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Registered number: 00527701
S.D. Holdings Limited
Unaudited
Financial statements
Information for filing with the registrar
For the Year Ended 31 December 2021
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S.D. Holdings Limited
Chartered Accountants' Report to the Board of Directors on the preparation of the Unaudited Statutory Financial Statements of S.D. Holdings Limited for the Year Ended 31 December 2021
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of S.D. Holdings Limited for the year ended 31 December 2021 which comprise the Balance Sheet and the related notes from the Company's accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at https://www.icaew.com /regulation.
This report is made solely to the Board of Directors of S.D. Holdings Limited, as a body, in accordance with the terms of our engagement letter. Our work has been undertaken solely to prepare for your approval the financial statements of S.D. Holdings Limited and state those matters that we have agreed to state to the Board of Directors of S.D. Holdings Limited, as a body, in this report in accordance with ICAEW Technical Release TECH07/16AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than S.D. Holdings Limited and its Board of Directors, as a body, for our work or for this report.
It is your duty to ensure that S.D. Holdings Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and profit of S.D. Holdings Limited. You consider that S.D. Holdings Limited is exempt from the statutory audit requirement for the year.
We have not been instructed to carry out an audit or review of the financial statements of S.D. Holdings Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
Kreston Reeves LLP
9 Donnington Park
85 Birdham Road
Chichester
West Sussex
PO20 7AJ
31 May 2022
Page 1
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S.D. Holdings Limited
Registered number: 00527701
Balance Sheet
As at 31 December 2021
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Page 2
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S.D. Holdings Limited
Registered number: 00527701
Balance Sheet (continued)
As at 31 December 2021
The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 13 form part of these financial statements.
Page 3
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
The Company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
4a Southview Road
Southwick
West Sussex
BN42 4TU
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The Company, and the group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and group are considered eligible for the exemption to prepare consolidated accounts.
Revenue represents the value of rental income, trading property sale proceeds and all other associated income receivable by the Company.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Page 4
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
2.Accounting policies (continued)
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the Statement of Comprehensive Income and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Interest income is recognised in profit or loss using the effective interest method.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Page 5
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Office equipment, consisting of:
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Page 6
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
2.Accounting policies (continued)
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Revaluation of tangible fixed assets
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Freehold land and buildings are carried at fair value under the revaluation model. Fair value is derived from the current market prices for comparable real estate determined annually by a qualified internal valuer. The valuer uses observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided.
This policy represents a departure from FRS 102, which requires depreciation to be provided on revalued property, plant and equipment. The directors consider that this policy is necessary in order that the financial statements may give a true and fair view because current value and changes in current value are of prime importance rather than the calculation of systematic annual depreciation. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.
Revaluation gains and losses are recognised in Other Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by a qualified internal valuer. The valuer uses observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Statement of Comprehensive Income.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.
At each balance sheet date, stocks are assessed for impairment. If stock is 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.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Page 7
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
2.Accounting policies (continued)
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Page 8
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Provision has been made in the financial statements for deferred tax amounting to £2,138,628 at the reporting date. This provision is based upon estimates of the availability of future taxable profits, the timing of the reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time, together with an assessment of the impact of future tax planning strategies.
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The average monthly number of employees, including directors, during the year was 11 (2020 - 11).
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Freehold land and buildings
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Charge for the year on owned assets
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The fair value of the Company's freehold land and buildings was revalued at 31 December 2021 by Mr P Calland MRICS who is internal to the Company. An independent valuer was not involved. The basis of this valuation was open market basis. Had this class of asset been measured on a historical cost basis, the aggregate cost would have been £667,475 (2020 - £667,475), accumulated depreciation would have been £55,554 (2020 - £46,866) and carrying amount would have been £611,920 (2020 - £620,609).
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Page 9
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
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Investments in subsidiary companies
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The investment properties were revalued at 31 December 2021 by the director Mr P Calland MRICS, who is a recognised and relevant professional valuer with recent experience in the location and category of the investment property being valued. The basis of this valuation was open market basis subject to existing leases. There has been no valuation of investment property by an independent valuer.
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Page 10
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Page 11
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
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Creditors: Amounts falling due after more than one year
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Secured loans
Bank loans are denominated in sterling (£) with a nominal interest rate of 2.5% plus base rate. Bank borrowings on which security has been given by the Company total £727,411 (2020 - £818,413). These loans are secured by fixed and floating charges over properties held.
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-5 years
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Amounts falling due after more than 5 years
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The total amount of contingencies not included in the Balance Sheet is £1,759,914 (2020 - £1,860,265). This relates to a guarantee provided to Barclays Bank PLC to secure a loan of £1,409,000 in 2013 and a loan of £1,010,000 in 2015 advanced to Mumford Investments Limited, a subsidiary company. These loans have been secured against the investment properties held by the Company.
Page 12
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S.D. Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2021
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Commitments under operating leases
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At 31 December 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Related party transactions
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The Company has taken advantage of the exemption in FRS 102 paragraph 33.1A from disclosing transactions with other members of the group.
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Page 13
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