Company registration number 04166304 (England and Wales)
TERRAMEK LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
PAGES FOR FILING WITH REGISTRAR
TERRAMEK LIMITED
CONTENTS
Page
Statement of financial position
1 - 2
Notes to the financial statements
3 - 10
TERRAMEK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
31 March 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
3
4,666
3,481
Investment property
4
5,325,124
7,814,122
Investments
5
102
102
5,329,892
7,817,705
Current assets
Stocks
1,820,877
1,721,074
Debtors
6
5,964,044
6,150,880
Cash at bank and in hand
114,271
36,985
7,899,192
7,908,939
Creditors: amounts falling due within one year
7
(3,089,509)
(5,226,767)
Net current assets
4,809,683
2,682,172
Total assets less current liabilities
10,139,575
10,499,877
Creditors: amounts falling due after more than one year
8
(2,819,803)
(2,733,876)
Provisions for liabilities
(246,543)
(355,003)
Net assets
7,073,229
7,410,998
Capital and reserves
Called up share capital
9
200
200
Other reserves
10
1,420,603
2,289,227
Profit and loss reserves
10
5,652,426
5,121,571
Total equity
7,073,229
7,410,998
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
For the financial year ended 31 March 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
TERRAMEK LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2023
31 March 2023
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 26 November 2023 and are signed on its behalf by:
S C Kelly
G Macari
Director
Director
Company Registration No. 04166304
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
1
Accounting policies
Company information
Terramek Limited is a private company limited by shares incorporated in England and Wales. The registered office is 30 City Road, London, EC1Y 2AB. The principal place of business is Wenman's Cottage, Glassenbury Road, Kent, TN17 2QF.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.
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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for the sale of development properties, net of VAT, and rents receivable from properties held for investment, net of VAT, where applicable.
Turnover from sales of properties is included on the basis of completions occurring during the year.
Turnover from rents receivable is recognised at the fair value of the rents received or receivable based on the rent agreements and to the extent that it is probable that the economic benefits will flow to the company and it can be reliably measured.
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:
Fixtures, fittings & equipment
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.
The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 4 -
1.5
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
The fair value is determined by the directors with the benefit of professional external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any differences in the nature or location of the specified asset.
1.6
Fixed asset investments
Interests in subsidiaries 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 company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 5 -
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include 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, 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.
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.
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, and loans from fellow group companies 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 6 -
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grant represents the fair value of the income received or receivable from the furlough scheme introduced by the UK Government due to the pandemic caused by COVID-19.
Income from the furlough scheme is recognised in the period the furlough income relates to and is recorded as part of 'other income'.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
2
4
3
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 April 2022
12,354
Additions
2,099
At 31 March 2023
14,453
Depreciation and impairment
At 1 April 2022
8,873
Depreciation charged in the year
914
At 31 March 2023
9,787
Carrying amount
At 31 March 2023
4,666
At 31 March 2022
3,481
4
Investment property
2023
£
Fair value
At 1 April 2022
7,814,122
Additions
20,795
Disposals
(2,353,079)
Revaluations
(156,714)
At 31 March 2023
5,325,124
The fair value of investment properties at the reporting date was based on a valuation carried out by the directors. The valuation was arrived at by reference to market evidence of transaction prices for similar properties in its location, together with a review of property rental yields. No depreciation is provided in respect of these properties.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
4
Investment property
(Continued)
- 8 -
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2023
2022
£
£
Cost
3,826,183
5,338,095
Accumulated depreciation
-
-
Carrying amount
3,826,183
5,338,095
5
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
102
102
Fixed asset investments comprise equity shares in subsidiary undertakings that are not publicly traded.
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
43,143
67,692
Amounts owed by group undertakings
518,912
539,870
Other debtors
5,401,989
5,543,318
5,964,044
6,150,880
Trade debtors disclosed above are measured at amortised cost.
Trade debtors are stated after provision for impairment of £18,432 (2022: £33,356 ).
Included within amounts due from fellow group undertakings is a loan balance of £518,912 (2022: £539,870) that is unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Included within other debtors is a loan balance of £151,675 (2022: £142,283 ) due to the directors' of the company. Interest is charged at the HM Revenue & Customs official rate. The loan is unsecured, have no fixed date of repayment and repayable on demand.
Included within other debtors are loan balances of £4,838,104 (2022: £4,835,947 ) that is unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Included within other debtors is a secured loan balances of £130,000 (2022: £130,000). Interest is charged at a rate of 6% above base rate per annum and is repayable on demand.
Included within other debtors is a secured loan balances of £225,000 (2022: £225,000). Interest is charged at a rate of 10% per annum and is repayable on demand.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
7
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
1,240,000
3,456,000
Trade creditors
15,975
7,880
Amounts owed to group undertakings
688,980
768,052
Taxation and social security
135,089
31,275
Other creditors
1,009,465
963,560
3,089,509
5,226,767
The bank loan is secured by a fixed and floating charge over the assets owned by the company and its subsidiaries. In addition, the directors have provided a personal guarantee of £1,350,000 and there is a cross guarantee over assets held by group companies.
Included within other creditors is a loan balances of £100,000 (2022: £100,000) that is unsecured, has interest payable at a rate of 7% per annum, have no fixed date of repayment and repayable on demand.
Included within other creditors are loan balances of £736,344 (2022: £736,411 ) that are unsecured, interest free and repayable on demand.
Aggregate secured liabilities are £1,240,000 (2022: £3,456,000 ).
8
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other creditors
2,819,803
2,733,876
The bank loan is secured by a fixed and floating charge over the assets owned by the company. In addition, the directors have provided a personal guarantee of £1,350,000 and there is a cross guarantee over assets held by group companies.
Included within other creditors is a balance of £1,072,658 (2022: £1,012,658 ) due to a connected company. The balance is unsecured and is repayable 3-5 years from 20 January 2022. Interest is charged at 5% per annum.
Other creditors includes a loan and deferred consideration of £1,747,145 (2022: £1,721,218) due to the company's pension scheme 'The TKP Scheme'. This loan is secured by personal guarantees provided by the directors and a charge over their shares in the company. Interest at 2.5% is charged per annum.
Aggregate secured liabilities are £1,747,145 (2022: £1,721,218 ).
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
200
200
200
200
There is a single class of Ordinary shares. there are no restrictions on the distribution of dividends and repayment of capital.
TERRAMEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
10
Reserves
Other Reserves
Other reserves relates to non-distributable reserves arising from revaluation of investment property less deferred tax.
Profit and loss reserves
Retained earnings represent accumulated comprehensive income for the year and prior periods less dividends paid.
11
Related party transactions
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
688,980
768,052
Other related parties
3,556,147
3,470,287
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
518,912
539,870
Key management personnel
151,675
142,283
Other related parties
4,838,104
4,835,948
12
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Loan account 2
2.00
13,713
192,376
1,180
(142,867)
64,402
Loan Account 1
2.00
128,570
181,770
2,429
(225,493)
87,276
142,283
374,146
3,609
(368,360)
151,678