Citygrove Securities PLC - Limited company accounts 23.2

REGISTERED NUMBER: 04757585 (England and Wales)

Citygrove Securities PLC

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 March 2023

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

DIRECTORS:

T R Baines

A J Rennie

D L Sheehan

A Banks

SECRETARY:

A Banks

REGISTERED OFFICE:

The White House

2 Meadrow

Godalming

Surrey

GU7 3HN

BUSINESS ADDRESS:

10 Albemarle Street

London

W1S 4HH

REGISTERED NUMBER:

04757585 (England and Wales)

AUDITORS:

Hughes Waddell

Chartered Accountants and Statutory Auditors

The White House

2 Meadrow

Godalming

Surrey

GU7 3HN

The directors present their strategic report for the year ended 31 March 2023.

Section 172(1) Statement

The Companies Act 2006 requires company directors to state they have had regard to the matters set out in section 172(1) (a) to (f) of the Companies Act 2006 when performing their duties under section 172. These matters include: the need to foster the company's business relationships with suppliers, tenants, employees of related businesses and the impact of the company's operations on the communities and environments relevant to the strategy of the business. In the discussion below we refer to Citygrove Securities plc and the associated development companies through which we deliver projects.

The board is responsible for fulfilling the company's legal and fiduciary responsibilities and determines the overall strategic direction and risk appetite of the business. Our purpose is to develop and improve the built environment to help not only our tenants thrive but also the people who live and work there and how we contribute to the wider public realm and community. Wherever we undertake a project development our strategy is influenced by the requirements of our occupiers and changing workplace needs. In the wake of the Covid-19 pandemic we have also addressed the size of our business to ensure focus on the key projects and the appropriateness of our risk profile to deliver shareholder returns and retain the key skilled staff to exploit market opportunities. We continue to maintain an intense focus on capital allocation, balance sheet discipline and cash flow to ensure delivery of our key identified development projects.

Review of Business

The Company's main activity is that of acting as a project manager to a number of associated property development companies in the UK, Spain and Germany which carry out pre-let and pre-sold developments in the office, retail, hotel, leisure and residential sectors.

Results and Performance

The profit for the year before taxation was £4,381,287 (2022: loss before tax of £ 1,618,246). No dividend has been paid and the retained profit for the year after taxation, amounting to £4,381,287 (2022: loss after tax of £ 1,306,711) has been credited to reserves. The financial results for the year show that the Company continues to trade successfully due to the income arising from the property developments carried out by associated companies in the UK, Spain and Germany. The Company and its associated companies continue to invest substantial amounts in various sites, primarily in those sites previously purchased in Germany. The directors expect the companies to generate substantial profits once these projects are sold.

Business Environment

Geopolitical tensions, high inflation and successive interest rate rises in both the UK and the EU since early 2022 have impacted trading and investment activity in our markets. Investment sentiment remains fragile. We expect investment activity in the markets in which the Company operates to remain muted until interest rates are widely perceived to have peaked and for rate reductions to have commenced. There remains a significant amount of capital from long-term institutional, pension and sovereign wealth fund investors seeking exposure to high quality assets generating rental growth under long-term leases with financially secure tenants. The directors expect to only sell completed development projects subject to attractive pricing levels being achieved in order to realise significant value creation through the property cycle.

Strategy

The Company's success is dependent upon the proper selection, pricing and ongoing management of the property developments it undertakes. The directors continue to mitigate development and exit risks by pursuing pre-funded and pre-let deals wherever possible.

Key Performance Indicators

By the very nature of the Company's principal activities there are no key performance indicators. The Company has no employees other than its directors. All operations and business activities are undertaken on the Company's behalf by Citygrove Professional Services Limited through a service agreement.

Principal Risks and Uncertainties

There are many risks facing the Company as it operates in highly competitive environments and economies which were initially thrown into recession due to initial lockdowns and social distancing measures adopted by governments across the regions in which the Company operates. Recessionary fears remain heightened against the backdrop of energy cost supply shocks and interest rate increases by the UK and EU central banks to reduce inflationary pressures. Investor confidence also continues to be adversely affected by the UK's departure from the EU. Despite the continuing uncertainty over the timeframe for economic recovery and the impact of the UK's departure from the EU, the Company has continued to progress projects whilst controlling the cost base. The directors consider that the principal risks that the Company faces are as follows:

1) Financial

The Company has finite resources and is dependent upon the availability of third-party bank financing. The directors monitor and manage the cash position of the Company on a constant basis and commitments are not undertaken unless funding is available. The Company regularly reviews its overheads and cuts costs where necessary to ensure that sufficient funding is available to cover ongoing financial commitments.

2) Development

Changes in trends cause shifts in customer demand for properties which affect the commercial attractiveness of new lettings and may lead to tenants becoming insolvent and being unable to complete on a guaranteed pre-let. Development and construction risk includes the possibility of contractors becoming insolvent during the building process. The directors manage these risks by carrying out detailed financial checks on prospective tenants and contractors, including a financial covenant review before the contract is agreed, retaining highly experienced in-house leasing staff, maintaining strong relationships with occupiers and ensuring appropriate performance bonds and insurances are in place to mitigate the risk of loss.

3) Planning Process

There is a planning risk that our schemes will not obtain consent from the relevant Local Authorities, or will take a disproportionate amount of time to gain approval. We try to minimise this risk by retaining specialist planning consultants to work on our behalf, by meeting with local planning officers and local residents at the earliest opportunity to find out their views and ensuring that we take account of their concerns in the design of our schemes.

4) People

There is a risk that the Company will not have the right people and skills in the business to meet its business objectives. The directors try to minimise this risk by ensuring that there is succession planning so that the loss of one individual does not lead to the loss of business relationships; by ensuring that staff go on regular training courses in all relevant disciplines to keep them up to date and by applying systematic and known procedures to ensure consistency of operations.

Future Developments

Since the financial year end, the Company, and its associated companies, have continued to fund development sites co-owned in Hannover and Lubeck in Germany, and in Marbella in Spain. A forward funded hotel development in London is expected to be completed before the end of 2023.

ON BEHALF OF THE BOARD:

A Banks - Secretary

4 September 2023

The directors present their report with the financial statements of the company for the year ended 31 March 2023.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of acting as project manager to a number of associated property development companies in the UK, Spain and Germany, and carrying out pre-let commercial property developments in the retail, hotel, leisure and residential sectors.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2023.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

T R Baines

A J Rennie

D L Sheehan

A Banks

CREDITORS

It is the company's policy to pay creditors within 28 days.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Hughes Waddell, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

A Banks - Secretary

4 September 2023

Opinion

We have audited the financial statements of Citygrove Securities PLC (the 'company') for the year ended 31 March 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We performed risk assessment procedures and obtained an understanding of the Company and its environment, the applicable financial reporting framework, the applicable laws and regulations, the Company's system of internal control and the fraud risk factors relevant to the Company that affect the susceptibility of assertions to material misstatement due to fraud. We made enquiries with management regarding actual or suspected fraud, non-compliance with laws and regulations, potential litigation and claims. The engagement partner led a discussion among the audit team with particular emphasis on how and where the Company's financial statements may be susceptible to material misstatement due to fraud, including how fraud might occur. The engagement partner assessed that the engagement team collectively had the appropriate competence and capability to identify or recognise non-compliance with laws and regulations.

We considered compliance with UK Companies Act 2006 and the applicable tax legislation as the key laws and regulations which non-compliance could directly lead to material misstatement due to fraud at the financial statement level. We evaluated whether the selection and application of accounting policies by the Company may be indicative of fraudulent financial reporting. Our audit procedures responsive to assessed risks of material misstatement due to fraud at the assertion level included but were not limited to:

-

Testing the appropriateness of manual journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements;

-

Making inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries;

-

Selecting and testing journal entries and other adjustments made at the end of a reporting period and throughout the period;

-

Reviewing accounting estimates for biases that could represent a risk of material misstatement due to fraud;

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements due to irregularities, including fraud, may not be detected, even though we have properly planned and performed our audit in accordance with the auditing standards. For example, 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. In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as they may involve collusion, forgery, intentional omissions, override of internal controls, or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Nicholas Dodd BA, FCA (Senior Statutory Auditor)

for and on behalf of Hughes Waddell

Chartered Accountants and Statutory Auditors

The White House

2 Meadrow

Godalming

Surrey

GU7 3HN

4 September 2023

TURNOVER

6,489,079

951,510

Cost of sales

2,313,066

380,046

GROSS PROFIT

4,176,013

571,464

Administrative expenses

5,164,161

2,622,660

(988,148

)

(2,051,196

)

Other operating income

265,000

255,000

OPERATING LOSS

4

(723,148

)

(1,796,196

)

Related party loans forgiven

5

4,952,060

-

Bad debt provision

5

(1,046,773

)

-

3,182,139

(1,796,196

)

Interest receivable and similar income

1,199,148

178,932

4,381,287

(1,617,264

)

Interest payable and similar expenses

6

-

982

PROFIT/(LOSS) BEFORE TAXATION

4,381,287

(1,618,246

)

Tax on profit/(loss)

7

-

(311,535

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

4,381,287

(1,306,711

)

PROFIT/(LOSS) FOR THE YEAR

4,381,287

(1,306,711

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

4,381,287

(1,306,711

)

FIXED ASSETS

Tangible assets

8

3,480

12,852

Investments

9

-

-

3,480

12,852

CURRENT ASSETS

Debtors

10

38,676,104

37,037,592

Cash at bank

772,804

2,009,226

39,448,908

39,046,818

CREDITORS

Amounts falling due within one year

11

23,213,608

27,202,177

NET CURRENT ASSETS

16,235,300

11,844,641

TOTAL ASSETS LESS CURRENT LIABILITIES

16,238,780

11,857,493

CAPITAL AND RESERVES

Called up share capital

13

50,000

50,000

Retained earnings

16,188,780

11,807,493

SHAREHOLDERS' FUNDS

16,238,780

11,857,493

The financial statements were approved by the Board of Directors and authorised for issue on 4 September 2023 and were signed on its behalf by:

T R Baines - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2021

50,000

13,114,204

13,164,204

Changes in equity

Total comprehensive income

-

(1,306,711

)

(1,306,711

)

Balance at 31 March 2022

50,000

11,807,493

11,857,493

Changes in equity

Total comprehensive income

-

4,381,287

4,381,287

Balance at 31 March 2023

50,000

16,188,780

16,238,780

Cash flows from operating activities

Cash generated from operations

1

(1,667,057

)

(1,622,894

)

Interest paid

-

(982

)

Tax paid

-

(114,648

)

Net cash from operating activities

(1,667,057

)

(1,738,524

)

Cash flows from investing activities

Purchase of tangible fixed assets

-

(452

)

Purchase of fixed asset investments

(309,912

)

-

Interest received

1,199,148

178,932

Net cash from investing activities

889,236

178,480

Cash flows from financing activities

Net loans in year

(918,601

)

1,921,517

Amount introduced by directors

460,000

-

Net cash from financing activities

(458,601

)

1,921,517

(Decrease)/increase in cash and cash equivalents

(1,236,422

)

361,473

Cash and cash equivalents at beginning of year

2

2,009,226

1,647,753

Cash and cash equivalents at end of year

2

772,804

2,009,226

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.3.23

31.3.22

£

£

Profit/(loss) before taxation

4,381,287

(1,618,246

)

Depreciation charges

9,372

12,348

Loans forgiven

(4,952,060

)

(52,267

)

Investment impairment

309,912

-

Finance costs

-

982

Finance income

(1,199,148

)

(178,932

)

(1,450,637

)

(1,836,115

)

(Increase)/decrease in trade and other debtors

(11,690

)

38,758

(Decrease)/increase in trade and other creditors

(204,730

)

174,463

Cash generated from operations

(1,667,057

)

(1,622,894

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2023

31.3.23

1.4.22

£

£

Cash and cash equivalents

772,804

2,009,226

Year ended 31 March 2022

31.3.22

1.4.21

£

£

Cash and cash equivalents

2,009,226

1,647,753

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.22

Cash flow

At 31.3.23

£

£

£

Net cash

Cash at bank

2,009,226

(1,236,422

)

772,804

2,009,226

(1,236,422

)

772,804

Total

2,009,226

(1,236,422

)

772,804

1.	STATUTORY INFORMATION

Citygrove Securities PLC is a private company , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include accrued income.

Turnover

Turnover consists of project related management fees relating to the year under unconditional contracts from projects in the United Kingdom, Spain and Germany, and the recharge of project related costs. Turnover is stated net of VAT. Turnover is recognised when the company obtains the right to consideration, which is when a project is complete and the profit can be accurately determined.

Accrued income represents rechargeable costs invoiced during the year that relate to future developments.

Tangible fixed assets

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost of each asset over its expected useful life, as follows:-

Office equipment

- 25% per annum on a straight line basis

Fixtures & fittings

- 25% per annum on a straight line basis

Pictures

- 10% per annum on a straight line basis

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Financial instruments

Financial instruments comprise financial assets, cash and cash equivalents, financial liabilities and equity instruments.

Financial assets

Financial assets are classified as either financial assets at fair value through profit or loss, or loans and receivables, as appropriate. When financial assets are recognised initially, they are measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial asset are capitalised unless they relate to a financial asset classified at fair value through profit and loss in which case transaction costs are expensed in the income statement.

The Company determines the classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.After initial measurement loans and receivables are subsequently carried at amortised cost, using the effective interest rate method, less any allowance for impairment.Amortised cost is calculated by taking into account any discount or premium on acquisition over the period to maturity. Gains and losses are recognised in the income statement when the loans and receivables are de-recognised or impaired, as well as through the amortisation process.

Cash and cash equivalents

Cash and cash equivalents are balances with banks.

Financial liabilities

Financial liabilities include interest bearing loans and borrowings, and trade and other payables.

Obligations for loans and borrowings are recognised when the Company becomes party to the related contracts and are measured initially at the fair value of consideration received less directly attributable transaction costs.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the amortisation process.

Equity

Equity instruments issued by the Company are recorded in equity at the proceeds received, net of direct issue costs.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Investments

Investments are stated at cost less accumulated impairment losses.

3.	EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 March 2023 nor for the year ended 31 March 2022.

The average number of employees during the year was as follows:

31.3.23

31.3.22

Directors

4

4

31.3.23

31.3.22

£

£

Directors' remuneration

-

-

4.	OPERATING LOSS

The operating loss is stated after charging/(crediting):

31.3.23

31.3.22

£

£

Depreciation - owned assets

9,372

12,348

Auditors remuneration - audit services

11,000

10,500

Operating lease payments

108,934

98,217

Foreign exchange differences

(536,934

)

80,046

5.	EXCEPTIONAL ITEMS

31.3.23

31.3.22

£

£

Related party loans forgiven

4,952,060

-

Bad debt provision

(1,046,773

)

-

3,905,287

-

The bad debt provision of £1,046,773 relates to a provision for a doubtful debt due from a related party company.

The related party loans forgiven of £4,952,060 include a credit of £5,296,234 in respect of a loan from a related party that was waived and a debit of £344,174 in respect of a loan to a related party that is not recoverable.

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.3.23

31.3.22

£

£

Interest on Corporation Tax

-

982

7.

TAXATION

Analysis of the tax credit

The tax credit on the profit for the year was as follows:

31.3.23

31.3.22

£

£

Current tax:

UK corporation tax

-

(311,535

)

Tax on profit/(loss)

-

(311,535

)

UK corporation tax has been charged at 19% (2022 - 19%).

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31.3.23

31.3.22

£

£

Profit/(loss) before tax

4,381,287

(1,618,246

)

Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 19% (2022 - 19%)

832,445

(307,467

)

Effects of:

Expenses not deductible for tax purposes

9,222

4,188

Income not taxable for tax purposes

(940,891

)

(9,931

)

Depreciation in excess of capital allowances

60,143

1,675

Losses carried forward

39,081

-

Total tax credit

-

(311,535

)

There are no factors to note affecting future tax charges.

8.	TANGIBLE FIXED ASSETS

Fixtures

and

Office

Pictures

fittings

equipment

Totals

£

£

£

£

COST

At 1 April 2022

and 31 March 2023

17,400

80,127

42,431

139,958

DEPRECIATION

At 1 April 2022

12,180

80,127

34,799

127,106

Charge for year

1,740

-

7,632

9,372

At 31 March 2023

13,920

80,127

42,431

136,478

NET BOOK VALUE

At 31 March 2023

3,480

-

-

3,480

At 31 March 2022

5,220

-

7,632

12,852

9.	FIXED ASSET INVESTMENTS

Unlisted

investments

£

COST

Additions

309,912

Impairments

(309,912

)

At 31 March 2023

-

NET BOOK VALUE

At 31 March 2023

-

The company's investments at the Balance Sheet date in the share capital of companies include the following:

Associated company

Weighton Enterprises Limited

Registered office: The White House, 2 Meadrow, Godalming, Surrey, GU7 3HN

Nature of business: Property investment

%

Class of shares:

holding

Ordinary

50.00

30.4.23

30.4.22

£

£

Aggregate capital and reserves

615,359

616,213

Loss for the year

(854

)

(953

)