Company registration number 11327247 (England and Wales)
TORSION DEVELOPMENTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
TORSION DEVELOPMENTS LIMITED
COMPANY INFORMATION
Directors
M M E H Dearden
D T Spencer
D W Worsley
Company number
11327247
Registered office
1280 Century Way
Thorpe Park
Leeds
LS15 8ZB
Auditor
Sumer Auditco Limited
The Beehive
City Place
Gatwick
RH6 0PA
TORSION DEVELOPMENTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 27
TORSION DEVELOPMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

 

Torsion Developments Limited (TDL) (“the company”) is a privately-owned property development business specialising in developing multi room developments including purpose-built student accommodation (PBSA), build-to-rent (BTR) and residential property throughout the UK.

Review of the business

The Company has had another successful year which has seen its investment portfolio grow to £11.4m (2022: £10.6m). Profit before tax for the year is £3.1m (2022: £0.8m).

Since the company was established in 2018 the Gross Development Value (GDV) of completed schemes now stands at £190m with a further £229m GDV currently under development. A pipeline of £445m has been secured for delivery before 2027 primarily focusing in the Residential and Alternative Living Sectors.

In 2023, TDL entered into an agreement with ZSL Capital Limited for a portfolio of 4 Purpose Built Student Accommodation schemes, consisting of 608 beds and a GDV in excess of £120m which will be delivered by September 2025. The Joint Venture has expanded further with an additional secured 297 Beds scheme taking the guaranteed JV bed numbers on exit to 905 beds. In addition, TDL have submitted planning for an additional 630 beds in key target university cities.

Also within the Company’s portfolio is The Phoenix, Leeds. This is the Company’s first Build-To-Rent (BTR) scheme and is currently in the construction phase with delivery and go live for September 2024. Further expansion into the BTR sector has continued in 2023 with a new Joint Venture being formed with Housing Growth Partnership for the delivery of 234 units in Sheffield - this is scheduled for completion and go live in the first quarter of 2026.

Part of what makes the Company successful at delivering the schemes is the close relationship with its sister companies Torsion Construction Limited and Torsion Students Ltd, providing a fully integrated service of Develop, Construct and Operate. This close relationship allows for transparency on programme, price and investment protection.

2023 has also seen TDL invest heavily into new ESG technology for its existing portfolio including building monitoring and certification of 2 Assets achieving the best-in-class award for Fit well 3 stars.

Principal risks and uncertainties

Whilst inflationary costs pressures have eased in the current development sector, uncertainty remains given ongoing global conflicts and the impact of any policy initiatives from the new government. Interest rates appear to have peaked but the impact on inflation remains to be seen. The Company limits its exposure by engaging its sister company, Torsion Construction Limited, under pre-construction services agreements to limit price risks through designing to a budget and early procurement protocols with key subcontractors and suppliers.

Key performance indicators

The company uses a range of financial and non-financial indicators. These are set out below:

The level of profitability is a key metric. The profit before tax for the year is £3.1m (2022: £0.8m). This has principally been generated by the fair value of our investments.

 

The company has net assets of £10.9m (2022: £8.1m) which recognises the market value of our investments. This fairly reflects the size and scope of the company, as well as our commitment to future sustainable growth.

 

The total portfolio includes 905 student beds and 401 BTR apartments with an aspiration to deliver in excess of 1,000 beds and additional 500 BTR and BTS Apartments by 2027.

TORSION DEVELOPMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Strategy

The company remains focused on market sectors where we have expertise and a proven track record, namely the student accommodation and residential sectors.

The commitment and dedication of our staff is critical to the ongoing success of the company. We continue to strengthen the management team through internal promotions wherever possible and strategic recruitment to support the growth of the business. This is reflected in the promotion of Edward Wooton in July 2024 to Managing Director of Torsion Developments alongside his same role in Torsion Construction ensuring the businesses work in an efficient and joined up manner.

Summary

The directors are delighted with the company’s performance in the year to continue to grow its investment portfolio in what remains a challenging economic and politically uncertain climate. The strategy is in place to ensure we maintain our reputation of delivering first-class, high-quality developments. Our exceptional management team, allied with secured workload and a strong pipeline of development opportunities position the company well to continue to grow in a sustainable, controlled manner.

On behalf of the board

D W Worsley
Director
24 September 2024
TORSION DEVELOPMENTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of property development in the UK.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £324,027. 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:

M M E H Dearden
D T Spencer
D W Worsley
Auditor

Sumer Auditco Limited were appointed as auditor of the company following the transfer of the audit business from Cowgill Holloway LLP, and are deemed to be reappointed under section 487 (2) of the Companies Act 2006.

Statement of directors' responsibilities

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:

 

 

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

Statement 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.

TORSION DEVELOPMENTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
D W Worsley
Director
24 September 2024
TORSION DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TORSION DEVELOPMENTS LIMITED
- 5 -
Opinion

We have audited the financial statements of Torsion Developments Limited (the 'company') for the year ended 31 December 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

Other information

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:

TORSION DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TORSION DEVELOPMENTS LIMITED
- 6 -
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:

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.

 

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

 

Secondly, the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: laws related to health and safety, employment and compliance with building and construction regulations.

TORSION DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TORSION DEVELOPMENTS LIMITED
- 7 -

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

Stuart Stead
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
25 September 2024
Statutory Auditor
The Beehive
City Place
Gatwick
RH6 0PA
TORSION DEVELOPMENTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
3,148,228
549,229
Cost of sales
(5,557)
(215,779)
Gross profit
3,142,671
333,450
Administrative expenses
(1,892,015)
(786,866)
Operating profit/(loss)
4
1,250,656
(453,416)
Interest receivable and similar income
7
(181,381)
321,380
Interest payable and similar expenses
8
(1,530,315)
(596,736)
Movement in investments
9
3,534,498
1,548,752
Profit before taxation
3,073,458
819,980
Tax on profit
10
(393)
(389,130)
Profit for the financial year
3,073,065
430,850

The profit and loss account has been prepared on the basis that all operations are continuing operations.

TORSION DEVELOPMENTS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
12
7,161
4,759
Investments
13
11,423,863
10,603,792
11,431,024
10,608,551
Current assets
Stocks
16
54,387
-
Debtors falling due after more than one year
17
-
0
3,763,558
Debtors falling due within one year
17
11,014,629
2,245,998
Cash at bank and in hand
3,515,320
1,745,005
14,584,336
7,754,561
Creditors: amounts falling due within one year
18
(13,683,421)
(10,073,244)
Net current assets/(liabilities)
900,915
(2,318,683)
Total assets less current liabilities
12,331,939
8,289,868
Creditors: amounts falling due after more than one year
19
(1,477,979)
(184,946)
Net assets
10,853,960
8,104,922
Capital and reserves
Called up share capital
22
105
105
Profit and loss reserves
10,853,855
8,104,817
Total equity
10,853,960
8,104,922

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
D W Worsley
Director
Company registration number 11327247 (England and Wales)
TORSION DEVELOPMENTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
105
8,206,706
8,206,811
Year ended 31 December 2022:
Profit and total comprehensive income
-
430,850
430,850
Dividends
11
-
(532,739)
(532,739)
Balance at 31 December 2022
105
8,104,817
8,104,922
Year ended 31 December 2023:
Profit and total comprehensive income
-
3,073,065
3,073,065
Dividends
11
-
(324,027)
(324,027)
Balance at 31 December 2023
105
10,853,855
10,853,960
TORSION DEVELOPMENTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
78,354
1,396,968
Interest paid
(1,530,315)
(596,736)
Income taxes paid
-
0
(2,419,969)
Net cash outflow from operating activities
(1,451,961)
(1,619,737)
Investing activities
Purchase of tangible fixed assets
(5,007)
(5,208)
Proceeds from disposal of subsidiaries
(6)
1
Proceeds from disposal of joint ventures
(3,510,225)
1,012,052
Proceeds from disposal of investments
6,224,658
275,886
Repayment of loans
283,985
(334,180)
Interest received
(181,381)
321,380
Net cash generated from investing activities
2,812,024
1,269,931
Financing activities
Repayment of borrowings
744,169
2,341,886
Repayment of bank loans
(9,890)
(9,647)
Dividends paid
(324,027)
(532,739)
Net cash generated from financing activities
410,252
1,799,500
Net increase in cash and cash equivalents
1,770,315
1,449,694
Cash and cash equivalents at beginning of year
1,745,005
295,311
Cash and cash equivalents at end of year
3,515,320
1,745,005
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Torsion Developments Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1280 Century Way, Thorpe Park, Leeds, LS15 8ZB.

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, modified to include the revaluation of certain financial instruments 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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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 and fittings
Straight line over 3 years

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, associates and jointly controlled entities are initially measured at cost and subsequently measured at fair value at each reporting date.

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

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.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

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.

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, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
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.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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
Cash and cash equivalents

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.

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

 

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.

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.

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.

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

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.

1.10
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.

1.11
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 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.

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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 profit and loss account, 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.

1.12
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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
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.

Retentions

The directors must assess the likelihood of recovering retentions from customers and accrue any relevant costs that may be necessary in order to recover these. No such costs have been accrued in the reporting or comparative year.

Contingent income

The company carries debtors on its balance sheet which relate to monies lent to subsidiaries and joint ventures in order to fund property development projects in those companies. The recoverability of these debtors is dependent on the final success of the projects and so the directors must consider the expectations for such projects and, if necessary, write down the debtors to the amounts expected to be finally recovered. No such write downs have been made to these debtor balance in the reporting or comparative year.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Management fees
1,763,137
549,229
Profit Share on Completion of Project
1,385,091
-
3,148,228
549,229
2023
2022
£
£
Other revenue
Interest income
(181,381)
321,380
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
5,000
12,000
Depreciation of owned tangible fixed assets
2,605
460
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
9
8

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
514,534
369,175
Social security costs
55,472
41,417
Pension costs
51,168
43,719
621,174
454,311
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
21,600
21,600
Company pension contributions to defined contribution schemes
30,666
28,116
52,266
49,716
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
(181,381)
321,380
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
1,530,315
596,736
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Gain on financial assets held at fair value through profit or loss
1,382,378
1,548,752
Other gains/(losses)
Gain on disposal of investments held at fair value
2,152,120
-
3,534,498
1,548,752
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
393
-
0
Deferred tax
Origination and reversal of timing differences
-
0
389,130
Total tax charge
393
389,130

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
3,073,458
819,980
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
768,365
155,796
Tax effect of expenses that are not deductible in determining taxable profit
3,550
(275)
Tax effect of income not taxable in determining taxable profit
(896,952)
-
0
Unutilised tax losses carried forward
126,307
-
0
Change in unrecognised deferred tax assets
-
0
184,498
Effect of change in corporation tax rate
-
0
49,111
Permanent capital allowances in excess of depreciation
(1,270)
-
0
Other permanent differences
393
-
0
Taxation charge for the year
393
389,130
11
Dividends
2023
2022
£
£
Interim paid
324,027
532,739
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 January 2023
18,256
Additions
5,007
At 31 December 2023
23,263
Depreciation and impairment
At 1 January 2023
13,497
Depreciation charged in the year
2,605
At 31 December 2023
16,102
Carrying amount
At 31 December 2023
7,161
At 31 December 2022
4,759
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
206
200
Investments in joint ventures
15
8,035,257
4,525,032
Unlisted investments
3,388,400
6,078,560
11,423,863
10,603,792
Fixed asset investments revalued

The historical cost of these investments total £2,519,557 (2022: £3,366,642). The total revaluation in the year amounted to £1,382,379 (2022: £1,548,752) and is included within the profit and loss account.

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 21 -
Movements in fixed asset investments
Shares in subsidiaries and joint ventures
Other investments
Total
£
£
£
Cost or valuation
At 1 January 2023
5,915,618
6,077,170
11,992,788
Additions
765,655
549,158
1,314,813
Valuation changes
4,409,073
1,736,251
6,145,324
Transfers
80,000
-
80,000
Disposals
(642,229)
(4,541,506)
(5,183,735)
At 31 December 2023
10,528,117
3,821,073
14,349,190
Impairment
At 1 January 2023
1,390,386
(1,390)
1,388,996
Impairment losses
1,102,268
434,063
1,536,331
At 31 December 2023
2,492,654
432,673
2,925,327
Carrying amount
At 31 December 2023
8,035,463
3,388,400
11,423,863
At 31 December 2022
4,525,232
6,078,560
10,603,792
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Torsion Students Limited
1
Ordinary
100.00
-
Torsion (Index House) Limited
1
Ordinary
100.00
-
Torsion (Index House) Devco Limited
1
Ordinary
-
100.00
Torsion (Flax Place) Limited
1
Ordinary
100.00
-
Torsion (Curzon Circle) Limited
1
Ordinary
100.00
-
Torsion (Tritton Road) Limited
1
Ordinary
100.00
-
Torsion DR2H (RQ) Limited
1
Ordinary
100.00
-
Torsion DR2H Devco Limited
1
Ordinary
-
100.00
HGP Torsion Holdco Limited
1
Ordinary
100.00
-
Torsion (Hollis Croft) Limited
1
Ordinary
-
100.00

Registered office addresses (all UK unless otherwise indicated):

1
1280 Century Way, Thorpe Park, Leeds, United Kingdom, LS15 8ZB
15
Joint ventures

Details of the company's joint ventures at 31 December 2023 are as follows:

Name of undertaking
Registered office
Interest
% Held
held
Direct
Indirect
Torsion (Phoenix Holdco) Limited
1
Ordinary A
40.00
-
Torsion (Burnsall Road) Limited
1
Ordinary
-
50.00
Zenzic Torsion JV Co Limited
1
Ordinary B
50.00
-

Registered office for all of the above:

 

1 - 1280 Century Way, Thorpe Park, Leeds, LS15 8ZB

16
Stocks
2023
2022
£
£
Work in progress
54,387
-
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
283,956
433,251
Corporation tax recoverable
-
0
393
Amounts owed by group undertakings
1,562,050
391,435
Amounts owed by undertakings in which the company has a participating interest
7,245,156
463,127
Other debtors
1,864,774
945,912
Prepayments and accrued income
58,693
11,880
11,014,629
2,245,998
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by undertakings in which the company has a participating interest
-
0
3,763,558
Total debtors
11,014,629
6,009,556
18
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
20
10,140
9,890
Other borrowings
20
4,802,983
5,361,987
Trade creditors
349,593
228,438
Amounts owed to group undertakings
-
0
563,104
Taxation and social security
57,114
52,673
Other creditors
8,043,141
3,644,615
Accruals and deferred income
420,450
212,537
13,683,421
10,073,244
19
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
20
14,806
24,946
Other borrowings
20
1,463,173
160,000
1,477,979
184,946
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
20
Loans and overdrafts
2023
2022
£
£
Bank loans
24,946
34,836
Other loans
6,266,156
5,521,987
6,291,102
5,556,823
Payable within one year
4,813,123
5,371,877
Payable after one year
1,477,979
184,946

The bank loan is a government backed Bounce Back loan and is repayable in instalments over 5 years after a 1 year repayment holiday.

 

Other loans are secured by way of guarantees.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
51,168
43,719

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.

22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A Shares of 1p each
7,500
7,500
75
75
Ordinary B Shares of 1p each
2,000
2,000
20
20
Ordinary C Shares of 1p each
500
500
5
5
Ordinary D Shares of 1p each
490
490
4.90
4.90
10,490
10,490
105
105

The holders of ordinary D shares are not entitled to vote at shareholders' meetings. The ordinary D shares are not entitled to a distribution of capital in excess of £50,000,000. In all other respects, the ordinary D shares rank parri passu with the A shares, B shares and C shares. The A shares, B shares and C shares rank parri passu in all respects and have the same rights attached to them.

23
Financial commitments, guarantees and contingent liabilities

Phoenix Estate Limited holds a charge over the company's investment in and loan notes relating to the Phoenix scheme. At 31 December 2023, these accounts include a value of investment relating to the scheme at its fair value of £3,128,812 (2022: £4,075,927) and loan notes due relating to the scheme of £80,000 (2022: £2,400,000).

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
24
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

2023
2022
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
-
171,669
Other related parties
8,022,930
3,567,751

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
8,807,206
452,169
Other related parties
85,808
4,460,257
25
Directors' transactions

Interest free loans have been granted by the company to its directors as follows:

Dividends totalling £324,027 (2022 - £532,739) were paid in the year in respect of shares held by the company's directors.

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan
-
-
124,681
(124,506)
175
Directors loan
-
334,180
537,000
(821,180)
50,000
Directors loan
-
-
199,562
(199,541)
21
334,180
861,243
(1,145,227)
50,196
26
Ultimate controlling party

The ultimate controlling party is Mr D T Spencer by virtue of the fact of his majority shareholding.

27
Prior period adjustment

During the year, the Directors determined the impact of corporation tax on the valuation of investments should be measured within the fair value assessment rather than via a deferred tax provision, this required a prior period adjustment to restate the figures for year ended 31 December 2022. This ultimately resulted in an overall reduction in prior year profits by £184,498.

 

TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
27
Prior period adjustment
(Continued)
- 26 -
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Fixed assets
Investments
13,016,175
(2,412,383)
10,603,792
Provisions for liabilities
Deferred tax
(2,227,885)
2,227,885
-
0
Net assets
8,289,420
(184,498)
8,104,922
Capital and reserves
Profit and loss reserves
8,289,315
(184,498)
8,104,817
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Taxation
(204,632)
(184,498)
(389,130)
Profit for the financial period
615,348
(184,498)
430,850
Reconciliation of changes in equity
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Prior period adjustment
-
(184,498)
Equity as previously reported
8,206,811
8,289,420
Equity as adjusted
8,206,811
8,104,922
Analysis of the effect upon equity
Profit and loss reserves
-
(184,498)
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Prior period adjustment
(184,498)
Profit as previously reported
615,348
Profit as adjusted
430,850
TORSION DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
28
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
3,073,065
430,850
Adjustments for:
Taxation charged
393
389,130
Finance costs
1,530,315
596,736
Investment income
181,381
(321,380)
Depreciation and impairment of tangible fixed assets
2,605
460
Other gains and losses
(3,534,498)
(1,548,752)
Movements in working capital:
Increase in stocks
(54,387)
-
0
(Increase)/decrease in debtors
(5,289,451)
413,689
Increase in creditors
4,168,931
1,436,235
Cash generated from operations
78,354
1,396,968
29
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,745,005
1,770,315
3,515,320
Borrowings excluding overdrafts
(5,556,823)
(734,279)
(6,291,102)
(3,811,818)
1,036,036
(2,775,782)
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