Westpoint Developments (Scotland) Limited is a private company limited by shares incorporated in Scotland. The registered office is 3 Arthur Street, Clarkston, Glasgow, G76 8BQ.
The financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.
The prior period has been restated to reflect the inclusion of cumulative interest and estimated fair value movements on certain financial liabilities that had been omitted in the prior year. As a policy of capitalising borrowing costs is adopted, all adjustments are capitalised to Work in progress. As such, these adjustments have no impact on equity brought forward or previously reported profits. Work in progress has been increased by £563,181 whilst current liabilities have increased by the same value.
The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have considered the company's ability to meet its liabilities as they fall due.
The company meets its day to day working capital requirements through related party funding and finance leases. Management information tools including budgets and cash flow forecasts are used to monitor and manage current and future liquidity.
The company also pays special attention to the recent COVID- 19 outbreak and the associated impact on the business. These risk s include:
Decreased economic activity impacting the property market through reduced demand and prices;
The consequential impact of this on the company's property revenue and cash flow;
Supply chain or sub-contractor disruptions resulting in delays to developments;
Interruption to operations due to measures taken to contain an outbreak on our sites ;
The impact of the above on the company's ability to satisfy its liabilities as they fall due.
The company's going concern assessment considers its principal risks, including those in respect of COVID-19 and is dependant on a number of factors including financial performance and access to funding facilities. The directors acknowledge that the company could be adversely affected by the pandemic depending on how the situation evolves and how this impacts the property and construction market moving forward.
The current and future financial position of the company , its cash flows and liquidity position have been reviewed by the directors. This included reviewing the projected profitability of all ongoing and proposed developments.
Following this review, the directors have a reasonable expectation that the company has adequate resources to continue in operational existences for the foreseeable future. The company has also obtained assurances that its related party undertakings will continue to provide such financial support as necessary to facilitate the development and growth of the company and to meet its long-term objectives . This includes ensuring the company has sufficient headroom to meet any additional cash requirements that would be contingent on a downturn in activity in relation to the Covid -19 pandemic.
Accordingly, the directors consider it appropriate to prepare the financial statements on the going concern basis.
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.
Other financial assets are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss.
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, 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 paymen ts 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. A m ounts 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.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
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.
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Work in progress is carried at the lower of cost and net realisable value. Calculation of the net realisable value requires management to use estimates regarding future selling prices and other projections which include a degree of uncertainty, particularly in relation to projects in the early stages of development.
Non basic financial instruments are carried at fair value through profit and loss. Calculation of the fair value is based on management's best estimate regarding expected development profit, appropriate interest rates and discount rates. These estimates include a degree of uncertainty, particularly in relation to final projected profits during the early stages of development.
In the prior year, the bank loan was secured by 1st ranking security over the developments at Bankhead Road, Dalmeny and Capelrig Road, Newton Mearns and a floating charge over all the assets of the company. Following repayment of the bank loans, this security was released.
Loans from West High Investments Limited, which are included within Other creditors, are secured by standard security and a floating charge.
There is one class of ordinary share with equal voting rights. There are no restrictions on the distribution of dividends and repayment of capital.
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.
Emphasis of matter
The global outbreak of COVID-19 after the year-end has resulted in an elevated level of uncertainty within the economy. The longer term effects of the virus, and the subsequent impact of the Government-imposed restrictions on movement and business, are not yet clear.
At this time, the directors believe there to be no quantifiable impact on the carrying value of assets in the balance sheet that results in either an adjusting or non-adjusting post balance sheet event.
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The company is a wholly owned subsidiary of WPH (Land) Limited and as permitted by exemption under the terms of FRS 102 has made no disclosure of transactions with wholly owned subsidiaries within the group.
The company's immediate parent company is Westpoint Homes Limited, a company incorporated and registered in Scotland under number SC137690.
WPH (Land) Limited, a company incorporated and registered in Scotland under number SC491311, is the ultimate parent company of the group. Copies of the accounts for the ultimate parent company can be obtained from 3 Arthur Street, Clarkston, Glasgow.
WPH (Land) Limited is controlled by S Cullis by virtue of his shareholding in that company.