The directors present their annual report and financial statements for the year ended 31 March 2024.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
We have reviewed the company's financial statements for the year ended 31 March 2024 which comprise of the group profit and loss account, company profit and loss account, group balance sheet, company balance sheet, group statement of changes in equity, company statement of changes in equity and notes to the financial statements, including a summary of 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).
Directors' Responsibility for the Financial Statements
As explained more fully in the Directors' Responsibilities Statement set out on page 1, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Accountants' Responsibility
Our responsibility is to express a conclusion on the financial statements. We conducted our review in accordance with International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to review historical financial statements and ICAEW Technical Release TECH 09/13AAF (Revised) Assurance review engagements on historic financial statements. ISRE 2400 (Revised) requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared, in all material respects, in accordance with United Kingdom Generally Accepted Accounting Practice. ISRE 2400 (Revised) also requires us to comply with the ICAEW Code of Ethics.
Scope of the Assurance Review
A review of financial statements in accordance with ISRE 2400 (Revised) is a limited assurance engagement. We have performed additional procedures to those required under a compilation engagement. These primarily consist of making enquiries of management and others within the entity, as appropriate, applying analytical procedures and evaluating the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (UK). Accordingly, we do not express an audit opinion on these financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial statements have not been prepared:
so as to give a true and fair view of the state of the company's affairs as at 31 March 2024, and of its loss for the year then ended;
in accordance with United Kingdom Generally Accepted Accounting Practice; and
in accordance with the requirements of the Companies Act 2006
Use of our report
This report is made solely to the Company's directors, as a body, in accordance with the terms of our engagement letter dated 19 June 2024. Our review has been undertaken so that we may state to the company’s directors those matters we have agreed to state to them in a reviewer’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 directors as a body for our work, for this report or the conclusions we have formed.
For the financial year ended 31 March 2024 the group was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The members have not required the group to obtain an audit of its financial statements for the year in question in accordance with section 476;
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
These financial statements have been prepared in accordance with the provisions applicable to groups and companies subject to the small companies regime.
Grovemere Holdings Limited "the company" is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 112, Lancaster Way Business Park, Lancaster Way, Ely, Cambridgeshire, CB6 3NX.
The group consists of Grovemere Holdings Limited and its wholly owned subsidiary Grovemere Property Limited.
The current period represents a 12 months period ended 31 March 2024. In the prior period, the company changed its year end date from June to March and the results are therefore not directly comparable with the comparative being a 9 month period.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The consolidated financial statements incorporate those of Grovemere Holdings Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 March 2024.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
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.
Rental and service charge income are accounted for in the period to which they relate.
Sale of land and property is accounted for on completion.
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 recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The group participates in a share-based payment arrangement granted to the employees of the subsidiary company. The subsidiary has elected to recognise and measure its share-based payment expense on the basis of a reasonable allocation of the expenses for the group.
The expense in relation to the parent company's shares granted to employees of the subsidiary is recognised by the parent as a capital contribution, and presented as an increase in the parent company's investment in that subsidiary.
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 income 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 lease asset are consumed.
In the application of the group’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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Investment properties are valued on the fair value basis. In arriving at the fair value, the valuation of Investment properties are valued by firms of independent Chartered Surveyors or by the directors. The directors review these valuations at each period end to ensure investment properties are held at fair value at each balance sheet date.
The company issued shares for the benefit of two of the directors resulting in a share based payment. The company has allocated the charge to the company's subsidiary via a capital contribution. The charge is based on the fair value of the shares issued for £3.6m. There is estimation involved in valuing the shares and the level of discount to be applied for a minority shareholding.
The average monthly number of persons (including directors) employed by the group and company during the year was:
The exceptional item relates to the revaluation of the investment properties at the year end to their fair values at the balance sheet date.
In addition to the above, as set out in note 16, there was a share based payment expense allocated from the parent company to the subsidiary company for £3.6m and this is included within administrative expenses.
Some of the investment properties included above were valued in May 2024 by a firm of independent Chartered Surveyors. The valuations were made on an open market value basis by reference to market evidence of transaction prices for similar properties. The total value of these properties was £42,160,000. The remaining investment properties were valued at the balance sheet date by the directors by reference to market evidence of transaction prices for similar properties. The directors have reviewed these valuations and concluded that there has been no material change in these valuations at the balance sheet date.
The borrowings of the group are secured over the majority of the freehold land and buildings. The group is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
Details of the company's subsidiaries at 31 March 2024 are as follows:
The bank loans are secured by a debenture and legal charges over certain freehold properties included within fixed assets.
Assets under HP and finance leases are secured against the assets which they relate.
During the year, the company entered into an equity settled group share based payment for the benefit of its employees in its subsidiary. The company issued 1,000 ordinary B shares with a nominal value of £100. The fair value of the shares issued were £3,600,000. The share based payment was treated as a capital contribution with an increase in the investment in the subsidiary. In the group accounts, the charge of £3.6m is included within administrative expenses.
The preferred ordinary shares rank equally for voting rights. On a company sale or return of capital, if the exit proceeds or distributable assets do not exceed £30m, the exit proceeds or distributable assets will be distributed to the holders of the preferred ordinary shares on a pro rate basis according to the number of shares held.
1,000 B ordinary shares were issued during the year. These shares rank equally for voting rights. On a company sale or return of capital, if the exit proceeds or distributable assets exceed £30m, the excess shall be distributed among the B ordinary shareholders on a pro rata basis according to the number of B ordinary shares held.
A cross guarantee amounting to £2,944,000 given by the parent company is in place in favour of a subsidiary's lender in respect of a loan in that subsidiary company.
The reserves of the company are fully distributable.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
During the year, there were further loans made to a director of £269,994 and repayments of loans of £55,482. At the balance sheet date the group were owed £250,959 (2023: £36,447) by this director. This balance is included within debtors.
In the prior period, the group had provided for a general bad debt provision for £47,493. General bad debt provisions are not allowed in accordance with FRS 102 and therefore this provision has been reversed.
In the prior period, the group had provided for a general accruals totalling £81,500. General provisions are not allowed in accordance with FRS 102 and therefore these accruals have been reversed.
The group had a negative revaluation reserve of £88,787 in the prior year. In accordance with FRS 102, impairment provisions in excess of a revaluation reserve should be charged to the profit and loss account. Therefore a prior year adjustment has been made to correct this historic balance and move the negative revaluation reserve into the profit and loss reserve.
Included within debtors in the prior period is a balance of £255,233 relating to a bank account used to hold deposits. A prior year adjustment has been made to reclassify this balance as cash at bank and in hand.