Liverpool and Chester Property Company - Limited company accounts 23.2

REGISTERED NUMBER: 00019009 (England and Wales)

Report of the Directors and

Financial Statements for the Year Ended 31 December 2023

for

Liverpool and Chester Property Company

Limited

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Income Statement

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

K Penny

A D Pelan

P Roberts

D C Watkins

A R Leece

SECRETARY:

A D Pelan

REGISTERED OFFICE:

7 Union Court

Cook Street

Liverpool

L2 4SJ

REGISTERED NUMBER:

00019009 (England and Wales)

SENIOR STATUTORY
AUDITOR:

Kate Taylor, FCCA

AUDITORS:

Haines Watts

Statutory Auditor

3rd Floor Pacific Chambers

11-13 Victoria Street

Liverpool

Merseyside

L2 5QQ

The Directors present their Report and Financial Statements for the year ended 31st December 2023. The principal business of the Company continues to be investment in and management of tenanted freehold and leasehold properties.

In the opinion of the Directors, the fair value of the freehold and leasehold investment properties at 31st December 2023 was £22,269,925 (2022 - £22,228,925).

Allan Pelan and Alastair Leece will retire from the Board by rotation and will offer themselves for re-election at the Annual General Meeting.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

K Penny

A D Pelan

P Roberts

D C Watkins

A R Leece

RISK OF BUSINESS INTERRUPTION

The Directors have considered the potential impact of various matters on rental income.

The potential for interest rate rises will be managed by borrowing at fixed rates where possible, and where not at rates which leave a safe margin.

The level of inflation and its impact on the economy and company portfolio will be monitored.

Notwithstanding the underlying impact on the economy, property as an investment class can sometimes benefit from periods of inflation compared to other more volatile types of holding.

The conflict in Ukraine and Gaza do not currently appear to be a risk to capital values or rental income, but the Directors recognise the potential for impact on the economy, both nationally and globally, and the situation will be monitored as it develops.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Haines Watts Liverpool Limited will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

A D Pelan - Secretary

28 March 2024

Qualified Opinion

We have audited the financial statements of Liverpool and Chester Property Company Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical, 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.

The financial statements include investment properties at cost rather than fair value, as required by Financial Reporting Standard 102. The relevant fair value figures are, however, disclosed in Note 7, and would result in an increase in the value of tangible fixed assets and reserves of £8,948,328 (2022 - £8,947,845). If the investments were stated at fair value a deferred tax provision of £1,152,420 (2022 - £1,145,170) would also have been recognised in the financial statements.

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

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:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the company engagement team included:

- Reviewing minutes of meetings of those charged with governance;

- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;

- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;

- Reviewing financial statements disclosures and testing to supporting documentation to assess compliance with

applicable law and regulations;

- Identifying and testing journal entries, in particularly any journal entries posted with unusual account combinations.

- Challenging assumptions and judgements made by management in its significant accounting estimates, in particular:

- Deferred and accrued income - we carried out a review and recalculation of deferred and accrued income to assess its appropriateness for inclusion within the financial statements;

- Bad debt provision - we carried out a review of the bad debt provision to check the appropriateness of inclusion

within the financial statements;

- Valuation of company's investment properties - we have reviewed the reports prepared by 3rd party professional

valuers. Whilst investment properties have not been included in the financial statements at fair value, there is reference made to the valuations within the notes.

Despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity likely involve collusion, forgery, intentional

misrepresentations, or the override of internal controls.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Kate Taylor, FCCA (Senior Statutory Auditor)

for and on behalf of Haines Watts

Statutory Auditor

3rd Floor Pacific Chambers

11-13 Victoria Street

Liverpool

Merseyside

L2 5QQ

28 March 2024

TURNOVER

1,531,170

1,539,252

Administrative expenses

524,947

560,925

OPERATING PROFIT

1,006,223

978,327

Interest receivable and similar income

25,258

-

1,031,481

978,327

Interest payable and similar expenses

112,022

75,964

PROFIT BEFORE TAXATION

919,459

902,363

Tax on profit

207,882

185,990

PROFIT FOR THE FINANCIAL YEAR

711,577

716,373

FIXED ASSETS

Investments

6

82,475

Investment property

7

13,285,598

13,281,081

13,368,073

13,363,556

CURRENT ASSETS

Debtors

8

170,415

144,103

Cash at bank

2,578,978

726,370

2,749,393

870,473

CREDITORS

Amounts falling due within one year

9

467,129

702,768

NET CURRENT ASSETS

2,282,264

167,705

TOTAL ASSETS LESS CURRENT
LIABILITIES

15,650,337

13,531,261

CREDITORS

Amounts falling due after more than one
year

10

3,479,962

1,518,750

NET ASSETS

12,170,375

12,012,511

CAPITAL AND RESERVES

Called up share capital

3,885,708

Other reserves

12

1,007,349

Retained earnings

12

7,277,318

7,119,454

SHAREHOLDERS' FUNDS

12,170,375

12,012,511

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

The financial statements were approved by the Board of Directors and authorised for issue on 28 March 2024 and were signed on its behalf by:

D C Watkins - Director

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

Balance at 1 January 2022

3,885,708

6,947,080

1,007,349

11,840,137

Changes in equity

Dividends

-

(543,999

)

-

(543,999

)

Total comprehensive income

-

716,373

-

716,373

Balance at 31 December 2022

3,885,708

7,119,454

1,007,349

12,012,511

Changes in equity

Dividends

-

(553,713

)

-

(553,713

)

Total comprehensive income

-

711,577

-

711,577

Balance at 31 December 2023

3,885,708

7,277,318

1,007,349

12,170,375

1.	STATUTORY INFORMATION

Liverpool and Chester Property Company Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Preparation of consolidated financial statements

The financial statements contain information about The Liverpool and Chester Property Company Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company has taken the option under Section 398 of the Companies Act 2006 not to prepare consolidated financial statements.

Turnover

The company's turnover represents rents chargeable for the period, excluding Value Added Tax. Rents receivable are included on an accruals basis, with annual rentals credited to profit and loss on a straight line basis over the expected term of the lease.

Finance costs

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

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Investment property

Investment properties comprise freehold and leasehold properties either to earn rental income or for capital appreciation, or both.

Investment properties have been revalued annually but have been included at cost in the balance sheet. No depreciation or amortisation is provided in respect of freehold investment properties and leasehold investment properties with over 20 years to run. The Companies Act 2006 requires tangible fixed assets to be depreciated systematically over their estimated useful economic lives. However, investment properties are held for investment rather than consumption. The directors therefore consider that depreciation on a systematic basis would not be appropriate in this case and that the accounting policy adopted is necessary for the accounts to give a true and fair view. Depreciation or amortisation is only one of the many factors reflected in the annual valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Debtors

Short term debtors are measured at transaction price, less any impairment.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty or notice of not more than 24 hours.

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and loans to related parties.

Debt instruments (other than those wholly repayable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

Financial assets that are measured at cost and amortised are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement and retained earnings.

Creditors

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

Going concern

The financial statements have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the annual budget and future cash flows in making their assessment. The Directors have considered the impact of high inflation and increased costs of borrowing and tested their cash flow analysis. Based on these assessments, given the measures that could be undertaken to mitigate the current adverse conditions, and the current resources available, the Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.

3.	CRITICAL ACCOUNTING 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 for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Revaluation of investment properties

The company carries its investment property at cost, with changes in being recognised in profit or loss. The company uses external professional advisors to determine fair value, who are RICS registered valuers. The company's investment properties were revalued by the directors at the balance sheet date. The valuation of the company's property portfolio is inherently subjective due to, among other factors, the individual nature of each property. As a result, the valuations the company places on its property portfolio are subject to a degree of uncertainty and are made on the basis of assumptions which may not prove to be accurate, particularly in periods of volatility or low transaction flow in the property market.

4.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 5 (2022 - 6 ) .

5.

DIVIDENDS

31.12.23

31.12.22

£

Ordinary shares of £1 each

Interim

223,428

Final

330,285

320,571

553,713

543,999

6.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 January 2023

and 31 December 2023

82,475

NET BOOK VALUE

At 31 December 2023

82,475

At 31 December 2022

82,475

7.	INVESTMENT PROPERTY

Total

£

COST OR VALUATION

At 1 January 2023

13,281,081

Additions

4,517

At 31 December 2023

13,285,598

NET BOOK VALUE

At 31 December 2023

13,285,598

At 31 December 2022

13,281,081

The freehold and leasehold investment properties owned by the company were valued as at 31st December 2023 by Mason Owen, Chartered Surveyors.

The valuations referred to above are freehold investment properties of £20,626,925 (2022 - £20,598,925) and leasehold investment properties of £1,643,000 (2022 - £1,630,000).

If investment properties were stated in the financial statements at their fair value, this would result in an increase in the value of tangible fixed assets and reserves of £8,984,328 (2022 - £8,947,844). If the investments were stated at fair value a deferred tax provision of £1,152,420 (2022 - £1,145,170) would also have been recognised in the financial statements.

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.23

31.12.22

£

Other debtors

170,415

144,103

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.23

31.12.22

£

Bank loans and overdrafts

-

250,304

Amounts owed to group undertakings

82,475

Taxation and social security

249,254

219,934

Other creditors

135,400

150,055

467,129

702,768

10.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

31.12.23

31.12.22

£

Bank loans

3,479,962

1,518,750

Amounts falling due in more than five years:

Repayable otherwise than by instalments

Bank loans more 5 yrs non-inst

3,479,962

1,518,750

11.	SECURED DEBTS

The following secured debts are included within creditors:

31.12.23

31.12.22

£

Bank loans

3,479,962

1,769,054

The bank loans of £3,479,962 (2022 - £1,769,054) are secured by first legal charges over certain of the company's investment property assets.

12.

RESERVES

Retained

Other

earnings

reserves

Totals

£

At 1 January 2023

7,119,454

1,007,349

8,126,803

Profit for the year

711,577

Dividends

(553,713

)

(553,713

)

At 31 December 2023

7,277,318

1,007,349

8,284,667

Retained earnings - accumulated profits and losses achieved.

Other reserves - surpluses and losses on sales of assets and investments, net of associated corporation tax, which are required by the Articles of Association of the company to be separately set aside and are not available for distribution as dividends.

13.	RELATED PARTY DISCLOSURES

The directors of the company are considered to be the key management personnel for both the current and previous year. The total benefits paid to the directors in the year were £115,000 (2022 - £110,000).