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Registered number: 05537144
THE DEPTFORD PROJECT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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THE DEPTFORD PROJECT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
The Directors of The Deptford Project Limited (the "Company") present their report and the audited financial statements for the year ended 31 March 2022.
Directors' responsibilities statement
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The Directors are responsible for preparing the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements 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 financial statements; and
∙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 to 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.
Principal activity, review of the business and future developments
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The Company's principal activity is that of property development and investment property holding company. No changes to the Company's principal activity are anticipated in the foreseeable future.
The Directors have determined that preparing the financial statements on the going concern basis is appropriate due to the continued financial support of the ultimate parent company, Land Securities Group PLC. The Directors' going concern assessment covers the period to 30 June 2024 and confirmation has been received that Land Securities Group PLC will support the Company until at least this date. It is understood that this support will remain in place until revoked and there is no expectation this will occur in the foreseeable future. The Company's ability to meet its future liabilities is therefore dependent on the financial performance, position and liquidity of the Group as a whole. At a Group level, considerations included potential risks and uncertainties in the business, credit, market, property valuation and liquidity risks, including the availability and repayment profile of bank facilities, as well as forecast covenant compliance. Stress testing has been carried out to ensure the Group has sufficient cash resources to continue in operation for the period to 30 June 2024. This stress testing modelled a scenario with materially reduced levels of cash receipts over the next 12 months. Based on these considerations, together with available market information and the Directors' knowledge and experience of the Company, the Directors continue to adopt the going concern basis in preparing the financial statements for the year ended 31 March 2022.
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THE DEPTFORD PROJECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
The loss for the year, after taxation, amounted to £440,338 (2021: £167,008).
The Directors do not recommend the payment of a dividend for the year ended 31 March 2022 (2021: £Nil).
The Directors who served during the year and up to the date of this report unless otherwise stated were:
R Upton (resigned 30 April 2022)
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M S Weiner (resigned 31 May 2021)
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M O Shepherd (resigned 19 June 2021)
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J G Christmas (appointed 27 May 2021, resigned 31 March 2022)
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G M Richardson (appointed 17 June 2021)
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U and I Director 1 Limited (appointed 20 October 2022)
U and I Director 2 Limited (appointed 20 October 2022)
The Company has made qualifying third-party indemnity provisions for the benefit of the respective directors which were in place throughout the year and which remain in place at the date of this report.
Small companies exemption
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In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
The Company has taken advantage of the exemption under s414B of the Companies Act 2006 not to prepare a Strategic Report.
The auditors, Ernst & Young LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
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THE DEPTFORD PROJECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
This report was approved by the board and signed on its behalf.
L McCaveny, for and on behalf of U and I Company Secretaries Limited
Company secretary
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE DEPTFORD PROJECT LIMITED
Qualified opinion on financial statements
We have audited the financial statements of The Deptford Project Limited for the year ended 31 March 2022 which comprise the statement of comprehensive income, the balance sheet and the statement of changes in equity and the related notes 1 to 14, 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, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”(United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements:
∙give a true and fair view of the state of the company's affairs as at 31 March 2022 and of its loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for Qualified Opinion on financial statements
We have not been provided with rental contracts to support the turnover of £189,924 recognised in the statement of comprehensive income or the lease disclosures in note 13 of the financial statements. We were unable to satisfy ourselves by alternative means concerning the turnover and lease disclosures by using other audit procedures. Accordingly, we have been unable to form a conclusion on whether the turnover recorded for the year ended 31 March 2022, or the related lease disclosures in note 13, are free from material misstatement.
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 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 qualified opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ 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 company’s ability to continue as a going concern for a period to 30 June 2024.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE DEPTFORD PROJECT LIMITED
Other information (continued)
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 the other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the turnover of £189,924 recognized during the year ended 31 March 2022. We have concluded that where the other information refers to turnover or related balances such as receivables it may be materially misstated for the same reason.
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which the auditor is required to report by exception
Except for the matter described in the basis for qualified opinion section of our report, 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.
In respect solely of the limitation on our work relating to revenue, described above:
∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙we were unable to determine whether adequate accounting records had been kept.
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:
∙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
∙the directors were not entitled to prepare the financial statements in accordance with the small companies’ regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.
Responsibilities of the Directors
As explained more fully in the directors’ responsibilities statement set out on page 1, 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE DEPTFORD PROJECT LIMITED
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax regulations in the United Kingdom, including the UK REIT regulations.
∙We understood how the company is complying with those frameworks through enquiry with the company and by identifying the company's policies and procedures regarding compliance with laws and regulations. We also identified those members of the company who have the primary responsibility for ensuring compliance with laws and regulations, and for reporting any known instances of non-compliance to those charged with governance.
∙We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur by reviewing the Land Securities Group risk register and through enquiry with the company's management during the planning and execution phases of the audit. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk, specifically the risk over valuation of investment properties and revenue recognition, including the timing of the revenue recognition and treatment of lease incentives.
∙Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved:
°Enquiry of management, and when appropriate, those charged with governance of the company regarding their knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements;
°Reading minutes of meetings of those charged with governance;
°Obtaining direct bank confirmations to vouch the existence of cash balances;
°Obtaining and reading correspondence from legal and regulatory bodies, including HMRC; and
°Journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding the business.
∙In addition, we completed procedures to conclude on the compliance of the disclosures in the financial statements with all applicable reporting requirements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk /auditorsresponsibilities. This description forms part of our auditor’s report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE DEPTFORD PROJECT LIMITED
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.
Graeme Downes (Senior statutory auditor)
For and on behalf of
Ernst & Young LLP, Statutory Auditor
London
2 June 2023
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THE DEPTFORD PROJECT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
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Loss on revaluation of investment property
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Impairment of investment in subsidiary undertaking
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Operating loss before tax
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Loss and total comprehensive loss for the financial year
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There were no recognised gains and losses for the year ended 31 March 2022 or for the year ended 31 March 2021 other than those included in the Statement of Comprehensive Income.
All amounts relate to continuing operations.
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The notes on pages 11 to 22 form part of these financial statements.
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THE DEPTFORD PROJECT LIMITED
REGISTERED NUMBER: 05537144
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
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Investment in subsidiary undertakings
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Trade and other receivables: due after more than 1 year
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Trade and other receivables
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Total assets less current liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
C Lund, for and on behalf of U and I Director 2 Limited
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The notes on pages 11 to 22 form part of these financial statements.
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THE DEPTFORD PROJECT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
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Comprehensive loss for the year
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Total comprehensive loss for the year
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Comprehensive loss for the year
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Total comprehensive loss for the year
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Shares issued during the year
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The notes on pages 11 to 22 form part of these financial statements.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The Deptford Project Limited (the "Company) is a private limited company and is incorporated, domiciled and registered in England and Wales (Registered number: 05537144). The nature of the Company’s operations is set out in the Directors' Report on page 1. The address of its registered office is 100 Victoria Street, London, SW1E 5JL.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared on a going concern basis and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland ('FRS102') and the Companies Act 2006. The financial statements are prepared under the historical cost convention.
The accounting policies which follow set out those policies which apply in preparing the financial statements for the period ended 31 March 2022. The financial statements are prepared in Pounds Sterling (£).
The Company is part of the overall Land Securities PLC Security Group and as such the Group’s borrowings are secured on the fixed and floating pool of assets of the Security Group.
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Financial reporting standard 102 - reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7 and 33.9.
This information and the reults of the Company are included in the consolidated financial statements of Land Securities PLC as at 31 March 2022 and these financial statements may be obtained from its registered office at 100 Victoria Street, London, SW1E 5JL.
The financial statements present information about the Company as an individual undertaking and not about its group. The Company has not prepared group accounts as it is exempt from the requirement to do so by section 400 of the Companies Act 2006 as it is a subsidiary of Land Securities Group PLC, a Company incorporated in England and Wales whose consolidated financial statements are publicly available.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
The Directors have determined that preparing the financial statements on the going concern basis is appropriate due to the continued financial support of the ultimate parent company, Land Securities Group PLC. The Directors' going concern assessment covers the period to 30 June 2024 and confirmation has been received that Land Securities Group PLC will support the Company until at least this date. It is understood that this support will remain in place until revoked and there is no expectation this will occur in the foreseeable future. The Company's ability to meet its future liabilities is therefore dependent on the financial performance, position and liquidity of the Group as a whole. At a Group level, considerations included potential risks and uncertainties in the business, credit, market, property valuation and liquidity risks, including the availability and repayment profile of bank facilities, as well as forecast covenant compliance. Stress testing has been carried out to ensure the Group has sufficient cash resources to continue in operation for the period to 30 June 2024. This stress testing modelled a scenario with materially reduced levels of cash receipts over the next 12 months. Based on these considerations, together with available market information and the Directors' knowledge and experience of the Company, the Directors continue to adopt the going concern basis in preparing the financial statements for the year ended 31 March 2022.
Turnover 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. Turnover is measured as the fair value of the consideration received, excluding discounts, rebates, value added taxes where applicable and other sales taxes.
Turnover for the year comprises rental income and other property related income. Rental income is recognised on an accrued straight-line basis over the term of the lease when the income has been earned. Incentives for lessees to enter into lease agreements are spread evenly over the lease term, even if payments are not made on such a basis. The lease term is the non-cancellable period of the lease together with any further term for which the tenant has the option to continue the lease, where, at inception of the lease, the Directors are reasonably certain that the tenant will exercise that option. Lease incentives are usually in the form of rent-free periods or capital contributions.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Rental payments under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.
Property and contract expenditure is expensed as incurred.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the tax payable on the taxable income for the year and any adjustment in respect of previous years. Deferred tax is provided in full using the Balance Sheet liability method on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the asset is realised, or the liability is settled.
No provision is made for temporary differences (i) arising on the initial recognition of assets or liabilities, other than on a business combination, that affect neither accounting nor taxable profit and (ii) relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future.
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Investment in subsidiary undertakings
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Investments in subsidiary undertakings are stated at cost in the Company’s Balance Sheet, less any provision for impairment in value (see 2.14).
Investment properties are properties, either owned or leased by the Company, that are held either to earn rental income or for capital appreciation, or both. Investment properties are measured initially at cost including related transaction costs, and subsequently at fair value. Fair value is based on market value, as determined by a professional external valuer at each reporting date. The difference between the fair value of an investment property at the reporting date and its carrying amount prior to re-measurement is included in the Statement of Comprehensive Income as a valuation surplus or deficit. Investment properties are presented on the Balance Sheet within non-current assets.
Properties are treated as acquired when the Company assumes control of the property. Capital expenditure on properties consists of costs of a capital nature, including costs associated with developments and refurbishments. Where a property is being developed or undergoing major refurbishment, interest costs associated with direct expenditure on the property are capitalised. The interest capitalised is calculated using the Company’s weighted average cost of borrowings. Interest is capitalised from the commencement of the development work until the date of practical completion. Certain internal staff and associated costs directly attributable to the management of major schemes are also capitalised. The total staff and associated costs are capitalised based on the proportion of time spent on the relevant scheme. Internal staff costs are capitalised from the date it is determined to be probable that the development will progress until the date of practical completion.
When the Company begins to redevelop an existing investment property for continued future use as an investment property, the property continues to be held as an investment property. When the Company begins to redevelop an existing investment property with a view to sell, the property is transferred to trading properties and held as a current asset. The property is re-measured to fair value as at the date of the transfer with any gain or loss being taken to the Statement of Comprehensive Income. The re-measured amount becomes the deemed cost at which the property is then carried in trading properties.
Properties are treated as disposed when control of the property is transferred to the buyer. Typically, this will either occur on unconditional exchange or on completion. Where completion is expected to occur significantly after exchange, or where the Company continues to have significant outstanding obligations after exchange, the control will not usually transfer to the buyer until completion.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
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Trade and other receivables
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Trade and other receivables are recognised initially at fair value, subsequently at amortised cost and, where relevant, adjusted for the time value of money. The Company assesses on a forwardlooking basis, the expected credit losses associated with its trade receivables. A provision for impairment is made for the lifetime expected credit losses on initial recognition of the receivable. If collection is expected in more than one year, the balance is presented within noncurrent assets.
In determining the expected credit losses, the Company takes into account any recent payment behaviours and future expectations of likely default events (i.e. not making payment on the due date) based on individual customer credit ratings, actual or expected insolvency filings or company voluntary arrangements and market expectations and trends in the wider macroeconomic environment in which our customers operate.
Trade and other receivables are written off once all avenues to recover the balances are exhausted and the lease has ended. Receivables written off are no longer subject to any enforcement activity.
Cash and cash equivalents comprise cash balances, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or fewer.
Ordinary shares are classified as equity.
The carrying amounts of the Company’s non-financial assets, other than investment properties, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated (see below). An impairment loss is recognised in the Statement of Comprehensive Income whenever the carrying amount of an asset exceeds its recoverable amount.
The recoverable amount of an asset is the greater of its fair value less costs to sell and its value in use. The value in use is determined as the net present value of the future cash flows expected to be derived from the asset, discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount after the reversal does not exceed the amount that would have been determined, net of applicable depreciation, if no impairment loss had been recognised.
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Amounts owed to Group undertakings
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Amounts owed to Group undertakings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, amounts owed to Group undertakings are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in the Statement of Comprehensive Income over the period of the loan, using the effective interest method.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
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Amounts due from Group undertakings
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Amounts due from Group undertakings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, amounts due from Group undertakings are stated at amortised cost and, where relevant, adjusted for the time value of money. The Company assesses on a forward-looking basis, the expected credit losses associated with its amounts due from Group undertakings. A provision for impairment is made for the lifetime expected credit losses on initial recognition of the amounts due. If collection is expected in more than one year, the balance is presented within non-current assets.
In determining the expected credit losses, the Company takes into account any future expectations of likely default events based on the level of capitalisation of the counterparty, which is a fellow subsidiary undertaking of Land Securities Group PLC.
Trade and other payables with no stated interest rate and payable within one year are recorded at transaction price. Trade and other payables after one year are discounted based on the amortised cost method using the effective interest rate.
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Changes in accounting policies and standards
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The accounting policies used in these financial statements have been amended where relevant to reflect the adoption of new standards, amendments and interpretations which became effective in the year. There have been no new accounting standards, amendments or interpretations during the year that have a material impact on the financial statements of the Company.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Significant accounting judgements and estimates
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The Company’s significant accounting policies are stated in note 1 above. Not all of these significant accounting policies require management to make difficult, subjective or complex judgements or estimates. The following is intended to provide an understanding of the policies that management consider critical because of the level of complexity, judgement or estimation involved in their application and their impact on the financial statements. These estimates involve assumptions or judgements in respect of future events. Actual results may differ from these estimates.
Trade debtors
The Company is required to judge when there is sufficient objective evidence to require the impairment of individual trade receivables. It does this by assessing on a forward-looking basis, the expected credit losses associated with its trade receivables. A provision for impairment is made for the lifetime expected credit losses on initial recognition of the receivable. In determining the expected credit losses, the Company takes into account any recent payment behaviours and future expectations of likely default events (i.e. not making payment on the due date) based on individual customer credit ratings, actual or expected insolvency filings or company voluntary arrangements, likely deferrals of payments due, rent concessions and market expectations and trends in the wider macro-economic environment in which our customers operate. These assessments are made on a customer by customer basis.
The Company’s assessment of expected credit losses is inherently subjective due to the forward-looking nature of the assessments, in particular, the assessment of expected insolvency filings or company voluntary arrangements, likely deferrals of payments due and rent concessions. As a result, the value of the provisions for impairment of the Company’s trade receivables are subject to a degree of uncertainty and are made on the basis of assumptions which may not prove to be accurate.
Investment property
The Company uses the valuation performed by its external valuer, CBRE Limited, as the fair value of its investment properties.
The valuation of investment properties is inherently subjective due to, among other factors, the individual nature of each property, its location and the expected future rental revenues from that particular property. As a result, the valuations the Company places on its property portfolio are subject to a degree of uncertainty and are made on the basis of assumptions which may not prove to be accurate, particularly in periods of volatility or low transaction flow in the property market. The assumptions upon which CBRE Limited has based its valuation of the Company’s properties as at 31 March 2022 include, but are not limited to, matters such as the tenure and tenancy details for the properties, ground conditions at the properties, the structural condition of the properties, prevailing market yields and comparable market transactions. These assumptions are market standard and accord with the Royal Institution of Chartered Surveyors (RICS) Valuation – Professional Standards UK. However, if any assumptions made by the external valuer prove to be inaccurate, this may mean that the value of the Company’s properties differs from their valuation, which could have a material effect on the Company’s financial condition.
Impairment of investment in subsidiary undertakings
The Company is required to judge when there is sufficient objective evidence to require the impairment of investments in subsidiaries. It does this by assessing the net asset value of each subsidiary undertaking as at year end. A provision for impairment is made if the net asset value of the subsidiary undertaking is lower than the carrying amount of the investment recorded by the Company.
Amounts due from group undertakings
The Company is required to estimate the impairment of amounts due from Group undertakings. It does this by assessing on a forward-looking basis, the expected credit losses associated with its amounts due from Group undertakings. A provision for impairment is made for the lifetime expected credit losses on initial recognition of the amounts due. In determining the expected credit losses, the Company takes into account any future expectations of likely default events based on the level of capitalisation of the counterparty, which is a fellow subsidiary undertaking of Land Securities Group PLC.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Management and administrative expenses
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(a) Management services
The Company had no employees during the year (2021: none). Management services were provided to the Company throughout the year by U and I Group Limited (formerly U and I Group PLC), a fellow subsidiary undertaking, charges for which amount to £11,324 (2021: £10,405).
(b) Directors' remuneration
The Company's directors' emoluments are borne by U and I Group Limited (formerly U and I Group PLC). The Directors of the Company, who as key management personnel of the Company, received no emoluments from U and I Group Limited (formerly U and I Group PLC) for their services to the Company.
(c) Auditor remuneration
The Company's auditor's remuneration is borne by LS Development Holdings Limited. The proportion of the remuneration which relates to the Company amounts to £8,595 (2021: £4,000) . No non-audit services were provided to the Company during the year (2021: £Nil).
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All turnover arose within the United Kingdom.
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Within cost of sales is property related expenditure of £495,574 (2021: £134,599) incurred in the operation and management of the investment properties.
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Current tax on losses for the year
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Adjustments in respect of previous periods
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Total income tax charge in the Statement of Comprehensive Income
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
7.Tax on loss (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2021: higher than) the standard rate of corporation tax in the UK of 19% (2021: 19%). The differences are explained below:
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021: 19%)
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Impairment against investment in subsidiary undetakings
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Group relief surrendered for nil consideration
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Revaluation loss on investment properties
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Adjustments in respect of previous periods
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Total tax charge for the year
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Factors that may affect future tax charges
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The Finance Act 2021 was substantially enacted in May 2021 and has increased the corporation tax rate to from 19% to 25% with effect from 1 April 2023. Any deferred taxation balances have been measured using the rates expected to apply in the reporting periods when the timing differences reverse.
The following balances relate to the total deferred tax asset not recognised on losses carried forward:
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Investment in subsidiary undertakings
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Investments in subsidiary companies
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During the year, the Company acquired a further 1,099,900 ordinary sharess in The Deptford Project 2 Limited for a consideration of £1,099,900. The total provision for impairment of investment in subsidiary undertakings is £66,760 (2021: £Nil). The directors believe that the carrying value of the investment is supported by the fair value of the subsidiary undertakings.
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The following was a subsidiary undertaking of the Company:
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The Deptford Project 2 Limited
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100 VIctoria Street, London, SW1E 5JL
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Investments in subsidiaries are measured at cost less accumulated impairment with any changes to be recognised in the Statement of comprehensive income. Management undertake an annual review of the carrying value of its investments to establish if there is any impairment to its value based on the performance of the underlying asset and external evidence.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Freehold investment property
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The freehold investment properties have been valued at 31 March 2022 by CBRE Limited, Chartered Surveyors, on an open market value for existing use basis in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors.
In assessing the valuation of investment properties, all rent free incentives given to tenants have been considered as disclosed in note 10.
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Trade and other receivables
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Due after more than one year
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Other debtors due after more than one year represents rent free incentives given to tenants that are amortised evenly over the length of the tenants lease.
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Amounts owed by group undertakings
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The unsecured amounts due from Group undertakings are interest free, unsecured, repayable on demand and with no fixed repayment date.
The company has provided £55,685 (2021: £45,711) against trade debtors where recovery is considered doubtful. Apart from the receivables that have been provided for at the year end, there is no further material expected loss. The maximum exposure to credit risk at the reporting date is the carrying value of the receivable.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Amounts owed to group undertakings
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Other taxation and social security
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The unsecured amounts owed to Group undertakings are interest free, unsecured, repayable on demand and with no fixed repayment date.
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Allotted, called up and fully paid
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1 (2021: 1) ordinary 'A' share of £1.00
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1 (2021: 1) ordinary 'B' share of £1.00
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1,999,998 (2021: Nil) ordinary shares of £1.00 each
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The 'A' ordinary share and the 'B' ordinary share shall rank pari passu in all respects but shall constitute separate classes of shares. On 22 October 2020, U and I IPA Limited acquired the share capital of the company from U and I PPP Limited.
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On 29 March 2022, the Company issued 1,999,998 ordinary 'A' shares at £1 each. All amounts have been
paid.
On the 6 May 2022, the 'A' class share and 'B' class share were designated to new ordinary shares following changes to the Articles of Association on the 29 March 2022.
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THE DEPTFORD PROJECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Commitments under operating leases
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At 31 March the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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The immediate parent company is U and I IPA Limited.
On 14 December 2021, LS Development Holdings Limited acquired 100% of the share capital in U and I Group Limited (formerly U and I Group PLC). With effect from this date and as at 31 March 2022, the ultimate parent company and controlling party of The Deptford Project Limited was Land Securities Group PLC. This is the largest parent company of the Group to consolidate these financial statements.
Consolidated financial statements for the year ended 31 March 2022 for Land Securities Group PLC can be obtained from the Company Secretary, at the registered office of the ultimate parent company, 100 Victoria Street, London, SW1E 5JL and from the Group website at www.landsec.com. This is the largest and smallest Group to include these accounts in its consolidated financial statements.
All companies are incorporated in Great Britain and registered in England and Wales.
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