Company registration number 08502338 (England and Wales)
EDWARD VII ESTATES TWO LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
EDWARD VII ESTATES TWO LTD
COMPANY INFORMATION
Directors
T R Sargeant
A I Sargeant
D R Sargeant
S Vernon-Harcourt
W Douglas
S J Marner
Secretary
A I Sargeant
Company number
08502338
Registered office
Bentfield Place
Bentfield Road
Stansted
Essex
United Kingdom
CM24 8HL
Auditor
Goodman Jones LLP
1st Floor Arthur Stanley House
40-50 Tottenham Street
London
United Kingdom
W1T 4RN
Business address
Bentfield Place
Bentfield Road
Stansted
Essex
CM24 8HL
EDWARD VII ESTATES TWO LTD
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Profit and loss account
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 15
EDWARD VII ESTATES TWO LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The directors present their annual report and financial statements for the year ended 31 July 2024.
Principal activities
The principal activity of the company is property development.
Results and dividends
The directors do not recommend payment of an ordinary dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
T R Sargeant
A I Sargeant
D R Sargeant
S Vernon-Harcourt
W Douglas
S J Marner
Financial instruments
The company uses financial instruments comprising borrowings and various net working capital items such as trade debtors and trade creditors, to finance its operations not funded by way of equity. The main risks identified with using these financial instruments are the management of cash flow and exposure to interest rate fluctuations. The company mitigates this risk by managing cash flow and negotiating credit facilities to assist with liquidity as required.
Going concern
The company meets its day to day working capital requirements through bank loans and intercompany loans. The company is in the process of developing a site and has incurred costs which have created an accumulated profit and loss deficit. Completion of the project is currently forecast to be profitable and ultimately will reverse this deficit. The directors of City & Country Group Plc have confirmed that the company will continue to provide support for the foreseeable future. The company’s forecast and projections, taking account of reasonable possible changes in trading performance, show that the company will be able to operate with the continued provision of the intercompany loan.
Accordingly, at 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. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Auditor
In accordance with the company's articles, a resolution proposing that Goodman Jones LLP be reappointed as auditor of the company will be put at a General Meeting.
EDWARD VII ESTATES TWO LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
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:
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 company will continue in business.
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.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
A I Sargeant
Director
30 January 2025
EDWARD VII ESTATES TWO LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EDWARD VII ESTATES TWO LTD
- 3 -
Opinion
We have audited the financial statements of Edward VII Estates Two Ltd (the 'company') for the year ended 31 July 2024 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 31 July 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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.
EDWARD VII ESTATES TWO LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EDWARD VII ESTATES TWO LTD (CONTINUED)
- 4 -
Opinions on other matters prescribed by the Companies Act 2006
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 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
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 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to industry sector regulations and unethical and prohibited business practices, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and UK Tax Legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Appropriate audit procedures in response to these risks were carried. These procedures included:
EDWARD VII ESTATES TWO LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EDWARD VII ESTATES TWO LTD (CONTINUED)
- 5 -
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
Reading minutes of meetings of those charged with governance;
Obtaining and reading correspondence from legal and regulatory bodies including HMRC;
Identifying and testing journal entries;
Challenging assumptions and judgements made by management in their significant accounting estimates.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members; and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above. The further removed instances of non-compliance are with laws and regulations from the events and transactions reflected in the financial statements, the less likely we are to become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.
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.
Matthew Cook
Senior Statutory Auditor
For and on behalf of Goodman Jones LLP
30 January 2025
Chartered Accountants
Statutory Auditor
1st Floor Arthur Stanley House
40-50 Tottenham Street
London
United Kingdom
W1T 4RN
EDWARD VII ESTATES TWO LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2024
- 6 -
2024
2023
Notes
£
£
Turnover
50,904
57,848
Cost of sales
(140,309)
(61,519)
Gross loss
(89,405)
(3,671)
Administrative expenses
(244,596)
(105,510)
Operating loss
(334,001)
(109,181)
Interest payable and similar expenses
(595,295)
(311,166)
Fair value gains and losses on investment properties
3
(52,500)
Loss before taxation
(929,296)
(472,847)
Tax on loss
Loss for the financial year
(929,296)
(472,847)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EDWARD VII ESTATES TWO LTD
BALANCE SHEET
- 7 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investment property
3
355,000
355,000
Investments
4
100
100
355,100
355,100
Current assets
Stocks
6
7,008,021
6,525,114
Debtors
7
337,501
7,345,522
6,525,114
Creditors: amounts falling due within one year
8
(10,510,198)
(8,760,494)
Net current liabilities
(3,164,676)
(2,235,380)
Net liabilities
(2,809,576)
(1,880,280)
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
(2,809,676)
(1,880,380)
Total equity
(2,809,576)
(1,880,280)
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 30 January 2025 and are signed on its behalf by:
A I Sargeant
W Douglas
Director
Director
Company registration number 08502338 (England and Wales)
EDWARD VII ESTATES TWO LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 8 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 August 2022
100
(25,600)
(1,381,933)
(1,407,433)
Year ended 31 July 2023:
Loss and total comprehensive income
-
-
(472,847)
(472,847)
Transfers
-
25,600
(25,600)
-
Balance at 31 July 2023
100
(1,880,380)
(1,880,280)
Year ended 31 July 2024:
Loss and total comprehensive income
-
-
(929,296)
(929,296)
Balance at 31 July 2024
100
(2,809,676)
(2,809,576)
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 9 -
1
Accounting policies
Company information
Edward VII Estates Two Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 29-30 Fitzroy Square, London, W1T 6LQ.
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 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 pounds sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Edward VII Estates Two Ltd is a wholly owned subsidiary of City & Country Group Plc and the results of Edward VII Estates Two Ltd are included in the consolidated financial statements of City & Country Group Plc which are available from Bentfield Place, Bentfield Road, Stansted, Essex, CM24 8HL.
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 10 -
1.2
Going concern
The company meets its day to day working capital requirements throughtrue bank loans and intercompany loans. The company is in the process of developing a site and has incurred costs which have created an accumulated profit and loss deficit. Completion of the project is currently forecast to be profitable and ultimately will reverse this deficit. The directors of City & Country Group Plc have confirmed that the company will continue to provide support for the foreseeable future. The company’s forecast and projections, taking account of reasonable possible changes in trading performance, show that the company will be able to operate with the continued provision of the intercompany loan.
Accordingly, at 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. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
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 at the fair value of the consideration received or receivable, excluding discounts and net of VAT.
Turnover comprises sales of private housing and development properties during the year, gross rents receivable recognised in the period to which they relate and the invoiced value of other sales net of VAT. Properties are treated as sold and profits recognised when contracts are exchanged and the company has transferred the significant risks and rewards of ownership to the buyer, the building works are substantially completed at the year end and the properties legally complete within three months of the year end ensuring that the amount of turnover can be reliably measured.
1.4
Investment property
Investment properties whose fair value can be measured reliably are measured at fair value. The surplus or deficit on revaluation is accumulated and recognised in the revaluation reserve net of deferred tax and released to the profit and loss reserve upon disposal of the investment property.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Stocks
Stock is valued at the lower of cost and net realisable value. Cost comprises of direct costs that have been incurred in bringing the stocks to their present location and condition. Land held for development, including land in the course of development, is initially recorded at cost.
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 11 -
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.
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.
1.9
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.
1.10
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.
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 12 -
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.
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 13 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Estimation of costs to complete
In order to determine the profit that the company is able to recognise on its developments in a specific period, the company has to allocate site-wide development costs between units built in the current year and in future years. It also has to estimate costs to complete on such developments. In making these assessments there is a degree of inherent uncertainty. The company has developed internal controls to assess and review carrying values and the appropriateness of estimates made.
Carrying value of land and work in progress
The company’s principal activity is residential property development. The majority of the development activity is not contracted prior to the development commencing. Accordingly, the company has in its Balance Sheet at 31 July 2024 current assets that are not covered by a forward sale. The company’s internal controls are designed to identify any developments where the estimated net realisable value of a site is less than its current carrying value within the Balance Sheet. The key judgements in these reviews were estimating the realisable value of a site, which is determined by forecast sales rates, expected sales prices and estimated costs to complete. Furthermore, for sites where planning permission has not yet been obtained, forecast sales include an expectation that reasonable planning permission will be successfully obtained. If the UK housing market were to change beyond management expectations in the future, in particular with regards to the assumptions around sales prices and estimated costs to complete, further adjustments to the carrying value of land and work in progress may be required.
Valuation of Investment Property
Investment properties are valued to fair value annually. The company recognises the property at fair value, defined as the estimated amount for which a property should exchange on the date of the valuation between a willing buyer and seller in an arm's length transaction, through the use of comparable values of similar properties observable in the market. The directors of the company assess the carrying value at each reporting date to ensure that the carrying value is adjusted to fair value.
3
Investment property
2024
£
Fair value
At 1 August 2023 and 31 July 2024
355,000
The investment properties have been shown in the balance sheet at fair value in accordance with FRS 102 Section 16 'Investment Property'. The directors have valued the investment properties using a property yield basis.
The directors are satisfied as to the values at 31 July 2024.
The historical cost of these properties is £433,100 (2023: £433,100).
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 14 -
4
Fixed asset investments
2024
2023
£
£
Shares in group undertakings and participating interests
100
100
5
Subsidiaries
Details of the company's subsidiaries at 31 July 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Edward VII Estates Three Ltd
England and Wales
Ordinary
100.00
The registered office of the above named subsidiary is 1st Floor Arthur Stanley House, 40-50 Tottenham Street, London, W1T 4RN.
6
Stocks
2024
2023
£
£
Stocks
7,008,021
6,525,114
Included in stock are properties under construction or development at the balance sheet date.
7
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
334
Other debtors
337,167
337,501
8
Creditors: amounts falling due within one year
2024
2023
£
£
Bank loans
6,814,682
5,753,534
Amounts owed to group undertakings
3,309,670
2,972,603
Other creditors
385,846
34,357
10,510,198
8,760,494
EDWARD VII ESTATES TWO LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 15 -
9
Loans and overdrafts
2024
2023
£
£
Bank loans
6,814,682
5,753,534
Payable within one year
6,814,682
5,753,534
Bank loans of £6,814,682 (2023: £5,753,534) are secured by a debenture over all the assets and undertaking of the company. Additionally the company has given a first legal charge over the property and a charge over their shares to the lender. The loans are due for repayment between January 2025 and July 2026. However, the loans are repayable on demand and are therefore disclosed as creditors due within one year. City and Country Residential Limited has given a cost overrun and interest shortfall guarantee for a total of £3,610,000 in respect of these loans.
10
Employees
There were no employees during the year apart from directors (2023: nil).
11
Related party transactions
The company has taken advantage of the exemption available in accordance with FRS 102 not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.
12
Parent company
The intermediate parent company is Edward VII Estates Limited, a company registered in England and Wales. The ultimate parent company is City & Country Group Plc, a company registered in England and Wales.
City & Country Group Plc prepares group financial statements and copies are kept in the registered office.
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