Hurstwood Estates Limited
Annual report and financial statements
For the year ended 31 December 2023
Hurstwood Estates Limited
Company information
Directors
Mr S J Ashworth
Mr H P Hill
Mr A C Park
Mr S D Ashworth
Ms A L Beaumont
Secretary
Mrs J Black
Company number
05861382
Registered office
40 Peter Street
Manchester
England
M2 5GP
Auditor
DJH Audit Limited
St George's House
56 Peter Street
Manchester
M2 3NQ
Hurstwood Estates Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
Hurstwood Estates Limited
Strategic report
For the year ended 31 December 2023
- 1 -

The Board of Directors are pleased to present their report and financial statements for Hurstwood Estates for the period ended 31 December 2023.

 

The principal activities of the Company are Commercial Property Investment, House Building and Commercial Development.

 

Review of the business

2023 has been a strong year despite the uncertainties in the market. The Directors are delighted with the performance of the Business with budgets met and exceeded in most areas. Our proven ability to manage an intensive commercial investment portfolio amidst the constraints and risks of what is still a relatively challenging economic situation are what make us unique. As Chairman, I would like to thank my team of staff and Directors for their amazing dedication and performance throughout the year.

 

2023 has seen market conditions become more challenging with steeply rising inflation and interest rate rises, but the directors have continued to take advantage of opportunities whilst consolidating previous gains.

 

The Business has recorded a profit for the 11th consecutive year as it continues to benefit from a well occupied and managed investment portfolio and low interest rate environment. The business’s key income stream of rental income remains very stable despite the underlying churn of short term leases, driven by the demands of the market, however this does leave us well placed to drive forward as we have done where occupier demand has improved.

 

The risks to the Business in the future remain as previously stated, largely client retention and interest rate risk and the Board of Directors continues to assess their strategy to mitigate these risks on an ongoing basis. We have significantly reduced the Gearing risk with strong amortisation in the last 5 years and this is set to continue in the year ahead, thus creating further balance sheet strength.

Principal risks and uncertainties

Cash Flow Risk

 

Cash flow is a key part of the business, as with any business, and we monitor this on a weekly basis. We do not commit to any projects until a full cash flow impact is performed and approved by the Board.

 

 

Credit Risk

 

We have built a solid reputation with our suppliers over the past 12 years and are on good terms with them. We do not rely on a single supplier. We have regular communication with our key suppliers to ensure the relationship remains on track and works for both parties.

Key performance indicators

Indicator        2023     2022

 

Turnover        £15.17m     £13.7m

Net profit margin    0.55%     0.55%        

    

Conclusion

 

Hurstwood Estates continues to perform well and grow organically whilst reducing its overall gearing. Future growth is targeted for 2024 and beyond.

Hurstwood Estates Limited
Strategic report (continued)
For the year ended 31 December 2023
- 2 -

On behalf of the board

Mr S J Ashworth
Director
19 September 2024
Hurstwood Estates 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 management company.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr S J Ashworth
Mr H P Hill
Mr A C Park
Mr S D Ashworth
Ms A L Beaumont
Auditor

DJH Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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.

Hurstwood Estates Limited
Directors' report (continued)
For the year ended 31 December 2023
- 4 -
Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr S J Ashworth
Director
19 September 2024
Hurstwood Estates Limited
Independent auditor's report
To the members of Hurstwood Estates Limited
- 5 -
Opinion

We have audited the financial statements of Hurstwood Estates 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 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.

Hurstwood Estates Limited
Independent auditor's report (continued)
To the members of Hurstwood Estates Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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.

Hurstwood Estates Limited
Independent auditor's report (continued)
To the members of Hurstwood Estates Limited
- 7 -

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management and from our commercial knowledge of the investment property sector;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including legislation such as the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations through making enquiries of management and reviewing legal and professional fee invoices and inspecting legal correspondence;

- identified laws and regulations were communicated within the audit team and the audit team remained alert to instances of non-compliance throughout the audit.

 

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

 

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries posted during the period and at the period end to identify unusual transactions and agreed to underlying supporting documentation and

- investigated the rationale behind significant or unusual transactions.

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- reading the minutes of meetings of those charged with governance;

- enquiring of management as to actual and potential litigation and claims and

- reviewing correspondence with HMRC and the company's legal advisors.

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

 

 

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.

Hurstwood Estates Limited
Independent auditor's report (continued)
To the members of Hurstwood Estates Limited
- 8 -
Susan Redmond FCA
Senior Statutory Auditor
For and on behalf of DJH Audit Limited
23 September 2024
Accountants and registered auditors
St George's House
56 Peter Street
Manchester
M2 3NQ
Hurstwood Estates Limited
Statement of comprehensive income
For the year ended 31 December 2023
- 9 -
2023
2022
Notes
£
£
Turnover
2
15,169,712
13,704,249
Administrative expenses
(15,063,887)
(13,584,744)
Operating profit
3
105,825
119,505
Interest payable and similar expenses
7
(21,988)
(43,918)
Profit before taxation
83,837
75,587
Tax on profit
8
(55,401)
(19,197)
Profit for the financial year
28,436
56,390

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

Hurstwood Estates Limited
Balance sheet
As at 31 December 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
359,073
436,476
Current assets
Debtors
10
10,395,960
8,967,967
Cash at bank and in hand
79,852
517,798
10,475,812
9,485,765
Creditors: amounts falling due within one year
11
(10,223,312)
(9,292,811)
Net current assets
252,500
192,954
Total assets less current liabilities
611,573
629,430
Creditors: amounts falling due after more than one year
12
(95,695)
(153,558)
Provisions for liabilities
Deferred tax liability
15
67,779
56,209
(67,779)
(56,209)
Net assets
448,099
419,663
Capital and reserves
Called up share capital
17
1
1
Profit and loss reserves
448,098
419,662
Total equity
448,099
419,663

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 19 September 2024 and are signed on its behalf by:
Mr S J Ashworth
Mr A C Park
Director
Director
Company registration number 05861382 (England and Wales)
Hurstwood Estates Limited
Statement of changes in equity
For the year ended 31 December 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1
363,272
363,273
Year ended 31 December 2022:
Profit and total comprehensive income
-
56,390
56,390
Balance at 31 December 2022
1
419,662
419,663
Year ended 31 December 2023:
Profit and total comprehensive income
-
28,436
28,436
Balance at 31 December 2023
1
448,098
448,099
Hurstwood Estates Limited
Notes to the financial statements
For the year ended 31 December 2023
- 12 -
1
Accounting policies
Company information

Hurstwood Estates 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.

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 cover the company as an individual entity.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with other group entities where the relationship is one of being wholly owned.

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.

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:

Freehold land and buildings
25% reducing balance
Plant and equipment
25% reducing balance
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 13 -

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
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.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

1.7
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.

Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 14 -
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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.

Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 15 -
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.

1.8
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.

1.9
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.

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.

1.10
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.

Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
- 16 -
1.11
Retirement benefits

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

1.12
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.

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.

2
Turnover

The turnover and profit before taxation are attributable to the one principal activity.

3
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
77,403
59,714
Operating lease charges
122,015
148,678
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
5,900
5,100
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 17 -
5
Employees

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

2023
2022
Number
Number
Directors
5
3
Office
43
39
Total
48
42

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,359,491
1,110,613
Pension costs
56,842
41,265
1,416,333
1,151,878
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
417,897
341,007
Company pension contributions to defined contribution schemes
45,321
31,888
463,218
372,895
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
96,000
89,760
Company pension contributions to defined contribution schemes
26,340
6,545
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 18 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
14,132
37,719
Interest on finance leases and hire purchase contracts
7,856
6,141
Other interest
-
0
58
21,988
43,918
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
43,831
-
0
Adjustments in respect of prior periods
-
0
33
Total current tax
43,831
33
Deferred tax
Origination and reversal of timing differences
11,570
19,164
Total tax charge
55,401
19,197

The main corporation tax rate increased from 19% to 25% with effect from 1st April 2023, significantly increasing the tax payable on profits earned.

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
83,837
75,587
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
19,718
14,362
Tax effect of expenses that are not deductible in determining taxable profit
4,613
8,014
Adjustments in respect of prior years
-
0
31
Effect of change in corporation tax rate
19,848
-
0
Depreciation on assets not qualifying for tax allowances
6,767
5,577
Deferred tax adjustments in respect of prior years
4,474
-
0
Enhanced capital allowances
(19)
(8,787)
Taxation charge for the year
55,401
19,197
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 19 -
9
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
38,679
503,679
542,358
Depreciation and impairment
At 1 January 2023
29,496
76,386
105,882
Depreciation charged in the year
2,296
75,107
77,403
At 31 December 2023
31,792
151,493
183,285
Carrying amount
At 31 December 2023
6,887
352,186
359,073
At 31 December 2022
9,183
427,293
436,476

The net book value of assets under hire purchase contracts are as follows:

 

Plant and machinery £227,377 (2022:£267,503).

10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,458,803
4,629,247
Amounts owed by group undertakings
324,531
271,880
Amounts owed by related undertakings
3,032,970
2,159,181
Other debtors
137,718
326,352
Prepayments and accrued income
1,441,938
1,581,307
10,395,960
8,967,967
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 20 -
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
13
-
0
562,500
Obligations under finance leases
14
57,863
57,863
Trade creditors
6,218,092
4,792,509
Amounts owed to group undertakings
57,422
346,237
Amounts owed to related undertakings
3,169,038
2,956,924
Corporation tax
43,831
3,803
Other taxation and social security
252,800
77,222
Other creditors
35,474
35,474
Accruals and deferred income
388,792
460,279
10,223,312
9,292,811

Hire purchase contracts disclosed within other creditors due within one year are secured against the asset to which it relates.

12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
14
95,695
153,558

Hire purchase contracts disclosed due after more than one year are secured against the asset to which it relates.

13
Loans and overdrafts
2023
2022
£
£
Bank loans
-
0
562,500
Payable within one year
-
0
562,500
14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
57,863
57,863
In two to five years
95,695
153,558
153,558
211,421
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
14
Finance lease obligations
(Continued)
- 21 -

The hire purchase contracts relate to plant and machinery which are subsequently included in fixed assets. The plant and machinery is used by related undertakings as part of the trade of the company.

 

The contracts include a small option to purchase fee at the end of the contract. Interest is charged on the hire purchase contracts at 4-5%.

15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
67,779
56,209
2023
Movements in the year:
£
Liability at 1 January 2023
56,209
Charge to profit or loss
11,570
Liability at 31 December 2023
67,779
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,842
41,265

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.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 22 -
18
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
134,210
134,210
Between two and five years
14,643
146,636
In over five years
-
0
2,217
183,476
283,063
19
Related party transactions
Transactions with related parties

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with other group entities where the relationship is one of being wholly owned.

 

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

Sales
Sales
2023
2022
£
£
Purchase recharges to related undertakings
9,973,066
9,111,480
Management charges to related undertakings
2,340,000
1,716,000
2023
2022
Amounts due to related parties
£
£
Balance in trade creditors
1,904,265
1,353,253
Balances included in amounts owed to related undertakings
3,169,038
2,956,924

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Balance in trade debtors
5,458,802
4,629,250
Balances included in amounts owed by related undertakings
3,032,970
2,159,181
Hurstwood Estates Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
- 23 -
20
Ultimate parent company

The company is a 100% owned subsidiary of Hurstwood 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.

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