Rivergreen Limited - Period Ending 2019-04-30

Registration number: 03079268

Rivergreen Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 30 April 2019

Rivergreen Limited

Contents

Company Information	1
Strategic Report	2
Directors' Report	3 to 4
Statement of Directors' Responsibilities	5
Independent Auditor's Report	6 to 8
Consolidated Income Statement	9
Consolidated Statement of Financial Position	10
Statement of Financial Position	11
Consolidated Statement of Changes in Equity	12
Statement of Changes in Equity	13
Consolidated Statement of Cash Flows	14
Notes to the Financial Statements	15 to 32

Rivergreen Limited

Company Information

Directors

P H Candler P A Ganley

Company secretary

J C Candler

Registered office

The Rivergreen Centre St Mary's Lane St Mary's Park Morpeth Northumberland NE61 6BL

Bankers

HSBC 110 Grey Street Newcastle upon Tyne Tyne & Wear NE1 6JG

Auditor

MHA Tait Walker Chartered Accountants & Statutory Auditor Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS

1

Rivergreen Limited

Strategic Report for the Year Ended 30 April 2019

The directors present their strategic report for the year ended 30 April 2019.

Principal activity

The principal activity of the company is that of property development, investment and project management.

Fair review of the business

Turnover increased to £1,213,062 during the year and operating loss was £293,324 (2018 - £1,635,960 operating profit).

Exceptional administrative expenses during the year amounted to £126,200 (2018 - £182,000) relating to doubtful debt provisions made against related party balances.

Marketing of the unlet units at the commercial development in Hartlepool continues.

Work continued on the developments at Stannington Park, a large scale mixed use development near Morpeth with the serviced office and conference venue, which is expected will welcome its first occupants during late 2019.

The group continues to consider appropriate opportunities for future developments.

Position at the year end

At the year end the group has a strong balance sheet position. The balance sheet strength puts the group in a strong position to continue with the long term strategy.

Principal risks and uncertainties

The principal risks identified by the management team to meet the long term strategy are in relation to employee retention, interest rates and liquidity. The group is continuing to monitor these risks and develop safeguards in order to sufficiently aide with the growth plans.

Financial KPI's
As part of its continuous improvement and quality programme, the group monitors a range of key performance indicators and the directors are pleased to comment on a number of these as follows:

	Unit	2019	2018
Gross margin	%	27.11	51.07

Approved by the Board on 29 October 2019 and signed on its behalf by:

P H Candler Director

2

Rivergreen Limited

Directors' Report for the Year Ended 30 April 2019

The directors present their report and the for the year ended 30 April 2019.

Directors of the group

The directors who held office during the year were as follows:

P H Candler

P A Ganley

Financial instruments

Objectives and policies

The group finances its activities with a combination of bank loans, other loans, finance leases and hire purchase contracts, cash and short term deposits. Overdrafts are used to satisfy short term cash flow requirements. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the group's operating activities.

Price risk, credit risk, liquidity risk and cash flow risk

Price risk
Price risk is the risk that changes in raw material prices have the potential to impact on the profitability of the group. The group does not consider that it is materially exposed to price risk.

Credit risk
Credit risk is the risk that one party of a financial instrument will cause a financial loss for the other party by failing to discharge its obligation. Group policies are aimed at minimising such losses and require customers to satisfy credit worthiness procedures prior to acceptance of contracts. The group also utilises insurance policies to protect against non-payment of debt. The group does not consider that it is materially exposed to credit risk.

Cash flow and liquidity risk
Cash flow and liquidity risk is the risk that a group's available cash will not be sufficient to meet its financial obligations. The group actively manages its cash flow position including collection of debts and timely payment of creditors. This, coupled with the strong cash position of the group is deemed sufficient to minimise the group's exposure to cash flow and liquidity risk.

Future developments

See disclosures within the Strategic Report regarding future developments of the group.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

3

Rivergreen Limited

Directors' Report for the Year Ended 30 April 2019 (continued)

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of MHA Tait Walker as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved by the Board on 29 October 2019 and signed on its behalf by:

P H Candler Director

4

Rivergreen Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and parent company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

•	select suitable accounting policies and apply them consistently;

•	make judgements 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; and

•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

5

Rivergreen Limited

Independent Auditor's Report to the Members of Rivergreen Limited

Opinion

We have audited the financial statements of Rivergreen Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2019, which comprise the Consolidated Income Statement, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, 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:

•	give a true and fair view of the state of the group's and the parent company's affairs as at 30 April 2019 and of the group's loss for the year then ended;
•	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

•	the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
•	the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

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.

6

Rivergreen Limited

Independent Auditor's Report to the Members of Rivergreen Limited (continued)

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

•	the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•	the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
•	the parent company financial statements are not in agreement with the accounting records and returns; or
•	certain disclosures of directors’ remuneration specified by law are not made; or
•	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

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.

7

Rivergreen Limited

Independent Auditor's Report to the Members of Rivergreen Limited (continued)

Use of our 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.

......................................
Brian Laidlaw BA CA (Senior Statutory Auditor)
For and on behalf of MHA Tait Walker
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS

29 October 2019


MHA Tait Walker is a trading name of Tait Walker LLP.

8

Rivergreen Limited

Consolidated Income Statement for the Year Ended 30 April 2019

	Note	2019 £	2018 £
Turnover	3	1,213,062	695,003
Cost of sales		(884,171)	(340,059)
Gross profit		328,891	354,944
Administrative expenses		(496,015)	(527,106)
Exceptional administrative expenses		(126,200)	(182,000)
Exceptional income - sale of investment property		-	1,990,122
Operating (loss)/profit	4	(293,324)	1,635,960
Other interest receivable and similar income	6	93,507	75,071
Interest payable and similar expenses	7	(28,856)	(70,722)
(Loss)/profit before tax		(228,673)	1,640,309
Taxation	11	20,856	(183,697)
(Loss)/profit for the financial year		(207,817)	1,456,612
Profit/(loss) attributable to:
Owners of the company		(207,817)	1,456,612

The group has no recognised gains or losses for the year other than the results above.

The notes on pages 15 to 32 form an integral part of these financial statements.
 

9

Rivergreen Limited

(Registration number: 03079268)
Consolidated Statement of Financial Position as at 30 April 2019

	Note	2019 £	2018 £
Fixed assets
Tangible assets	12	78,603	93,197
Investment property	13	3,256,724	4,299,724
		3,335,327	4,392,921
Current assets
Stocks	15	1,671,900	2,320
Debtors	16	2,530,811	1,992,416
Investments	17	1,049,999	1,049,999
Cash at bank and in hand		647,963	173,667
		5,900,673	3,218,402
Creditors: Amounts falling due within one year	19	(1,060,274)	(832,052)
Net current assets		4,840,399	2,386,350
Total assets less current liabilities		8,175,726	6,779,271
Creditors: Amounts falling due after more than one year	19	(2,018,026)	(356,398)
Provisions for liabilities		(296,281)	(317,137)
Net assets		5,861,419	6,105,736
Capital and reserves
Called up share capital	22	2,000	2,000
Other reserves	23	49,000	49,000
Profit and loss account	23	5,810,419	6,054,736
Equity attributable to owners of the company		5,861,419	6,105,736
Total equity		5,861,419	6,105,736

Approved and authorised by the Board on 29 October 2019 and signed on its behalf by:
 

P H Candler Director

The notes on pages 15 to 32 form an integral part of these financial statements.
 

10

Rivergreen Limited

(Registration number: 03079268)
Statement of Financial Position as at 30 April 2019

	Note	2019 £	2018 £
Fixed assets
Tangible assets	12	46,940	55,224
Investment property	13	740,000	740,000
Investments	14	1,002	1,001
		787,942	796,225
Current assets
Debtors	16	1,822,377	1,678,053
Investments		1,049,999	1,049,999
Cash at bank and in hand		915	150,938
		2,873,291	2,878,990
Creditors: Amounts falling due within one year	19	(156,579)	(132,700)
Net current assets		2,716,712	2,746,290
Total assets less current liabilities		3,504,654	3,542,515
Creditors: Amounts falling due after more than one year	19	(333,846)	(356,398)
Provisions for liabilities		(1,813)	(2,398)
Net assets		3,168,995	3,183,719
Capital and reserves
Called up share capital		2,000	2,000
Profit and loss account		3,166,995	3,181,719
Total equity		3,168,995	3,183,719

The company made a profit after tax for the financial year of £21,776 (2018 - profit of £1,728,043).

Approved and authorised by the Board on 29 October 2019 and signed on its behalf by:
 

P H Candler Director

The notes on pages 15 to 32 form an integral part of these financial statements.
 

11

Rivergreen Limited

Consolidated Statement of Changes in Equity for the Year Ended 30 April 2019
Equity attributable to the parent company

	Share capital £	Other reserves £	Profit and loss account £	Total £
At 1 May 2017	2,000	49,000	4,798,124	4,849,124
Profit for the year	-	-	1,456,612	1,456,612
Total comprehensive income	-	-	1,456,612	1,456,612
Dividends	-	-	(200,000)	(200,000)
At 30 April 2018	2,000	49,000	6,054,736	6,105,736

	Share capital £	Other reserves £	Profit and loss account £	Total £
At 1 May 2018	2,000	49,000	6,054,736	6,105,736
Loss for the year	-	-	(207,817)	(207,817)
Total comprehensive income	-	-	(207,817)	(207,817)
Dividends	-	-	(36,500)	(36,500)
At 30 April 2019	2,000	49,000	5,810,419	5,861,419

The notes on pages 15 to 32 form an integral part of these financial statements.
 

12

Rivergreen Limited

Statement of Changes in Equity for the Year Ended 30 April 2019

	Share capital £	Profit and loss account £	Total £
At 1 May 2017	2,000	1,653,676	1,655,676
Profit for the year	-	1,728,043	1,728,043
Total comprehensive income	-	1,728,043	1,728,043
Dividends	-	(200,000)	(200,000)
At 30 April 2018	2,000	3,181,719	3,183,719

	Share capital £	Profit and loss account £	Total £
At 1 May 2018	2,000	3,181,719	3,183,719
Profit for the year	-	21,776	21,776
Total comprehensive income	-	21,776	21,776
Dividends	-	(36,500)	(36,500)
At 30 April 2019	2,000	3,166,995	3,168,995

The notes on pages 15 to 32 form an integral part of these financial statements.
 

13

Rivergreen Limited

Consolidated Statement of Cash Flows for the Year Ended 30 April 2019

	Note	2019 £	2018 £
Cash flows from operating activities
(Loss)/profit for the year		(207,817)	1,456,612
Adjustments to cash flows from non-cash items
Depreciation and amortisation	4	15,110	19,362
Changes in fair value of investment property	13	-	(109,495)
Finance income	6	(93,507)	(75,071)
Finance costs	7	28,856	70,722
Gain/(loss) from investment property		-	(2,042,877)
Income tax expense	11	(20,856)	183,697
		(278,214)	(497,050)
Working capital adjustments
Increase in stocks	15	(626,580)	-
Increase in debtors	16	(538,395)	(444,253)
Increase/(decrease) in creditors	19	198,115	(62,410)
Cash generated from operations		(1,245,074)	(1,003,713)
Income taxes paid	11	(29,893)	(32,892)
Net cash flow from operating activities		(1,274,967)	(1,036,605)
Cash flows from investing activities
Interest received		93,507	75,071
Acquisitions of tangible assets		(516)	(1,139)
Acquisition of investment properties	13	-	(342,884)
Proceeds from sale of investment properties		-	8,542,877
Purchases of other investments		-	(1,000,000)
Net cash flows from investing activities		92,991	7,273,925
Cash flows from financing activities
Interest paid	7	(2,615)	(70,722)
Proceeds from bank borrowing draw downs		550,000	-
Repayment of bank borrowing		-	(5,603,414)
Proceeds from other borrowing draw downs		1,167,939	-
Repayment of other borrowing		(22,552)	-
Dividends paid		(36,500)	(200,000)
Net cash flows from financing activities		1,656,272	(5,874,136)
Net increase in cash and cash equivalents		474,296	363,184
Cash and cash equivalents at 1 May		173,667	(189,517)
Cash and cash equivalents at 30 April		647,963	173,667

The notes on pages 15 to 32 form an integral part of these financial statements.
 

14

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019

1	General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is The Rivergreen Centre, St Mary's Lane, St Mary's Park, Morpeth, Northumberland, NE61 6BL.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

These financial statements are prepared in sterling which is the functional currency of the entity.

Summary of disclosure exemptions

The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102:

(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.

The company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 April 2019.

No Income Statement is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a profit after tax for the financial year of £21,776 (2018 - profit of £1,728,043).

15

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

2	Accounting policies (continued)

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

There are considered to be no significant judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies which effect the amounts recognised in the financial statements.

16

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

2	Accounting policies (continued)

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Useful economic lives of tangible assets - The annual depreciation charge is sensitive to changes in the estimated useful lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, future investments and economic utilisation. The total depreciation charge during the year was £15,110 (2018 - £19,362).

Impairment of debtors - The company makes an estimate of the recoverable value of the trade and other debtors. When assessing impairment of trade and other debtor, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. The group has made a bad debt provision in the year of £244,961 (2018 - £267,977).

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the company.

The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.

Tax

The tax expense for the period comprises deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements. Unrelieved tax losses and other deferred tax assets are recognised when 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.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

17

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

2	Accounting policies (continued)

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

	Asset class	Depreciation method and rate
	Plant and machinery	50% straight line and 15% reducing balance
	Equipment, fixtures and fittings	25% straight line and 15% reducing balance
	Motor vehicles	25% reducing balance
	Computer equipment	25% straight line

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by the directors. Changes in fair value are recognised in profit or loss.

If a reliable measure of fair value is no longer available without undue cost or effort for an item of investment property, it shall be transferred to tangible assets and treated as such until it is expected that fair value will be reliably measurable on an on-going basis.

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment. Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

18

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

2	Accounting policies (continued)

Inventories

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Income Statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

19

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

2	Accounting policies (continued)

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3

Revenue

The analysis of the group's revenue for the year from continuing operations is as follows:

	2019 £	2018 £
Sale of goods	830,000	98,514
Rendering of services	248,849	288,621
Rental income from investment property	130,786	285,467
Other revenue	3,427	22,401
	1,213,062	695,003

The analysis of the group's turnover for the year by market is as follows:

	2019 £	2018 £
UK	1,213,062	695,003

4	Operating loss

Arrived at after charging/(crediting)

	2019 £	2018 £
Depreciation expense	15,110	19,362

5	Exceptional items

	2019 £	2018 £
Exceptional administrative expenses	126,200	182,000
Exceptional income - sale of investment property	-	(1,990,122)
	126,200	(1,808,122)

Exceptional administrative expenses of £126,200 (2018 - £182,000) relate to doubtful debt provisions made against related party loan balances following an assessment of recoverability by management.

Exceptional income of £Nil (2018 - £1,990,122) relates to a gain on the disposal of an investment property in the prior year.

20

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

6	Other interest receivable and similar income

	2019 £	2018 £
Other finance income	93,507	75,071

Other finance income relates to interest on a loan with Hotel Operations Limited, a related party. The interest is not considered to be recoverable and as such has been included as a provision for doubtful debts in the current and prior year respectively.

7	Interest payable and similar expenses

	2019 £	2018 £
Interest on bank overdrafts and borrowings	21,228	47,607
Interest expense on other finance liabilities	7,628	23,115
	28,856	70,722

8	Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2019 £	2018 £
Wages and salaries	314,780	400,533
Social security costs	62,741	65,450
Pension costs, defined contribution scheme	4,853	1,318
	382,374	467,301

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

	2019 No.	2018 No.
Administration and support	14	14
Management	5	5
	19	19

9	Directors' remuneration

The directors' remuneration for the year was as follows:

	2019 £	2018 £
Remuneration	155,000	163,760
Contributions paid to money purchase schemes	1,698	460
	156,698	164,220

21

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

10	Auditors' remuneration

	2019 £	2018 £
Audit of these financial statements and the financial statements of the subsidiaries of the company	10,710	9,812

11

Taxation

Tax charged/(credited) in the income statement

	2019 £	2018 £
Current taxation
UK corporation tax	-	90,214
Deferred taxation
Arising from origination and reversal of timing differences	(20,856)	-
Arising from changes in tax rates and laws	-	93,483
Total deferred taxation	(20,856)	93,483
Tax (receipt)/expense in the income statement	(20,856)	183,697

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2018 - lower than the standard rate of corporation tax in the UK) of 19% (2018 - 19%).

The differences are reconciled below:

	2019 £	2018 £
(Loss)/profit before tax	(228,673)	1,640,309
Corporation tax at standard rate	(43,448)	311,659
Effect of revenues exempt from taxation	-	(398,837)
Effect of expense not deductible in determining taxable profit (tax loss)	15,268	47,597
Deferred tax expense/(credit) relating to changes in tax rates or laws	2,454	(11,038)
Decrease in UK and foreign current tax from adjustment for prior periods	-	(344)
Tax (decrease)/increase from effect of capital allowances and depreciation	(15,038)	19,434
Other tax effects for reconciliation between accounting profit and tax expense (income)	19,908	215,226
Total tax (credit)/charge	(20,856)	183,697

22

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

11	Taxation (continued)

Deferred tax

Group

Deferred tax assets and liabilities

2019	Liability £
Fixed asset timing differences	20,362
Fair value adjustment of investment property	184,377
Short term timing differences - trading	97,532
Losses	(5,990)
	296,281

2018	Liability £
Fixed asset timing differences	21,699
Fair value adjustment of investment property	295,463
Short term timing differences - trading	(25)
Losses	-
	317,137

Company

Deferred tax assets and liabilities

2019	Liability £
Fixed asset timing differences	1,813

2018	Liability £
Fixed asset timing differences	2,398

23

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

12	Tangible assets

Group

	Fixtures and fittings £	Plant and machinery £	Office equipment £	Motor vehicles  £	Total £
Cost or valuation
At 1 May 2018	430,555	100,369	31,780	29,316	592,020
Additions	516	-	-	-	516
At 30 April 2019	431,071	100,369	31,780	29,316	592,536
Depreciation
At 1 May 2018	343,701	95,713	31,780	27,629	498,823
Charge for the year	12,972	1,716	-	422	15,110
At 30 April 2019	356,673	97,429	31,780	28,051	513,933
Carrying amount
At 30 April 2019	74,398	2,940	-	1,265	78,603
At 30 April 2018	86,854	4,656	-	1,687	93,197

Company

	Fixtures and fittings £	Office equipment £	Total £
Cost or valuation
At 1 May 2018	354,685	31,780	386,465
At 30 April 2019	354,685	31,780	386,465
Depreciation
At 1 May 2018	299,461	31,780	331,241
Charge for the year	8,284	-	8,284
At 30 April 2019	307,745	31,780	339,525
Carrying amount
At 30 April 2019	46,940	-	46,940
At 30 April 2018	55,224	-	55,224

24

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

13	Investment properties

Group

	2019 £
At 1 May	4,299,724
Disposals	(1,043,000)
At 30 April	3,256,724

Included within Investment properties at the year end is a commercial property and residential properties.

The commercial property was valued at an open market basis by Storeys Edward Symmons LLP on 29 February 2012. Since the date of the external valuation the company has sold commercial units within the property and the valuation has been reduced accordingly for their disposal.

Taking the disposal values into consideration, the directors are of the opinion that there has been no significant change in the market value since the last external valuation.

During the year the company sold a development site to Rivergreen Homes Limited, a fellow subsidiary of Rivergreen Limited, at market value.

The residential properties were valued at an open market basis by Storeys Edward Symmons LLP on 30 April 2011. In the directors opinions there have been no significant changes in the market value since that date.

There has been no valuation of investment property by an independent valuer.

Had investment properties been measured on a historical cost basis, the carrying value would have been £2,030,147 (2018 - £2,413,652).

Company

	2019 £
At 1 May	740,000
At 30 April	740,000

Included within investment properties are residential properties held by the company. The residential properties were valued at an open market basis by Storeys Edward Symmons LLP on 30 April 2011. In the directors opinions there have been no significant changes in the market value since that date.

There has been no valuation of investment property by an independent valuer.

Had investment properties been measured on a historical cost basis, the carrying value would have been £877,204 (2018 - £877,204).

25

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

14	Investments

Company

	2019 £	2018 £
Investments in subsidiaries	1,002	1,001

Subsidiaries	£
Cost or valuation
At 1 May 2018	1,001
Additions	1
At 30 April 2019	1,002
Carrying amount
At 30 April 2019	1,002
At 30 April 2018	1,001

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Registered office	Holding	Proportion of voting rights and shares held
			2019	2018
Subsidiary undertakings
Rivergreen Developments Plc	The Rivergreen Centre, St. Mary's Lane, St. Marys' Park, Morpeth, Northumberland, NE61 6BL	Ordinary	100%	100%
Rivergreen Homes Limited	The Rivergreen Centre, St. Mary's Lane, St. Marys' Park, Morpeth, Northumberland, NE61 6BL	Ordinary	100%	100%
Rivergreen Centre (St Mary's) Limited	The Rivergreen Centre, St. Mary's Lane, St. Marys' Park, Morpeth, Northumberland, NE61 6BL	Ordinary	100%	0%

The principal activity of Rivergreen Developments Plc is property development, investment and project management.

The principal activity of Rivergreen Homes Limited is the sale of residential homes.

The principal activity of Rivergreen Centre (St Mary's) Limited is the operation of a commercial centre.

26

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

15

Stocks

	Group		Company
	2019 £	2018 £	2019 £	2018 £
Work in progress	1,669,580	-	-	-
Other inventories	2,320	2,320	-	-
	1,671,900	2,320	-	-

Group

The cost of stocks recognised as an expense in the year amounted to £1,182,897 (2018 - £54,082).

16

Debtors

		Group		Company
	Note	2019 £	2018 £	2019 £	2018 £
Trade debtors		2,044	13,059	1,440	6,631
Amounts owed by group undertakings		-	-	1,755,380	1,594,206
Amounts owed by related parties	27	2,305,670	1,761,436	-	-
Other debtors		168,921	135,093	13,036	7,625
Prepayments		1,655	13,237	-	-
Directors loan accounts		52,521	69,591	52,521	69,591
		2,530,811	1,992,416	1,822,377	1,678,053
Less non-current portion		(1,187,084)	(1,151,087)	-	-
		1,343,727	841,329	1,822,377	1,678,053

Details of non-current trade and other debtors

Group

£1,187,084 (2018 - £1,151,087) of amounts owed by related parties is classified as non current.

17	Current asset investments

	Group		Company
	2019 £	2018 £	2019 £	2018 £
Investment in unlisted shares	1,049,999	1,049,999	1,049,999	1,049,999

27

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

18	Cash and cash equivalents

	Group		Company
	2019 £	2018 £	2019 £	2018 £
Cash on hand	113	113	-	-
Cash at bank	647,850	173,554	915	150,938
	647,963	173,667	915	150,938

19

Creditors

		Group		Company
	Note	2019 £	2018 £	2019 £	2018 £
Due within one year
Loans and borrowings	20	90,000	30,000	90,000	30,000
Trade creditors		416,136	262,782	-	-
Social security and other taxes		14,075	30,024	-	-
Other creditors		339,343	396,525	-	-
Accruals		140,399	22,507	6,258	12,486
Corporation tax liability	11	60,321	90,214	60,321	90,214
		1,060,274	832,052	156,579	132,700
Due after one year
Loans and borrowings	20	2,018,026	356,398	333,846	356,398

20	Loans and borrowings

	Group		Company
	2019 £	2018 £	2019 £	2018 £
Current loans and borrowings
Other borrowings	90,000	30,000	90,000	30,000

	Group		Company
	2019 £	2018 £	2019 £	2018 £
Non-current loans and borrowings
Bank borrowings	550,084	-	-	-
Other borrowings	1,467,942	356,398	333,846	356,398
	2,018,026	356,398	333,846	356,398

28

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

20	Loans and borrowings (continued)

Group

Bank borrowings

The Atom Bank loan is denominated in Sterling and the final instalment is due on 22 May 2023. The carrying amount at year end is £550,084 (2018 - £Nil). The loan is secured against an investment property owned by the group.

Other borrowings

The Homes England drawdown facility is denominated in Sterling and the final instalment is due on 30 June 2020. The carrying amount at year end is £1,134,096 (2018 - £Nil).

The loan is secured by way of a debenture over all property and assets of the group.

Company

Bank borrowings

The Newcastle Building Society mortgage is denominated in Sterling and the final instalment is due on 31 October 2021. The carrying amount at year end is £363,846 (2018 - £386,398). The loan is secured by way of a fixed and floating charge over all present property as well as a fixed charge over book and other debts.

Other borrowings

The Rivergreen Management Pension Scheme loan is denominated in Sterling and the final instalment is due on 21 February 2020. The carrying amount at year end is £60,000 (2018 - £Nil).

The loan is secured by way of a first legal charge over an investment property of the company.

21	Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £4,853 (2018 - £1,318).

22	Share capital

Allotted, called up and fully paid shares

	2019		2018
	No.	£	No.	£
Ordinary of £0.02 each	100,000	2,000	100,000	2,000

29

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

23

Reserves

Group

Merger reserve

This reserve arose on the group reorganisation.

Profit and loss account

This reserve records retained earnings, gains and losses on asset revaluations and accumulated losses.

24	Obligations under leases and hire purchase contracts

Group

Operating leases

The total of future minimum lease payments is as follows:

	2019 £	2018 £
Not later than one year	9,805	11,305
Later than one year and not later than five years	12,475	22,279
	22,280	33,584

The amount of non-cancellable operating lease payments recognised as an expense during the year was £11,306 (2018 - £61,307).

25

Dividends

Interim dividends paid

		2019 £		2018 £
Interim dividend of £0.365 (2018 - £2.00) per each Ordinary share		36,500		200,000

26	Contingent liabilities

Company and group

In respect of its investment properties and property development the company has received grants from the following organisations which may be repayable in full or in part under certain conditions. Grants in the sum of £1,624,392 from the Secretary of State for the Environment under Section 5(2) of the Regional Development Agencies Act 1998. Grants in the sum of £529,195 from the European Regional Development Fund. The company has given an unlimited multilateral guarantee to its bankers in respect of the facilities of its subsidiary undertaking, Rivergreen Developments Plc. No liability is expected to arise as a result of this guarantee.

30

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

27	Related party transactions

Group

Key management compensation

	2019 £	2018 £
Salaries and other short term employee benefits	176,199	184,927

Summary of transactions with other related parties

Hotel Operations Limited is a related party by virtue of common directorship and shareholders of P H Candler and P A Ganley. Net loan movements during the year, excluding interest, totalled £35,997 (2018 - £26,200). At the year end, included within debtors, is an amount of £1,283,084 (2018 - £1,247,087) due to the company. The loan balance is subject to an interest charge of 2.0% above the bank base rate on a cumulative basis. During the year the company charged loan interest of £93,507 (2018 - £75,070), all of which was provided against as a bad debt provision as the directors do not consider the interest to be recoverable.

 Jesmond Dene house Limited is a 100% subsidiary of Hotel Operations Limited. During the year the company made net purchases totalling £5,756 (2018 - £50,330). At the year end the balance owed to Jesmond Dene house Limited, included in trade creditors is £104,661 (2018 - £65,061) and included in trade debtors is ££21,204 (2018 - £10,929). During the year the company made advances to Jesmond Dene House Limited totalling £505,000 (2018 - £484,000), received repayments totalling £Nil (2018 - £5,000) and costs were paid on the company's behalf totalling £5,764 (2018 - £3,185). At the year end, included within debtors, is an amount of £1,015,641 (2018 - £510,649) due to the company.

 At the year end, included within trade debtors, is an amount of £2,652 (2018 - £Nil) owed to the company by The Rivergreen Management Pension Scheme, the directors' self investment personal pension scheme, in respect of historical rent (2018 - £106,563 included in trade creditors and owed to The Rivergreen Management Pension Scheme). During the year, the company made repayments of £106,563 (2018 - £Nil) to The Rivergreen Management Pension Scheme.

 Big Hearted Hospitality Company Limited is a related party by virtue of common directorship and shareholders of P H Candler and P A Ganley. The company advanced £126,200 (2018 - £182,000) to Big Hearted Hospitality Limited during the year and provided against this amount in full.

St Mary's Inn Limited is a related party by virtue of common directorship and shareholders of P H Candler and P A Ganley. During the year, net purchases totalling £1,944 (2018 - £7,779) were made to St Mary's Inn Limited. At the year end £126,945 (2018 - £3,699) was included within debtors and £23,969 (2018 - £12,151) within trade debtors. A bad debt provision was made against the trade debtor balance.

31

Rivergreen Limited

Notes to the Financial Statements for the Year Ended 30 April 2019 (continued)

27	Related party transactions (continued)

Company

Transactions with directors

2019	At 1 May 2018 £	Advances to directors £	Repayments by director £	At 30 April 2019 £
P H Candler
Director's loan account	17,543	17,462	(18,250)	16,755
P A Ganley
Director's loan account	52,048	1,967	(18,250)	35,765

2018	At 1 May 2017 £	Advances to directors £	At 30 April 2018 £
P H Candler
Director's loan account	(27,818)	45,361	17,543
P A Ganley
Director's loan account	19,622	32,426	52,048

28	Financial instruments

Group

Categorisation of financial instruments

	2019 £	2018 £
Financial assets that are debt instruments measured at amortised cost	3,139,004	2,152,846
	3,139,004	2,152,846
Financial liabilities measured at amortised cost	(809,877)	(681,814)
Loan commitments measured at cost less impairment	(2,108,026)	(386,398)
	(2,917,903)	(1,068,212)

Impairment

Amounts owed by related parties
The amount of the impairment loss during the year is £244,961 (2018 - £267,977).

29	Parent and ultimate parent undertaking

The ultimate controlling party is P H Candler and P A Ganley.

32