Company registration number 01950748 (England and Wales)
HIGHFIELD HOMES OF DISTINCTION LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
PAGES FOR FILING WITH REGISTRAR
HIGHFIELD HOMES OF DISTINCTION LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
HIGHFIELD HOMES OF DISTINCTION LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
5
146,351
223,014
Investments
6
10,200
10,200
156,551
233,214
Current assets
Stocks
7
2,698,670
2,304,977
Debtors
8
2,281,746
2,224,732
Cash at bank and in hand
1,279
1,655
4,981,695
4,531,364
Creditors: amounts falling due within one year
9
(5,050,955)
(4,374,352)
Net current (liabilities)/assets
(69,260)
157,012
Total assets less current liabilities
87,291
390,226
Creditors: amounts falling due after more than one year
10
(38,850)
(84,721)
Net assets
48,441
305,505
Capital and reserves
Called up share capital
2,000
2,000
Profit and loss reserves
46,441
303,505
Total equity
48,441
305,505
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 23 May 2024
Mr D J Watkins
Director
Company Registration No. 01950748
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
1
Accounting policies
Company information
Highfield Homes of Distinction Limited is a private company limited by shares incorporated in England and Wales. The registered office is Highfield House, Holsworthy Beacon, Holsworthy, Devon, EX22 7NF.
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. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Highfield Homes of Distinction Limited is a wholly owned subsidiary of W J Watkins and Son Limited and the results of Highfield Homes of Distinction Limited are included in the consolidated financial statements of W J Watkins and Son Limited.
1.2
Going concern
The company's working capital is primarily funded by a development facility with a third party financial institution and through loans from the company director and other entities under his control. As disclosed in the financial statements of parent company, W.J. Watkins and Son Limited, the company director and his family have also, as required, supported the group as a whole through the introduction of loans and the offering of personal assets as security for third party borrowing.
The going concern status of the company is reliant upon the ongoing financial support of the director, connected persons and businesses and on the development loan providers. On the basis of group-wide financial projections prepared and ongoing dialogue with third party lenders, the director considers that the company has access to adequate financial resources to enable it to continue in operational existence for the foreseeable future and has therefore prepared the financial statements on the going concern basis.
1.3
Turnover
Turnover represents amounts receivable for the sale of properties, construction projects and minor works net of VAT and trade discounts.
Income from the sale of properties is recognised at the point in time when an unconditional contract is signed by the purchaser.
Profit is recognised on contracts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account, turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of the total contract value, which costs to date bear to total expected costs for that contract.
Income from minor works is invoiced on completion.
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 3 -
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and machinery
Assets acquired from parent company: written off over remaining life
Others: 10% per annum on cost
Computer equipment
20% per annum on cost
Motor vehicles
20% per annum on cost
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.
1.5
Fixed asset investments
Interests in subsidiaries 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.
1.6
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.
1.7
Stocks
Stocks and work in progress are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and direct labour costs and, where applicable, those overheads that have been incurred in bringing the stocks and work in progress to their present location and condition.
Work in progress is the accumulated cost of unsold plots. At the point of sale of a property, the relevant accumulated costs are transferred to cost of sales with allowance made for general site development costs to come.
The company operates a policy of capitalising within work in progress, interest and charges incurred on loans taken specifically for the purpose of funding the development of properties.
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.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 4 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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.
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.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.10
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.
1.11
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -
2
Exceptional item
Provision for loss on property development
Sales of completed properties by this company and its 100% subsidiary, Highfield Penscombe Limited. during the year were lower than projected, with the housing market impacted by increases in interest rates and costs of living and works on sites delayed by labour shortages. The building industry has seen significant inflation in the costs of materials and labour in recent years which has impacted on the cost of completed properties for sale and those nearing completion. The extended time taken to complete and sell certain properties has resulted in development loan facilities exceeding projection. In the light of these adverse trading conditions, the carrying value of development work in progress was reviewed again as at the end of the year and a further provision of £350,000 has been introduced for projected losses on the sale of completed properties. This followed a detailed review in the previous year which resulted in the creation of a provision of £565,000 as at 31 October 2022.
Of the amount provided, £200,000 (2022: £565,000) relates to the property development of Highfield Penscombe Limited. This company is the sole supplier to Highfield Penscombe Limited, with all materials, labour, finance and other costs borne by this company and recharged via an intercompany loan account. As such, the projected loss has been accounted for within administrative expenses as a provision for an irrecoverable debtor.
The remaining provision of £150,000 relates to one of this company's own developments and has been accounted for within cost of sales.
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 6 -
3
Judgements and estimates
In the application of the company’s accounting policies, the director is 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Net realisable value and impairment of property work in progress
The director exercises judgement in projecting the costs to completion and sales values of properties under construction and consequently in adjustments for the impairment of work in progress when it is anticipated that total development costs will exceed total sales values. An adjustment for impairment is made to work in progress to write down the value to a level that, allowing for projected future costs and sales values, will produce an overall break even result for the development in question. Each property development is assessed for impairment on an individual basis and projected profits on one project are not used to offset projected losses on another.
In assessing impairment of work in progress, the director is required to estimate future costs and the timing and value of future sales. Factors beyond the directors’ control can impact upon the actual outcome compared to the original estimates. Changes to the price and availability of materials and labour can be driven by general market forces. Rising interest rates and the cost of living might impact upon demand for completed properties and the timing of sales. In estimating expected sales values, the director takes appropriate advice from property agents. However, general economic factors can result in variances from expectation. Delays to the timing of completed property sales mean that costs will increase, in particular, in relation to development loan interest.
In assessing work in progress for impairment, the director has used the best information available to him as at the date of approving the financial statements. However, there remains the possibility that factors beyond his control may result in material divergence of actual results from projections.
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
12
12
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 November 2022
698,842
Disposals
(119,640)
At 31 October 2023
579,202
Depreciation and impairment
At 1 November 2022
475,828
Depreciation charged in the year
41,872
Eliminated in respect of disposals
(84,849)
At 31 October 2023
432,851
Carrying amount
At 31 October 2023
146,351
At 31 October 2022
223,014
6
Fixed asset investments
2023
2022
£
£
Investment in 100% subsidiary company
10,200
10,200
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 November 2022 & 31 October 2023
10,200
Carrying amount
At 31 October 2023
10,200
At 31 October 2022
10,200
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
7
Stocks
2023
2022
£
£
Work in progress
2,698,670
2,304,977
Work in progress includes bank interest and charges totalling £244,407 (2022: £249,390) in connection with the building development loan.
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
6,286
684
Amounts owed by group undertakings
1,857,803
1,887,392
Other debtors
417,657
336,656
2,281,746
2,224,732
9
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
10,204
9,726
Obligations under finance leases
34,686
34,003
Other borrowings
2,992,824
3,167,710
Trade creditors
141,710
226,547
Amounts due to group undertakings
64,028
Other taxation and social security
14,840
19,426
Other creditors
1,733,778
752,338
Accruals and deferred income
122,913
100,574
5,050,955
4,374,352
Other borrowings totalling £2,578,073 (2022: £2,752,959) are secured, by fixed and floating charges, on assets owned by the company and its subsidiary and by a personal guarantee provided by the company director, supported by certain of his own assets.
Bank loans are secured by a limited guarantee over the assets of the parent company W. J. Watkins & Son Limited.
Finance lease and hire purchase creditors are secured upon the assets to which they relate.
HIGHFIELD HOMES OF DISTINCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
10
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
15,658
26,938
Obligations under finance leases
23,192
57,783
38,850
84,721
Finance lease and hire purchase creditors are secured upon the assets to which they relate.
Bank loans are secured by a limited guarantee over the assets of the parent company W. J. Watkins & Son Limited.
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
The senior statutory auditor was Jonathan Williams BSc ACA CTA.
The auditor was Simpkins Edwards Audit LLP.
12
Parent company
Highfield Homes of Distinction Limited is a wholly owned subsidiary of ultimate parent company W J Watkins and Son Limited. The results of Highfield Homes of Distinction Limited are included in the consolidated financial statements of W J Watkins and Son Limited whose registered office is Highfield House, Holsworthy Beacon, Holsworthy, Devon, EX22 7NF.
2023-10-312022-11-01false24 May 2024CCH SoftwareCCH Accounts Production 2024.100No description of principal activityThis audit opinion is unqualifiedMr D J WatkinsMr D J Watkinsfalsefalse019507482022-11-012023-10-31019507482023-10-31019507482022-10-3101950748core:OtherPropertyPlantEquipment2023-10-3101950748core:OtherPropertyPlantEquipment2022-10-3101950748core:CurrentFinancialInstrumentscore:WithinOneYear2023-10-3101950748core:CurrentFinancialInstrumentscore:WithinOneYear2022-10-3101950748core:CurrentFinancialInstruments2023-10-3101950748core:CurrentFinancialInstruments2022-10-3101950748core:Non-currentFinancialInstruments2023-10-3101950748core:Non-currentFinancialInstruments2022-10-3101950748core:ShareCapital2023-10-3101950748core:ShareCapital2022-10-3101950748core:RetainedEarningsAccumulatedLosses2023-10-3101950748core:RetainedEarningsAccumulatedLosses2022-10-3101950748bus:CompanySecretaryDirector12022-11-012023-10-3101950748core:PlantMachinery2022-11-012023-10-3101950748core:ComputerEquipment2022-11-012023-10-3101950748core:MotorVehicles2022-11-012023-10-3101950748direp:SexPreferNotToDisclose2023-10-31019507482021-11-012022-10-3101950748core:OtherPropertyPlantEquipment2022-10-3101950748core:OtherPropertyPlantEquipment2022-11-012023-10-3101950748core:WithinOneYear2023-10-3101950748core:WithinOneYear2022-10-3101950748bus:PrivateLimitedCompanyLtd2022-11-012023-10-3101950748bus:SmallCompaniesRegimeForAccounts2022-11-012023-10-3101950748bus:FRS1022022-11-012023-10-3101950748bus:Audited2022-11-012023-10-3101950748bus:Director12022-11-012023-10-3101950748bus:CompanySecretary12022-11-012023-10-3101950748bus:FullAccounts2022-11-012023-10-31xbrli:purexbrli:sharesiso4217:GBP