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Financial Statements |
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for the Year Ended 31 December 2020 |
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for |
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THE BOTLEY DEVELOPMENT COMPANY LIMITED |
REGISTERED NUMBER:
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Financial Statements |
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for the Year Ended 31 December 2020 |
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for |
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THE BOTLEY DEVELOPMENT COMPANY LIMITED |
THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Contents of the Financial Statements |
for the year ended 31 December 2020 |
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Company Information | 1 |
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Balance Sheet | 2 |
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Notes to the Financial Statements | 3 |
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THE BOTLEY DEVELOPMENT COMPANY LIMITED |
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Company Information |
for the year ended 31 December 2020 |
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Directors: |
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Secretary: |
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Registered office: |
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Registered number: |
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Auditors: |
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Chartered Accountants |
Statutory Auditor |
Aissela |
46 High Street |
Esher |
Surrey |
KT10 9QY |
THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Balance Sheet |
31 December 2020 |
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2020 | 2019 |
Notes | £ | £ | £ | £ |
Fixed assets |
Investments | 4 |
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Current assets |
Stocks | 5 |
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Debtors | 6 |
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Cash at bank |
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Creditors |
Amounts falling due within one year | 7 |
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Net current assets |
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Total assets less current liabilities |
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Creditors |
Amounts falling due after more than one
year |
8 |
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Net liabilities |
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Capital and reserves |
Called up share capital | 10 |
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Other reserves | ( |
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Retained earnings |
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Shareholders' funds |
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In accordance with Section 444 of the Companies Act 2006, the Profit and Loss Account has not been delivered. |
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The financial statements were approved by the Board of Directors and authorised for issue on
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THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Notes to the Financial Statements |
for the year ended 31 December 2020 |
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1. | Statutory information |
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The Botley Development Company Limited is a
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The presentation currency of the financial statements is the Pound Sterling (£). |
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2. | Accounting policies |
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Basis of preparing the financial statements |
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Going concern |
There is a balance sheet deficit of £18,307,917 (2019: £144,188) at the year end. |
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The financial statements have been prepared on a going concern basis. This basis is considered appropriate by the directors. |
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The directors have prepared detailed forecasts and plans covering the timing to a proposed sale. This includes the renegotiation of internal and external debt to extend the maturity and have sought group support to be able to meet liabilities as they become due and aid with any cash flow difficulties. |
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In particular, in response to the COVID-19 pandemic, the directors have considered the impact on the company's development project. With the appropriate social distancing measures in place, the project has continued as planned, with minimal disruption. The directors therefore consider the resulting impact of COVID-19 on the project to be minimal. |
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Based on their assessment, given the measures that have been undertaken to mitigate the current adverse position, the current resources available and the availability of group support, the directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts. |
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The financial statements do not include any adjustments to the value of the balance sheet which would result from the going concern basis not being valid. The company's ability to achieve the sales plan as detailed in the forecasts prepared by the directors are of paramount importance in adopting the going concern basis. |
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Preparation of consolidated financial statements |
The financial statements contain information about The Botley Development Company Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 399(2A) of the Companies Act 2006 from the requirements to prepare consolidated financial statements. |
THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2020 |
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2. | Accounting policies - continued |
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Key source of estimation, uncertainty and judgement |
The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgement that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Key areas of estimation and judgement include the following: |
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a) Valuation of work-in-progress |
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When determining the net realisable value of work-in-progress, key estimates and judgements are applied by the directors. This includes an estimation of the costs remaining to complete the development (including work completed by subcontractors but not yet billed) as well as an estimation of future revenue. The application of these estimates includes a degree of uncertainty. Should these estimates change unfavourably, then a write down of work-in-progress may be required. |
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b) Trade and other debtors |
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The directors review the recoverability of trade and other debtors at the year end. Should a debtor balance be deemed irrecoverable, a provision is recognised accordingly. The directors apply judgement when estimating the level of provision required. |
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c) Intra-group loan and imputed interest |
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There was significant uncertainty in calculating the present value of the intra-group loan, principally due to difficulty in ascertaining a market interest rate for a comparable debt instrument for discounting purposes and the uncertainties affecting the predicted timing of the loan repayments under the loan terms. |
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There are inherent uncertainties predicting the timing of future repayments under the terms of the intra-group loan, which also leads to judgements concerning the amount of the discount to be recognised on an amortised cost basis for the financial year. |
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Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales tax in respect of the sale of property from work-in-progress. |
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Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
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Work-in-progress |
Work-in-progress includes costs directly attributable to the purchase of and development of land sites. The purchase of land and other property is recognised upon legal completion. Costs include amounts expended on land acquisition, construction and related planning costs, legal and professional fees as well as other costs directly attributable to the development of the sites. |
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Borrowing costs in respect of particular site developments are capitalised and included within work-in-progress until completion of the construction work. |
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Work-in-progress is carried forward at the lower of cost and net realisable value. |
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The company undertakes developments on such terms that it cannot determine profit until the development is complete and a sale achieved. Therefore, no attributable profit is taken on such uncompleted developments. |
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Completed developments are retained within stock until such a time that a buyer is found and the related site has been sold. This reflects the nature of the development which is not held for long term investment. Completed developments are held by the company whilst a buyer is being sought, during which time, the properties are let on a commercial basis. |
THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2020 |
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2. | Accounting policies - continued |
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Financial instruments |
Financial assets and financial liabilities are recognised in the balance sheet when the company becomes a party to the contractual provisions of the instrument. |
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Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the company will not be able to collect all amounts due. |
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Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank and bank overdrafts. |
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Financial liabilities and equity instruments issued by the company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. |
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Taxation |
Taxation for the year comprises current tax. Tax is recognised in the Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
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3. | Employees and directors |
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The average number of employees during the year was NIL (2019 - NIL). |
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4. | Fixed asset investments |
Shares in |
group |
undertakings |
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Cost |
Additions |
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At 31 December 2020 |
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Net book value |
At 31 December 2020 |
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THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2020 |
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5. | Stocks |
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2020 | 2019 |
£ | £ |
Work-in-progress brought forward | 94,871,138 | 68,606,577 |
Additions during the year | 25,597,849 | 48,226,878 |
Sales during the year | (65,750,000 | ) | - |
Transfer during the year | - | (21,962,317 | ) |
Impairment | (5,209,402 | ) | - |
49,509,585 | 94,871,138 |
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Included within work-in-progress, before the sale and impairment, are amounts totalling £23,950,369 (2019: £18,564,519) in respect of borrowing costs that have been capitalised. |
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From 1 October 2020, all interest charges are included in the profit and loss account and not capitalised. |
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Further information on the sales during the year of £65,750,000 can be found in the related party note. |
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6. | Debtors |
2020 | 2019 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
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Solicitors client account | 14,090 | 178,276 |
Managing agent client account | 321,886 | 225,716 |
Related party debtors | 647,999 | 3,926,901 |
VAT |
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Amounts falling due after more than one year: |
Related party debtors | 57,880,134 | - |
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Aggregate amounts |
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7. | Creditors: amounts falling due within one year |
2020 | 2019 |
£ | £ |
Trade creditors |
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Related party creditors | 3,789,368 | 3,790,011 |
Accrued interest |
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Accruals and deferred income |
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8. | Creditors: amounts falling due after more than one year |
2020 | 2019 |
£ | £ |
Bank loans 1-2 yrs - capital |
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Bank loans 1-2 yrs - interest | 4,547,248 | 1,683,452 |
Related party creditors | 37,505,534 | 36,464,584 |
Accrued interest | 13,961,669 | 10,130,974 |
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THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2020 |
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8. | Creditors: amounts falling due after more than one year - continued |
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As part of the refinancing that took place during 2019, the company paid a premium of £67,065 to acquire an interest rate cap in respect of its facility amounting to £70,081,257. The cap rate is 1.50% per annum, rising to 2.50% per annum on 22 March 2021. The cap expires on 28 March 2022. |
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The premium is included within work-in-progress at the year end and has been carried forward at the transaction value. Any adjustment to fair value has been deemed to be immaterial to the financial statements. |
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9. | Secured debts |
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The following secured debts are included within creditors: |
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2020 | 2019 |
£ | £ |
Bank loans | 68,223,180 | 47,662,295 |
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There is a fixed and floating charge over all the property and undertaking of the company. |
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10. | Called up share capital |
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Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2020 | 2019 |
value: | £ | £ |
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A Ordinary | £1 | 45,651 | 45,651 |
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11. | Disclosure under Section 444(5B) of the Companies Act 2006 |
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The Report of the Auditors was unqualified. |
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for and on behalf of
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THE BOTLEY DEVELOPMENT COMPANY LIMITED (REGISTERED NUMBER: 07117579) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2020 |
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12. | Related party disclosures |
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Parent undertaking |
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The parent undertaking introduced loans of £1,049,050 (2019: £nil) to the company. Interest on this loan will become payable when the loan agreement expires and is charged at 4.75% above LIBOR. Interest charged during the year totalled £1,914 (2019: £nil). |
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Interest on loans other than the one above from the parent undertaking will become payable when the loan agreements expire and is being calculated at various rates ranging from 8% to 10.5% per annum, compounded annually. Interest charged during the year was £4,365,605 (2019: £3,673,065). |
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At the end of the year, £58,530,571 (2019: £53,122,103) was owed to the parent company, including £17,235,669 (2019: £12,868,151) accrued interest. During the year, loans and interest totalling £nil (2019: £7,254,750) were repaid to the parent company. |
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In addition to the above, an amount of £3,426,901 (2019: £3,426,901) was owed from the parent company at the beginning of the year. During the year, the full amount was written off with £3,426,901 included as a write off expense in the profit and loss account. |
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Company with common shareholders |
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During the year, a company with common shareholders, recharged management expenses of £629,490 (2019: £629,495) to the company. These are included in work-in-progress at the year end. |
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Fellow subsidiaries |
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During the year, property held in work-in-progress of £65,750,000 was sold to fellow subsidiaries following the issue of a 999 year lease to each of the subsidiaries. The property was sold at cost and therefore nil profit or loss arose as a result of the transaction. This comprised of two separate sales of £58,500,000 and £7,250,000. In return, an interest free loan was provided to the subsidiaries for a term of 3 years from the date of the 999 year lease. Imputed interest has been calculated on these loans, with £853,823 included as interest receivable in the profit and loss account. Amounts owed at the end of the year included in debtors due after 1 year totalled £57,880,134. |
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At 31 December 2020, included in other debtors is an amount of £630,000 (2019: £500,000) owed from another fellow subsidiary. The loan is interest free and repayable on demand. |
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13. | Controlling party |
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The company is a wholly owned subsidiary of Botley Developments (Holdings) Limited. There is no ultimate controlling party. |