Company registration number 08261566 (England and Wales)
CHICHESTER HOMES DEVELOPMENTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
CHICHESTER HOMES DEVELOPMENTS LIMITED
COMPANY INFORMATION
Directors
J W Sharman
P J Harrison
L M Sharman
P How
B Sharman
Secretary
J T Haynes
Company number
08261566
Registered office
3 Brannam Crescent
Roundswell Business Park
Barnstaple
EX31 3TD
Auditor
Henton & Co LLP
Northgate
118 North Street
Leeds
England
LS2 7PN
CHICHESTER HOMES DEVELOPMENTS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
CHICHESTER HOMES DEVELOPMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Principal activity
The principal activity of the company is the development of residential properties, including an element of social housing, in the North Devon area.
There have not been any changes in the company’s principal activities in the year and the directors are not aware of any likely major changes in the company’s activities in the next year.
Business review and key performance indicators
The profit for the year, after tax, amounted to £1,571,828 (2022: £2,749,049). The directors are satisfied with the performance of the company for the year. Key financial performance indicators are turnover and gross profit which can be seen in the Profit and Loss Account. Given the nature of the company’s operations turnover will fluctuate depending on the conditions within the housing market sector, progress of developments, type of developments and the percentage of open market and social housing completions in the year. Turnover in the year decreased by 32.6% to £11,277,016. The gross profit margin has decreased to 25.53% (2022: 25.9%) in the year as a result of these factors. Shareholders' funds increased to £12,103,048 from £10,531,220, reflecting the profit for the year.
Principal risks and uncertainties
The residential construction industry continues to go through a period of economic uncertainty, and this is likely to be the case until after the General Election later in the year. Risks which could impact the level of activity in the sector include fluctuations in the short-term supply and pricing of certain key raw materials, interest rates, the cost-of-living crisis, and competitive pressures in the sector.
Planning also remains a barrier given the time and costs required to obtain detailed planning permissions. This has become harder over the year since the current Government removed housing targets on local planning authorities.
The company manages these risks by maintaining a strong balance sheet and regularly reviewing construction costs and selling prices to ensure that current and future projects remain viable. The supply chain, including subcontractors and materials, are tendered to ensure costs are competitive and, where deemed appropriate, are fixed at an early stage of construction.
Going concern
In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether the company can continue in operation for the foreseeable future.
The company has prepared forecasts, which take into account possible changes in trading activities. Having considered these forecasts, the directors are of the view that the company will have adequate resources to meet its liabilities in the foreseeable future, being at least 12 months from the date of the approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
P How
Director
9 April 2024
CHICHESTER HOMES DEVELOPMENTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2023.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J W Sharman
P J Harrison
L M Sharman
P How
B Sharman
Future developments
The company has sufficient resources, and as such the directors believe the company is well placed to manage its business risks successfully despite the ongoing economic uncertainty caused by the long term effects of the global pandemic, and more recently the implications as a result of the conflict in Ukraine.
Auditor
The auditor, Henton & Co LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
P How
Director
9 April 2024
CHICHESTER HOMES DEVELOPMENTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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.
CHICHESTER HOMES DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CHICHESTER HOMES DEVELOPMENTS LIMITED
- 4 -
Opinion
We have audited the financial statements of Chichester Homes Developments Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 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 30 September 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CHICHESTER HOMES DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHICHESTER HOMES DEVELOPMENTS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.
We also considered the company’s compliance with laws and regulations that have a significant impact on the financial statements including, but not limited to, health and safety regulations, the Companies Act 2006, United Kingdom Accounting Standards and relevant tax legislation.
CHICHESTER HOMES DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHICHESTER HOMES DEVELOPMENTS LIMITED
- 6 -
Our audit procedures to respond to the risks identified included the following:
• enquiring of management of their health and safety policies and procedures and inspecting health and safety audit/observational reports undertaken by an external third party for any instances of non-compliance;
• reviewing the financial statement disclosures and agreeing to underlying supporting documentation to assess
compliance with applicable laws and regulations;
• performing analytical review procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud;
• enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations;
• testing the appropriateness of journal entries and other adjustments; and
• assessing whether the judgements made in making accounting estimates are indicative of potential management bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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.
Chris Howitt
Senior Statutory Auditor
For and on behalf of Henton & Co LLP
9 April 2024
Chartered Accountants
Statutory Auditor
Northgate
118 North Street
Leeds
England
LS2 7PN
CHICHESTER HOMES DEVELOPMENTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
11,277,016
16,720,947
Cost of sales
(8,398,028)
(12,390,152)
Gross profit
2,878,988
4,330,795
Distribution costs
(155,689)
(198,004)
Administrative expenses
(726,410)
(718,287)
Other operating income
3,150
3,000
Operating profit
4
2,000,039
3,417,504
Interest receivable and similar income
7
56,563
855
Interest payable and similar expenses
8
(36,718)
(11,134)
Profit before taxation
2,019,884
3,407,225
Tax on profit
9
(448,056)
(658,176)
Profit for the financial year
1,571,828
2,749,049
The notes on pages 11 to 23 form part of these financial statements.
CHICHESTER HOMES DEVELOPMENTS LIMITED
BALANCE SHEET
AS AT 30 SEPTEMBER 2023
30 September 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
158,298
196,985
Current assets
Stocks
11
13,667,606
10,214,911
Debtors
12
395,709
1,137,464
Cash at bank and in hand
4,253,113
3,455,643
18,316,428
14,808,018
Creditors: amounts falling due within one year
13
(5,333,212)
(4,347,184)
Net current assets
12,983,216
10,460,834
Total assets less current liabilities
13,141,514
10,657,819
Creditors: amounts falling due after more than one year
14
(1,000,000)
(15,323)
Provisions for liabilities
Provisions
17
63,414
Deferred tax liability
18
38,466
47,862
(38,466)
(111,276)
Net assets
12,103,048
10,531,220
Capital and reserves
Called up share capital
20
106
106
Profit and loss reserves
12,102,942
10,531,114
Total equity
12,103,048
10,531,220
The notes on pages 11 to 23 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 9 April 2024 and are signed on its behalf by:
P How
Director
Company registration number 08261566 (England and Wales)
CHICHESTER HOMES DEVELOPMENTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 October 2021
106
7,782,065
7,782,171
Year ended 30 September 2022:
Profit and total comprehensive income
-
2,749,049
2,749,049
Balance at 30 September 2022
106
10,531,114
10,531,220
Year ended 30 September 2023:
Profit and total comprehensive income
-
1,571,828
1,571,828
Balance at 30 September 2023
106
12,102,942
12,103,048
The notes on pages 11 to 23 form part of these financial statements.
CHICHESTER HOMES DEVELOPMENTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
22
(106,688)
1,369,529
Interest paid
(36,718)
(11,134)
Income taxes paid
(498,519)
(894,704)
Net cash (outflow)/inflow from operating activities
(641,925)
463,691
Investing activities
Purchase of tangible fixed assets
(47,318)
(122,642)
Proceeds from disposal of tangible fixed assets
35,100
71,835
Interest received
56,563
855
Net cash generated from/(used in) investing activities
44,345
(49,952)
Financing activities
Proceeds from borrowings
2,500,000
1,100,000
Repayment of borrowings
(1,100,000)
Repayment of bank loans
(342,333)
Payment of finance leases obligations
(4,950)
(39,558)
Net cash generated from financing activities
1,395,050
718,109
Net increase in cash and cash equivalents
797,470
1,131,848
Cash and cash equivalents at beginning of year
3,455,643
2,323,795
Cash and cash equivalents at end of year
4,253,113
3,455,643
The notes on pages 11 to 23 form part of these financial statements.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
1
Accounting policies
Company information
Chichester Homes Developments Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3 Brannam Crescent, Roundswell Business Park, Barnstaple, EX31 3TD. The business address is 3 Brannam Crescent, Roundswell Business Park, Barnstaple, Devon, EX31 3TD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future being at least 12 months from the date of these financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable in the normal course of business.
Turnover represents amounts receivable for sales of properties. Revenue from the sale of properties is recognised when the significant risks and rewards of ownership of the properties have passed to the buyer (usually on completion), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Profit is recognised on long-term contacts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contact activity progresses. Turnover is calculated as that proportion of total contract value which costs to date bear to total expected costs for the contract.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Leasehold improvements
10% straight line
Plant and machinery
25% reducing balance
Fixtures, fittings & equipment
25% reducing balance
Motor vehicles
25% reducing balance
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 credited or charged to profit or loss.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.6
Stocks
Work in progress is valued at the lower of cost and net realisable value.
1.7
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.8
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. The company holds only basic financial instruments, which comprise cash and cash equivalents, trade and other debtors, trade and other creditors and loans and borrowings.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction. Financial assets classified as receivable within one year are not amortised.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.10
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. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account.
1.11
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In preparing these financial statements, the directors have had to make the following judgements and estimates:
Recognition of profit on long term contracts
Profit on long term contracts is taken as work is carried out if the final outcome can be assessed with reasonable certainty. This requires an accurate assessment of the stage of completion of each contract as well as the estimated costs to complete.
Vaulation of work in progress
Work in progress represents costs which will be recovered on completion of developments and future sales. These costs are recognised in comprehensive income upon legal completion of property sales and in proportion to total revenue expected on each developments. This is impacted by the profit on long term contracts as noted above, and any provision required against cost of developing property to reduce it to net realisable value. This requires an estimate of costs to complete and expected sales prices.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of residential property
11,266,852
16,660,843
Other income
10,164
60,104
11,277,016
16,720,947
2023
2022
£
£
Other revenue
Interest income
56,563
855
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
24,820
20,960
Depreciation of owned tangible fixed assets
52,036
50,958
Profit on disposal of tangible fixed assets
(1,131)
(30,228)
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
18
18
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
590,778
628,212
Social security costs
62,666
66,670
Pension costs
87,696
135,916
741,140
830,798
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
185,716
182,864
Company pension contributions to defined contribution schemes
73,262
118,113
258,978
300,977
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
55,525
792
Other interest income
1,038
63
Total income
56,563
855
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
55,525
792
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
4,753
Other finance costs:
Interest on finance leases and hire purchase contracts
-
765
Other interest
36,718
5,616
36,718
11,134
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
445,427
652,518
Deferred tax
Origination and reversal of timing differences
2,629
5,658
Total tax charge
448,056
658,176
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,019,884
3,407,225
Expected tax charge based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
444,374
647,373
Tax effect of expenses that are not deductible in determining taxable profit
6,354
7,445
Effect of change in corporation tax rate
(2,587)
7,999
Permanent capital allowances in excess of depreciation
(328)
(4,851)
Depreciation on assets not qualifying for tax allowances
243
210
Taxation charge for the year
448,056
658,176
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
10
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 October 2022
11,062
220,804
45,372
89,621
366,859
Additions
13,508
1,955
31,855
47,318
Disposals
(106,163)
(6,725)
(18,986)
(131,874)
At 30 September 2023
11,062
128,149
40,602
102,490
282,303
Depreciation and impairment
At 1 October 2022
5,524
103,579
29,458
31,313
169,874
Depreciation charged in the year
1,104
27,293
4,007
19,632
52,036
Eliminated in respect of disposals
(78,253)
(5,242)
(14,410)
(97,905)
At 30 September 2023
6,628
52,619
28,223
36,535
124,005
Carrying amount
At 30 September 2023
4,434
75,530
12,379
65,955
158,298
At 30 September 2022
5,538
117,225
15,914
58,308
196,985
11
Stocks
2023
2022
£
£
Work in progress
13,667,606
10,214,911
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
12,879
24,409
Gross amounts owed by contract customers
62,828
853,796
Other debtors
239,375
158,017
Prepayments and accrued income
67,074
75,664
382,156
1,111,886
Deferred tax asset (note 18)
13,553
25,578
395,709
1,137,464
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
15,323
4,950
Other borrowings
15
1,500,000
1,100,000
Trade creditors
1,065,975
1,224,451
Corporation tax
200,427
253,519
Other taxation and social security
17,957
37,892
Other creditors
2,015,677
1,101,875
Accruals and deferred income
517,853
624,497
5,333,212
4,347,184
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
15,323
Other borrowings
15
1,000,000
1,000,000
15,323
15
Loans and overdrafts
2023
2022
£
£
Other loans
2,500,000
1,100,000
Payable within one year
1,500,000
1,100,000
Payable after one year
1,000,000
The loans are secured by a fixed legal charge over certain land owned by the company.
The loan outstanding at the year end is repayable in two instalments by 31st July 2025. Interest is payable at 4% over bank base rate if the loan is not repaid by the due dates.
The loan outstanding at 30th September 2022 was repaid in the year. Interest was payable at 2% per annum.
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
15,323
4,950
In two to five years
15,323
15,323
20,273
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
16
Finance lease obligations
(Continued)
- 21 -
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
Provisions for liabilities
2023
2022
£
£
Other provisions
-
63,414
Other provisions consist of contract-related costs associated with sites still undergoing development. The provisions were utilised in 2023.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
38,466
47,862
-
-
Retirement benefit obligations
-
-
13,553
25,578
38,466
47,862
13,553
25,578
2023
Movements in the year:
£
Liability at 1 October 2022
22,284
Charge to profit or loss
2,629
Liability at 30 September 2023
24,913
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
87,696
135,916
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 22 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
Non-voting shares of £1 each
6
6
6
6
106
106
106
106
The non-voting shares have no voting rights but full rights as to dividends and distribution on winding up.
CHICHESTER HOMES DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
21
Related party transactions
At the balance sheet date the company owed £2,015,677 (2022: £1,099,092) to its shareholders. The above amounts are included in creditors: amounts falling due within one year. Interest is payable at 1.80% on £250,000 and at 3.30% on £859,653 of the loans. The balance of the loans are interest free.
During the year, the company advanced an interest free loan of £nil (2022: £36,616) to one of its directors. This amount is included in debtors. The loan was repaid in April 2023.
22
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
1,571,828
2,749,049
Adjustments for:
Taxation charged
448,056
658,176
Finance costs
36,718
11,134
Investment income
(56,563)
(855)
Gain on disposal of tangible fixed assets
(1,131)
(30,228)
Depreciation and impairment of tangible fixed assets
52,036
50,958
Decrease in provisions
(63,414)
(106,328)
Movements in working capital:
Increase in stocks
(3,452,695)
(1,762,510)
Decrease in debtors
729,730
648,932
Increase/(decrease) in creditors
628,747
(848,799)
Cash (absorbed by)/generated from operations
(106,688)
1,369,529
23
Analysis of changes in net funds
1 October 2022
Cash flows
30 September 2023
£
£
£
Cash at bank and in hand
3,455,643
797,470
4,253,113
Borrowings excluding overdrafts
(1,100,000)
(1,400,000)
(2,500,000)
Obligations under finance leases
(20,273)
4,950
(15,323)
2,335,370
(597,580)
1,737,790
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