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REGISTERED NUMBER: 09878652 (England and Wales)


















REPORT OF THE DIRECTORS AND

AUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

FOR

MERCURY LAND HOLDINGS LIMITED

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023










Page

Company Information 1

Report of the Directors 2

Report of the Independent Auditors 4

Consolidated Income Statement 7

Consolidated Other Comprehensive Income 8

Consolidated Balance Sheet 9

Company Balance Sheet 10

Consolidated Statement of Changes in Equity 11

Company Statement of Changes in Equity 12

Consolidated Cash Flow Statement 13

Notes to the Consolidated Financial Statements 14


MERCURY LAND HOLDINGS LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 MARCH 2023







DIRECTORS: A Blake-Herbert
G K Green
A V Huff
I P Rhodes



SECRETARY: S Jeewa



REGISTERED OFFICE: Town Hall
Main Road
Romford
Essex
RM1 3BB



REGISTERED NUMBER: 09878652 (England and Wales)



SENIOR STATUTORY AUDITOR: Shahid Hameed FCA FCCA



AUDITORS: THP Limited
Chartered Accountants
and Statutory Auditors
34-40 High Street
Wanstead
London
E11 2RJ

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023


The directors present their report with the financial statements of the company and the group for the year ended 31 March 2023.

PRINCIPAL ACTIVITY
The principal activity of the group in the year under review was that of the renting and operating of owned or leased real estate.

GOING CONCERN
The group continued to generate significant operational cash flows and continued to increase operations year-on-year. Despite this, the group balance sheet as at 31 March 2023 shows net current liabilities of £4,008,758 (2022: £3,883,343) and negative retained earnings of £2,782,649 (2022: £2,490,182). These losses have been driven pre-dominantly by the interest and financing costs associated with the investment by the group in growing its property portfolio. The result of this investment is that the group has an exceptionally strong balance sheet position with net assets of £19,555,646 (2022: £13,908,678). The group also has a number of future schemes in hand that are expected to deliver significant profits in future years.

The group continues to meet its day to day working capital requirements through operating cash flows and finances all investment via financing from the ultimate controlling party, "The London Borough of Havering".

The ultimate controlling party continues to give financial support to the group by injecting funds as necessary and has confirmed it will continue this support for at least 12 months from the date of approving these accounts.

Having considered all the relevant facts the directors consider it is appropriate to prepare the financial statements on a going concern basis.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

A Blake-Herbert
G K Green
A V Huff
I P Rhodes

DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS
The auditors, THP Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.


MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:





G K Green - Director


23 October 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MERCURY LAND HOLDINGS LIMITED


Opinion
We have audited the financial statements of Mercury Land Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial Statements, 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 Financial Reporting Standard 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 state of the group's and of the parent company affairs as at 31 March 2023 and of the group's 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 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 this 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Directors 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company 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 prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Group Strategic Report or in preparing the Report of the Directors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MERCURY LAND HOLDINGS LIMITED


Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page two, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the group operates;
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, planning regulations, environmental and health and safety legislation;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC and any other relevant regulators as required.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MERCURY LAND HOLDINGS LIMITED


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 a Report of the Auditors 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.




Shahid Hameed FCA FCCA (Senior Statutory Auditor)
for and on behalf of THP Limited
Chartered Accountants
and Statutory Auditors
34-40 High Street
Wanstead
London
E11 2RJ

23 October 2023

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

2023 2022
Notes £    £    £    £   

TURNOVER 3 2,760,387 2,285,373

Cost of sales 421,155 -
GROSS PROFIT 2,339,232 2,285,373

Property related costs 602,805 653,076
Administrative expenses 455,771 431,577
1,058,576 1,084,653
1,280,656 1,200,720

Other operating income 5,425 -
OPERATING PROFIT 5 1,286,081 1,200,720

Profit on sale of investment
property 6 - 170,898
1,286,081 1,371,618

Gain on revaluation of
investment property 142,251 255,500
1,428,332 1,627,118

Interest payable and similar expenses 2,003,419 1,984,414
LOSS BEFORE TAXATION (575,087 ) (357,296 )

Tax on loss 7 116,955 (369,919 )
(LOSS)/PROFIT FOR THE FINANCIAL
YEAR

(692,042

)

12,623
(Loss)/profit attributable to:
Owners of the parent (692,042 ) 12,623

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

CONSOLIDATED OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023 2022
Notes £    £   

(LOSS)/PROFIT FOR THE YEAR (692,042 ) 12,623


OTHER COMPREHENSIVE INCOME
Pension scheme deficit movement 152,000 47,000
Income tax relating to other comprehensive
income

(22,990

)

(2,660

)

OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF INCOME TAX

129,010

44,340
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

(563,032

)

56,963

Total comprehensive income attributable to:
Owners of the parent (563,032 ) 56,963

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

CONSOLIDATED BALANCE SHEET
31 MARCH 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 9 - -
Investments 10 - -
Investment property 11 54,532,189 47,546,071
54,532,189 47,546,071

CURRENT ASSETS
Debtors 12 370,291 273,752
Cash at bank 13 590,778 693,498
961,069 967,250
CREDITORS
Amounts falling due within one year 14 4,969,827 4,850,593
NET CURRENT LIABILITIES (4,008,758 ) (3,883,343 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

50,523,431

43,662,728

CREDITORS
Amounts falling due after more than one
year

15

(30,074,661

)

(28,879,871

)

PROVISIONS FOR LIABILITIES (893,124 ) (753,179 )

PENSION LIABILITY 19 - (121,000 )
NET ASSETS 19,555,646 13,908,678

CAPITAL AND RESERVES
Called up share capital 17 17,515,950 11,305,950
Revaluation reserve 18 4,822,345 5,092,910
Retained earnings (2,782,649 ) (2,490,182 )
SHAREHOLDERS' FUNDS 19,555,646 13,908,678

The 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 23 October 2023 and were signed on its behalf by:





G K Green - Director


MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

COMPANY BALANCE SHEET
31 MARCH 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 9 - -
Investments 10 100 100
Investment property 11 55,099,960 48,113,842
55,100,060 48,113,942

CURRENT ASSETS
Debtors 12 384,905 273,720
Cash at bank 13 590,033 685,430
974,938 959,150
CREDITORS
Amounts falling due within one year 14 4,964,298 4,894,576
NET CURRENT LIABILITIES (3,989,360 ) (3,935,426 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

51,110,700

44,178,516

CREDITORS
Amounts falling due after more than one
year

15

(30,074,661

)

(28,879,871

)

PROVISIONS FOR LIABILITIES (893,124 ) (753,179 )

PENSION LIABILITY 19 - (121,000 )
NET ASSETS 20,142,915 14,424,466

CAPITAL AND RESERVES
Called up share capital 17 17,515,950 11,305,950
Revaluation reserve 18 4,822,345 5,092,910
Retained earnings (2,195,380 ) (1,974,394 )
SHAREHOLDERS' FUNDS 20,142,915 14,424,466

Company's (loss)/profit for the financial
year

(620,561

)

31,617

The 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 23 October 2023 and were signed on its behalf by:





G K Green - Director


MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023

Called up
share Retained Revaluation Total
capital earnings reserve equity
£    £    £    £   

Balance at 1 April 2021 12,305,950 (2,340,190 ) 4,885,955 14,851,715

Changes in equity
Reduction in share capital (1,000,000 ) - - (1,000,000 )
Total comprehensive income - (149,992 ) 206,955 56,963
Balance at 31 March 2022 11,305,950 (2,490,182 ) 5,092,910 13,908,678

Changes in equity
Issue of share capital 6,210,000 - - 6,210,000
Total comprehensive income - (292,467 ) (270,565 ) (563,032 )
Balance at 31 March 2023 17,515,950 (2,782,649 ) 4,822,345 19,555,646

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023

Called up
share Retained Revaluation Total
capital earnings reserve equity
£    £    £    £   

Balance at 1 April 2021 12,305,950 (1,843,396 ) 4,885,955 15,348,509

Changes in equity
Reduction in share capital (1,000,000 ) - - (1,000,000 )
Total comprehensive income - (130,998 ) 206,955 75,957
Balance at 31 March 2022 11,305,950 (1,974,394 ) 5,092,910 14,424,466

Changes in equity
Issue of share capital 6,210,000 - - 6,210,000
Total comprehensive income - (220,986 ) (270,565 ) (491,551 )
Balance at 31 March 2023 17,515,950 (2,195,380 ) 4,822,345 20,142,915

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 21 754,030 1,756,452
Interest paid (2,003,419 ) (1,984,414 )
Net cash from operating activities (1,249,389 ) (227,962 )

Cash flows from investing activities
Purchase of investment property (6,867,135 ) (174,304 )
Sale of investment property - 837,122
Reversal of pre-acquisition costs 23,268 -
Net cash from investing activities (6,843,867 ) 662,818

Cash flows from financing activities
Movement in loan from group undertakings 1,780,536 (3,582,771 )
Share capital issue/(reduction) 6,210,000 (1,000,000 )
Net cash from financing activities 7,990,536 (4,582,771 )

Decrease in cash and cash equivalents (102,720 ) (4,147,915 )
Cash and cash equivalents at beginning
of year

22

693,498

4,841,413

Cash and cash equivalents at end of
year

22

590,778

693,498

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023


1. STATUTORY INFORMATION

Mercury Land Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements and going concern
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The group continued to generate significant operational cash flows and continued to increase operations year-on-year. Despite this, the group balance sheet as at 31 March 2023 shows net current liabilities of £4,008,758 (2022: £3,883,343) and negative retained earnings of £2,782,649 (2022: £2,490,182). These losses have been driven pre-dominantly by the interest and financing costs associated with the investment by the group in growing its property portfolio. The result of this investment is that the group has an exceptionally strong balance sheet position with net assets of £19,555,646 (2022: £13,908,678). The group also has a number of future schemes in hand that are expected to deliver significant profits in future years.

The group continues to meet its day to day working capital requirements through operating cash flows and finances all investment via financing from the ultimate controlling party, "The London Borough of Havering".

The ultimate controlling party continues to give financial support to the group by injecting funds as necessary and has confirmed it will continue this support for at least 12 months from the date of approving these accounts.

Having considered all the relevant facts the directors consider it is appropriate to prepare the financial statements on a going concern basis.

Basis of consolidation
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. All accounting policies as detailed below are applied consistently across the Group.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for services supplied, net of returns, discounts and value added taxes.

Revenue is recognised in the accounting period in which the services were rendered.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Fixtures and fittings - 25% on cost

Investment properties
Investment properties are shown at fair values determined 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. Any aggregate surplus or deficit that arises from a change in fair value is recognised in the Consolidated Income Statement, net of deferred tax. On an annual basis this surplus or deficit is transferred from retained profits into a separate, non-distributable reserve called the "Revaluation Reserve".


MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


2. ACCOUNTING POLICIES - continued
Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Development costs
Development expenditure is capitalised in accordance with company's accounting policy. Initial capitalisation of costs is based on management's judgement that technical and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits.

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
(i) Defined Contribution Scheme

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

(ii) Defined Benefit Scheme

The group also operates a defined benefit scheme, as further explained in Note 17.

Finance costs
Finance costs are charged to the Consolidated Income Statement over the term of the debt using the effective interest method so that amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Financial reporting standard 102 – reduced disclosure exemption
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

- the requirements of Section 7 Statement of Cash Flows for the company in the group accounts

3. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the group.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Rental income 2,339,232 2,285,373
Consultancy fees 421,155 -
2,760,387 2,285,373

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


3. TURNOVER - continued

Consultancy fees relate to charges made to the parent entity, London Borough of Havering, for work done in relation to their land and property. The related costs are included in cost of sales.

4. EMPLOYEES AND DIRECTORS

The average number of employees during the year was 4 (2022 - 4 ) .

The average number of employees by undertakings that were proportionately consolidated during the year was 4 (2022 - 4 ) .

5. OPERATING PROFIT

The operating profit is stated after charging:

2023 2022
£    £   
Depreciation - owned assets - 1,313

6. EXCEPTIONAL ITEMS
2023 2022
£    £   
Profit on sale of investment
property - 170,898

7. TAXATION

Analysis of the tax charge/(credit)
The tax charge/(credit) on the loss for the year was as follows:
2023 2022
£    £   
Deferred tax 116,955 (369,919 )
Tax on loss 116,955 (369,919 )

Tax effects relating to effects of other comprehensive income

2023
Gross Tax Net
£    £    £   
Pension scheme deficit movement 152,000 (22,990 ) 129,010

2022
Gross Tax Net
£    £    £   
Pension scheme deficit movement 47,000 (2,660 ) 44,340

It is group policy that no charge is made between group companies for group relief claims and the surrender of taxable losses.

Factors that may affect future tax charges

The deferred tax liability includes £1,607,449 which is the theoretical corporation tax that would be due if the properties were to be sold at their current revalued amount.

The group also has property business tax losses of £2,857,299 (2022: £2,202,442) available to carry forward and utilise against future property business profits and a deferred tax asset of £714,325 on these losses has been recognised and netted off with the liability noted above.

A net deferred tax liability of £893,124 has therefore been provided at 31 March 2023. This tax would only be payable in the event that the properties were actually sold.

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


8. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.


9. TANGIBLE FIXED ASSETS

Group
Fixtures
and
fittings
£   
COST
At 1 April 2022
and 31 March 2023 38,709
DEPRECIATION
At 1 April 2022
and 31 March 2023 38,709
NET BOOK VALUE
At 31 March 2023 -
At 31 March 2022 -

Company
Fixtures
and
fittings
£   
COST
At 1 April 2022
and 31 March 2023 38,709
DEPRECIATION
At 1 April 2022
and 31 March 2023 38,709
NET BOOK VALUE
At 31 March 2023 -
At 31 March 2022 -

10. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 April 2022
and 31 March 2023 100
NET BOOK VALUE
At 31 March 2023 100
At 31 March 2022 100

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


10. FIXED ASSET INVESTMENTS - continued

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiary

Mercury Design & Build Limited
Registered office: Town Hall, Main Road, Romford RM1 3BB
Nature of business: Development of Real Estate
%
Class of shares: holding
Ordinary 100.00


11. INVESTMENT PROPERTY

Group
Total
£   
FAIR VALUE
At 1 April 2022 47,546,071
Additions 6,867,135
Disposals (23,268 )
Revaluations 142,251
At 31 March 2023 54,532,189
NET BOOK VALUE
At 31 March 2023 54,532,189
At 31 March 2022 47,546,071

The investment properties were valued by Savills and Glenny Estate Agents at 31 March 2023 at an open market value. This includes properties of £7,869,960 that were in the course of construction at that date.

The difference between the investment properties in the group and that in the company (in consolidated accounts) relates to the Mark Up from the subsidiary (Mercury Design & Build Ltd) which is eliminated on consolidation.

Fair value at 31 March 2023 is represented by:
£   
Valuation in 2018 333,061
Valuation in 2020 69,531
Valuation in 2021 5,629,451
Valuation in 2022 255,500
Valuation in 2023 142,251
Cost 48,102,395
54,532,189

Company
Total
£   
FAIR VALUE
At 1 April 2022 48,113,842
Additions 6,867,135
Disposals (23,268 )
Revaluations 142,251
At 31 March 2023 55,099,960
NET BOOK VALUE
At 31 March 2023 55,099,960
At 31 March 2022 48,113,842

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


11. INVESTMENT PROPERTY - continued

Company

The investment properties were valued by Savills and Glenny Estate Agents at 31 March 2023 at an open market value. This includes properties of £7,869,960 that were in the course of construction at that date.

Fair value at 31 March 2023 is represented by:
£   
Valuation in 2018 333,061
Valuation in 2020 69,531
Valuation in 2021 5,629,451
Valuation in 2022 255,500
Valuation in 2023 142,251
Cost 48,670,166
55,099,960

12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Trade debtors 222,708 216,863 222,708 216,863
Amounts owed by group undertakings - - 17,664 -
VAT - 5,490 - 5,458
Prepayments and accrued income 147,583 51,399 144,533 51,399
370,291 273,752 384,905 273,720

13. CASH AT BANK

During the year, the company was required by the London Borough of Havering to earmark £200,000 of cash at bank due to a breach of a loan covenant whereby the Loan to Value Ratio (LTVR) exceeded the required minimum ratio. This retention will be released in part or in full on the basis that the market valuation increases in future valuations.

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Trade creditors 142,792 161,957 142,792 161,957
Amounts owed to group undertakings 4,583,482 3,997,736 4,583,482 4,048,769
Social security and other taxes 7,711 7,963 7,711 7,963
VAT 3,602 - 4,633 -
Accruals and deferred income 232,240 682,937 225,680 675,887
4,969,827 4,850,593 4,964,298 4,894,576

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts owed to group undertakings 30,074,661 28,879,871 30,074,661 28,879,871

16. SECURED DEBTS

Amounts owed to group undertakings are secured by fixed and floating charges over the investment properties of the group.

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


17. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:


Number Class Nominal value 2023 2022
£    £   
17,515,950 (2022: 11,305,950) Ordinary £1 17,515,950 11,305,950

During the year 6,210,000 new shares were issued at par in exchange for land purchase from the parent entity London Borough of Havering.

18. RESERVES

Group
Revaluation
reserve
£   
At 1 April 2022 5,092,910
Deferred tax on revaluation (412,816 )
Transfer of revaluation
surplus 142,251

At 31 March 2023 4,822,345

Company
Revaluation
reserve
£   
At 1 April 2022 5,092,910
Deferred tax on revaluation (412,816 )
Transfer of revaluation
surplus 142,251

At 31 March 2023 4,822,345


MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


19. EMPLOYEE BENEFIT OBLIGATIONS

One of the company's employees is part of a defined benefits pensions scheme, the Local Government Pension Scheme Fund: London Borough of Havering Pension Fund. The assets of the schemes are held separately from those of participating group companies. A complete valuation of the scheme is undertaken by independently qualified actuaries at the year end and annual contributions to the schemes are required to be made accordance with their recommendations.

The pension liability under FRS 102 at the year end relates to the scheme is as follows:

31 March 2023 31 March 2022
£    £   

Assets 130,000 107,000
Obligations (116,000 ) (228,000 )
--------------- -----------------
Net asset/(liability) 14,000 (121,000 )
--------------- -----------------

In accordance with FRS102, the scheme surplus has not been recognised as there is not an expectation that the employer is able to recover that surplus in future.

The major categories of plan assets as a percentage of total plan assets

The actuaries have used the most recent asset split provided to them and allowed for index returns, where required, on each asset category to determine the estimated split of assets as at 31 March 2023.

31 March 2023 31 March 2022
Equities 36% 40%
Bonds 35% 33%
Property 23% 24%
Cash 6% 3%

Financial Assumptions

The financial assumptions are summarised below:

31 March 2023 31 March 2022
% p.a. % p.a.
Pension Increase Rate (CPI) 2.95% 3.15%
Salary Increase Rate 3.65% 3.85%
Discount Rate 4.75% 2.75%

As at the date of the most recent valuation, the duration of the Employer’s funded liabilities is 40 years.

Mortality

Life expectancy is based on the Fund's VitaCurves with improvements in line with the CMI 2021 model, with a 10% weighting of 2021 (and 2020) data, standard smoothing (Sk7), initial adjustment of 0.25% and a long term rate of improvement of 1.5% p.a. Based on these assumptions, the average future life expectancies at age 65 for the Employer are summarised below:

Males Females

Current Pensioners 21.4 years 24.0 years
Future Pensioners* 23.6 years 25.5 years
* Figures assume members aged 45 as at the last formal valuation date.

20. ULTIMATE CONTROLLING PARTY

The ultimate parent undertaking and ultimate controlling party is considered to be The London Borough of Havering. Group financial statements can be obtained from:

London Borough of Havering
Town Hall
Main Road
Romford
RM1 3BD

MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 MARCH 2023


21. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Loss before taxation (575,087 ) (357,296 )
Depreciation charges - 1,313
Gain on revaluation of fixed assets (142,251 ) (255,500 )
Pension deficit charge 31,000 33,000
Finance costs 2,003,419 1,984,414
1,317,081 1,405,931
(Increase)/decrease in trade and other debtors (96,539 ) 73,733
(Decrease)/increase in trade and other creditors (466,512 ) 276,788
Cash generated from operations 754,030 1,756,452

22. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2023
31.3.23 1.4.22
£    £   
Cash and cash equivalents 590,778 693,498
Year ended 31 March 2022
31.3.22 1.4.21
£    £   
Cash and cash equivalents 693,498 4,841,413


23. ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.22 Cash flow At 31.3.23
£    £    £   
Net cash
Cash at bank 693,498 (102,720 ) 590,778
693,498 (102,720 ) 590,778
Total 693,498 (102,720 ) 590,778