Registered number:
03948741
MARSTON PROPERTIES HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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MARSTON PROPERTIES HOLDINGS LIMITED
COMPANY INFORMATION
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J E T Clark
(appointed
1 June 2021
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Chartered Accountants
&
Statutory Auditor
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MARSTON PROPERTIES HOLDINGS LIMITED
CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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MARSTON PROPERTIES HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
Marston Properties Holdings Limited reports the consolidated results of the subsidiary undertakings - Marston Properties Limited, W. J. Marston & Son Limited and Square Yard Limited.
The principal activities of the group continue to be those of investment in properties and property development.
The group concentrates on three main areas of activity being the residential and commercial investment portfolios and development.
The directors present their report together with the audited financial statements for the year ended 31 March 2022.
The operating profit amounted to £1,691,095 against £2,782,934 in 2021 which is a decrease of £1,091,839. The group results include impairment losses of £1,590,000 (2021 £400,000) and exceptional administrative income of £184,516 related to a reimbursement of previous years costs. Excluding these events, the decrease in operating profits is reduced to £64,002 (2%).
Turnover £7,237,285 (2021 £6,645,990) increased by £591,295 (8.9%). The increase in turnover reflects an improvement in rental income following the downturn in rents caused by the pandemic in 2020 - 2021.
During the year, we continued to professionally manage our property portfolio and increased maintenance and refurbishments, which in turn increased property costs on the investment portfolio by £266,814 (16%) to £1,913,237 (2021 £1,646,423).
At the year end, the directors revalued the portfolio with consideration to external valuations carried out following the year end. Overall, this resulted in a portfolio valuation net increase of £518,065 (2021 £4,544,153).
After the revaluation and interest payable of £635,264 (2021 £620,751), the profit before tax was £1,575,843 (2021 £6,706,941). Excluding the stock impairment, exceptional income and the revaluation, profits before tax of £2,474,558 (2021 £2,551,731) decreased by £77,173 (3%).
During the year, the company paid a dividend of £140,453 (2021 £nil).
The group continued to pursue a policy of reinvesting profits into the business through developing and refurbishing the existing portfolio and seeking opportunities to add value through development and investment.
Future Developments
The directors continue to closely monitor the business risks and management information and have adopted more caution in their business decisions. However, the directors are confident in the future and where appropriate for the business, intend to continue to invest in new properties and its existing portfolio.
Principal risks and uncertainties
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The directors have reviewed the principal risks for the group have been identified as the uncertainty of the economy and the effect of social change on our occupiers. The economic risk includes the level of interest rates, inflation, building costs and a potential recession. Social change includes changes to working and living culture and practices. It is the directors’ opinion that the group has adequate resources to manage these risks.
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MARSTON PROPERTIES HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
Financial key performance indicators
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The directors use a range of performance measures to monitor and manage the business. Certain of these are particularly important in the generation of shareholder value and are considered key performance indicators (KPI’s). Our KPI’s measure past performance and provide information to allow us to manage the business in the future. Our KPI’s therefore exclude one-off and exceptional events and are gross profit as a percentage of turnover, administrative expenses as a percentage of turnover, operating profit as a percentage of turnover and gearing.
2022 202
1
Gross profit as a percentage of turnover 73.50% 75.20%
Administrative expenses as a percentage of turnover 31.60% 27.90%
Operating profit as a percentage of turnover 42.00% 47.80%
Gearing 18.30% 17.10%
This report was approved by the board
and signed on its behalf.
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C L Marston
Director
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MARSTON PROPERTIES HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
The directors present their report and the financial statements for the year ended 31 March 2022.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
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select suitable accounting policies for the Group's financial statements and then apply them consistently;
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make judgments and accounting estimates that are reasonable and prudent;
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.
The loss for the year, after taxation, amounted to £
3,979,671
(2021 -
profit
£
5,416,257
)
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Dividends declared during the year amounted to £140,453 (2021 £Nil).
The directors who served during the year were:
J E T Clark
(appointed
1 June 2021
)
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J J S Marston MBE
(deceased
1 July 2022
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MARSTON PROPERTIES HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
Disclosure of information to auditors
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
During the year, Berg Kaprow Lewis LLP acted as auditor to the company until 31 March 2022. On 31 March 2022, Berg Kaprow Lewis LLP transferred its audit business to a new LLP, BKL Audit LLP. The directors consented to treating the appointment of Berg Kaprow Lewis LLP as extending to BKL Audit LLP with effect from 1 April 2022.
Under section 487(2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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C L Marston
Director
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MARSTON PROPERTIES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARSTON PROPERTIES HOLDINGS LIMITED
We have audited the financial statements of Marston Properties Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2022, which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity
and the related notes, 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).
In our opinion the financial statements:
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give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 March 2022 and of the Group's profit for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.
Conclusions relating to going concern
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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 Group's or the parent 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.
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MARSTON PROPERTIES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARSTON PROPERTIES HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or 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:
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adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
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the parent Company financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors
' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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MARSTON PROPERTIES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARSTON PROPERTIES HOLDINGS LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 Group 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:
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Enquiring of management, those charged with governance and the entity’s solicitors around actual and
potential litigation and claims;
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Reviewing minutes of meetings of those charged with governance;
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Reviewing financial statement disclosures and testing to supporting documentation to assess compliance
with applicable laws and regulation;
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Performing audit work over the risk of management override of controls, including testing of journal entries
and other adjustments for appropriateness, evaluating the business rationale of significant transactions
outside the normal course of business and reviewing accounting estimates for bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
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Conclude on the appropriateness of the directors
' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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MARSTON PROPERTIES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MARSTON PROPERTIES HOLDINGS LIMITED (CONTINUED)
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 Auditors' 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.
Myfanwy Neville FCA
(Senior Statutory Auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
London
6 December 2022
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MARSTON PROPERTIES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
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Exceptional cost of sales
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Exceptional administrative income
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Amounts written off investments
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Interest receivable and similar income
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Interest payable and similar expenses
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Fair value gain/(loss) on investment property revaluation
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(Loss)/profit for the financial year
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Movement of deferred tax on fair value loss/(gain) on property classified
as tangible fixed assets
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Fair value gain/(loss) on property classified as tangible fixed assets
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Other comprehensive income for the year
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Total comprehensive income for the year
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(Loss)/profit for the year attributable to:
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Owners of the parent Company
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Total comprehensive income for the year attributable to:
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Owners of the parent Company
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The notes on pages 18 to 36 form part of these financial statements.
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MARSTON PROPERTIES HOLDINGS LIMITED
REGISTERED NUMBER:
03948741
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2022
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Creditors: amounts falling due within one year
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Net current assets/(liabilities)
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Investment property reserve
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Equity attributable to owners of the parent Company
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MARSTON PROPERTIES HOLDINGS LIMITED
REGISTERED NUMBER:
03948741
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(CONTINUED)
AS AT
31 MARCH 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
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N S Tapp
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The notes on pages 18 to 36 form part of these financial statements.
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MARSTON PROPERTIES HOLDINGS LIMITED
REGISTERED NUMBER:
03948741
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2022
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Investment property reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by
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N S Tapp
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The notes on pages 18 to 36 form part of these financial statements.
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MARSTON PROPERTIES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MARCH 2022
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Tangible fixed asset revaluation reserve
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Investment property revaluation reserve
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Equity attributable to owners of parent Company
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Comprehensive income for the year
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Movement of deferred tax on unrealised gains on revaluation of property
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Other comprehensive loss for the year
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Total comprehensive loss for the year
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Dividends: Equity capital
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Fair value gains on investment properties transferred to investment properties revaluation reserve
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Transfer of deferred tax on investment property revaluation
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Realised fair value gain on property disposal
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Total transactions with owners
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The notes on pages 18 to 36 form part of these financial statements.
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MARSTON PROPERTIES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MARCH 2021
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Tangible fixed asset revaluation reserve
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Investment property revaluation reserve
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Equity attributable to owners of parent Company
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Comprehensive income for the year
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Movement on deferred tax on unrealised deficit on revaluation of property classified as tangible fixed assets
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Fair value loss on property classified as tangible fixed assets
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Other comprehensive loss for the year
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Total comprehensive loss for the year
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Fair value gains on investment properties transferred to investment properties revaluation reserve
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Transfer of deferred tax on investment property revaluation
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Fair value gains realised on disposal of investment property
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Total transactions with owners
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The notes on pages 18 to 36 form part of these financial statements.
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MARSTON PROPERTIES HOLDINGS LIMITED
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MARCH 2022
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 18 to 36 form part of these financial statements.
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MARSTON PROPERTIES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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(Gain)/Loss on disposal of tangible assets
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|
Fair value loss/(gain) on investment property revaluation
|
|
|
Net cash generated from operating activities
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
Purchase of tangible fixed assets
|
|
|
Sale of tangible fixed assets
|
|
|
Sale of unlisted and other investments
|
|
|
|
|
|
Capital refurbishment/purchase of investment properties
|
|
|
Sale of investment properties
|
|
|
Net cash from investing activities
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
Cash and cash equivalents at the end of year
|
|
|
|
|
|
Cash and cash equivalents at the end of year comprise:
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 18 to 36 form part of these financial statements.
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The principal activity of the Group continued to be property investment and property development.
The Company is a private company limited by shares and is incorporated in England and Wales.
The principal place of business is 1 Mills Yard, Hugon Road, London, SW6 3AQ.
2.
Accounting policies
|
|
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 Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The Company's and the Group's functional and presentational currency is Sterling.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Going concern
On the basis of their assessment of the Group's financial position and resources, the directors believe that they are well placed to manage its business risks.
The Group has significant reserves and therefore, the directors believe that there are adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The directors have reviewed forecasts and budgets and are confident of the Group''s ability to continue trading as a going concern for the foreseeable future. The Group keeps its management accounts under constant review to ensure that no further action or changes are required to their business in order for it to continue as a going concern. Based on the results to date and future projections, the directors are confident that the Group will continue to meet its liabilities as they fall due. As a result, the directors have prepared the financial statements on a going concern basis.
The following principal accounting policies have been applied:
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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.
Turnover comprises rental income receivable from letting of investment properties, management fees and goods and services net of value added tax. Turnover also includes revenue recognised by the Group in respect of its property development activities, exclusive of VAT. When turnover is in relation to contracts, revenue is recognised in the period to which it relates, or on satisfactory completion of contracts.
Any ancillary rental income received from properties held for trading or development purposes is shown within other operating income, and is recognised in the period to which it relates.
|
|
Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Consolidated Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
|
|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
The Group's trading premises classified as tangible fixed assets will be revalued each year and be subject to a policy of depreciation as specified below.
Tangible fixed assets under the cost model, other than the Group's trading premises and investment properties, are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
|
|
Tangible fixed assets (continued)
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
|
|
|
|
Freehold property trading premises
|
|
Negligible over its estimated useful economic life of 125 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The residual value of the trading premises is considered to be higher than the current valuation of the property in the financial statements, and as a result, the financial statements show no depreciation charge.
|
|
Revaluation of tangible fixed assets
|
Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the year end.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
Investment property is carried at market value determined annually by the directors and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Consolidated Statement of Comprehensive Income.
Investments in unlisted Company shares are stated at historic cost less impairment.
Investments in subsidiaries are measured at cost less accumulated impairment.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
Stock of trading property is stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.
At each year end date, the properties are assessed for impairment. If there is an impairment, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the income and expenditure statement.
|
|
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.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
|
|
Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and loans to/from related parties.
(i) 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.
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 profit or loss.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
|
|
Financial instruments (continued)
|
If there is 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.
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, bank loans and loans from fellow group companies, 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.
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. 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.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
Judgments in applying accounting policies and key sources of estimation uncertainty
|
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates may differ from the actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
Useful economic life of freehold property
This is an estimate of the remaining life of the freehold property held within tangible fixed assets and used for business purposes. The useful life forms the basis of the depreciation rate for the freehold property.
Residual value of freehold property
The residual value of freehold property is estimated in order to calculate the depreciation attributable to the period.
Property valuation
A valuation is carried out for both investment and freehold property classified as tangible fixed assets at the year end date. Judgements and estimation techniques have been employed as part of the professional valuation process to determine the current market value of the property.
No other judgements have been made in the process of applying the above accounting policies.
|
|
|
The contributions of the various acitivities of the Group to turnover are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and service charge income
|
|
|
|
|
|
|
|
All turnover arose within the United Kingdom.
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
|
The operating profit is stated after charging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
|
|
|
Other operating lease rentals
|
|
|
|
Defined contribution pension cost
|
|
|
|
|
|
|
|
Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
|
|
|
|
Fees payable to the Group's auditor and its associates in respect of:
|
|
|
|
Taxation advisory services
|
|
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
|
Staff costs, including directors' remuneration, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of defined contribution scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
|
|
The Company has no employees other than the directors, who did not receive any remuneration
(2021 - £
NIL
)
|
|
|
|
|
|
Group contributions to defined contribution pension schemes
|
|
|
|
|
|
|
|
|
|
|
|
During the year retirement benefits were accruing to
2
directors
(2021 -
1
)
in respect of defined contribution pension schemes.
|
|
The highest paid director received remuneration of £
210,000
(2021 - £
153,063
)
.
|
|
The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £
13,125
(2021 - £
NIL
)
.
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax on profits for the year
|
|
|
|
Adjustments in respect of previous periods
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
|
|
|
|
Taxation on profit on ordinary activities
|
|
|
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is higher than
(2021 - higher than)
the standard rate of corporation tax in the UK of 19%
(2021 -
19
%)
. The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit on ordinary activities before tax
|
|
|
|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes
|
|
|
|
Capital allowances for year in excess of depreciation
|
|
|
|
|
|
|
|
|
|
|
|
Fair value loss on investment property revaluation
|
|
|
|
|
|
|
|
Total tax charge for the year
|
|
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
11.
Taxation (continued)
|
Factors that may affect future tax charges
|
On 24 May 2021 the Finance Bill 2021 was substantively enacted and the corporation tax rate will increase to 25% from 1 April 2023.
|
Dividends on ordinary shares
|
|
|
|
|
|
|
|
Re-imbursement of prior years costs
|
|
|
|
|
|
|
|
Parent company profit for the year
|
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £43,748
(2021 -
£
NIL
)
.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
|
|
Fixtures, fittings and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The 2022 freehold property valuations were made by the directors based on market advice from independent valuers, at market value for existing use basis as at 31 March 2022.
The value of land included within freehold property is inextricably connected to the building, and as a result the directors do not feel any split of the value would be meaningful.
|
|
If the freehold property had not been included at valuation they would have been included under the historical cost convention as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
Other fixed asset investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The unlisted investments above include 6 ordinary shares in Carlton Square Limited and 4 ordinary shares in 23/24 Heathfield Square Limited.
|
|
|
Investments in subsidiary companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct subsidiary undertakings
|
|
The following were subsidiary undertakings of the Company:
|
|
|
|
|
|
|
|
Marston Properties Limited
|
1 Mills Yard, London, SW6 3AQ
|
|
|
|
|
|
1 Mills Yard, London, SW6 3AQ
|
|
|
|
|
W J Marston & Son Limited
|
1 Mills Yard, London, SW6 3AQ
|
|
|
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
Freehold investment property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The 2022 valuations were made by the directors based on market advice from independent valuers, on an open market value for existing use basis.
|
Stocks of development property
|
|
|
|
|
|
|
|
The carrying value of stocks are stated net of impairment losses totalling £2,760,000
(2021 - £960,000)
. These impairment losses were recognised in profit and loss.
Stock recognised in cost of sales during the year as an expense was £Nil
(2021: £Nil).
The difference between the purchase price of stocks and their replacement cost is not material.
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
|
|
|
|
|
Amounts owed by group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other taxation and social security
|
|
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans comprise a revolving credit facility of £37m (2021: £37m), secured against certain freehold investment properties owned by the Group.
|
|
|
|
Analysis of the maturity of loans is given below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
Amounts falling due 2-5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The bank loans comprise a new 5 year revolving credit facility of £37m, of which £6.6m was undrawn at 31 March 2022 and which is due for repayment in full on 7 December 2026. Interest is payable at rates related to SONIA from 8th December 2021 and previously at rates related to LIBOR. Interest was charged at an average rate of 2.11% (2020: 2.13%)
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
Charged to other comprehensive income
|
|
|
|
|
|
|
|
The provision for deferred taxation is made up as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated capital allowances
|
|
|
|
Tax on fair value adjustment to properties
|
|
|
|
|
|
|
|
We expect deferred tax of approximately £10,000 to be released in the year ended 31 March 2022.
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G0
shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G1
shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G2
shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G3
shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G4
shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G5 shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G6 shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G7 shares of £
0.10
each
|
|
|
|
|
228,200
(2021 -
228,200
)
Ordinary G8 shares of £
0.10
each
|
|
|
|
|
228,210
(2021 -
228,210
)
Ordinary G9 shares of £
0.10
each
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All issued shares carry an equal vote in the event of a resolution to liquidate the company or to vary the class rights.
Ordinary G0 to G9 shares have varying dividend rights as determined by the articles of association.
|
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Tangible fixed assets revaluation reserve
The tangible fixed asset revaluation reserve represents the fair value gains recognised in respect of the Group's trading premises classified as a tangible fixed assets, less any adjustments in respect of expected deferred tax liabilities that would arise on disposal of the property. This reserve is not distributable.
Investment property revaluation reserve
The investment property revaluation reserve represents the fair value gains recognised in respect of the Group's investment property portfolio, less any adjustments in respect of deferred tax on expected capital gains tax liabilities arising on these properties. This reserve is not distributable.
Where fair value losses have been identified in relation to investment properties, the fair value loss has been recognised in the profit and loss reserves, and not as a reduction to the investment property revaluation reserve. The associated deferred tax asset was also recognised in the profit and loss reserve as it is expected that these losses will reverse in the foreseable future.
Merger Reserve
The merger reserve arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.
Profit and loss account
The profit and loss account represents the Group's cummulative profits net of dividends. This reserve is distributable.
The Group companies have given cross guarantees as security for group bank borrowings. These borrowings are primarily supported by charges over certain freehold properties owned by the group. See note 23 for loan disclosures.
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £110,169
(2021: £102,185).
Contributions totalling £13,750
(2021: £12,764)
were payable to the fund at the year end date and are included in other creditors.
|
MARSTON PROPERTIES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
|
Commitments under operating leases
|
|
At 31 March 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
|
|
|
|
Related party transactions
|
|
See note 9 for disclosure of the directors’ remuneration and key management compensation. The non-executive directors received a total consideration of £41,564 for services provided to the Group during the year.
All of the Company's related party transactions were with other companies that are wholly owned within the Group.
|
|