Company Registration Number 11075378 (England and Wales)
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2022
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
COMPANY INFORMATION
Director
Mr David Sullivan
Company number
11075378
Registered office
Ramillies House
2 Ramillies Street
London
W1F 7LN
Auditor
F Winter & Co. LLP
Ramillies House
2 Ramillies Street
London
W1F 7LN
Business address
Birch Hall
Coppice Row
Theydon Bois
Essex
CM16 7DR
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 7
Income statement
8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 23
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 1 -

The director presents his strategic report for the year ended 30 November 2022.

 

Principal activities

The principal activities of the Group are those of developers and dealers in properties.

Fair review of the business

The result for the year showed post tax losses amounting to £10,212,043 (2021: Profits £141,221). The losses incurred during the year were primarily due to impairment losses on development property stocks held for resale amounting to £8,985,099 and an increase in finance costs, an additional drawdown of the company's loan revolving facility and a rise in the Bank of England Base rate. There were no additions of disposals of development properties during the year under review.

 

Principal risks and uncertainties

The management of the business and the nature of the Group's strategy are subject to a number of risks. Given the size of the Group the director has retained the responsibility of monitoring financial risk management. The director has set out below the principal risks facing the business. Where possible, processes are in place to monitor and mitigate such risks. To the extent that the risk is insurable, the director is risk averse and widely insured.

 

Property Development

The major risk is failure to execute property development strategies which are value enhancing. This could potentially impact the Net Asset value of the Group and the total property return. To mitigate this issue the management team has defined development strategy and asset appraisal process including monitoring of macro-economic and property market trends. Investor Market decrease in demand by investors for real estate could adversely impact the net asset value and progress for any new development opportunities. In order to mitigate this issue the Group tries to ensure that its developments are in prime location and actively manage its strategic activities thus providing deterrent against some downturn in the market.

Events after reporting date

Please refer to note number 20 of the financial statements.

Key performance indicators

The Group's key performance indicators are net assets per share, capital yield, loan to value ratio, disposal proceeds, interest cover, finance cost rate and total shareholders return and these indicators are monitored closely by the director to ensure optimal business performance. The Group's strategy is to manage the business through the property market cycles, adjusting key development activities ahead of changing conditions to maximise shareholders return and minimise risks. The Group adds value through active management of assets, its strong financial position and the timing of acquisitions and disposals.

Future Prospects

Please refer to future developments in directors' report on page 3

 

Going Concern

The director has reviewed the current and projected financial position of the Group making reasonable assumptions about future trading prospects. On the basis of this review, and after making enquiries, the director has reasonable expectation that the Group is strongly capitalised and has considerable liquidity and resources to continue in operational existence for the foreseeable future. Furthermore, the Group has strong diversity in terms of the locations of its developments. For this reason the director continues to adopt the going concern basis in preparing the financial statements.

 

 

 

On behalf of the board

Mr David Sullivan
Director
24 November 2023
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 2 -

The director presents his annual report and financial statements for the year ended 30 November 2022.

Director

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

Mr David Sullivan
Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

Future developments
By having a stable, strong managment team together with our own financial resources and the facilities available from our bankers, we have the ability to move into the property development market when conditions become more favourable. We believe that this will be possible in the foreseeable future as the vendors either recognise the fragility of the current market and cut their losses or forced to do so by factors beyond their control. Conversely, companies with developed properties in prime location who are under no pressure to sell, can command higher prices on their portfolio of properties as interest rates are at a record low. This gives us great confidence for future prospects.
Credit risk

Financial counterparty risk could result in the loss of the Group's large cash deposits, substantial costs of rearranging facilities and incremental charges in the financing rate. Counterparty credit worthiness is monitored regularly and the Group has an arrangement in place with its bank to offset the cash balances against its liabilities to the bank.

Going concern

Looking forward over the next twelve months, the director expects the Group to continue to trade and maintain positive cash flow. As a result the director does not believe there will be any going concern issues that could materially impact the financial statements.

Auditor

In accordance with the company's articles, a resolution proposing that F Winter & Co. LLP be reappointed as auditor of the group in accordance with S487 (2) CA (2006).

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 3 -
Statement of director's responsibilities

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

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

Statement of disclosure to auditor

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

On behalf of the board
Mr David Sullivan
Director
24 November 2023
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
- 4 -
Opinion

We have audited the financial statements of Rosequake Development Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2022 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's report.

 

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

 

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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.

Our approach was as follows:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the reporting group from our general commercial and sector experience and from previous audits of the client.

 

We assessed the risk of material misstatement in respect of fraud by obtaining an understanding of the group's business processes and accounting systems and assessing the susceptibility to fraud.

 

We corroborated our enquiries through discussions with director and other members of management, review of minutes of director's meetings and any correspondence with the group's legal advisers.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
- 6 -

We determined that the most significant laws and regulations which relate and have a direct impact on the determination of material amounts and disclosures within the group's financial statements are the Companies Act 2006, Corporation Tax Act 1998 and relevant accounting standards.

 

The following laws and regulations are additional significant rules, non-compliance of which would result in a materially adverse effect on the financial statements and overall affairs of the reporting group. They are building control regulations, contract laws, sub-contractors' rights and CIS rules, employment laws, health and safety regulations, data protection laws, local council planning and building regulations.

 

The engagement partner ensured that the audit team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with any of the above laws and regulations.

Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with laws described above which involved detailed substantive tests based on relevant sample sizes from all material aspects of the audit, review of appropriate documentary evidence relating to the above laws and regulations such as copies of building and subcontractors' contracts and valuation reports, planning permissions, stock of properties and so on. During the course of our audit, we have not identified any irregularities or non-compliance with any of the above laws and regulations for the year under review.

In relation to material misstatements due to fraud, we identified few significant risks involving management fraud including unauthorised payments from the group's bank accounts, acquisitions of properties in collusion with estate agents, properties being developed in collusion with subcontractors and builders and ghost sub-contractors. The engagement partner discussed these factors during the audit team briefing and ensured that professional scepticism was exercised by the team throughout the conduct of the audit.

Based on the results of our risk assessment we designed our audit procedures to identify and address material misstatements as a result of fraud.

 

We considered the risk of fraud through factors described above and incorporated testing of company's internal controls which identified strong control over the entire business by director primarily through segregation of duties, involvement of various project managers for each property, set periodic reporting cycle from project managers on the progress of each property. In regards to the risk of fraud through management override, we incorporated testing of all the material bank receipts and payment entries into our audit approach along with ensuring that the company has taken all the reasonable measures to shelter itself from risk of fraud. In regards to the risk of ghost subcontractors, our audit included substantive testing of payments on random sampling to provide us with satisfactory comfort.

 

We have not identified any material misstatement incurred in relation to fraud during the course of our audit for the year under review.

As a result of the inherent limitation of the audit there is a risk that we may not detect all misstatements due to irregularities, including fraud.

 

The more removed the laws and regulations are from the financial transactions, the less likely it is that we would become aware of non-compliance and any material misstatement arising due to fraud can be harder to detect than those that arise from error as they may involved deliberate concealment, forgery, omission, misrepresentation and collusion.

The audit standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiries of management and inspection of regulatory and legal correspondence, if any, in the absence of identified or suspected non-compliance.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
- 7 -

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.

Hilesh Khakhria (Senior Statutory Auditor)
For and on behalf of F Winter & Co. LLP
24 November 2023
Chartered Accountants
Statutory Auditor
Ramillies House
2 Ramillies Street
London
W1F 7LN
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 8 -
2022
2021
Notes
£
£
Revenue
-
12,334,100
Cost of sales
(8,985,099)
(11,482,078)
Gross (loss)/profit
(8,985,099)
852,022
Administrative expenses
(197,249)
(165,191)
Operating (loss)/profit
5
(9,182,348)
686,831
Investment income
8
628
194
Finance costs
9
(1,030,323)
(545,804)
(Loss)/profit before taxation
(10,212,043)
141,221
Tax on (loss)/profit
10
-
0
-
0
(Loss)/profit for the financial year
(10,212,043)
141,221
(Loss)/profit for the financial year is all attributable to the owner of the parent company.
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 9 -
2022
2021
£
£
(Loss)/profit for the year
(10,212,043)
141,221
Other comprehensive income
-
-
Total comprehensive income/(loss) for the year
(10,212,043)
141,221
Total comprehensive income/(loss) for the year is all attributable to the owners of the parent company.
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
30 NOVEMBER 2022
30 November 2022
- 10 -
2022
2021
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
11
574
689
Current assets
Inventories
14
61,994,363
57,601,430
Trade and other receivables
15
1,214,941
975,540
Cash and cash equivalents
560,948
2,614,935
63,770,252
61,191,905
Current liabilities
16
(205,600)
(29,266,894)
Net current assets
63,564,652
31,925,011
Total assets less current liabilities
63,565,226
31,925,700
Non-current liabilities
17
(41,851,569)
-
Net assets
21,713,657
31,925,700
Equity
Called up share capital
19
36,217,024
36,217,024
Retained earnings
(14,503,367)
(4,291,324)
Total equity
21,713,657
31,925,700
The financial statements were approved and signed by the director and authorised for issue on 24 November 2023
24 November 2023
Mr David Sullivan
Director
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2022
30 November 2022
- 11 -
2022
2021
Notes
£
£
£
£
Non-current assets
Investments
12
21,734,153
35,841,081
Current assets
Cash and cash equivalents
4
4
Current liabilities
16
(20,600)
(11,600)
Net current liabilities
(20,596)
(11,596)
Total assets less current liabilities
21,713,557
35,829,485
Equity
Called up share capital
19
36,217,024
36,217,024
Retained earnings
(14,503,467)
(387,539)
Total equity
21,713,557
35,829,485

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £14,115,928 (2021 - £10,100 loss).

The financial statements were approved and signed by the director and authorised for issue on 24 November 2023
24 November 2023
Mr David Sullivan
Director
Company Registration No. 11075378
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 12 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 December 2020
36,217,024
(4,432,545)
31,784,479
Year ended 30 November 2021:
Profit and total comprehensive income for the year
-
141,221
141,221
Balance at 30 November 2021
36,217,024
(4,291,324)
31,925,700
Year ended 30 November 2022:
Loss and total comprehensive income for the year
-
(10,212,043)
(10,212,043)
Balance at 30 November 2022
36,217,024
(14,503,367)
21,713,657
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 13 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 December 2020
36,217,024
(377,439)
35,839,585
Year ended 30 November 2021:
Loss and total comprehensive income for the year
-
(10,100)
(10,100)
Balance at 30 November 2021
36,217,024
(387,539)
35,829,485
Year ended 30 November 2022:
Loss and total comprehensive income for the year
-
(14,115,928)
(14,115,928)
Balance at 30 November 2022
36,217,024
(14,503,467)
21,713,557
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(12,624,292)
(2,755,511)
Investing activities
Interest received
628
194
Net cash generated from investing activities
628
194
Financing activities
New loans
11,600,000
5,100,000
Interest paid
(1,030,323)
(545,804)
Net cash generated from financing activities
10,569,677
4,554,196
Net (decrease)/increase in cash and cash equivalents
(2,053,987)
1,798,879
Cash and cash equivalents at beginning of year
2,614,935
816,056
Cash and cash equivalents at end of year
560,948
2,614,935
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 15 -
1
Company information

Rosequake Development Holdings Limited ("the company") is a private company limited by shares and incorporated in England and Wales with registration number 11075378. The registered office is Ramillies House, 2 Ramillies Street, London, W1F 7LN.

 

The group consists of Rosequake Development Holdings Limited and all of its subsidiaries.

2
Compliance with accounting standards

These financial statements have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ('FRS 102') and the requirements of the Companies Act 2006.

 

The company is qualifying entity for the purposes of FRS102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

-Section 7 'Statement of Cash Flows' - Presentation of a statement of cash flow and related notes and disclosures,

-Section 11 'Basic Financial Instruments'

-Section 33 'Related Party Disclosures' - Compensation for key management personnel.

 

 

3
Accounting policies
3.1
Accounting convention

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

3.2
Basis of consolidation

The financial information consolidates the accounts of Rosequake Development Holdings Limited and its subsidiary undertakings using the acquisition method.

3.3
Going concern

The accounts have been prepared on a going concern basis which assumes that the group will continue to trade. The validity of this assumption is dependent upon the continued support of the director who has indicated that he intends to provide the necessary facilities to enable the group to continue to trade for the forseeable future. If the company was unable to trade, adjustments would have to be made to reduce the value of assets to their recoverable amount, to provide for any further liabilities that might arise and to reclassify fixed assets and long term liabilities as current assets and liabilities.

3.4
Revenue

The group's revenue comprises of proceeds from the sale of developed properties held for resale and a small proportion of other income. The income on sale of developed properties is recognised on completion.

3.5
Property, plant and equipment

Property, plant and equipment are initially measured at cost net of depreciation and any impairment losses.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
3
Accounting policies
(Continued)
- 16 -

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

Fixtures and fittings
10% per annum on a straight line basis

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

3.6
Non-current investments

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

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

3.7
Inventories

Inventories are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Inventories comprises of properties held for resale and are valued, as stated above. Cost is based on the cost of purchase.

 

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 the profit & loss.

3.8
Cash and cash equivalents

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

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
3
Accounting policies
(Continued)
- 17 -
3.9
Financial instruments
Basic financial assets

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

 

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

 

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Basic financial liabilities

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

3.10
Taxation

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

Current tax

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

Deferred tax

The tax expense represents the sum of tax currently payable and deferred tax. Deferred tax is provided at the rate expected to apply at the date that the timing differences reverse, based on the rates enacted or substantively enacted at the balance sheet date.

 

Deferred taxation is provided on the liability method to take account of timing differences between the treatment of certain items for accounts purposes and their treatment for tax purposes.

 

Tax deferred or accelerated is accounted for in respect of all material timing differences.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 18 -
4
Judgements and key sources of estimation uncertainty

Inventories (see note 14) comprise of land and buildings which are stated at the lower of cost and net realizable value based on the valuation performed by an independent professional valuer Savills , Chartered Surveyors with recent experience in the location and category of property valued. The valuer used observable market prices adjusted as necessary for any difference in the future, location, or condition of the specific asset.

 

However, the rise in interest rates and inflation has caused significant disruption and uncertainty in the UK property market which has inevitably increased the degree of judgement involved in the property valuation at 30 November 2022. In addition, the main stock currently held by the company is one which will be marketable to high net individuals , hence limiting the ability of prospective purchaser.

 

As residential development is largely speculative by nature, not all inventories are covered by forward sales contracts. Due to current economic conditions, there is increased risk that the carrying amount of the stock shown in the company’s financial statements may require material adjustments within the next financial year.

 

The key areas involving estimation uncertainty, which are significant to the Financial Statements, are: — cost of sales recognition which is dependent on an estimate of future selling prices and build costs.— post completion development provisions which relies on management judgement in estimating the quantum and timing of outflows of resources to settle any constructive obligations.

5
Operating (loss)/profit
2022
2021
£
£
Operating (loss)/profit for the year is stated after charging:
Depreciation of owned property, plant and equipment
115
115
Inventories impairment losses recognised or reversed
8,985,099
-
0
6
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
8,500
9,600
7
Employees

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

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
1
1
1
1
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 19 -
8
Investment income
2022
2021
£
£
Interest income
Interest on bank deposits
628
194
9
Finance costs
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on other loans
1,030,275
545,777
Other finance costs:
Other interest
48
27
Total finance costs
1,030,323
545,804
10
Taxation

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

2022
2021
£
£
(Loss)/profit before taxation
(10,212,043)
141,221
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(1,940,288)
26,832
Tax effect of utilisation of tax losses not previously recognised
-
(30,939)
Depreciation on assets not qualifying for tax allowances
22
22
Other permanent differences
1,940,266
4,085
Taxation charge
-
-

The Group has tax losses amounting to £13,474,695 (2021: £3,271,767) to carry forward against future trading profits.

 

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 20 -
11
Property, plant and equipment
Group
Fixtures and fittings
£
Cost
At 1 December 2021 and 30 November 2022
1,149
Depreciation and impairment
At 1 December 2021
460
Depreciation charged in the year
115
At 30 November 2022
575
Carrying amount
At 30 November 2022
574
At 30 November 2021
689
The parent company had no property, plant and equipment at 30 November 2022 or 30 November 2021.
12
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
21,734,153
35,841,081
Movements in non-current investments
Company
Shares in group undertakings
£
Cost or valuation
At 1 December 2021 and 30 November 2022
36,217,020
Impairment
At 1 December 2021
(375,939)
Impairment losses
(14,106,928)
At 30 November 2022
(14,482,867)
Carrying amount
At 30 November 2022
21,734,153
At 30 November 2021
35,841,081
ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 21 -
13
Subsidiaries

Details of the company's subsidiaries at 30 November 2022 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Conegate Developments Limited
England and Wales
Property development activities
Ordinary
100.00

The group has opted for audit exemption for its wholly owned subsidiary Conegate Developments Limited under section 479A of the Companies Act 2006.

14
Inventories
Group
Company
2022
2021
2022
2021
£
£
£
£
Properties held for resale
61,994,363
57,601,430
-
-
15
Trade and other receivables
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Corporation tax recoverable
410,298
410,298
-
0
-
0
Other receivables
683,060
473,562
-
0
-
0
Prepayments and accrued income
121,583
91,680
-
0
-
0
1,214,941
975,540
-
-
16
Current liabilities
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade payables
150,000
-
0
-
0
-
0
Financial liabilities
-
29,221,294
-
0
-
0
Accruals and deferred income
55,600
45,600
20,600
11,600
205,600
29,266,894
20,600
11,600

Financial liabilities include loans amounting to £NIL (2021: £29,221,294) owed to a connected entity. These loans were issued at arm's length and are wholly repayable on demand. The interest rate on the loans amounting to £NIL (2021: £29,221,294) is charged between base plus 2% and 2.5% per annum.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 22 -
17
Non-current liabilities
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Other borrowings
18
41,851,569
-
0
-
0
-
0
18
Borrowings
Group
Company
2022
2021
2022
2021
£
£
£
£
Non bank loans
41,851,569
29,221,294
-
0
-
0
Payable within one year
-
29,221,294
-
0
-
0
Payable after one year
41,851,569
-
0
-
0
-
0

Non bank loans amounting to £NIL (2021: £29,221,294) are owed by the Group to Rickleford Limited (Co. Reg. No. 08156827) which is a company under common control and not part of the Group. These are unsecured loans on which interest is charged at base rate plus 2% per annum and are repayable on demand.

 

Non-bank loans amounting to £41,851,569 (2021: £NIL) are owed by the Group to Rickleford Limited (Co. Reg. No. 08156827) which is a company under common control and not part of the Group. These are unsecured loans on which interest is charged at base rate plus 2% per annum and are repayable between 31/01/2026 to 20/10/2027.

19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' shares of 10p each
17,246,200
17,246,200
1,724,620
1,724,620
Ordinary 'B' shares of 10p each
172,462,020
172,462,020
17,246,202
17,246,202
Ordinary 'C' shares of 10p each
172,462,020
172,462,020
17,246,202
17,246,202
362,170,240
362,170,240
36,217,024
36,217,024

With effect from 10th December 2018, the A, B and C shares have the following rights to income and capital:

 

The A shares are entitled to income distributions and capital distributions and capital proceeds on a sale of A shares up to £4,292,830 in aggregate. The B shares are entitled to income distributions and capital distributions and capital proceeds on a sale of B shares up to £543,396 after the holders of A shares have received £4,292,830 in aggregate. The C shares are entitled to income distributions and capital distributions and capital proceeds on a sale of C shares, after the holder of A shares and B shares have received £4,836,226 in aggregate.

20
Events after the reporting date

The Group has completed on the disposal of one of its stock of development properties for £8,550,000. The completion of this disposal took place on the 22nd May 2023.

ROSEQUAKE DEVELOPMENT HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 23 -
21
Related party transactions

The material related party transactions during the year ended 30th November 2022 were:

 

As at 30th November 2022 the following balances have been shown within borrowings payable within one year and more than one year.

 

- Within one year

£NIL (2021: £3,880,058) due to a company controlled by the director and shareholder.

£NIL (2021: £21,187,096) due to a company controlled by the director and shareholder.

£NIL (2021: £4,154,140) due to a company controlled by the director and shareholder.

 

- More than one year

£3,992,999 (2021: £NIL) due to a company controlled by the director and shareholder.

£21,827,644 (2021: £NIL) due to a company controlled by the director and shareholder.

£16,030,926 (2021: £NIL) due to a company controlled by the director and shareholder.

22
Controlling party

As at 30th November 2022, Mr. D. Sullivan, the director of the Group is the ultimate controlling party by virtue of his shareholding in the parent company, Rosequake Development Holdings Limited.

23
Cash absorbed by group operations
2022
2021
£
£
(Loss)/profit for the year after tax
(10,212,043)
141,221
Adjustments for:
Finance costs
1,030,323
545,804
Investment income
(628)
(194)
Depreciation and impairment of property, plant and equipment
115
115
Movements in working capital:
Increase in inventories
(4,392,933)
(3,803,599)
Increase in trade and other receivables
(239,401)
(115,190)
Increase in trade and other payables
1,190,275
476,332
Cash absorbed by operations
(12,624,292)
(2,755,511)
24
Analysis of changes in net funds - group
1 December 2021
Cash flows
30 November 2022
£
£
£
Cash at bank and in hand
2,614,935
(2,053,987)
560,948
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