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Registered number: 03784639














MERCHANT CITY LIMITED

 
UNAUDITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
MERCHANT CITY LIMITED
 

CONTENTS



Page
Balance sheet
 
1 - 2
Notes to the financial statements
 
3 - 9


 
MERCHANT CITY LIMITED
REGISTERED NUMBER:03784639

BALANCE SHEET
AS AT 31 MARCH 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 4 
62,424
-

Investments
 5 
4
4

Investment property
 6 
12,813,009
12,445,686

  
12,875,437
12,445,690

Current assets
  

Debtors: amounts falling due within one year
 7 
1,919,325
1,681,585

Cash at bank and in hand
 8 
16,289
1,996,928

  
1,935,614
3,678,513

Creditors: amounts falling due within one year
 9 
(12,860,808)
(11,691,048)

Net current liabilities
  
 
 
(10,925,194)
 
 
(8,012,535)

Total assets less current liabilities
  
1,950,243
4,433,155

Creditors: amounts falling due after more than one year
 10 
(3,419,467)
(3,446,963)

Provisions for liabilities
  

Deferred tax
 13 
(789,006)
(1,355,466)

  
 
 
(789,006)
 
 
(1,355,466)

Net liabilities
  
(2,258,230)
(369,274)


Capital and reserves
  

Called up share capital 
 14 
2
2

Non-distributable profit and loss reserve
  
2,320,200
4,066,398

Profit and loss account
  
(4,578,432)
(4,435,674)

  
(2,258,230)
(369,274)


1

 
MERCHANT CITY LIMITED
REGISTERED NUMBER:03784639
    
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2023

The directors consider that the company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.

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 financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 December 2023.




................................................
G A Lee
Director

The notes on pages 3 to 9 form part of these financial statements.

2

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

Merchant City Limited is principally engaged in property investment. The directors are actively seeking opportunities to invest in properties. 
 
The company is a private company, limited by shares and is registered in England and Wales. The address of its registered office and principal place of business is Grove Lodge, 287 Regents Park Road, London, N3 3JY.
 
2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The company is the parent undertaking of a small group and as such is not required by the Companies Act 2006 to prepare group accounts. These financial statements therefore presentinformation about the company as an individual undertaking and not abouts its group.
The company's functional and presentational currency is pound sterling.

The following principal accounting policies have been applied:

 
2.2

Going concern

The parent company has committed to continue to provide necessary funding in order for the company to maintain operations and meet liabilities in full for at least the next 12 months. On this basis, the directors are satisfied that the financial statements should be prepared on a going concern basis.

 
2.3

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the 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.

 
2.4

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

3

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.5

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences.

 
2.6

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Motor vehicles
-
20%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.7

Investments

Fixed asset investments are stated at cost less provision for diminution in value.

 
2.8

Investment property

Investment property is carried at fair value determined annually by directors 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.

4

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.9

 Debtors

Short term debtors are measured at transaction price, less any impairment.

 
2.10

 Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

 
2.11

 Creditors

Short term creditors are measured at the transaction price.

 
2.12

 Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of comprehensive income.


3.


Employees

The average monthly number of employees, including directors, during the year was 4 (2022 - 2).


4.


Tangible fixed assets





Motor vehicles

£



Cost or valuation


Additions
66,883



At 31 March 2023

66,883



Depreciation


Charge for the year on owned assets
4,459



At 31 March 2023

4,459



Net book value



At 31 March 2023
62,424



At 31 March 2022
-

5

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

           4.Tangible fixed assets (continued)

Included within the net book value of £62,424 is £62,424 (2022 – £NIL) relating to assets held under HP agreement.


5.


Fixed asset investments





Investments in subsidiary companies

£



Cost


At 1 April 2022
4



At 31 March 2023
4






Net book value



At 31 March 2023
4



At 31 March 2022
4



6.


Investment property


Freehold investment property

£



Valuation


At 1 April 2022
12,445,686


Additions at cost
2,695,587


Deficit on revaluation
(2,328,264)



At 31 March 2023
12,813,009

The 2023 valuations were made by the directors, on an open market value for existing use basis.




If the investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:

2023
2022
£
£


Historic cost
9,719,407
7,023,821

6

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

7.


Debtors

2023
2022
£
£


Trade debtors
16,756
-

Amounts owed by group undertakings
1,047,786
679,903

Other debtors
61,193
112,287

Prepayments
793,590
889,395



8.


Cash and cash equivalents

2023
2022
£
£

Cash at bank
16,289
1,996,928



9.


Creditors: Amounts falling due within one year

2023
2022
£
£

Other loans
91,266
10,573

Trade creditors
190,631
284,099

Amounts owed to group undertakings
9,374,280
8,576,315

Obligations under finance lease and hire purchase contracts
2,535
-

Other creditors
3,165,596
2,785,061

Accruals
36,500
35,000

12,860,808
11,691,048


The loan is secured by a fixed charge over the investment property of the company.
 

10.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Other loans
3,372,598
3,446,963

Net obligations under finance leases and hire purchase contracts
46,869
-

3,419,467
3,446,963


The loan is secured by a fixed charge over the investment property of the company.

7

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

11.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Other loans
91,266
10,573

Amounts falling due 1-2 years

Other loans
3,372,598
88,135

Amounts falling due 2-5 years

Other loans
-
3,358,828


3,463,864
3,457,536



12.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£
£


Within one year
4,770
-

Between 1-5 years
4,770
-

Over 5 years
45,825
-

55,365
-


13.


Deferred taxation




2023
2022


£

£






At beginning of year
1,355,466
364,738


Charged to profit or loss
(566,460)
990,728



At end of year
789,006
1,355,466

8

 
MERCHANT CITY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
13.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
15,606
-

Capital gains timing difference
773,400
1,355,466

789,006
1,355,466


14.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



2 ordinary shares of £1 each
2
2

There is one class of share. There are no restrictions on the distribution of dividends and the repayment of capital.


15.


Related party transactions

During the year, the company received £NIL (2022 - £5,600) from Sentinal Properties Limited, a 50% shareholder. At the year end, the company owed £335,599 (2022 - £335,599) to Sentinal Properties Limited. The loan is interest free and repayable on demand.

During the year, the company received £NIL (2022 - £2,023,000) from A.R. & V. Investments Limited, a 50% shareholder. At the year end, the company owed £3,292,999 (2022 - £3,292,999) to A.R. & V. Investments Limited. The loan is interest free and repayable on demand.

During the year, the company received £364,000 (2022 - paid £118,825) from Kerrington Limited, a 50% shareholder. At the year end, the company owed £276,565 (2022 - £87,435 was owed by) to Kerrington Limited. The loan is interest free and repayable on demand.

At the year end, the company owed £736,700 (2022 - £771,704) to G A Lee, a director of the company. The loan is interest free and repayable on demand.

At the year end, the company owed £864,489 (2022 - £864,489) to E Azouz, a director of the company. The loan is interest free and repayable on demand

 
9