IPE_Group_(Holdings)_Limi - Accounts

The director presents the strategic report for the year ended 30 March 2021.

The Group headed by IPE Group (Holdings) Limited (commonly known as IPE Developments) is a UK based property developer predominantly acquiring land in London and the South East, developing and constructing residential (90%) and mixed use residential and commercial (10%) property for sale, typically aiming for the first time buyer and property investors. The vast majority of the residential sales operate with the government backed “Help to Buy” scheme which is critical in the market space in which we operate. During the financial period in question the Group had turnover of £17,985,916 (2020 - £26,357,506).

Profit before interest, tax and amortisation of goodwill was £4,298,891 (2020 - £3,635,140). Goodwill amortisation reflects the write down of investments acquired by the Group for projects that had not been realised on the date of acquisition. These are considered to be exceptional items by the director which are not a reflection of the underlying profitability of the Group's principal activity, but are accounting entries required for compliance with FRS 102 (see Note 4 on page 22). The director considers the true profitability of the Group's underlying property development activities to be £4,298,891 (2020 - £3,635,140). The Group met its financial target for the year.

The current uncertainty associated with Covid and Brexit and the potential impact on the value of our stock is the most significant risk factor for the Group. However we have taken appropriate steps to mitigate against this uncertainty by only acquiring projects with significant margins that can absorb any major price corrections.

Liquidity risk and credit risks are always factors within this industry. An unknown shock to the system resulting in major interest rate hikes will adversely affect the business. We routinely assess the possibility of major interest rate increases and in our opinion we are a few years away from any changes that may significantly affect us.

Operational risks including the failure to complete an acquisition on time, the risks associated with construction and exceeding both financial budgets, time budgets and changes to property values are factors we continually need to monitor to ensure we are ready to adapt.

London house prices are reaching levels where they will be very hard for the average person to acquire. We have therefore been seeking to diversify our product range and acquired sites in Birmingham and Essex.

Section 172(1) statement

The group recognises the importance of delivering effective corporate governance in supporting the longterm success and sustainability of its business. The members of the senior management team bring a wide range of technical and industrial experience when making decisions.

Business relationships

The Directors and Operational Board regularly review how the Group maintains positive relationships with all its stakeholders including suppliers, customers and others.

Key performance indicators include:

Review of actual turnover versus budget – this highlights the performance of the sales and marketing team.

Review of anticipated construction cost versus actual – this highlights the performance of the operation and construction team.

Actual timeline of revenue generated versus budget – The longer the period to fully exit a project the greater the profit erosion due to interest cost.

Return on cost – We need to hit a specific target before we will even consider acquiring a project.

Pipeline gross development value – This provides an indication of the scale of the group and the level of planning that will be required.

Timing of practical completion – This is a critical moment as it is the official sign off of a project by building control allowing us to generate revenue.

Number of offers, exchanges and completions – This is fundamental to establish cash flow.

We have been diversifying our project range into the Home Counties and Essex to mitigate the risk of with property price inflation in London.

Our current pipeline has an estimated gross development value of £99m (2020 - £149m). We therefore have a considerable pipeline of projects to work through and with the build-up of profits we plan to further grow our team.

Our ultimate objective is to have a sophisticated financing structure which allows us to grow to levels whereby we can list the Group on a UK stock exchange.

On behalf of the board

The director presents his annual report and financial statements for the year ended 30 March 2021.

The principal activity of the company and group continued to be that of real estate development.

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

The director who held office during the year and up to the date of signature of the financial statements was as follows:

The auditor, Saffery Champness LLP, has expressed their willingness to continue in office.

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 auditor of the company 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 auditor of the company is aware of that information.

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

•     select suitable accounting policies and then 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 ;

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

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

We have audited the financial statements of IPE Group (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 March 2020 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). The financial statements have been prepared under the Companies (Revision of Defective Accounts and Reports) Regulations 2008.

In our opinion the financial statements:

•     give a true and fair view of the state of the group and of the parent company's affairs as at 30 March 2021 and of the group's profit 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 and the parent 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

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group or the parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The director is 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.

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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 the audit:

• the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's report.

We have nothing to report in respect of the following matters in relation to which 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

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the group 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 director either intends to liquidate the group or parent company or to cease operations, or has no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the group and parent company 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the director, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with director and by updating our understanding of the sector in which the group and parent company operates.

Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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 parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

As permitted by s408 Companies Act 2006, the company has not presented its ownincome statement and related notes. The company’s profit for the year was £1,204,229 (2020 - £1,171,192).

IPE Group (Holdings) Limited (“the company”) is a private limited company incorporated in England and Wales. The registered office is 4th Floor, 73 New Bond Street, London, W1S 1RS.

The group consists of IPE Group (Holdings) Limited and all of its subsidiaries.

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.

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 investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The group financial statements incorporate those of IPE Group (Holdings) Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 30 March 2021. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future as a letter of support has been received to confirm that amounts due to NMI Holdings Limited will not be called on unless there is adequate resources to do so. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for the sale of property provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Revenue from the sale of property is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on completion), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill arising on the acquisition of subsidiary undertakings represents the excess of the fair value of the consideration over the fair value of the identifiable assets and liabilities acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is either 1 or 3 years depending on the subsidiary.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Work in progress is stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the property to their present condition.

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.

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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, 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 assets classified as receivable within one year are not amortised.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 group 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. Financial liabilities classified as payable within one year are not amortised.

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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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 group’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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

In the application of the group’s accounting policies, the director is 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.

Valuation of investment properties

Investment properties are valued by the directors using their knowledge of the industry, comparable property values and mortgage valuations.

The goodwill arising on the acquisition of Aberfeldy Street Limited, Bemish Road Limited, Rotherhithe New Limited and North End Limited on 4 July 2016 has been written off over a period of 12 months as this was the expected remaining life of the projects over which the profits will be realised. At 31 March 2018 all goodwill had been amortised.

The goodwill arising on the acquisition of Walworth Road Limited on 4 July 2016 has been written off over a period of 36 months as this was the expected remaining life of the project over which the profits will be realised. As at 30 March 2020, all goodwill had been amortised.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The main rate of corporation tax for the year ended 30 March 2021 was 19% and will remain in force until 31 March 2023.

At Budget 2021 the government announced that from 1 April 2023 the rate of corporation tax will be 25% for companies with annual profits over £250,000. For companies with annual profits below £50,000 the rate will remain at 19%. Marginal relief provisions will also be introduced so that, where a company’s profits fall between the lower (£50,000) and upper (£250,000) limits, it will be able to claim an amount of marginal relief that bridges the gap between the lower and upper limits providing a gradual increase in the corporation tax rate.

The lower and upper limits will be proportionately reduced for short accounting periods and where there are associated companies.

Investment property comprises freehold land and buildings. The fair value of the investment property has been arrived at on the basis of a valuation carried out at 30 March 2021 by the directors. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

Details of the company's subsidiaries at 30 March 2021 are as follows:

Registered office addresses (all UK unless otherwise indicated):

The following subsidiaries are exempt from audit under the requirements of s479A of the Companies Act 2006. IPE Group (Holdings) Limited guarantees the liabilities of the companies under s479C of the Companies Act 2006 in respect of the year ended 30 March 2021.

IPE Capital Limited, company number 07508898

Roman Road Apartments Limited, company number 10486872

AI Ventures Limited, company number 07852490

IPE Property Assets Limited, company number 10687145

Fairfield Bow Limited, company number 10161221

Bluecroft - IPE Jubilee Limited, company number 10081313

AI Capital Investments Ltd, company number 09816663

IPE Freeholds Limited, company number10705614

IPE Tanner Street Limited, company number 11056180

IPE Wood Street Limited, company number 10958724

IPE Squirries Street Limited, company number 10774720

IPE Clifford Road Limited, company number 11011255

IPE Nightingale Limited, company number 11056555

IPE Orchestra Land Limited, company number 10387676

Bluecroft IPE Crystal Palace Limited, company number 10816523

IPE 32 Bemish Road Limited, company number 11202269

IPE Bemish Road Limited, company number 11071955

IPE Bickley Road Limited, company number 11196460

IPE Hanwell Limited, company number 11242026

IPE SMAM Jubilee Limited, company number 11072010

IPE SMAM Morville Limited, company number 11071932

IPE Calm Homes Solihull Limited, company number 11544649

IPE Church Path Limited, company number 10229818

IPE Creekside Limited, company number 10897606

IPE Equity Management Limited, company number 11860350

IPE Nightingale Property Limited, company number 11834656

IPE Property Development Management Limited, company number 11854933

IPE Tanner Street Properties Limited, company number 12132624

IPE Tidemill Forest Road Limited, company number 11637863

St Paul Way Properties Limited, company number 11637137

ARC Bemish Road Limited, company number 11056652

IPE Arcadia Street Limited, company number 12086536

IPE North Street Limited, company number 12879076

IPE Jim Brentwood Limited, company number 12820324

Aston Grange Forest Road Limited, company number 12132733

IPE Acton Limited, company number 12605125

Redirs Limited, company number 11372869

IPE Southern Road Limited, company number 13201080

IPE Radlett Close Limited, company number 12318707

Buckhurst Hill Capital Limited, company number 12402992

IPE Calm Homes Solihull 2 Limited, company number 12401587

IPE Clifford Road Properties Limited, company number 12357435

IPE Brandy Hole Limited, company number 12949934

IPE Harley Limited, company number 13350419

Details of associates at 30 March 2021 are as follows:

See registered office key in Subsidiaries note.

Lendinvest Security Trustees Limited have a fixed charge and negative pledge over the share capital of IPE Jim Brentwood Limited dated 5 November 2020.

Zorin Finance Limited and Pollen Street Secured Lending PLC have a fixed charge and negative pledge over the assets of IPE Hanwell Limited dated 10 March 2020.

CSPP Finance Limited has a fixed charge and negative pledge over the subordinated debt in IPE Arcadia Street Limited dated 2 March 2020, and IPE Wood Street Limited dated 16 August 2019.

CSPP Finance Limited has a fixed charge and negative pledge over the assets of IPE Arcadia Street Limited dated 2 March 2020, and IPE Wood Street Limited dated 16 August 2019.

Oaknorth Bank PLC has negative pledge over the share capital of Bluecroft - IPE Jubilee Limited dated 29 November 2019.

Zorin Finance Limited and P2P Global Investments PLC have a fixed charge and negative pledge over the assets of IPE Calm Homes Solihull Limited dated 8 March 2019, and IPE Tidemill Forest Road Limited dated 14 February 2019.

NMI Holdings Limited has a fixed and floating charge, and a negative pledge over the assets of IPE Group (Holdings) Limited dated 16 October 2018.

IPE Group (Holdings) Limited has a floating charge and negative pledge over 10 Arnison Road, East Molesey dated 12 September 2018.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is not expected to reverse within 12 months and relates to timing differences on revaluations.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

The revaluation reserve represents the gain on revaluations from investment properties, reclassified from profit and loss reserves to assist in tracking the movements.

The other reserve is a merger reserve used for previous acquisitions under the merger method of accounting.

Profit and loss reserves represent accumulated income for the year and prior periods less dividends paid.

During the year the group entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

Company

At 30 March 2021, the director was owed by the company £51,960 (2020: £869,817).

Group

At 30 March 2021, the director was owed by the group £584,558 (2020: £187,050).