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Registered number: 05946950
HORWOOD HOUSE PROPERTIES LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2020
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HORWOOD HOUSE PROPERTIES LIMITED
REGISTERED NUMBER: 05946950
BALANCE SHEET
AS AT 31 DECEMBER 2020
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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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Provisions for liabilities
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HORWOOD HOUSE PROPERTIES LIMITED
REGISTERED NUMBER: 05946950
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2020
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:
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K S Kassam
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The notes on pages 3 to 10 form part of these financial statements.
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Horwood House Properties Limited is a private company limited by shares and registered in England and Wales. Its principal place of business is Mursley Rd, Little Horwood, Milton Keynes MK17 0PH. The registered office address is: Aston House, Cornwall Avenue, London N3 1LF.
The principal activity of the Company is property investment.
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 financial statements are prepared in Pounds Sterling, rounded to the nearest £1.
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis which assumes that the Company will be able to continue trading for the foreseeable future. The Company has net current liabilities of £6,936,236 (2019: £6,459,904) at the Balance Sheet date. The main form of funding for the Company’s operations is through loans from its Group totalling £7,196,156 (2019: £6,666,156) included in current liabilities. The Group has stated that it intends, without creating a contractual obligation, to provide such support as may be necessary to the Company, and confirmed the Group’s commitment to provide funds to meet ongoing expenses for at least 12 months from the date of approval of the financial statements.
The Director has evaluated the impact to the Company in respect of the Covid-19 (Coronavirus) pandemic, ongoing at the time of approving these financial statements. The hotel was closed during the lockdown periods and the Group sought support under various Government initiatives to support the business during this unprecedented period. The Director is confident that such support is sufficient to support the business and does not consider there to be a material uncertainty to the Company's ability to continue as a going concern as a result of Covid-19.
The Director is therefore satisfied that the going concern basis is appropriate for the preparation of these financial statements.
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
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.
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Operating leases: the Company as lessor
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Rental income from operating leases is credited to profit or loss on a straight line basis over the lease term.
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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.
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
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.
Investment property rented to other group entities and accounted for under the cost model is stated at historical cost less accumulated depreciation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Land is not depreciated. Depreciation on other assets 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:
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.
Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, 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 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.
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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.
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.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
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.
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The average monthly number of employees, including directors, during the year was 1 (2019 - 3).
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Freehold investment property
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The 2020 valuation was performed by the Director.
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If the Investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:
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As a result of the impact to the hotel and leisure sector at the height of the Covid pandemic, the valuation report from the external third party valuers includes a material valuation uncertainty. The Director has conservatively considered retaining the value of the property at the third party value obtained pre-pandemic.
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Amounts owed by group undertakings
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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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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Accruals and deferred income
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At the Balance Sheet date, the Company had commitments in respect of capital expenditure totalling £202,095.
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10.Other financial commitments
The Company, along with fellow group companies, Horwood House Hotel Limited and ZIZ Properties Limited, are party to a bank loan agreement. The bank loan above is secured by way of fixed and floating charges over the assets of the Company and Horwood House Hotel Limited, including the investment property owned by the Company.
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Related party transactions
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The Company has taken advantage of the exemption available in FRS102 from disclosing transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the Group.
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HORWOOD HOUSE PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Post balance sheet events
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Since the Balance Sheet date, the Group's hotel operations have been impacted by the global Covid-19 (Coronavirus) pandemic, ongoing at the time of approving these financial statements. The hotel was closed during the lockdown periods and the Group sought support under various Government initiatives to support the business during this unprecedented period.
The management have used this time to implement and commence various strategic plans for developing the hotel.
On 6 September 2019, the Company was acquired by ZIZ Properties Limited, the immediate parent company at the Balance Sheet date. The ultimate parent company at the Balance Sheet date is ZIZ Enterprises Limited. The smallest and largest group in which the Company's financial statements are included are the consolidated financial statements of ZIZ Enterprises Limited, copies of which can be obtained from Companies House.
The ultimate controlling party at 31 December 2020 is K S Kassam, the Director.
The auditors' report on the financial statements for the year ended 31 December 2020 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
In forming our opinion on the financial statements, which is not qualified, we have considered the value of Investment Property and the disclosure included in note 5 to the financial statements concerning the valuation of the property. As indicated in the note, the impact on the hotel and leisure sector as a result of the ongoing Covid pandemic has resulted in material uncertainty in the valuation of the property by the third party valuers. The Director has retained the property at the third party value obtained prior to the pandemic. We consider the basis of the Director’s valuation to be reasonable, however, due to the material uncertainty highlighted by the third party valuers, we do not express an opinion on the value of the property. Our audit opinion is not modified in respect of this matter.
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The audit report was signed on 29 September 2021 by Alexander Chrysaphiades FCA (Senior Statutory Auditor) on behalf of Adler Shine LLP.
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