vehicles
Computer Equipment
Total
£
£
£
£
£
£
Cost
At 1 Jan 2022
5,120,000
959,733
128,935
5,314
6,213,982
Additions
212,059
90,340
41,787
13,687
357,873
Disposals
( 51,231)
( 51,231)
Revaluations
275,000
275,000
------------
------------
---------
--------
--------
------------
At 30 Dec 2022
5,395,000
1,120,561
219,275
41,787
19,001
6,795,624
------------
------------
---------
--------
--------
------------
Depreciation
At 1 Jan 2022
289,438
64,207
4,948
358,593
Charge for the period
130,482
63,651
5,161
1,671
200,965
Disposals
( 14,813)
( 14,813)
------------
------------
---------
--------
--------
------------
At 30 Dec 2022
405,107
127,858
5,161
6,619
544,745
------------
------------
---------
--------
--------
------------
Carrying amount
At 30 Dec 2022
5,395,000
715,454
91,417
36,626
12,382
6,250,879
------------
------------
---------
--------
--------
------------
At 31 Dec 2021
5,120,000
670,295
64,728
366
5,855,389
------------
------------
---------
--------
--------
------------
The company has no tangible assets.
14. INVESTMENTS
The group has no investments.
Company
Unlisted
£
Cost
At 1 January 2022 and 30 December 2022
500
----
Impairment
At 1 January 2022 and 30 December 2022
----
Carrying amount
At 1 January 2022 and 30 December 2022
500
----
At 31 December 2021
500
----
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Citu Manufacturing Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu Group Developments Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu (Low Fold) LLP: The Place, Leeds, LS10 1FB
Members interest
100
Climate Innovation District Phase 1B Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Climate Innovation District Phase 2 Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Climate Innovation District Phase 4 Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Kelham Central Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu (Kelham Island) LLP: The Place, Leeds, LS10 1FB
Members interest
100
Climate Innovation District Phase 3 Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu Developments LLP: The Place, Leeds, LS10 1FB
Members interest
100
Citu Internals Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu Delivery Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu Design Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Citu Low Fold Leeds Ltd: The Place, Leeds, LS10 1FB
Ordinary
100
Little Kelham Investments Ltd: The Place, Leeds, LS10 1FB
Ordinary
75
15. STOCKS
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Raw materials and consumables
491,091
232,281
Work in progress
62,759,461
37,159,875
-------------
-------------
----
----
63,250,552
37,392,156
-------------
-------------
----
----
16. DEBTORS
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Trade debtors
477,496
1,569,580
28,995
5,598
Amounts owed by group undertakings
184,205
16,341,128
12,849,153
Prepayments and accrued income
243,028
429,028
Corporation tax repayable
86,805
248,176
Amounts due from related companies
181,163
267,970
164,829
96,329
Other debtors
1,016,479
913,143
2,188
65,522
------------
------------
-------------
-------------
2,004,971
3,612,102
16,537,140
13,016,602
------------
------------
-------------
-------------
17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise the following:
30 Dec 22
31 Dec 21
£
£
Cash at bank and in hand
727,515
1,400,470
Bank overdrafts
( 57,680)
---------
------------
669,835
1,400,470
---------
------------
18. CREDITORS: amounts falling due within one year
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Bank loans and overdrafts
57,680
Trade creditors
2,333,346
2,806,670
19,161
1,001,233
Amounts owed to group undertakings
81,892
17,480,164
4,479,448
Accruals and deferred income
1,074,672
1,075,429
250,461
( 15,944)
Social security and other taxes
882,245
Obligations under finance leases and hire purchase contracts
110,828
72,013
Amounts due to related companies
34,833
1,127,702
21,778
1,029,905
Other loans
12,023,441
11,324,633
Other creditors
803,676
756,487
55,948
13,142
------------
-------------
-------------
-------------
4,415,035
18,825,879
17,827,512
17,832,417
------------
-------------
-------------
-------------
19. CREDITORS: amounts falling due after more than one year
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Bank loans and overdrafts
66,054,426
28,272,281
4,232,112
Obligations under finance leases and hire purchase contracts
273,056
252,525
-------------
-------------
------------
----
66,327,482
28,524,806
4,232,112
-------------
-------------
------------
----
20. FINANCE LEASES AND HIRE PURCHASE CONTRACTS
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Not later than 1 year
110,828
72,013
Later than 1 year and not later than 5 years
273,056
252,525
---------
---------
----
----
383,884
324,538
---------
---------
----
----
21. PROVISIONS
Group
Deferred tax (note 22)
£
At 1 January 2022
( 6,796)
Additions
399,966
---------
At 30 December 2022
393,170
---------
Company
Deferred tax (note 22)
£
At 1 January 2022
( 347,716)
Additions
347,716
---------
At 30 December 2022
---------
22. DEFERRED TAX
The deferred tax included in the statement of financial position is as follows:
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Included in provisions (note 21)
393,170
( 6,796)
( 347,716)
---------
-------
----
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Accelerated capital allowances
119,942
119,942
Fair value adjustment of financial assets
273,228
220,978
Unused tax losses
( 347,716)
( 347,716)
---------
---------
----
---------
393,170
(6,796)
(347,716)
---------
---------
----
---------
23. EMPLOYEE BENEFITS
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 111,638 (2021: £ 113,592 ).
24. GOVERNMENT GRANTS
The amounts recognised in the consolidated financial statements for government grants are as follows:
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
27,845
----
--------
----
----
25. CALLED UP SHARE CAPITAL
Issued, called up and fully paid
30 Dec 22
31 Dec 21
No.
£
No.
£
Ordinary shares of £ 1 each
200
200
200
200
----
----
----
----
26. GUARANTEE PROVIDED IN RESPECT OF SUBSIDIARIES AUDIT EXEMPTION
Citu Group Ltd has given guarantees under section 479C of the Companies Act 2006, for the year ended 31 December 2022, for the following group entities:
Citu Delivery Ltd
Citu (Kelham Island) LLP
Citu Developments LLP
Climate Innovation District Phase 3 Ltd
Citu Design Ltd
Citu Internals Ltd
Little Kelham Investments Ltd
The above group entities are therefore exempt from the requirements relating to the audit of the individual accounts by virtue of section 479A of the Companies Act 2006.
Guarantees given under this section have the effect that:
(a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary entities are subject at the end of the financial year to which the guarantee relates, until they are satisfied in full.
(b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary entities are liable in respect of those liabilities.
27. ANALYSIS OF CHANGES IN NET DEBT
At 1 Jan 2022
Cash flows
At 30 Dec 2022
£
£
£
Cash at bank and in hand
1,400,470
(672,955)
727,515
Bank overdrafts
(57,680)
(57,680)
Debt due within one year
(153,905)
43,077
(110,828)
Debt due after one year
(28,524,806)
(37,802,676)
(66,327,482)
-------------
-------------
-------------
( 27,278,241)
( 38,490,234)
( 65,768,475)
-------------
-------------
-------------
28. OPERATING LEASES
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
30 Dec 22
31 Dec 21
30 Dec 22
31 Dec 21
£
£
£
£
Not later than 1 year
465,000
465,000
Later than 1 year and not later than 5 years
1,843,333
1,860,000
Later than 5 years
182,500
630,833
------------
------------
----
----
2,490,833
2,955,833
------------
------------
----
----