CITY_&_COUNTRY_SPRINGFIEL - Accounts

The directors present their annual report and financial statements for the period ended 31 March 2020.

The principal activity of the company is property developers.

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

The company uses financial instruments comprising borrowings and various net working capital items such as trade debtors and trade creditors, to finance its operations not funded by way of equity. The main risks identified with using these financial instruments are the management of cash flow and exposure to interest rate fluctuations.

Going concern

The company meets its day to day working capital requirements through bank facilities. The company’s forecast and projections, taking account of reasonable possible changes in trading performance, show that the company will be able to operate within the level of its current facilities.

As detailed in note 9, the company’s bank loan facility expires within 12 months of the sign off of these financial statements. Given the previous history of obtaining financing facilities and the property asset development value which supports the existing facility, the directors consider that the current facility will be replaced in due course on normal commercial terms.

In the annual review of the Company’s going concern, the Directors have considered the immediate and longer-term impact of the Covid-19 pandemic. Following the lockdown in the UK, the Company experienced a temporary slowdown in construction activities but are now pleased to report activities returning to normal levels. During the period of slowdown, the Directors used available Covid-19 government schemes such as the Coronavirus Job Retention Scheme and deferment of tax liabilities to manage cashflow during the period of uncertainty. The Directors are committed to carrying out regular reviews of the Company’s cash flows to monitor the ongoing situation and take further steps as required.

Accordingly, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

In accordance with the company's articles, a resolution proposing that Goodman Jones LLP be reappointed as auditor of the company will be put at a General Meeting.

The directors are responsible 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 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 and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     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 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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

We have audited the financial statements of City & Country Springfield Ltd (the 'company') for the period ended 31 March 2020 which comprise the profit and loss account, the balance sheet, the statement of changes in equity 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 FRS 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 company's affairs as at 31 March 2020 and of its loss for the period 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 company 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 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.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

• the directors' report has 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 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, or returns adequate for our audit have not been received from branches not visited by us; or

•     the 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; or

•     the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and take advantage of the small companies exemption from the requirement to prepare a strategic report.

As explained more fully in the directors' responsibilities statement, 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: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

City & Country Springfield Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Bentfield Place, Bentfield Road, Stansted, Essex, CM24 8HL.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

City & Country Springfield Ltd is a wholly owned subsidiary of City & Country Group Plc and the results of City & Country Springfield Ltd are included in the consolidated financial statements of City & Country Group Plc which are available from Bentfield Place, Bentfield Road, Stansted, Essex, CM24 8HL.

The company meets its day to day working capital requirements through bank facilities. The company’s forecast and projections, taking account of reasonable possible changes in trading performance, show that the company will be able to operate within the level of its current facilities. true

As detailed in note 9, the company’s bank loan facility expires within 12 months of the sign off of these financial statements. Given the previous history of obtaining financing facilities and the property asset development value which supports the existing facility, the directors consider that the current facility will be replaced in due course on normal commercial terms.

In the annual review of the Company’s going concern, the Directors have considered the immediate and longer-term impact of the Covid-19 pandemic. Following the lockdown in the UK, the Company experienced a temporary slowdown in construction activities but are now pleased to report activities returning to normal levels. During the period of slowdown, the Directors used available Covid-19 government schemes such as the Coronavirus Job Retention Scheme and deferment of tax liabilities to manage cashflow during the period of uncertainty. The Directors are committed to carrying out regular reviews of the Company’s cash flows to monitor the ongoing situation and take further steps as required.

Accordingly, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover comprises sales of private housing and development properties recognised on legal completion, gross rents receivable recognised in the period to which they relate and the invoiced value of other sales net of VAT.

Stock is valued at the lower of cost and net realisable value. Cost comprises of direct costs that have been incurred in bringing the stocks to their present location and condition. Land held for development, including in the course of development, is initially recorded at cost.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Bank Borrowings

Interest bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs.

Where bank agreements include a legal right of offset for in hand and overdraft balances, and the company intends to settle the net outstanding position, the offset arrangements are applied to record the net position

in the Balance Sheet.

Finance income and charges are accounted for using the ‘effective interest rate’ method in the Profit and Loss Account.

Finance costs are recognised as an expense in the Profit and Loss Account in the period to which they relate.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, 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 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 payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Deferred consideration

Deferred consideration is payable in connection with the company's purchase of the development site held in work in progress. Given that there is a finance element to this arrangement, an effective interest rate of 3.25% has been used to discount the amounts payable as this is representative of the interest rate of other third party group borrowings with similar lending periods and security terms.

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.

Estimation of costs to complete

In order to determine the profit that the company is able to recognise on its developments in a specific period, the company has to allocate site-wide development costs between units built in the current year and in future years. It also has to estimate costs to complete on such developments. In making these assessments there is a degree of inherent uncertainty. The company has developed internal controls to assess and review carrying values and the appropriateness of estimates made.

Carrying value of land and work in progress

The company’s principal activity is residential property development. The majority of the development activity is not contracted prior to the development commencing. Accordingly, the company has in its Balance Sheet at 31 March 2020 current assets that are not covered by a forward sale. The company’s internal controls are designed to identify any developments where the estimated net realisable value of a site is less than its current carrying value within the Balance Sheet. The key judgements in these reviews were estimating the realisable value of a site, which is determined by forecast sales rates, expected sales prices and estimated costs to complete. Furthermore, for sites where planning permission has not yet been obtained, forecast sales include an expectation that reasonable planning permission will be successfully obtained. If the UK housing market were to change beyond management expectations in the future, in particular with regards to the assumptions around sales prices and estimated costs to complete, further adjustments to the carrying value of land and work in progress may be required.

Effective interest rate on deferred consideration

As noted in accounting policy 1.10, deferred consideration payable has been recognised in connection with the company's purchase of the development site held in work in progress. Given that there is a finance element to this arrangement, an effective interest rate of 3.25% has been used to discount the amounts payable as this is representative of the interest rate of other third party group borrowings with similar lending periods and security terms.

There were no employees during the year apart from directors.

Included in stock are properties under construction or development at the balance sheet date.

Other creditors represents deferred consideration payable in connection with the company's purchase of the development site held in work in progress. Given that there is a finance element to this arrangement, an effective interest rate of 3.25% has been used to discount the amounts payable. The instalments are due on 31 December 2023, 30 June 2025 and 30 June 2027. The deferred consideration is secured by a fixed and floating charge over the assets of the company. In addition the parent company, City & Country Residential Limited, alongside other third parties associated with the project, has provided a guarantee for finance cost shortfalls and cost overruns.

The bank loan facility currently expires in March 2021 and is secured by fixed and floating charges over the assets of the company. A guarantee of £6,300,000 is provided by City & Country Group Plc.

During the period, 100 Ordinary shares at £1 each were issued at par for cash consideration.

The company has taken advantage of the exemption available in accordance with FRS 102 'related party disclosures' not to disclose transactions entered into between two or more members of a group as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.

The intermediate parent company is City & Country Holdings Limited, a company registered in England and Wales. The ultimate parent company is City & Country Group Plc, a company registered in England and Wales.

City & Country Group Plc prepares group financial statements and copies can be obtained from the registered office.