Company registration number 02263367 (England and Wales)
Arrowmere Capital (Lancaster) Limited
financial statements
For the year ended 31 December 2023
Arrowmere Capital (Lancaster) Limited
Contents
Page
Statement of financial position
1
Notes to the financial statements
2 - 7
Arrowmere Capital (Lancaster) Limited
Statement of financial position
As at 31 December 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
5
17,526,989
14,547,435
Current assets
Debtors
6
7,763,596
8,047,653
Cash at bank and in hand
265,670
174,511
8,029,266
8,222,164
Creditors: amounts falling due within one year
7
(10,130,886)
(8,258,566)
Net current liabilities
(2,101,620)
(36,402)
Total assets less current liabilities
15,425,369
14,511,033
Creditors: amounts falling due after more than one year
8
(8,419,740)
(7,507,250)
Provisions for liabilities
9
(803,210)
(803,210)
Net assets
6,202,419
6,200,573
Capital and reserves
Called up share capital
11
100,000
100,000
Profit and loss reserves
6,102,419
6,100,573
Total equity
6,202,419
6,200,573
The directors of the company have elected not to include a copy of the income statement 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 by the board of directors and authorised for issue on 19 September 2024 and are signed on its behalf by:
Mr S J Ashworth
Mr A C Park
Director
Director
Company registration number 02263367 (England and Wales)
Arrowmere Capital (Lancaster) Limited
Notes to the financial statements
For the year ended 31 December 2023
- 2 -
1
Accounting policies
Company information
Arrowmere Capital (Lancaster) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 40 Peter Street, Manchester, England, M2 5GP.
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 the revaluation of investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Turnover
Turnover comprises revenue recognised by the company in respect of property rental income (comprising rents, service charge and insurance rents) accounted for on an accruals basis, all net of VAT.
1.3
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:
Plant and equipment
4, 7 and 8 years straight line
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.
1.4
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value at the reporting date. The surplus or deficit on revaluation is recognised in the profit and loss account. Deferred tax is provided on these gains at the rate expected to apply when the property is sold.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.
Arrowmere Capital (Lancaster) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 3 -
1.5
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 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.
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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
1.6
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Arrowmere Capital (Lancaster) Limited
Notes to the financial statements (continued)
For the year ended 31 December 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 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.
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Valuation of investment property
Investment property is measured using the fair value model and as such requires significant judgement from the directors. The valuation has been based on the directors knowledge of the portfolio of investment properties taking account of geographical locations, estimated rental values and external valuations undertaken in the period.
Apportionment of loan
The loan balance seen within creditors has been apportioned between the company, other group companies and a company under common control based on the directors' assessment of the value of the respective companies' investment property and stock holdings.
Arrowmere Capital (Lancaster) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 5 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023 and 31 December 2023
6,929
Depreciation and impairment
At 1 January 2023 and 31 December 2023
6,929
Carrying amount
At 31 December 2023
At 31 December 2022
5
Investment property
2023
£
Fair value
At 1 January 2023
14,547,434
Additions
2,979,555
At 31 December 2023
17,526,989
The fair value of the investment property has been determined by the directors of the company, on an open market value for existing use basis. The valuation has been based on the directors' knowledge of the portfolio of investment properties taking account of the geographical locations and their estimated rental value.
The company's investment properties were valued in September 2021 by an external professional valuer. The third party valuation is not materially different to the value in the financial statements.
Arrowmere Capital (Lancaster) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 6 -
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
126,798
75,630
Amounts owed by group undertakings
7,543,036
7,639,099
Amounts owed to related undertakings
12,000
12,000
Other debtors
81,762
320,924
7,763,596
8,047,653
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
3,889,179
1,542,941
Amounts owed to group undertakings
5,283,681
5,317,099
Amounts owed to related undertakings
666,932
630,359
Corporation tax
10,280
10,021
Other creditors
52,925
21,656
Accruals and deferred income
227,889
736,490
10,130,886
8,258,566
8
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
8,419,740
7,507,250
Bank loans of £8,419,740 (2022: £7,507,250) disclosed under creditors falling due after more than one year were secured by the company by way of fixed charges over the investment property.
9
Provisions for liabilities
2023
2022
£
£
Deferred tax liabilities
10
803,210
803,210
Arrowmere Capital (Lancaster) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 7 -
10
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Revaluations
803,210
803,210
There were no deferred tax movements in the year.
11
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
12
Reserves
Included within profit and loss reserves are non-distributable reserves of £5,547,886 (2022: £5,547,886).
13
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.
Senior Statutory Auditor:
Susan Redmond FCA
Statutory Auditor:
DJH Audit Limited
14
Financial commitments, guarantees and contingent liabilities
The company has given a cross guarantee in respect of a loan facility provided to Crystal Homes 2 Limited, Arrowmere Capital 9 Limited and Merepoint Capital Limited. At 31 December 2023 an amount of £19,971,656 (2022: £19,340,205) was outstanding in respect of this facility.
15
Ultimate parent company
The company is a 100% owned subsidiary of Arrowmere Holdings Limited, which is the ultimate parent company. The ultimate parent company prepares consolidated financial statements as at 31 December 2023 and these financial statements may be obtained from 40 Peter Street, Manchester, M2 5GP.