HMG Investments Limited - Accounts to registrar (filleted) - small 23.2.5

REGISTERED NUMBER: 00460732 (England and Wales)

Financial Statements

for the Year Ended 31 August 2023

for

HMG Investments Limited

Page

Company Information

1

Abridged Statement of Financial Position

2

Notes to the Financial Statements

3

DIRECTORS:

N P Casson

C H H Murray

Mrs C A Hall

E G Murray

B A I Murray

SECRETARY:

Mrs C A Hall

REGISTERED OFFICE:

St Johns House

Barrington Road

Altrincham

Cheshire

WA14 1TJ

REGISTERED NUMBER:

00460732 (England and Wales)

AUDITORS:

Hardy & Company (Hyde) Ltd

Chartered Certified Accountants

& Statutory Auditors

Onward Chambers

34 Market Street

Hyde

Cheshire

SK14 1AH

FIXED ASSETS

Tangible assets

4

12,110

16,146

Investment property

5

87,546,851

91,851,850

87,558,961

91,867,996

CURRENT ASSETS

Debtors

4,967,882

3,282,234

CREDITORS

Amounts falling due within one year

64,090,542

64,399,756

NET CURRENT LIABILITIES

(59,122,660

)

(61,117,522

)

TOTAL ASSETS LESS CURRENT LIABILITIES

28,436,301

30,750,474

CAPITAL AND RESERVES

Called up share capital

599,938

599,938

Capital redemption reserve

62

62

Cashflow hedging reserve

7

870,341

503,121

Retained earnings

26,965,960

29,647,353

SHAREHOLDERS' FUNDS

28,436,301

30,750,474

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

All the members have consented to the preparation of an abridged Statement of Financial Position for the year ended 31 August 2023 in accordance with Section 444(2A) of the Companies Act 2006.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 19 February 2024 and were signed on its behalf by:

N P Casson - Director

1.	STATUTORY INFORMATION

HMG Investments Limited is a private company, limited by shares , 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" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Turnover

Turnover represents rental income for the year excluding VAT together with premiums received from tenants. Amounts invoiced in advance relating to the next accounting period are included in accruals as deferred income.

Acquisitions and disposals of properties are recognised on the date of exchange of contracts for the purchase or sale, provided there is certainty at the balance sheet date that completion will take place. If completion is subject to a contingent event the purchase or sale is recognised on the date that the contingent event occurred.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery etc

-

25% on reducing balance

Tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses.

Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in capital and reserves, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess shall be recognised in profit or loss.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Investment properties are revalued at the accounting date and the aggregate surplus or temporary deficit is recognised in the profit and loss account. A reserve transfer to the non distributable reserve account is then made.

Deferred taxation is provided on these gains at the rate expected to apply when the property is sold.

No depreciation or amortisation is provided in respect of freehold and long leasehold properties. Any permanent diminutions in value below cost are charged in the profit and loss account.

This treatment is a departure from the requirements of the Companies Act concerning the depreciation of fixed assets.

The Directors consider that as these properties are not held for consumption but for investment, to depreciate them would not give a true and fair view, and that it is necessary to adopt FRS 102 for the accounts to give a true and fair view. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.

These valuations have been prepared on the basis of Open Market Value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.

Each property has been valued individually and not as part of a portfolio. No account has been taken of any inter-company leases or arrangements, nor any mortgages, debentures or other charges, and no allowance has been made for any expenses of realisation nor for any taxation which might arise in the event of a disposal. The figures also do not reflect any element of special purchaser value following a merger of interests or sale to an owner or occupier of an adjoining property.

Where properties have not been included in the valuation review, they are included at cost or at the Directors' assessment of open market value.

Financial instruments

The Company uses derivatives; interest rate swaps and interest rate caps to manage interest rate exposures.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to fair value at each Balance Sheet date. Fair value gains and losses are recognised in the Profit and Loss account unless hedge accounting is applied and the hedge is a cash flow hedge.

Interest rate caps:

The Company have interest rate cap instruments which have been measured at fair value at the Balance Sheet date, with any gains or losses being reported in the Profit and Loss account. The fair value of interest rate caps is included in short term creditors.

Interest rate swaps:

The Company have interest swaps which have been designated as cash flow hedge accounting instruments and qualify for hedge accounting under FRS 102. Further details relating to these instruments are set out below.

To qualify for hedge accounting, the Company has documented the hedged item, the hedging instrument and the hedging relationship between them as well as the causes of hedge ineffectiveness such as different maturities, nominal amounts or variable rates or counter-party credit risk.

The Company elects to adopt hedge accounting for interest rate swaps where:

1)The interest rate swap is a qualifying hedging instrument with an external party that hedges the interest rate risk on a loan or part of the nominal amount of a loan that share the same risk and that qualify as a hedged item;

2) The hedging relationship between the interest rate swap and the interest rate risk on the loan is consistent with the risk management objectives for undertaking hedges (i.e. to manage the risk that fixed interest rate become unfavourable in comparison to current market rates or the variability in cash flows arising from floating interest rates); and

3)The change in the fair value of the interest rate swap is expected to move inversely to the change in the fair value of the interest rate risk on the loan.

Where an interest rate swap that converts floating rate debt into fixed rate debt qualifies for hedge accounting, it is accounted for as a cash flow hedge. The cumulative change in the fair value of the interest rate swap is recognised in the Statement of Other Comprehensive Income up to the amount of the cumulative fair value movement on the floating rate debt that is attributable to the floating interest rate risk. Any excess fair value gains or losses on the interest rate swap not recognised in the Statement of Other Comprehensive Income are recognised in the Profit and Loss account. The gains and losses recognised in the Statement of Other Comprehensive Income are recorded as a separate component of equity - the cash flow hedging reserve.

Hedge accounting is discontinued when a floating to fixed interest rate swap expires, is sold, terminated or exercised or when the conditions for hedge accounting are no longer met if the company documents its election to discontinue hedge accounting. Any fair value gains or losses accumulated in the hedging reserve are reclassified to the Profit and Loss account, either when the variable interest rate expense is recognised in the Profit and Loss account, or immediately on discontinuation of hedge accounting if future variable interest rate cash flows are no longer expected to occur.

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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 7 (2022 - 7 ) .

4.	TANGIBLE FIXED ASSETS

Totals

£

COST

At 1 September 2022

and 31 August 2023

594,764

DEPRECIATION

At 1 September 2022

578,618

Charge for year

4,036

At 31 August 2023

582,654

NET BOOK VALUE

At 31 August 2023

12,110

At 31 August 2022

16,146

5.	INVESTMENT PROPERTY

Total

£

FAIR VALUE

At 1 September 2022

91,851,850

Additions

198,375

Disposals

(1,109,828

)

Revaluations

(3,393,546

)

At 31 August 2023

87,546,851

NET BOOK VALUE

At 31 August 2023

87,546,851

At 31 August 2022

91,851,850

Fair value at 31 August 2023 is represented by:

£

Valuation in 2023

9,403,966

Cost

78,142,885

87,546,851

If investment property had not been revalued it would have been included at the following historical cost:

31.8.23

31.8.22

£

£

Cost

78,142,885

79,054,340

Investment property was valued on an open market basis on 31 August 2023 by Jones Lang Lasalle and the Directors .

6.	SECURED DEBTS

The following secured debts are included within creditors:

31.8.23

31.8.22

£

£

Bank loans

53,762,750

52,700,257

7.

RESERVES

Cashflow

hedging

reserve

£

At 1 September 2022

503,121

Net fair value movement on investment hedging instruments

367,220

At 31 August 2023

870,341

8.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Paul Robert Campbell (Senior Statutory Auditor)

for and on behalf of Hardy & Company (Hyde) Ltd

9.	ULTIMATE CONTROLLING PARTY

The company is a subsidiary of HMG Investment Holdings Limited and the ultimate holding company is The Hollins Murray Group Limited. Both companies are incorporated in England and Wales.