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Company Registration Number 11582575
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HRE (POTTERY LANE) LIMITED
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HRE (POTTERY LANE) LIMITED
REGISTERED NUMBER: 11582575
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 2 to 6 form part of these financial statements.
Page 1
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HRE (POTTERY LANE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
HRE (Pottery Lane) Limited is a private company limited by shares, incorporated in England and Wales. The registered office is Rotterdam House, 116 Quayside, Newcastle upon Tyne, NE1 3DY.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
At the balance sheet date the company has net liabilities of £3,788,934 following a loss for the year of £3,761,812. Post year end the development hasn’t progressed due to ownership changes and discussions with funders. All of the funding in place was in breach of their respective covenants at the year end. As such, all funding was repayable on demand, although no debt has been recalled in the post year end period. The company has a new funding offer which will enable the previous funding to be repaid and for the development to proceed. Whilst the offer has been made completion still needs to take place, and with existing funding repayable on demand, without the alternative funding progressing to completion the company would not be able to continue as a going concern.
The director is confident that this funding offer will progress to completion and the site will be developed. Should this current offer not proceed the director is confident that alternative funding would be sought or a further extension would be granted. However, there is a material uncertainty linked to these scenarios.
In August 2021, the company was sold to a new parent company and at that time there was a debt forgiveness for all group liabilities owed. This has resulted in a significant loss during the year due to charges made against loans owed by those group companies.
Notwithstanding the material uncertainty disclosed above, the directors have prepared the accounts on a going concern basis.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Inventories are stated at the lower of cost and estimated selling price less cost to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and overheads that have been incurred in bringing the inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Page 2
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HRE (POTTERY LANE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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The Company has no employees other than the directors, who did not receive any remuneration (2020 - £NIL).
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The average monthly number of employees, including directors, during the year was 0 (2020 - 0).
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Page 3
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HRE (POTTERY LANE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Amounts owed to group undertakings have no repayment date and are repayable on demand bearing no interest.
Included in other loans is a loan which accrues interest daily at a rate of 7%, with a principal value of £2,550,000, and a loan which accrues interest daily at a rate of 10%, with a principal value of £4,090,500. Each of these loans is secured against the development.
Bank loans are not secured. Interest on this loan is payable monthly at a rate of 2.5%. The loan is repayable over 6 years with repayment commencing 12 months after drawdown.
The directors are of the view that the company was in breach of its covenants at the year end on all of its lending and, as such, all loans are repayable on demand and presented as falling due within one year.
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Creditors: Amounts falling due after more than one year
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Page 4
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HRE (POTTERY LANE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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Allotted, called up and fully paid
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1 (2020 - 1) Ordinary Shares share of £1.00
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The company's immediate parent is All Saints Living Limited.
The company's ultimate parent is Hadrian Real Estate plc, registered office Rotterdam House, 116 Quayside, Newcastle upon Tyne, United Kingdom, NE1 3DY.
Page 5
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HRE (POTTERY LANE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The auditors' report on the financial statements for the year ended 31 December 2021 was qualified.
The qualification in the audit report was as follows:
Basis for qualified opinion
With regards many of the transactions that arose in the period prior to that ending 31 December 2021, and balances that existed prior to the transfer of ownership in August 2021, the new Directors are unable to support beyond the nominal ledger provided. As such, we have not been able to obtain confirmation from source documents in our testing. We were unable to satisfy ourselves by alternative means concerning the exceptional charge in the year, amounting to £3,378,572, which consists of impairment charges against amounts owed by group undertakings, the value of which we were unable to confirm by direct confirmation. No such unverifiable balances were included in the balance sheet at the year end.
Consequently we were unable to determine whether any adjustment to this amount was necessary.
Material uncertainty related to going concern
We draw attention to note 2.2 in the financial statements, which indicates that the company's ability to continue as a going concern is dependent on the securing of further financing. At the time of approving the accounts this funding is not confirmed.
As stated in note 2.2, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The audit report was signed on 16 November 2023 by Joanna Gray (Senior Statutory Auditor) on behalf of Armstrong Watson Audit Limited.
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