DONCASTER_PROPERTY_DEVELO - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 30 November 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

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

Doncaster Property Developments Limited is a private company limited by shares incorporated in England and Wales. The registered office is Market House, 10 Market Walk, Saffron Walden, Essex, CB10 1JZ.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

These financial statements for the year ended 30 November 2017 are the first financial statements of Doncaster Property Developments Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 December 2015. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 8.

Turnover represents rental income receivable by the company in the year.

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

Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.

Stock, which consists of a plot of land held for potential development purposes, is valued at the lower of cost and net realisable value.

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, and other loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

During the prior year, as part of a financing exercise, a formal valuation was obtained in respect of Kelham House, Kelham Street, Doncaster. This property has been valued at £1,877,000, and as a result a property revaluation of £932,714 was recorded in the company's accounts in the previous year. No revaluation has been processed in the current period, as the directors do not believe that the valuation of this property has changed during the current year.

For the property at 24 Avenue Road, Doncaster, DN2 4AQ, which was acquired during the previous year, this was valued at £750,000 as at 30 November 2016 by the company's directors and accordingly a revaluation of £197,157 was recorded in the company's accounts. No further revaluation has been processed in the current year, as the directors are of the opinion that the property's value has not changed.

three additional properties owned by the company, being 69 and 215 Carr House Road, Doncaster and the property known as Upper Floors, York House, Cleveland Street, Doncaster were all valued in previous years, as part of a similar financing exercise. These valuations have valued 69 Carr House Road at a value of £166,000, 215 Carr House Road at a value of £160,000 and York House at a value of £1,700,000. No further change in value is considered to have occurred during the last 12 months.

The directors have considered the position as regards the value of other property owned by the company, and are of the view that, no further amendment to the carrying value of the company's investment properties is required.

The following amounts were outstanding at the reporting end date:

Throughout the year, the company has continued to receive a loan from Doncaster Property Investments Limited, a company in which both Mr J Lodge and Mr P Rothwell are directors and shareholders. In the year, the amount of the loan has decreased from £769,296 to £688,231. Interest of £36,935 (2016: £32,000) was paid to Doncaster Property Investments Limited during the year, being at what the directors consider to be a commercial interest rate.

In addition, the company has also continued to be in receipt of a loan from Manchester & Edinburgh Property Investment Co Limited, a company in which Mr J Lodge is a director and shareholder. This loan increased from £800,000 at the start of the year to £1,000,000 at 30 November 2017. The loan has no fixed repayment terms, but interest is charged monthly on the outstanding balance at a rate of 10%. During the year, interest of £86,663 (2016: £26,664) was charged on this loan.

The company's directors, Mr J Lodge and Mr P Rothwell, have continued to provide personal guarantees in respect of bank loans that have been advanced to the company.

On conversion to FRS102, the company's revaluation reserves totalling to £1,824,857 have been combined into the Profit and Loss Account reserve balance. This change has been made by way of prior period adjustment. As a result of this change, the profit reported in the year ended 30 November 2016 has increased by £1,129,871 to reflect revaluation gains that arose during this year. In the current year, there is no impact from this change, as no revaluation has been recorded in the current period.

On transition to FRS102, a deferred tax liability has ben recognised in respect of the revaluation gains previously recognised within the company's accounts. This deferred tax liability had not previously been recognised on the basis that the company had not entered into any contracts to dispose of its investment properties, in accordance with previously applied UK GAAP. As a result of the transition to FRS102, deferred tax must be recognised in respect of these revaluation balances, regardless of whether any contract for sale has been entered into.

As a result of this change, a prior year adjustment has been brought into the accounts to reflect a deferred tax liability of £277,060. A debit of £152,060 has been reflected in the prior period Profit and Loss Account to reflect the deferred tax charge arising on revaluations in that period. In the current period, as no investment property revaluation has been processed, there is no Profit and Loss Account effect.