Company Registration No. 13011796 (England and Wales)
PADLOCK UK BIDCO 4 LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
PADLOCK UK BIDCO 4 LIMITED
CONTENTS
Page
Statement of financial position
1 - 2
Statement of changes in equity
3
Statement of cash flows
4
Notes to the financial statements
5 - 13
PADLOCK UK BIDCO 4 LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
31 December 2021
- 1 -
2021
Notes
£
Non-current assets
Investment property
4
6,680,000
Current assets
Inventories
5
3,736
Trade and other receivables
6
1,105,650
1,109,386
Current liabilities
Trade and other payables
8
7,053,445
Net current liabilities
(5,944,059)
Non-current liabilities
Deferred tax liabilities
9
195,426
Net assets
540,515
Equity
Called up share capital
10
2
Revaluation reserve
12
580,781
Retained earnings
(40,268)
Total equity
540,515

The directors of the company have elected not to include a copy of the income statement within the financial statements.

For the period ended 31 December 2021 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 period in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 30 August 2022 and are signed on its behalf by:
PADLOCK UK BIDCO 4 LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2021
31 December 2021
- 2 -
S  Silvester
Director
Company Registration No. 13011796
PADLOCK UK BIDCO 4 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 3 -
Share capital
Revaluation reserve
Retained earnings
Total
Notes
£
£
£
£
Balance at 11 November 2020
-
-
-
-
Period ended 31 December 2021:
Profit and total comprehensive income for the period
-
-
540,513
540,513
Issue of share capital
10
2
-
-
2
Transfers
-
580,781
(580,781)
-
Balance at 31 December 2021
2
580,781
(40,268)
540,515
PADLOCK UK BIDCO 4 LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 4 -
2021
Notes
£
£
Cash flows from operating activities
Cash absorbed by operations
16
(611,443)
Net cash outflow from operating activities
(611,443)
Investing activities
Purchase of investment property
(5,903,794)
Net cash used in investing activities
(5,903,794)
Financing activities
Proceeds from issue of shares
2
Proceeds from interco loans
6,515,235
Net cash generated from/(used in) financing activities
6,515,237
Net increase in cash and cash equivalents
-
Cash and cash equivalents at beginning of year
-
0
Cash and cash equivalents at end of year
-
0
PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 5 -
1
Accounting policies
Company information

Padlock UK Bidco 4 Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Uk Storage Consultancy Limited, Wework 184 Shepherds Bush Road, London, W6 7NL. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

 

These financial statements are prepared as at 31 December 2021 and cover the 14 month period from 11 November 2020 to 31 December 2021.

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, except for the revaluation of investment property. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Padlock UK Bidco 4 Limited is a wholly owned subsidiary of Padlock UK Holdco 1 and the results of Padlock UK Bidco 4 Limited are included in the consolidated financial statements of Padlock Partners UK Fund I which are available online from Sedar.com.

1.2
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

1.3
Revenue

Revenue represents amounts derived from the provision of services which fall within the Company's ordinary activities after deduction of any discounts and any applicable value added tax.

The company recognises revenue from the following major sources:

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Rental income

Rental income is from tenants of properties owned and awaiting development. Rental income is recognised on a straight-line basis over the period in which it is earned.

Insurance income

Insurance income is recognised on a straight line basis over the period a customer occupies their room.

PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 6 -
1.4
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. The surplus or deficit on revaluation is recognised in profit or loss.

1.5
Inventories

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those 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 cost and replacement 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.

1.6
Cash and cash equivalents

Cash and cash equivalents 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.

1.7
Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 7 -
Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

Impairment of financial assets

Financial assets, other than those measured at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.8
Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

 

 

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 8 -
Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

1.9
Equity instruments

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.

1.10
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.

1.11
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.

PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 9 -
Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 10 -
2
Critical accounting estimates and judgements

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements
Valuation of Investment Property

The determination of the fair value of investment property requires the use of estimates such as future cash flows from assets (i.e. tenant profiles, future revenue streams and overall condition of the property), discount rates applicable to those assets’ cash flows, identification of comparable properties and capitalization rates. These estimates are based on market conditions existing at the reporting date.

 

The following approach is used by management, together with the appraisals, in determination of the fair value of the investment property.

 

The Income Approach derives market value by estimating the future cash flows that will be generated by the property and then applying an appropriate capitalization rate or discount rate to those cash flows. This approach can utilize the direct capitalization method and/or the discounted cash flow analysis.

3
Employees

The average monthly number of persons (including directors) employed by the company during the period was:

2021
Number
Total
-
0
4
Investment property
2021
£
Cost
At 11 November 2020
-
0
Additions through acquisition
4,090,711
Addition through subsequent expenditure
1,813,083
Fair value adjustment
776,206
At 31 December 2021
6,680,000
PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 11 -
5
Inventories
2021
£
Finished goods
3,736
6
Trade and other receivables
2021
£
Trade receivables
11,556
VAT recoverable
1,084,922
Amounts owed by fellow group undertakings
1,678
Prepayments
7,494
1,105,650
7
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

8
Trade and other payables
2021
£
Trade payables
5,722
Amounts owed to fellow group undertakings
6,515,235
Accruals
482,418
Other payables
50,070
7,053,445
PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 12 -
9
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

Revaluation
£
Deferred tax liability at 11 November 2020
-
Deferred tax movements in current year
Charge/(credit) to profit or loss
195,426
Deferred tax liability at 31 December 2021
195,426
10
Share capital
2021
2021
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
2
2
11
Capital risk management

The company is not subject to any externally imposed capital requirements.

12
Revaluation reserve
2021
£
At the beginning of the period
-
0
Transfer from retained earnings (see below)
580,781
At the end of the period
580,781

The transfer from retained earnings comprises of £776,207 revaluation gain on the investment property, offset by the deferred tax impact of £195,426.

13
Related party transactions

During the year, Padlock UK Bidco 4 Limited incurred purchases totalling £500 from Happy Lock Limited.

 

During the year, Padlock UK Bidco 4 Limited incurred purchases totalling £1,750 from Leighton Buzzard Self Storage Limited.

 

During the year, Padlock UK Bidco 4 Limited incurred purchases totalling £1,059,987 from Padlock UK Bidco 2 Limited. This related to the transfer of the Newmarket property.

 

During the year, Padlock UK Bidco 4 Limited incurred interest charges totalling £259,242 from Padlock UK Bidco 5 Limited. The interest was capitalised as a cost of the development of the investment property held.

PADLOCK UK BIDCO 4 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
- 13 -
14
Controlling party

Padlock UK Bidco 4 Limited is a wholly owned subsidiary of Padlock UK Holdco 1. The ultimate parent is Padlock Partners UK Fund I, a Canadian entity.

15
Events after the reporting date

On 1 January 2022, Padlock UK Holdco 1 Limited sold 100% of it shareholding in Padlock UK Bidco 4 Limited to Padlock UK Bidco 5 Limited. As at 1 January 2022, the ultimate parent is Padlock Partners UK Fund II, a Canadian entity.

16
Cash absorbed by operations
2021
£
Profit for the period after tax
540,513
Adjustments for:
Taxation charged
195,426
Other gains and losses
(776,206)
Movements in working capital:
Increase in inventories
(3,736)
Increase in trade and other receivables
(1,105,650)
Increase in trade and other payables
538,210
Cash absorbed by operations
(611,443)
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