REGISTERED NUMBER: |
Estel Property Investments No.3 Limited |
Financial Statements for the Year Ended 31st December 2022 |
REGISTERED NUMBER: |
Estel Property Investments No.3 Limited |
Financial Statements for the Year Ended 31st December 2022 |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Contents of the Financial Statements |
for the year ended 31st December 2022 |
Page |
Company Information | 1 |
Balance Sheet | 2 |
Notes to the Financial Statements | 3 |
Estel Property Investments No.3 Limited |
Company Information |
for the year ended 31st December 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
Statutory Auditor |
Regent's Court |
Princess Street |
Hull |
East Yorkshire HU2 8BA |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Balance Sheet |
31st December 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 4 |
Derivative financial instruments | 5 |
Investment property | 6 |
CURRENT ASSETS |
Debtors | 7 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 8 |
NET CURRENT ASSETS/(LIABILITIES) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
9 |
( |
) |
PROVISIONS FOR LIABILITIES | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 12 |
Non-distributable reserves |
Hedging reserve |
Retained earnings |
SHAREHOLDERS' FUNDS |
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 |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Notes to the Financial Statements |
for the year ended 31st December 2022 |
1. | STATUTORY INFORMATION |
Estel Property Investments No.3 Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated. |
Going concern |
The company made a loss before taxation for the year of £729,041 (2021: £1,346,103) which gives rise to a going concern risk. The Directors have therefore prepared financial forecasts for the 12 month period ending 31 December 2024. The financial forecasts, together with an undertaking from the company's ultimate controlling party to provide financial support to the company for at least 12 months from the date of approval of these financial statements, have led the directors to conclude that the use of the going concern basis remains appropriate. |
Turnover |
Turnover represents the value of services provided and rental income accruing during the period stated net of VAT. Rent received on freehold property is recognised straight line over the term of the lease. The Directors consider the activities of the business to constitute a single class of business, originating wholly in the United Kingdom. |
Tangible fixed assets |
Plant and machinery etc | - |
Investment property |
Investment properties are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Notes to the Financial Statements - continued |
for the year ended 31st December 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. |
i. Financial assets |
Basic financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, 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. |
Such assets are subsequently carried at amortised cost using the effective interest method. |
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. |
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. |
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. |
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are |
subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in |
profit or loss in finance costs or finance income as appropriate, unless they are included in a hedging |
arrangement. |
ii. Financial liabilities |
Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, are initially recognised at transaction price. |
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates. |
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual |
obligation is discharged, cancelled or expires. |
iii. Offsetting |
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. |
iv. Hedging arrangements |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Notes to the Financial Statements - continued |
for the year ended 31st December 2022 |
2. | ACCOUNTING POLICIES - continued |
The company applies hedge accounting for transactions entered into to manage the cash flow exposures of borrowings. Interest rate swaps are held to manage the interest rate exposures and are designated as cash flow hedges of floating rate borrowings. |
Changes in the fair values of derivatives designated as cash flow hedges, and which are effective, are recognised directly in equity. Any ineffectiveness in the hedging relationship (being the excess of the cumulative change in fair value of the hedging instrument since inception of the hedge over the cumulative change in the fair value of the hedged item since inception of the hedge) is recognised in the income statement. |
The gain or loss recognised in other comprehensive income is reclassified to the income statement when the hedge relationship ends. Hedge accounting is discontinued when the hedging instrument expires, no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised or the hedging instrument is terminated. |
Taxation |
Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. 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. |
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences. Deferred tax on revalued non-depreciable tangible fixed assets and investment properties is measured using the rates and allowances that apply to the sale of the asset. |
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 |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Notes to the Financial Statements - continued |
for the year ended 31st December 2022 |
4. | TANGIBLE FIXED ASSETS |
Fixtures |
and |
fittings |
£ |
COST |
Additions |
At 31st December 2022 |
NET BOOK VALUE |
At 31st December 2022 |
5. | DERIVATIVE FINANCIAL INSTRUMENTS |
2022 | 2021 |
£ | £ |
Non-current derivative financial assets: |
Fair value of interest rate swap | 588,886 | - |
6. | INVESTMENT PROPERTY |
Total |
£ |
FAIR VALUE |
At 1st January 2022 |
Additions |
Revaluations | (178,618 | ) |
At 31st December 2022 |
NET BOOK VALUE |
At 31st December 2022 |
At 31st December 2021 |
Fair value at 31st December 2022 is represented by: |
£ |
Valuation in 2022 | 14,600,000 |
The company's investment property was valued in the year as at 31 December 2022 by a 3rd party |
RICS qualified valuer at open market value using the current RICS "Red Book". The significant |
assumptions of market rents and yields have been benchmarked against similar properties. |
The historical cost of the property is £5,532,263 including enhancement expenditure. |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Notes to the Financial Statements - continued |
for the year ended 31st December 2022 |
7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Amounts owed by related parties | 85,456 |
Prepayments and accrued income |
8. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Bank loans |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
Other creditors |
Amounts owed to Related Party | 16,677 |
Accruals and deferred income |
9. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2022 | 2021 |
£ | £ |
Bank loans |
10. | SECURED DEBTS |
The following secured debts are included within creditors: |
2022 | 2021 |
£ | £ |
Bank loans |
The bank borrowings are stated net of issue costs and were secured by a fixed charge over all freehold or leasehold property. No assets were subject to a specific charge at 31 December 2022. The rate of interest on the loan is calculated as the Sterling Overnight Index Average interest rate benchmark displayed on the relevant screen of any authorised information service. |
Estel Property Investments No.3 Limited (Registered number: 07359150) |
Notes to the Financial Statements - continued |
for the year ended 31st December 2022 |
11. | FINANCIAL INSTRUMENTS |
All financial instruments are carried at amortised cost with the exception of derivative financial assets (see note 5) that are carried at their fair value of £588,864, as detailed below. |
Derivative financial instruments - Interest rate swaps |
The company has entered into an interest rate swap to receive interest at SONIA and pay interest at a fixed rate of 2.131%. The swap is based on a principal amount of £8,000,000, the principal amount of the bank loan, amortising in-line with the bank loan that matures in 2027. |
The instrument is used to hedge the company’s exposure to interest rate movements on the bank loan facility. The hedging arrangement fixes the total interest payable on the bank loan to 4.481%. The fair value of the interest rate swap is £588,864 (2021: £nil). |
Cash flows on both the loan and the interest rate swaps are paid quarterly until 2027. During 2022, a hedging gain of £588,864 (2021: £nil) was recognised in other comprehensive income for changes in the fair value of the interest rate swap. |
12. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
Ordinary shares of £1 each | £1 | 1 | 1 |
13. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
The Report of the Auditors was unqualified. |
for and on behalf of |
14. | RELATED PARTY TRANSACTIONS |
15. | ULTIMATE CONTROLLING PARTY |
The company's ultimate parent company up until 4 March 2022 was New Statesman Media Group Limited. On this date New Statesman Media Group Limited became a subsidiary of Progressive Holdco Limited, who became the ultimate parent company. Progressive Holdco Limited is the smallest and largest group in which the company's results are consolidated. |
Michael Danson is the ultimate controlling party through his 100% shareholding of Progressive Holdco Limited. |