| Rowan Homes (SW) Limited |
| Notes to the Accounts |
| for the year ended 31 December 2018 |
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| 1 |
Summary of significant accounting policies |
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Basis of preparation |
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The accounts have been prepared in accordance with Financial Reporting Standard 102 (FRS 102) and the Companies Act 2006 (as applicable to companies subject to the small companies regime).
The significant accounting policies applied in the preparation of these statements are set out below. Theses policies have been consistently applied to all years presented unless otherwise stated. |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of property and from the rendering of services. Turnover from the sale of property is recognised when the contract for sale is completed and all contractual conditions have been fulfilled. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Plant and machinery |
20 % straight line |
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Motor vehicles |
25 % straight line |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised.
Stock is assessed for impairment at each reporting date. The carrying amount of each item of stock is compared with its selling price less costs to complete and sell. If an item of stock is impaired its carrying amount is reduced to selling price less costs to complete and sell , and an impairment loss is recognised immediately in the profit and loss account.
Where an impairment loss is subsequently reversed, the carrying amount of the stock is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the stock in prior periods. A reversal of an impairment loss is recognised immediately in the profit and loss account.
When items of stock are complete and being marketed all methods of obtaining revenue are utilised to maximise income. |
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Borrowing Costs |
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Borrowing costs that are directly attributable to the acquisition, construction or production of stock are capitalised as part of the cost of that stock. Capitalisation is applied consistently to each property in stock. The borrowing costs that are directly attributable to the acquistion, construction or production of the stock are those borrowing costs that would have been avoided if the expenditure on the stock property had not been made. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Other than loans from directors who are also shreholders. loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. Short term creditors are measured at transaction price (which is usually the invoice price). Loans from directors who are also shareholders are measured at the transaction price and the exemption from measuring the loans using the amortised cost and effective method has been applied to the loans. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Employee benefits |
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When employees have rendered service to the company, short term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service. |
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Going Concern |
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The company has indebtedness to its bank and the directors of £149,902 (2017 - £154,699) and £708,713 (2017 - £637,433) respectively. The company is reliant on the continued support of the company's bankers and directors. The directors do not consider this support will be withdrawn and that the company can continue trading as a going concern for the foreseeable future. |
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| 2 |
Employees |
2018 |
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2017 |
| Number |
Number |
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Average number of persons employed by the company |
2 |
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2 |
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| 3 |
Tangible fixed assets |
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Plant and machinery |
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Motor vehicles |
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Total |
| £ |
£ |
£ |
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Cost |
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At 1 January 2018 |
5,710 |
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14,165 |
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19,875 |
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Disposals |
(233) |
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- |
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(233) |
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At 31 December 2018 |
5,477 |
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14,165 |
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19,642 |
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Depreciation |
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At 1 January 2018 |
3,013 |
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10,034 |
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13,047 |
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Charge for the year |
687 |
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3,541 |
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4,228 |
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On disposals |
(200) |
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- |
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(200) |
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At 31 December 2018 |
3,500 |
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13,575 |
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17,075 |
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Net book value |
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At 31 December 2018 |
1,977 |
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590 |
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2,567 |
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At 31 December 2017 |
2,697 |
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4,131 |
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6,828 |
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The company has allowed a floating charge over the company's assets, as security for the bank loan. |
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| 4 |
Stock |
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Stocks include interest on funds borrowed to fund developments in progress at the year end up to the completion of the developement. Borrowing costs in the year totalling £Nil (2017 - £7,295) have been included in stock. The total interest included in stocks at the year end was £85,826 (2017 - £85,826).
The amount of impairment losses recognised in the profit and loss account during the year is £21,376 (2017 -- £Nil). The reversals of impairment losses recognised in earlier years are £Nil (2017 - £20,439).
The company has allowed a floating charge over the company's assets, including development land and buildings with a carrying amount of £290,000 (2017 - £291,894), as security for the bank loan. |
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| 5 |
Debtors |
2018 |
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2017 |
| £ |
£ |
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Other debtors |
7,298 |
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4,195 |
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| 6 |
Creditors: amounts falling due within one year |
2018 |
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2017 |
| £ |
£ |
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Bank loans and overdrafts |
4,275 |
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4,425 |
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Trade creditors |
1,432 |
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1,078 |
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Other creditors |
175,557 |
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176,396 |
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181,264 |
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181,899 |
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| 7 |
Creditors: amounts falling due after one year |
2018 |
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2017 |
| £ |
£ |
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Bank loans |
145,627 |
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150,274 |
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Other creditors |
708,713 |
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637,433 |
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854,340 |
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787,707 |
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| 8 |
Borrowings |
2018 |
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2017 |
| £ |
£ |
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Creditors include: |
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Loan instalments falling due for payment after more than five years |
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124,934 |
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130,493 |
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Secured bank loans |
149,902 |
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154,699 |
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The bank loans are secured by the following: a first legal charge over the freehold property at The Old Chapel, Chapel Street, Gunnislake, PL18 9NA, a property include within stock, together with a floating charge on company assets and a personal guarantee by a director. |
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| Nominal |
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2018 |
| 9 |
Share Capital |
Value |
Number |
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2018 |
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2017 |
| £ |
£ |
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Ordinary shares |
£1 each |
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100 |
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100 |
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100 |
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| 10 |
Related party transactions |
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A director has provided a personal guarantee for £50,000 for the company loan.
The directors have lent various amounts to the company. No interest was due for the year (2017 - £Nil ). Unpaid accrued interest from previous years at the year end was £169,332 (2017 - £169,332). The loan amount due at the year end to the directors and included in other creditors is £708,713 (2017 - £637,433). The directors have indicated that they will not seek repayment of the loan for at least 12 months following approval of the accounts. |
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| 11 |
Other information |
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Rowan Homes (SW) Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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17 Wyndham Square |
|
Plymouth |
|
Devon |
|
PL1 5EF |
