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Registered number: 10014303









HERTSMERE DEVELOPMENTS LIMITED









FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 31 MARCH 2024

 
HERTSMERE DEVELOPMENTS LIMITED
REGISTERED NUMBER: 10014303

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024

2024
2023
Note
£
£

  

Current assets
  

Stocks
  
2,000,603
1,961,784

Debtors: amounts falling due within one year
 4 
510,294
107,100

Cash at bank and in hand
 5 
1,311,519
1,332,351

  
3,822,416
3,401,235

Creditors: amounts falling due within one year
 6 
(1,994,493)
(1,775,028)

Net current assets
  
 
 
1,827,923
 
 
1,626,207

Total assets less current liabilities
  
1,827,923
1,626,207

Creditors: amounts falling due after more than one year
 8 
(1,288,354)
(1,894,792)

  

Net assets/(liabilities)
  
539,569
(268,585)


Capital and reserves
  

Called up share capital 
 9 
491,100
491,100

Profit and loss account
  
48,469
(759,685)

  
539,569
(268,585)


Page 1

 
HERTSMERE DEVELOPMENTS LIMITED
REGISTERED NUMBER: 10014303
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024

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 comprehensive income 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: 






................................................
M L Bunyon
Director

Date: 23 December 2024

The notes on pages 3 to 8 form part of these financial statements.

Page 2

 
HERTSMERE DEVELOPMENTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.


General information

The principal activity of Hertsmere Developments Limited ('the Company'), a wholly-owned local authority property development company, is to explore property development opportunities and maximise its income stream. It was formed to assist the Council to deliver its regeneration, housing, financial and commercial objectives.
The Company is a private company limited by shares and is incorporated in England and Wales.
The registered office address is Civic Offices Elstree Way, Borehamwood, WD6 1WA.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. 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 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.

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due.
The Company made a profit before tax, for the year ended 31 March 2024 of £808,154 and had net assets of £539,569 as at the reporting date.
Of the liabilities of this company, a balance of £2,573,842, is due to Hertsmere Borough Council, the immediate parent undertaking that has funded this company's operations since incorporation. Hertsmere Borough Council has also committed additional funding for each of the approved projects.
The Company is dependent on the continued support of the immediate parent undertaking to allow it to meet its financial obligations as they fall due and also not seeking repayment of existing loans made to the Company. The directors are confident that the support from the parent company will continue for at least twelve months from the date of approval of these financial statements.
Based on all of the above, the directors believe that the Company has adequate resources to continue in operational existence for the forseeable future and that it is appropriate to prepare the accounts under the going concern basis. 

Page 3

 
HERTSMERE DEVELOPMENTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Turnover represents the sale proceeds of property sales completed in the year. The sales were made to a related party at market value. 

 
2.4

Finance costs

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.

  
2.5

Borrowing costs

All borrowing costs for specific projects are capitalised and included in stock.

 
2.6

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 4

 
HERTSMERE DEVELOPMENTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.7

Stocks

Stocks, which consist of property development costs, are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.8

Debtors

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.

 
2.9

Cash and cash equivalents

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.

 
2.10

Financial instruments

(i) Financial assets
Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Income and Retained Earnings.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary
Page 5

 
HERTSMERE DEVELOPMENTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.10
Financial instruments (continued)

course of business from suppliers. Trade creditors 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 liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.


(iii) Offsetting
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.


3.


Employees

2024
2023
£
£

Wages and salaries
157,381
137,150

Social security costs
16,487
16,185

Cost of defined contribution scheme
8,120
7,776

181,988
161,111


The average monthly number of employees, including directors, during the year was 7 (2023 - 8).

Page 6

 
HERTSMERE DEVELOPMENTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

4.


Debtors

2024
2023
£
£


Other debtors
14,372
91,355

Prepayments and accrued income
493,850
15,745

Tax recoverable
2,072
-

510,294
107,100



5.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
1,311,519
1,332,351

1,311,519
1,332,351



6.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
394,546
25,085

Amounts owed to group undertakings
1,373,842
1,446,252

Accruals and deferred income
226,105
303,691

1,994,493
1,775,028



7.


Financial Commitments

Hertsmere Developments Limited have entered into an agreement with Parrot Construction Limited to develop and build two properties. The total commitment for all projects oustanding at the year end is £5,856,571.
The projects will be funded by Hertsmere Borough Council.






Page 7

 
HERTSMERE DEVELOPMENTS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

8.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Trade creditors
88,354
30,082

Amounts owed to group undertakings
1,200,000
1,864,710

1,288,354
1,894,792


The working capital loan is secured against the fixed and floating assets of the company and covers all the property and leasehold interests held within stock.
The loan is long term and bears a market rate of interest.


9.


Share capital

2024
2023
£
£
Authorised, allotted, called up and fully paid



491,100 (2023 - 491,100) Ordinary shares of £1.00 each
491,100
491,100



10.


Related party transactions

Included within creditors is a balance of £2,573,842 owed to Hertsmere Borough Council ("the Council"), the immediate parent undertaking.
During the year the company made sales of £4,938,500 to a joint venture company of the parent company. Included in trade debtors is £493,850 due from that company.
Where possible the company has taken advantage of the exemption conferred by Section 33.1A of Financial Reporting Standard 102: Related Party Disclosures, from the requirement to disclose transactions with wholy-owned group companies.


11.


Controlling party

The ultimate controlling party is Hertsmere Borough Council. The principal business address is Civic Offices, Elstree Way, Borehamwood, WD6 1WA.


12.


Auditors' information

The auditors' report on the financial statements for the year ended 31 March 2024 was unqualified.

The audit report was signed on 23 December 2024 by Ian Saunderson (Senior Statutory Auditor) on behalf of BKL Audit LLP.

 
Page 8