Registered number: 12841144
MERCHANT LAND PORTFOLIO 2 LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
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MERCHANT LAND PORTFOLIO 2 LIMITED
REGISTERED NUMBER: 12841144
BALANCE SHEET
AS AT 31 OCTOBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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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.
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MERCHANT LAND PORTFOLIO 2 LIMITED
REGISTERED NUMBER: 12841144
BALANCE SHEET (CONTINUED)
AS AT 31 OCTOBER 2023
The Company has opted not to file the statement of comprehensive income 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 11 June 2024.
The notes on pages 3 to 8 form part of these financial statements.
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MERCHANT LAND PORTFOLIO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
Merchant Land Portfolio 2 Limited (the "Company") is a private company, limited by shares, incorporated in England and Wales. The registered office is 61 Charlotte Street, London, W1T 4PF.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. 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 following principal accounting policies have been applied:
During the year the Company was in breach of their covenants and as a result their bank loans have been presented as repayable on demand, however the bank have expressed their continued support of the company.
The Directors have received an unconditional letter of support from a fellow subsidiary, confirming that it will continue to provide financial support to the company if it requires assistance to meet its financial obligations. The letter of support has been provided for at least twelve months from the approval of these financial statements. The financial statements are therefore prepared on a going concern basis.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rental income
The Company generates rental income from investment properties let to third parties. Sales invoices are raised in advance for services provided. Revenue is recognised in the accounting period in which services are rendered.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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MERCHANT LAND PORTFOLIO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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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 except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Investment property is carried at fair value determined annually and derived from 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.
Short term debtors are measured at transaction price, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
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.
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MERCHANT LAND PORTFOLIO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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MERCHANT LAND PORTFOLIO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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The average monthly number of employees, including directors, during the year was 5 (2022 - 5).
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The Directors are of the opinion that £8,175,000 represents the market value on an open market basis.
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If the Investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:
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MERCHANT LAND PORTFOLIO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
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Amounts owed by group undertakings
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Secured loans
Total bank loans of £4,558,040 (2022 - £4,596,192) are secured by a debenture over all assets of the company, a charge over the Company's investment property, a charge over the shares in the company, an assignment over future rental income and guarantees given by fellow group companies.
Covenant breaches
During the year the Company was in breach of their covenants and as a result their bank loans have been presented as repayable on demand, however the bank have expressed their continued support of the company.
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Creditors: Amounts falling due after more than one year
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MERCHANT LAND PORTFOLIO 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
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The provision for deferred taxation is made up as follows:
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Unrealised gain on investment property
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Allotted, called up and fully paid
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100 (2022 - 100) Ordinary shares of £1.00 each
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Related party transactions
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Transactions with group companies are not disclosed by virtue of the exemption claimed under FRS 102 Section 1AC.35.
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Holbud Group Limited is the parent of the group for which consolidated financial statements are prepared. The registered office is 61 Charlotte Street, London, W1T 4PF.
The auditor's report on the financial statements for the year ended 31 October 2023 was unqualified.
The audit report was signed on 17 June 2024 by Andrew May ACCA (Senior statutory auditor) on behalf of Barnes Roffe LLP.
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