Registered number:
(FORMERLY AFFINITY LAND PLC)
FOR THE YEAR ENDED 30 NOVEMBER 2017
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
COMPANY INFORMATION
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
CONTENTS
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2017
The principal activity of the company is to acquire or invest in UK and international land and property related entities with investment growth potential through active asset management.
During the year, the Directors continued the Company’s strategy to focus on making investments in property investment entities.
The Company has made a loss of £451,065 for the year. Ordinary expenses that were incurred during the year mainly related to the professional fees, consultancy fees, insurance costs and administration costs associated with the bonds. In respect of the investment in associates, the current strategy of the company is to develop out the site held within the associated group. The investment is held at cost, however, the site currently has a GDV value of £234m; the current residual land value is current £28m to £32m. The company will be the development manager of the project earning an income from the build process and gain the capital value on project completion; which is phased across several years.
The principal risk to the business is that the investments made by the company do not meet the required rate of return on each investment. The company carries out study, research and evaluates each project carefully and extensively before making any investment. The company will also closely monitor the performance of the investments.
The company also faces the same general risks and uncertainties as any other business, such as changes in the property market and general economic conditions. Financial key performance indicators The Directors consider that the company's key performance indicators are its investments and the return on those investments. The main key points are: Investments £2,763,311 (2016 - £3,145,054) Income from investments £281,893 (2016 - £192,595) The Directors actively review the monthly management accounts to monitor the performance of the company. Currently, the company does not consider there to be any non-financial key performance indicators. Future developments The directors continue to work on evaluating investment proposals in order to make strategic investments that will maximise return to the company.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2017
As noted, the company issues financial instruments in the form of bonds for the purpose of financing its operations. The bonds are issued for a five year period, and pay an agreed fixed return. During the year, the company has used some of the funds raised to provide investment loans to entities associated with property investments.
The main risks arising from the company’s financial instruments are liquidity risk and market price risk. The directors review and agree policies for managing each of these risks and they are summarised below.
Liquidity risk
The company has invested funds in real estate projects including a company related in property development. Property development is subject to risks of overrun in time and cost. The company actively monitors the performance of the investments made, the likely cash returns, and the company’s obligations to make payments on the debenture loans. The company invests in a range of different projects to reduce the risk that the company will not have funds available to make the payments due on the bonds.
Market price risk
The company gains much of its property exposure through the provision of equity and loan finance to property related companies. In addition, property as an asset may be difficult to value accurately or sell for the price intended. Failure to perform by the borrowers, or a decline in the value of the underlying property, could leave the borrowers unable to repay their loans, and in turn leave the company unable to meet its obligations. As with the measures to manage liquidity risk, the company monitors the performance of the investments made and invests in a variety of different projects to reduce the risk to the company of any one project proving unsuccessful. The company carefully selects the entities with which to deal, based on their experience in the sector. The company also fully analyses and appraises the underlying property investment, and continually monitors performance throughout the period of the investment.
This report was approved by the board on 16 November 2018
and signed on its behalf.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2017
The directors present their report and the financial statements for the year ended 30 November 2017.
The directors are responsible for preparing the Strategic report, the Directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £
451,065
(2016 -
loss
£
499,822
)
.
The directors do not recommend a final dividend.
The Company's business involves raising funds in the form of the issue of bonds for reinvestment into projects in the real estate sector. The cost of issuing the bonds and commencing the investments in real estate projects, have led to a loss in the current period. The company has generated income of £281,893 from the interest receivable on investment loans in the period, which although insufficient to cover the losses in the year, is an indication of longer term profitability. The directors have reviewed the remaining start up and working capital requirements for the Company and the planned returns from current and future investments. They remain confident that the Company has adequate financial resources for the foreseeable future and that the Company will be able to meet its obligations and achieve its objectives.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2017
The directors who served during the year were:
On 1 November 2018 S Gilbert was appointed as a director.
Each of the persons who are
directors at the time when this Directors' report is approved has confirmed that:
There have been no significant events affecting the Company since the year end.
This report was approved by the board on
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
We have audited the financial statements of Affinity Land Limited (formerly Affinity Land Plc) (the 'Company') for the year ended 30 November 2017, which comprise the Statement of income and retained earnings, the Balance sheet, the Statement of cash flows
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:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to note 2.2 in the financial statements, which indicates that the company recorded a net loss of £451,065 for the year to 30 November 2017 and as at that date had a net deficit of £1,246,990. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC) (CONTINUED)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC) (CONTINUED)
As explained more fully in the Directors' responsibilities statement 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 Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditor's report.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Leytonstone House
London
E11 1GA
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 NOVEMBER 2017
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
REGISTERED NUMBER:
08790444
BALANCE SHEET
AS AT
30 NOVEMBER 2017
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 11 to 18 form part of these financial statements.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2017
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
Affinity Land Limited (formerly Affinity Land Plc) ("the Company") is a company limited by shares, incorporated in England and Wales. Its registered office is 109 Baker Street, London, W1U 6RP.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors have considered the business activities of the company and the factors likely to affect its future development and performance and have reviewed the financial position of the company.
At 30 November 2017, the company made losses of £451,065 in the year and as at that date had a net deficit of £1,246,990. The company's business involves raising funds in the form of the issue of bonds for reinvestment into projects in the real estate sector. The cost of servicing this debt has led to the loss in the current period. The company has generated income of £281,893 from interest receivable on investment loans in the period, which although insufficient to cover the losses in the year, is an indication of longer term profitability. The company is dependent upon the repayment of interest and/or capital from the investments and debtors in order to meet operating cash requirements and to pay the bond interests as they fall due. There is an element of uncertainty as to the timing and value of incoming funds. However, the directors have reviewed the remaining working capital requirements for the company and the planned returns from current and future investments. They remain confident that the company has adequate financial resources for the foreseeable future, and that the company will be able to meet its obligations and achieve its objectives. Based on their assessment, the directors are of the opinion that the company has adequate resources to fund its operations for the foreseeable future and so determine that a going concern basis is the appropriate basis for the preparation of these financial statements.
Finance costs are charged to the Statement of income and retained earnings 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 the Statement of income and retained earnings in the year in which they are incurred.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
2.
Accounting policies (continued)
Bonds are recognised on their issue to the bond holder. The bonds carry a coupon of 7% per annum of which 2% is to be payable annually and 5% is to be rolled up, compounded and payable on maturity. All the bonds will be redeemed at par in full on the fifth anniversary of the issue of the bonds. Interest on the bonds is accrued accordingly.
Expenses and commissions directly related to the issue of the bonds have been capitalised and included within the borrowings. The issue costs are amortised over the period of the bonds.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
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 balance sheet date.
Investments held as fixed assets are shown at cost less provision for impairment.
Investments in associates are included at cost less provision for impairment..
Short term debtors are measured at transaction price, less any impairment. Debtors include accrued income from investments.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
2.
Accounting policies (continued)
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 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 Company's cash management.
Short term creditors are measured at the transaction price.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Estimates and judgments 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.
a) Critical judgments in applying the entity’s accounting policies No significant judgments have had to be made by management in preparing these financial statements. b) Critical accounting estimates and assumptions No significant accounting estimates and assumptions have had to be made by management in preparing these financial statements.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
The company has estimated tax losses of £625,444 available to carry forward to be offset against future trading profits.
Deferred tax assets of £72,530 have not been recognised in the financial statements due to the uncertainty over the recoverability of the amount.
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
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AFFINITY LAND LIMITED (FORMERLY AFFINITY LAND PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2017
Profit and loss account
The profit and loss account represents cumulative distributable profits and losses net of dividends and other adjustments.
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