Company registration number 07405235 (England and Wales)
RURAL HOUSING TRUST LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
PAGES FOR FILING WITH REGISTRAR
RURAL HOUSING TRUST LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 7
RURAL HOUSING TRUST LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
4
10,563,919
9,429,665
Investments
5
100
100
10,564,019
9,429,765
Current assets
Debtors
6
142,292
98,801
Cash at bank and in hand
54,324
12,597
196,616
111,398
Creditors: amounts falling due within one year
7
(1,103,305)
(1,139,920)
Net current liabilities
(906,689)
(1,028,522)
Total assets less current liabilities
9,657,330
8,401,243
Provisions for liabilities
(1,984,869)
(1,756,611)
Net assets
7,672,461
6,644,632
Capital and reserves
Called up share capital
9
250,010
250,010
Revaluation reserve
7,269,001
8,160,370
Capital redemption reserve
55,200
55,200
Profit and loss reserves
98,250
(1,820,948)
Total equity
7,672,461
6,644,632
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 25 January 2024 and are signed on its behalf by:
C M Hobden
Director
Company registration number 07405235 (England and Wales)
RURAL HOUSING TRUST LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
1
Accounting policies
Company information
Rural Housing Trust Limited is a private company limited by shares incorporated in England and Wales. The registered office is 54 Weymouth Street, London, W1G 6NU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Turnover
Turnover represents income (excluding value added tax) from the sale of shared ownership houses and rental income.
1.3
Investment property
Investment properties are carried at fair value determined annually by the directors with reference to external and internal valuers as appropriate 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 statement of comprehensive income.
Investment property under construction is valued as if complete with appropriate deductions for expected cost
to complete and theoretical developer's margin on remaining costs. Borrowing costs incurred during the course of development are capitalised as part of investment property.
Share ownership investment properties are valued depending on the type of lease, being either HCA or non-HCA. Those that are income-producing assets (HCA Leases) are valued periodically by professional external surveyors, or otherwise by the directors. Non-income producing (Non-HCA leases) are valued based on the number of expected conversions to income producing assets each year. The directors use recent experience of the Company to assess the number of expected conversions to apply per annum when valuing the non-income producing shared ownership investment properties.
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.5
Borrowing costs
Borrowing costs are charged to the statement of comprehensive income 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.
RURAL HOUSING TRUST LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 3 -
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
RURAL HOUSING TRUST LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 4 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
1.11
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
1.12
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.
RURAL HOUSING TRUST LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Investment properties
Investment properties are valued to fair value annually by the directors with reference to third party valuations where available. The company recognises investment properties at fair value, defined as the estimated amount for which a property should exchange on the date of the valuation between a willing buyer and seller in an arm's length transaction. In considering the valuation, the relevant income streams are reviewed, deducting any non-recoverable costs to be incurred by the landlord to arrive at a net income. The income is then capitalised at a market yield which is derived from comparable transactions of similar properties observable in the market. Any refurbishment costs or other capital items are then deducted along with purchaser's costs to arrive at the fair value. The directors of the company asses the carrying value at each reporting date to ensure that the carrying value is adjusted to fair value.
Impairment review
Determine whether there are indicators of impairment of the company's fixed asset investments. Factors taken into consideration in reaching such a determination include the economic viability and expected future financial performance of the investment and whether it is a component of larger cash-generating unit, the viability and expected future performance of that unit.
3
Employees
The average monthly number of persons (excluding directors) employed by the company during the year was:
2023
2022
Number
Number
Total
4
Investment property
2023
£
Fair value
At 1 November 2022
9,429,665
Additions
54,544
Disposals
(13,790)
Revaluations
1,093,500
At 31 October 2023
10,563,919
RURAL HOUSING TRUST LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
4
Investment property
(Continued)
- 6 -
The historical cost of investment properties at the balance sheet date was £1,310,049 (2022: £1,269,295).
Included within investment properties are properties under construction totalling £700,891 (2022: £660,137), held for capital appreciation and future rental income. The historical cost of these properties is £700,891 (2022: £660,137).
The investment properties were valued on the basis of fair value at 31 October 2023 by directors of the company with reference to third party valuations where available.
5
Fixed asset investments
2023
2022
Notes
£
£
Shares in group undertakings and participating interests
100
100
Movements in fixed asset investments
Participating interests
£
Cost or valuation
At 1 November 2022 & 31 October 2023
100
Carrying amount
At 31 October 2023
100
At 31 October 2022
100
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
66,326
62,762
Other debtors
70,523
30,706
Prepayments and accrued income
5,443
5,333
142,292
98,801
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
4,883
30,127
Amounts owed to group undertakings
20,000
40,000
Corporation tax
47,141
39,344
Other creditors
1,031,281
1,030,449
1,103,305
1,139,920
RURAL HOUSING TRUST LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
7
Creditors: amounts falling due within one year
(Continued)
- 7 -
There are no formal arrangements in place for the repayment of amounts owed to group undertakings. Interest is not charged on these balances.
8
Contingencies
The company owns a part share in 450 dwellings. Where the occupier's share in a property is financed by a mortgage, the company would theoretically be liable for any losses arising from default leading to repossession of shared properties. A reliable estimate of any potential liability in relation to this cannot be made.
The company has never been called upon to make good losses incurred by mortgage lenders, and no repossessions have taken place in the year.
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1.00 each of £1 each
10
10
10
10
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
8% Preference shares of £1.00 each of £1 each
250,000
250,000
250,000
250,000
Preference shares classified as equity
250,000
250,000
Total equity share capital
250,010
250,010
10
Controlling party
The parent of the smallest group for which consolidated financial statements are drawn up is Hobden Capital Limited, a company registered in England and Wales. The registered address of Hobden Capital Limited is 54 Weymouth Street, London, W1G 6NU.
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Giuseppe Scozzaro
Statutory Auditor:
Goodman Jones LLP
Date of audit report:
25 January 2024