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Registered number: 07372402
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FAIRLIE PROPERTIES LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 30 JUNE 2023
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FAIRLIE PROPERTIES LIMITED
REGISTERED NUMBER:07372402
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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NET CURRENT (LIABILITIES)/ASSETS
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TOTAL ASSETS LESS CURRENT LIABILITIES
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Creditors: amounts falling due after more than one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on form part of these financial statements.
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Fairlie Properties Limited is a limited liability company incorporated in England. The registered office is 10 Temple Back, Bristol, BS1 6FL.
2.ACCOUNTING POLICIES
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BASIS OF PREPARATION OF FINANCIAL STATEMENTS
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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FINANCIAL REPORTING STANDARD 102 - REDUCED DISCLOSURE EXEMPTIONS
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Fairlie Holdings Limited as at 30 June 2023 and these financial statements may be obtained from Companies House.
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.ACCOUNTING POLICIES (continued)
The main revenue stream for Fairlie Properties Ltd comes from rent associated with leasing Fairlie House, to its subsidiary Fairlie Healthcare Ltd. The revenue streams for Fairlie Healthcare Limited are provided by Integrated Care Boards (ICBs) and Social Services and have remained strong and are forecast to continue to do so for the foreseeable future. Fairlie Healthcare Ltd continues to provide a high-quality provision for its patients to secure its revenue streams.
The Company is a part of the Fairlie Holdings Limited group (“the Group”) and the Group has two distinct and separate funding groups, one of which, at the year end, has borrowings from Barclays (“the Barclays borrowing group”) and the other which has borrowings from Triodos (“the Triodos borrowing group”). As disclosed in Notes 10 & 12, the company is part of the Barclays borrowing group and cross guarantees exist amongst the members of the Barclays borrowing group.
At the balance sheet date and subsequently the Barclays borrowing group funding facilities’ financial covenants are being met. As set out in Note 10, the Barclays facility is due to expire with 12 months of the year end date, and subsequent to the year end was replaced with a facility with Cynergy Bank. Based on financial performance to date and forecasts, the directors are satisfied that the Company and other companies in the Barclays borrowing group have sufficient resources to meet the covenant, debt finance service and working capital requirements of these debt facilities.
At the Balance Sheet date, the Company has balances totalling £2,660,081 due from fellow subsidiaries which are members of the Triodos borrowing group. The Company does not intend to seek repayment of these balances in the short or medium term. Companies within each borrowing group are dependent upon the continued availability of these advances, which is in turn dependent upon the companies within the other borrowing group continuing as going concerns and vice versa. At the Balance sheet date, the company has balances totalling £876,600 due to fellow subsidiaries which are members of the Triodos borrowing group.
At the balance sheet date, the Triodos facilities totalling £17,841,546 were in default due to a year end financial covenant not being achieved. Notwithstanding this breach, based on financial performance to date and forecasts, the directors of the companies in the Triodos Borrowing group believe that those companies will comply with future requirements of the Triodos banking facilities and that they will have sufficient resources to meet future covenant, debt finance service and working capital requirements.
Whilst the directors believe that Triodos will continue to be supportive of the Group, Triodos has recently issued a reservation of rights letter and also instructed an independent review of likely future trading performance of companies in the Triodos borrowing group. The outcome of this review is currently unknown, and whilst the directors believe the outcome is likely to be positive, this is uncertain.
Should Triodos not continue to support the group, the directors believe that it will be possible to secure alternative sources of funding. However, this is uncertain.
If companies in the Triodos borrowing group were unsuccessful in securing ongoing facilities, from Triodos or an alternative funder, and were to seek immediate repayment of the intercompany balances payable by the Company, the Company would need to seek additional sources of funding. It is uncertain as to whether such funding would be available. The recoverability of balances due from members of the Triodos borrowing group would also become uncertain.
The directors are confident that such funding can be secured and therefore consider that it is appropriate to prepare the group accounts on a going concern basis.
If the group were unable to obtain adequate funding, it would not be able to continue trading and adjustments would have to be made to reduce the assets to their realisable amount and to provide
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.ACCOUNTING POLICIES (continued)
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GOING CONCERN (CONTINUED)
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for any further liabilities.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Revenue represents rent receivable during the period.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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CASH AND CASH EQUIVALENTS
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.ACCOUNTING POLICIES (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
No consideration has been paid in respect of group relief utilised throughout the group in the current or prior year.
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.ACCOUNTING POLICIES (continued)
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FINANCIAL INSTRUMENTS (CONTINUED)
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arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
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JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY
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Preparation of the financial statements requires management to make significant judgements and estimates, where required.
There were no significant judgements or estimates applied in the preparation of the financial statements.
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The average monthly number of employees, including directors, during the year was 2 (2022: 2).
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Charge for the year on owned assets
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Included in land and buildings is freehold land at a cost of £2,738,353 (2022: £2,738,353), which is not depreciated.
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, repayable on demand and bear no interest. However, the directors do not expect repayment within one year.
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CASH AND CASH EQUIVALENTS
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
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Amounts owed to group undertakings
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For information regarding bank loans, see note 9.
Amounts owed to group undertakings are unsecured, repayable on demand and bear no interest.
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Analysis of the maturity of loans is given below:
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AMOUNTS FALLING DUE WITHIN ONE YEAR
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AMOUNTS FALLING DUE 1-2 YEARS
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Bank loans are secured by a fixed charge over the assets of the company and by a cross guarantee with Fairlie Healthcare Limited, a fellow group company, in favour of Barclays Bank plc. The loan bears interest at 2.25% over LIBOR and is repayable by instalment on a notional term of 20 years for 5 years from the first drawdown.
As the loan facility was due to expire within one year but had not been formally refinanced at the balance sheet date the loan is shown as repayable within one year. This facility was replaced by a facility of £9,000,000 with Cynergy Bank in March 2024 with similar terms and cross charge arrangements.
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FAIRLIE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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ALLOTTED, CALLED UP AND FULLY PAID
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1,000 (2022: 1,000) Ordinary shares of £1.00 each
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The company is subject to a fixed charge over its assets via a cross guarantee in favour of Barclays Bank plc with Fairlie Healthcare Limited, a fellow group company, on a loan totalling £7,214,947 (2022: £7,520,128). This facility was replaced by a facility of £9,000,000 with Cynergy Bank in March 2024 with a similar cross charge arrangement.
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RELATED PARTY TRANSACTIONS
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The company is a wholly owned subsidiary of a group whose consolidated financial statements are publicly available and has therefore taken advantage of exemption under Section 33 to not disclose transactions with other group companies.
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ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY
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The immediate and ultimate parent undertaking is Fairlie Holdings Limited, a company incorporated in the UK. The consolidated accounts are available from Companies House and the registered office of Fairlie Holdings Limited is 10 Temple Back, Bristol, BS1 6FL.
The ultimate controlling party is J Whelan by virtue of his majority shareholding in Fairlie Holdings Limited.
The auditors' report on the financial statements for the year ended 30 June 2023 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
We draw attention to Note 2.3 in the financial statements, which indicate that bank facilities held in fellow subsidiaries were in breach of a financial covenant. Whilst the directors are confident of a successful outcome to ongoing negotiations with the bank, no formal waiver of enforcement action as a result of this breach has been obtained by the directors. The company holds intercompany debtors and creditors with these subsidiaries and the ultimate parent company, which is a necessary part of the company’s working capital. In the event of default these balances may become payable or irrecoverable.
As stated in Note 2.3, these events or conditions, along with other matters as set forth in Note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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The audit report was signed on 30 October 2024 by Andrew Sandiford BCom FCA (Senior statutory auditor) on behalf of Bishop Fleming Bath Limited.
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