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Registered number: 05385380
DEVELOPMENT SECURITIES (FURLONG) LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
The Directors of Development Securities (Furlong) 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 investment. 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 31 March 2024 and confirmation has been received that Land Securities Group PLC will support the Company until this date, so long as the Company remains a subsidiary of Land Securities Group PLC. If the Company was sold within the next 12 months from 31 March 2023, confirmation has been received that Land Securities Group PLC would ensure the Company remains in a position to continue as a going concern at the point of sale. 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 31 March 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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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
The loss for the year, after taxation, amounted to £253,086 (2021: £872,587).
The Directors are unable to 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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M J Hood (appointed 17 June 2021)
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U and I Director 1 Limited (appointed 5 October 2022)
U and I Director 2 Limited (appointed 5 October 2022)
The Company has made qualifying third-party indemnity provisions for the benefit of the respective directors which were in place throughout the period and which remain in place at the date of this report.
Small companies exemption
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The Directors' Report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.
The Company has taken advantage of the exemption under section 414B 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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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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 DEVELOPMENT SECURITIES (FURLONG) LIMITED
Opinion
We have audited the financial statements of Development Securities (Furlong) Limited (the ‘Company’) for the year ended 31 March 2022 which comprise the Statement of Comprehensive Income, the Balance sheet, the Statement of Changes in Equity and the related notes 1 to 13, 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 FRS 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 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 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 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 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 through the period to 31 March 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 DEVELOPMENT SECURITIES (FURLONG) LIMITED (CONTINUED)
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.
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 Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors’ Report has 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 Directors’ Report.
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:
∙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; or
∙the Directors were not entitled to 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 DEVELOPMENT SECURITIES (FURLONG) LIMITED (CONTINUED)
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.
∙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 impairment of investment in a joint venture.
∙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 impairment of investment in subsidiary undertakings.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DEVELOPMENT SECURITIES (FURLONG) LIMITED (CONTINUED)
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
∙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 impairment of amounts due from group undertakings.
∙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.
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
Date: 31 March 2023
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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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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 20 form part of these financial statements.
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
REGISTERED NUMBER:05385380
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BALANCE SHEET
AS AT 31 MARCH 2022
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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:
G M Richardson, for and on behalf of U and I Director 2 Limited
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The notes on pages 11 to 20 form part of these financial statements.
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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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The notes on pages 11 to 20 form part of these financial statements.
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Development Securities (Furlong) Limited (the "Company") is a private limited company and is incorporated, domiciled and registered in England and Wales (Registered number: 05385380). 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, United Kingdom.
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 (£).
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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 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7 and 33.9.
This information and the results 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, United Kingdom.
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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 31 March 2024 and confirmation has been received that Land Securities Group PLC will support the Company until this date, so long as the Company remains a subsidiary of Land Securities Group PLC. If the Company was sold within the next 12 months from 31 March 2023, confirmation has been received that Land Securities Group PLC would ensure the Company remains in a position to continue as a going concern at the point of sale. 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 31 March 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 tax and other sales taxes.
Turnover for the period comprises of 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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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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.
Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Statement of comprehensive income.
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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 non-current 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.
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
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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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 losses associated with its amounts due from Group undertakings. A provision for impairment is made for the lifetime expected 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 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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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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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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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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 judgements in respect of future events. Actual results may differ from these estimates.
Trade and other receivables
The Company assesses, on a forward-looking basis, the expected losses associated with its trade debtors. The recoverability of the debtors will be reviewed at the reporting date and adjusted on a contract-by-contract basis as necessary. To measure the expected loss of trade debtors, the Company has reviewed aged balances on an individual debtor basis. The Company has based its assessment on previous bad debts, current trading conditions of the debtor and future expectations. As at 31 March 2022, the Company considered the impact of the Covid-19 pandemic when assessing the impairment of debtors. Within the year, the Company wrote back a provision of £13,500 relating to a debtor that was recoverable in the current year (2021: provision of £13,500).
Investment property
The investment portfolio is stated at fair value, which requires a number of judgements and estimates in assessing the qualities of the company's assets relative to market transactions.
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 RICS standards.
The remaining properties have been valued by the Directors. They have made key assumptions in the determination of the fair values of investment properties in respect of the state of the property market in the location where the properties are situated and in respect of the range of reasonable fair value estimates of the assets. In addition, the Directors have needed to assess the implications of Covid-19 on the values of property assets, estimating the impact of unit closures and the risk of tenant default. The Directors have carried out their valuation assessments according to RICS guidance on Covid-19.
The valuation method is further described in note 8 together with the valuation of the properties at the reporting date.
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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 £3,855 (2021: £3,650).
(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 (2021: None).
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Management and administrative expenses (continued)
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(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 Cornpany during the year (2021: £Nil).
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An analysis of turnover by class of business is as follows:
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All turnover arose within the United Kingdom.
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Within cost of sales is property related expenditure of £45,762 (2021: £69,898) 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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Total income tax charge in the Statement of Comprehensive Income
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
7.Taxation (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 19.0% (2021: 19.0%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities before tax multiplied by standard rate of corporation tax in the UK of 19% (2021: 19%)
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Loss on sale of investment properties
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Revaluation deficit on investment properties
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Group relief (claimed)/surrended for nil consideration
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Total tax charge for the year
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Factors that may affect future tax charges
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.
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The following balances relate to the total deferred tax not recognised on losses carried forward:
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Freehold investment property
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Long term leasehold investment property
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The freehold investment properties has 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 Surveyor.
All the remaining freehold and long leasehold properties have been valued by the Directors, derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset.
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Trade and other receivables
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Amounts owed by group undertakings
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The unsecured amounts due by group undertakings are interest free, unsecured, repayable on demand and with no fixed repayment date.
Within the year, the company wrote back £13,500 relating to a debtor that was recoverable in the current year (2021: provision of £13,500). Apart from the receivables that have been provided for at the year end, there is no further material expected credit loss. The maximum exposure to credit risk at the reporting date is the carrying value of the receivable.
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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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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 share of £1.00
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Operating lease arrangements
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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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DEVELOPMENT SECURITIES (FURLONG) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The immediate parent company is U and I IPC 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 Development Securities (Furlong) Limited was Land Securities Group PLC.
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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Post balance sheet events
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In November 2022, the Company exchanged contracts with a number of purchasers to sell all of its freehold and leasehold assets for £2,916,000. In December 2022, sales were completed for £446,000 of the assets. The remainder of the assets are also agreed with the buyers with a long-stop date of May 2023 for £1,750,000.
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