|
Registered number:
FOR THE YEAR ENDED 31 MARCH 2025
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
CONTENTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
COMPANY INFORMATION
Page 1
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The Directors present the strategic report and financial statements for the year ended 31 March 2025.
The trading activity of Strata Residential Finance PLC (the ‘Company’) was the provision of funding to developers with experience and demonstrable track record carrying out residential property developments with planning permission in the South of England. A new Strategic Business Plan (‘SBP’) was put in place in March 2025 to facilitate first charge lending on commercial property from the 1 April 2025 via the Proplend platform with Proplend Limited appointed as Loan Originator and Asset Manager for the Company.
The Company experienced difficult trading conditions during the 2024/25 financial year with its distributable reserves significantly reduced and a substantial loss resulting in the financial year. At a General Meeting held on the 14 January 2025 a resolution was passed authorising the Company to seek a Court Order to enable the Company’s share capital to be reduced. This Court Order was granted and this enabled the Company to meet the objectives of the SBP in place at the time primarily as regards meeting Withdrawal requests.
A new SBP was put in place at the Annual General Meeting held in September 2024. This SBP included scope for a succession plan for the Company (as the current Board individuals had been in place since the business first traded in April 2007). As part of this process the Board considered the current trading activity of the business. As trading conditions had worsened it began an exercise to identify a suitable business to provide new Directors to the Board with a new SBP. After discussions with various residential and commercial lending businesses, the Board suggested that Proplend Limited ("Proplend") would be suitable to act as the new Loan Originator & Asset Manager of the Company. Shareholder approval was given at a General Meeting held on the 26 March 2025. A new SBP was put in place, to facilitate first charge lending on commercial property (moving away from a residential development lending strategy). Proplend is authorised and regulated by the Financial Conduct Authority (726646). Proplend Limited’s registered office is 20-22 Wenlock Road, London N1 7GU (Company Number: 08315922). Proplend has been trading since 2014. During this time it has funded £235m across 267 loans. All loans are secured with a first charge against commercial property in England and Wales. It has been paid £29m of interest (not £1 of default) and of the £167m of repaid capital, its only loss has been £40,000. It is not involved with any development risk. The 10 year average investor return has been 8.45%. It lends on term, VAT and bridging loans. As a consequence the Company is now implementing the following action points during an envisaged period of six months to the end of September 2025 (the “Succession Period”). This period will be variable in length subject to progress in putting in place the new SBP:
∙The Board now comprises six Directors. Two new Directors were appointed from Proplend Brian Bartaby and Matt Carson). The four original Directors will remain for an envisaged six months;
∙The Funding Adviser and Asset Manager Agreements terminated on 31 March 2025 (the previous SBP allowed these agreements to continue until 31 March 2027) and Proplend will be appointed as the Loan Originator and Asset Manager. This provided significant cost savings to the Company;
∙The services of Gallium (Compliance Monitoring Manager), Blick Rothenburg (audit and tax) and Osborne Clark (legal) are retained. The Company will investigate if there are any Gallium services which can be provided by Proplend in-house more cost efficiently;
∙The original Directors will work to redeem the current second charge, residential development loan book as expeditiously as possible, and enable a smooth handover of the running of the Company in line with the SBP; and
∙As loans are redeemed the proceeds will be advanced in line with the SBP or distributed to Shareholders who wish to withdraw.
Page 2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Business review (continued)
The share capital of the Company was split between Continuing Shareholders and Withdrawing Shareholders with effect from the 1 April 2025.
The Continuing Shareholders benefit from the new SBP and the Proplend lending strategy (but be subject to the risk) as funds become available. The Withdrawing Shareholders are not exposed to the new lending strategy put in place with the new SBP through Proplend and will receive their fair share as residential development loans made by the Company are repaid. Any shares in the Company held by Withdrawing Shareholders have been reclassified as Redeemed Shares (in the case of Redeemable Shares) or Redeemed Capital Shares (in the case of Redeemable Capital Shares) with the rights set out in new Articles subsequently adopted pursuant to the Resolution put in place at the March General Meeting. The loss before taxation of £3,987,811 (2024: Loss £977,763) is the third time in 18 years that the Strata business has suffered a loss, and the second time the Company has done so. Trading conditions worsened significantly during the financial year. This impact is particularly evident in the movement of loan provisions within administrative expenses. Total administrative costs increased to £6,157,465 (2024: £3,962,220), driven largely by a loan provision charge of £4,778,567 (2024: £2,652,951). Notably, operating administrative costs remained broadly consistent, at £1,378,898 (2024: £1,309,259). During the first half of 2025 mortgage approvals for new house purchases have trended downwards from c66,000 per month to c63,000 in May; the latter being broadly in line with the 5 years before the Covid pandemic. At a UK level, the Nationwide house price index growth was 3.5% in the year to May 2025, a fall from the 4.7% in December 2024, but still positive in real terms. The reduction in the nil-rate SDLT thresholds on 1 April 2025 led to a spike in transactions in March and significant dip in April, before recovering in May to c80,000. If interest rates continue to fall and assist affordability, there is hope transactions will recover to the c100,000 per month level. That said, the spring and early summer market of 2025 has, according to Savills, ‘marked a turning point, with caution emanating from London taking hold in the regions… stemming migration from London into the regions, reducing demand from a key source, particularly at the fringe of the commuter zone’. Again, according to Savills, discretionary purchases (e.g. country houses and locations which saw the fastest pandemic related growth such as coastal properties) have seen value decreases of up c6% over the last 12 months, whilst prime central London is now offering its greatest ‘value’ in over a decade, falling 22.4% on the 2014 peak. Other research suggests that supply currently exceeds demand by very significant levels, especially in the south of England. The headwinds to positive buyer sentiment appear significant in the next 6 months, with strikes by the doctors, uncertainties in the job market, wage growth, inflation and the autumn budget; excluding global concerns with conflicts and US trading policies. The market is generally weak for sellers. This has been demonstrated by the lack of sales across the Company residential loan book in the last 6 months. Houses at Ovingdean and the large house at Braunton have seen asking price falls after failed campaigns during the usually lively Spring market. The final unit at Middle Barton was sold in March for £650,000 bringing an end to the Companies’ activities as mortgagee in possession of this 9 unit development. Issues are now being experienced across most of the Company loans with LPA Receivers appointed at Norwich, Deptford, Barnstaple and Maidenhead. An administrator has been appointed over the borrower entity at Seaton. Significant provisions are in place against the Norwich, Deptford, Braunton, Wandsworth and Barnstaple loans. The schemes at Maidenhead and Seaton appear likely to be supported by the senior lenders and built out but they are under threat and monitored continuously.
Page 3
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Business review (continued)
Delays to schemes causes great damage and the post Covid perfect storm of construction delays, rising construction costs, labour shortfalls, rising interest rates and a disappointing sales market appear to be affecting many schemes across the UK, not just in the Companies’ portfolio. The Company has put in place a new SBP with the aim of significantly reducing trading risk, moving away from development related lending and focussing on secure short term loans with interest payable (not receivable) and a significantly reduced cost base. At the discretion of the shareholders and in compliance with the terms of the Strategic Business Plan (‘SBP’), if, from time to time there is cash in the company and sufficient profit has been generated, then dividends will be paid to A shareholders in proportion to the shares held by them. The SBP for the company envisages the payment of dividends for A shareholders with a target of 7% per annum per £1.00 A share. The board has the authority to incrementally increase this target dividend.
The financial instruments used by the Company arise wholly and directly from its activities. The financial instruments comprise debtors (borrowers), cash at bank and trade creditors. The Company has no borrowings.
The Company has put in place the following measures in order to manage the financial risks arising from these financial instruments.
The key performance indicators used by the Company are detailed in the SBP and the current Information Memorandum prepared by the Company. The Company targets a pre-tax profit of 7% per annum.
The Company has greatly enhanced governance and the reporting of key performance indicators to ensure optimal business performance, including monthly reporting of key metrics to the board.
The non financial key performance indicators for the Company include:
The Company considers communication with the shareholders to be of significant importance and seeks to deliver a Trading Statement twice a year in addition to the delivery of formal accounts. The directors of the Company make their contact details freely available to all shareholders to enable personal communication on an ongoing basis. All future lending is to be through the Proplend platform and this enables a significant spread of risk across different commercial property types, loan size and regional split. The Company is rigorous in selecting suitable projects and borrowers for new loans. Key performance indicators are maintained across all parts of the business to ensure we are constantly monitoring and challenging our results.
Page 4
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
The board of directors of Strata Residential Finance PLC consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole in decisions taken during the year ended 31 March 2025 and in full compliance with the new SBP. The change of SBP authorised at the March 2025 General Meeting is a comprehensive reshape of the business to reduce risk, avoid future losses and generate attractive returns going forwards, whilst also implementing the succession planning authorised at the September Annual General Meeting.
∙Our SBP was designed to have a long term beneficial impact on the Company and to contribute to its success in delivering an efficient and well regarded business capable of paying regular dividends of in excess of 7% per annum per £1.00 A share to shareholders and to maintain similar attractive performance to C shareholders.
∙Our employees are fundamental to the delivery of our plan. The only Company employees are the directors. We aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and well being of our employees is one of our primary considerations in the way we conduct business.
∙Our customers are the borrowers that approach the Company seeking the financial assistance of the Company to advance their projects to mutual benefit. The Company strives to maintain a consistent and fair image in its marketplace and to treat borrowers fairly to achieve business results that develop the reputation of the Company further.
∙We work with our professional advisers to help drive change in our organisation through promoting new ideas and ways of working, whilst working with our borrowers to ensure that they reflect the same values and behaviours that we expect from our own people. The board has sight of all the construction processes in place and receives regular updates on any matters of significance.
∙As well as borrowers and advisers, we seek to build strong relationships with other key stakeholders in the areas in which we operate, such as financial advisers and wealth managers. Our directors take an active interest in these connections and participate where possible in building such relationships and are proactive in developing investor interest in the Company to assist in maintaining share liquidity. The Company has not failed to meet a share Withdrawal request to date.
∙Our SBP took into account the impact of the Company's operations on the community and environment and our wider societal responsibilities. All schemes subject to Company loans have already been through an exhaustive planning process that takes account of many areas of concern at all levels. The Company does not take on board planning risk and it does not seek to be involved in contentious schemes.
∙As the board of directors, our intention is to behave responsibly and ensure that the board operates the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours and in doing so, will contribute to the delivery of the SBP. The intention is to nurture our reputation, through both the construction and delivery of our plan, that reflects our responsible behaviour.
∙As the board of directors, our intention is to behave responsibly toward our shareholders and treat them fairly and equally, so they too may benefit from the successful delivery of the SBP.
Page 5
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
This report was approved by the board and signed on its behalf.
Page 6
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The directors present their report and the financial statements for the year ended 31 March 2025.
The loss for the year, after taxation, amounted to £4,229,225 (2024 - loss £736,349).
No interim ordinary dividend was paid for A shares (2024: £253,515). The directors continue to follow the Strategic Business Plan and do not recommend the payment of a final dividend.
The directors who served during the year were:
The Company adopted and continues to follow a new Strategic Business Plan, which was put in place following the Annual General Meeting held in September 2024.
As permitted by s414c(11) of the Companies Act 2006, the directors have elected to disclose information, required to be in the directors' report by Schedule 7 of the 'Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008', in the strategic report.
This report was approved by the board and signed on its behalf.
Page 7
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2025
The directors are responsible for preparing the strategic report, the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements 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 to 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.
Page 8
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA RESIDENTIAL FINANCE PLC
FOR THE YEAR ENDED 31 MARCH 2025
We have audited the financial statements of Strata Residential Finance Plc (the 'Company') for the year ended 31 March 2025, which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows and the 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
Page 9
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA RESIDENTIAL FINANCE PLC (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Page 10
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA RESIDENTIAL FINANCE PLC (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
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:
∙the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the residential development sector;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested a sample of journal entries to identify unusual transactions;
∙assessed whether judgments and assumptions made in determining the accounting estimates set out in note
3 were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙reading the minutes of meetings of those charged with governance;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HM Revenue and Customs.
Page 11
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF STRATA RESIDENTIAL FINANCE PLC (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Auditor's responsibilities for the audit of the financial statements (continued)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
WC2B 5AH
Date:
Page 12
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2025
Page 13
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
BALANCE SHEET
AS AT 31 MARCH 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 17 to 27 form part of these financial statements.
Page 14
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
Page 15
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
Page 16
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Strata Residential Finance PLC is a public company limited by shares incorporated in England and Wales. The registered office is Terminal Buildings, Blackbushe Airport, Blackwater, Camberley, GU17 9LQ.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with 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:
After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Revenue is recognised and measured as the fair value of the consideration receivable when it falls due.
Page 17
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
The Company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the Company becomes party to the contractual provisions of the instrument.
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.
The Company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest rate method, less any impairment.
Financial liabilities
Basic financial liabilities, including other creditors 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Page 18
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the Company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets and financial liabilities
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) despite having retained some significant risks and rewards of ownership, 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.
Page 19
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
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. Critical judgements The following judgments (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. Key accounting estimates and assumptions Recoverability of receivables The company establishes a provision for loans receivable from developers (trade debtors) that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience of recoverability and the credit profile of the developer.
Page 20
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 21
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 22
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
9.Taxation (continued)
There were no factors that may affect future tax charges.
Page 23
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 24
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 25
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Other reserves
Page 26
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
STRATA RESIDENTIAL FINANCE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
There is no single overall controlling party.
Page 27
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||