Company registration number 05997934 (England and Wales)
GROUND RENT ESTATES 5 LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
PAGES FOR FILING WITH REGISTRAR
GROUND RENT ESTATES 5 LIMITED
CONTENTS
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 7
GROUND RENT ESTATES 5 LIMITED
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
4
418,000
418,000
Current assets
Debtors
5
13,494,750
1,779,811
Cash at bank and in hand
763,705
120,783
14,258,455
1,900,594
Creditors: amounts falling due within one year
6
(476,367)
(1,812,976)
Net current assets
13,782,088
87,618
Total assets less current liabilities
14,200,088
505,618
Creditors: amounts falling due after more than one year
7
(10,078,250)
(7,615,691)
Provisions for liabilities
8
(5,157,051)
(79,420)
Net liabilities
(1,035,213)
(7,189,493)
Capital and reserves
Called up share capital
455,001
455,001
Non-distributable profits reserve
10
418,000
338,580
Distributable profit and loss reserves
(1,908,214)
(7,983,074)
Total equity
(1,035,213)
(7,189,493)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered 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 28 March 2024 and are signed on its behalf by:
N A Simon
Director
Company Registration No. 05997934
GROUND RENT ESTATES 5 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Share capital
Non-distri-butable profits
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2021
455,001
(4,290,343)
(3,835,342)
Year ended 31 March 2022:
Loss and total comprehensive income for the year
-
338,580
(3,692,731)
(3,354,151)
Balance at 31 March 2022
455,001
338,580
(7,983,074)
(7,189,493)
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
79,420
6,074,860
6,154,280
Balance at 31 March 2023
455,001
418,000
(1,908,214)
(1,035,213)
GROUND RENT ESTATES 5 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
1
Accounting policies
Company information
Ground Rent Estates 5 Limited is a private company limited by shares incorporated in England and Wales, registration number 05997934. The registered office is Observatory House, 25 Windsor Road, Slough, Berkshire, United Kingdom, SL1 2EL.
1.1
Accounting convention
These financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies, in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 2).
The following principal accounting policies have been applied.
1.2
Going concern
The directors assessment has considered operations up to the date of signing these financial statements. The company reached settlement on its insurance claim after the year end in relation to unsafe cladding and as such a proportion of the settlement totalling £13,435,616 (2022: £nil) has been accrued in relation to expenditure paid to date in respect of the works to be completed. Ttruehe company has net liabilities at the year end of £1,035,213 (2022: £7,189,493).
Slough Borough Council (SBC) the parent company, will continue to provide financial support to the company. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will be provided although, at the date of approval of these financial statements they have no reason to believe that it will not do so.
Consequently, the directors consider that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and have therefore prepared the accounts on a going concern basis.
1.3
Turnover
Turnover represents the proceeds of ground rent together with fees and insurance premiums. Ground rent is recognised when the transaction is completed. Insurance premiums are recognised in the period to which they relate. Fees are recognised when the service is performed.
1.4
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and 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.
GROUND RENT ESTATES 5 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 4 -
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probably that they will be recovered against future taxable profits or against the reversal of deferred tax liabilities. Deferred tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Current or deferred taxation assets and liabilities are not discounted.
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
GROUND RENT ESTATES 5 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 5 -
1.10
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Potential liabilities
Failure of the external cladding, and concerns over the structure to the building and internal compartmentation, requires works to be carried out to Nova House to meet safety considerations. A programme of works to address these safety considerations has been agreed and work has commenced. A significant proportion of these costs has been recovered from the insurance policy and the Government's Remediation Fund and action is ongoing to seek to recover further costs from relevant third parties. However, a proportion of these costs may need to be recovered from the Nova House Leaseholders at later date.
3
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
Total
4
Investment property
2023
£
Fair value
At 1 April 2022 and 31 March 2023
418,000
GROUND RENT ESTATES 5 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
4
Investment property
(Continued)
- 6 -
Investment property comprises freehold interest which was acquired on 14 August 2017. The fair value has been arrived at on the basis of a valuation carried out at 31 March 2022 by Carter Jonas LLP, who are not connected with the company. The ground rent income from the flats was capitalised at a rate of 5% up to the 100th anniversary of the term, following which the ground rent will become a nominal sum and is capitalised at a higher rate of 8%.
The directors do not believe there is a material change between March 2022 and March 2023 and accordingly have continued to use this valuation at the year end.
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Other debtors
13,494,750
1,779,811
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
158,737
Amounts owed to group undertakings
46,667
1,800,546
Corporation tax
26,660
Other creditors
244,303
12,430
476,367
1,812,976
7
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to group undertakings
10,078,250
7,615,691
8
Provisions for liabilities
2023
2022
£
£
Government grant potential clawback
5,157,051
-
Deferred tax liabilities
79,420
5,157,051
79,420
GROUND RENT ESTATES 5 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
The senior statutory auditor was Rebecca Boys and the auditor was Azets Audit Services.
10
Non-distributable profits reserve
2023
2022
£
£
At the beginning of the year
338,580
-
Non distributable profits in the year
79,420
338,580
At the end of the year
418,000
338,580
Non distributable profits relate to revaluations in investment properties net of expected tax due on future sale.
11
Events after the reporting date
The company reached settlement June 2023 in relation to an insurance claim for unsafe cladding. A proportion of the settlement totalling £13,435,616 (2022: £nil) has been accrued in relation to expenditure paid to date in respect of the works to be completed.
12
Related party transactions
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 other group companies wholly owned within the group.
During the year, Slough Borough Council (SBC), the parent company paid expenditure totalling £307,152 (2022: £285,378) in relation to waking watch costs for Nova House, on behalf the company.
During the year Slough Borough Council, has paid expenditure totalling £428,731 (2022: £479,352) in relation to legal fees and £19,446 (2022: £33,430) in technical advice and surveys on behalf on the company in relation to the investment property Nova House. A significant proportion of these costs has been recovered from the insurance policy and the Government's Remediation Fund and action is ongoing to seek to recover further costs from relevant third parties. However, a proportion of these costs may need to be recovered from the Nova House Leaseholders at later date.
13
Parent company
The immediate and ultimate parent company is Slough Borough Council, a company incorporated in England and Wales.