ELDON STREET LIMITED
COMPANY INFORMATION
Directors
Mr N Thompson
Mr J A Fresnedo Amado
Company number
12546588
Registered office
Connect House
133-137 Alexandra Road
London
SW19 7JY
Auditor
Deloitte LLP
1 New Street Square
London
EC4A 3HQ
ELDON STREET LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
ELDON STREET LIMITED
DIRECTORS' REPORT
For the year ended 31 December 2023
The directors present their annual report on the affairs of the company, together with the financial statements and auditor’s report, for the period ended 31 December 2023.
The directors' report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption; accordingly no separate strategic report has been presented.
Principal activities
The principal activity of Eldon Street Limited (the "company") is that of a property investment company.
Results and dividends
The results for the year are set out on page 7.
As shown in the company's statement of comprehensive income on page 7, the company's revenue of £4.01m has increased by £1.07m from £2.94m in the prior year. The increase is due to a full year of revenue recognised on the acquisition of an investment property in June 2022 offset by lower revenue on an existing property due to refurbishment.
Loss before tax is £12.22m compared to a loss of £14.69m in the previous year. This loss is mainly due to impairment of £11.58m during the year on all investment properties.
The acquisition of a third property was novated to the company from another company within the group on 22nd September 2023.
No ordinary or preference dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr N Thompson
Mr J A Fresnedo Amado
Directors' insurance
The company maintains insurance policies on behalf of all the directors against liability arising from negligence, breach of duty and breach of trust in relation to the company.
Auditor
The auditor, Deloitte LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Approved by the board and signed on its behalf by
Mr N Thompson
Director
2 September 2024
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ELDON STREET LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
For the year ended 31 December 2023
The directors are responsible for preparing the annual report 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), including FRS101 'Reduced Disclosure Framework'. 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 of the profit or loss of the company 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; and
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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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ELDON STREET LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ELDON STREET LIMITED
Report on the audit of the financial statements
Qualified opinion
In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the financial statements of Eldon Street Limited (the ‘company’):
give a true and fair view of the state of the company’s affairs as at 31 December 202 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
the statement of comprehensive income
the balance sheet
the statement of changes in equity; and
the related notes 1 to 24.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
Basis for qualified opinion
The company has investment property with a carrying value of £124.5m as at 31 December 2023 and £87.4m at 31 December 2022. The company has impaired investment property to what is determined as fair value less costs of disposal in both the current and prior period.
In accordance with IFRS 13 paragraphs 14 and 32 the fair value of the investment property that is recognised as an asset should reflect the property as the unit of account and thus consider the amount that would be received if the property itself were directly disposed of. In the current and prior period, the fair value did not appropriately reflect the amount that the company would receive to sell the property. The fair value incorrectly reflects the proceeds that would be received by the company for the sale of shares in a special purpose vehicle holding just the property. The amount the company would receive for sale of such shares would be greater than what it would receive were it to sell the property directly because of stamp duty land tax the buyer would incur under the latter transaction.
As such, the investment property value recognised in the balance sheet as at 31 December 2023 and at 31 December 2022 is materially overstated by £5.2m and £3.7m respectively. In accordance with IAS 8 paragraph 42 the material error of £3.7m relating to the prior period should have been corrected in these financial statements through the restatement of comparative information. Accordingly, the comparative balance for investment property should be £3.7m lower than the amount reported in the balance sheet. Similarly, the comparative impairment reported in the statement of comprehensive income should be £3.7m higher. In the current year, the carrying value of investment property should be £5.2m lower and opening profit and loss reserves should be £3.7m lower than the amount reported in the balance sheet and the impairment reported in the statement of comprehensive income should be £1.5m higher. The effect of this is also not disclosed in the directors’ report.
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 auditor's responsibilities for the audit of the financial statements section of our report.
We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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 qualified opinion.
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ELDON STREET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ELDON STREET LIMITED
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 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.
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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.
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 course of 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.
As described in the basis for qualified opinion section of our report, our audit opinion is qualified in relation to the understatement of impairment of the investment property. The effect of this would also impact the discussion of financial performance in the directors report and accordingly we have concluded that the other information is materially misstated for the same reason.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, 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 is 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 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 company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 an auditor's report 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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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ELDON STREET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ELDON STREET LIMITED
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the company's industry and its control environment, and reviewed the company's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company's business sector.
We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that:
had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act and tax legislation; and
do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included the Health and Safety at Work Act 1974, the Landlord and Tenants Act 1985 and Fire Safety Act 2021.
We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our specific procedures performed to address it are described below:
Completeness, accuracy and cut-off of rental income has been identified as a risk due to fraud. This is due to this revenue being used as a key factor in the value of the investment property itself, which can be used to seek further funding and alter any impairments recognised. To address the risk, we have tested a sample of revenue recognised in the year and agreed it back to invoices as well as to signed lease agreements with the tenants.
We identified a risk due to fraud in relation to the valuation of the investment properties. This is in response to the large capital investments made and the downturn in the market environment during the period which has impacted the profitability of the company and potential future cash flows. We have assessed whether there are indicators of impairment in the investment properties. We obtained third party valuation reports and assessed the valuation assumptions to confirm their reasonableness in line with industry expectations for market performance.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and
reading minutes of meetings of those charged with governance.
review correspondence with HMRC.
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ELDON STREET LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ELDON STREET LIMITED
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, based on the work undertaken in the course of the audit:
the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors’ report has been prepared in accordance with applicable legal requirements.
Except for the effects of the matter described in the basis for qualified opinion section of our repot, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any material misstatements in the directors’ report.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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.
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.
We have nothing to report in respect of these matters.
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 an auditor’s report 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.
Charlotte Lord ACA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
2 September 2024
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ELDON STREET LIMITED
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
2023
2022
Notes
£
£
Revenue
3
4,005,718
2,940,617
Cost of sales
5
(2,511,331)
(1,199,980)
Gross profit
1,494,387
1,740,637
Administrative expenses
(2,248,615)
(1,529,171)
Operating (loss)/profit
6
(754,228)
211,466
Interest receivable and similar income
8
113,821
685
Interest payable and similar expenses
9
-
(487,399)
Investment properties impairment
4
(11,585,542)
(14,410,368)
Loss before taxation
(12,225,949)
(14,685,616)
Tax on loss
10
(1,066,078)
(392,298)
Loss for the financial year
(13,292,027)
(15,077,914)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There were no items of other comprehensive income therefore a separate statement of other comprehensive income has not been prepared.
The notes on pages 9 to 20 form an integral part of the financial statements.
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ELDON STREET LIMITED
BALANCE SHEET
As at 31 December 2023
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible fixed assets
11
1,408
2,156
Investment property
12
124,500,000
87,400,000
124,501,408
87,402,156
Current assets
Debtors
13
3,366,113
2,694,331
Cash at bank and in hand
9,879,728
2,772,635
13,245,841
5,466,966
Creditors: amounts falling due within one year
14
(62,615,248)
(57,169,172)
Net current liabilities
(49,369,407)
(51,702,206)
Total assets less current liabilities
75,132,001
35,699,950
Provisions for liabilities
Deferred tax liabilities
17
(1,548,300)
(482,222)
Net assets
73,583,701
35,217,728
Capital and reserves
Share capital
19
1,115
599
Share premium account
20
101,515,985
49,858,501
Profit and loss reserves
(27,933,399)
(14,641,372)
Total equity
73,583,701
35,217,728
The financial statements of the company have been prepared in accordance with the small companies regime, and delivered in accordance with the special provisions relating to companies subject to the small companies regime within the Companies Act 2006.
The financial statements were approved by the board of directors and authorised for issue on 2 September 2024 and are signed on its behalf by:
Mr N Thompson
Director
Company registration number 12546588
The notes on pages 9 to 20 form an integral part of the financial statements.
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ELDON STREET LIMITED
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
311
21,058,789
436,542
21,495,642
Total comprehensive loss for the year
-
-
(15,077,914)
(15,077,914)
Issue of share capital
19
288
28,799,712
-
28,800,000
At 31 December 2022
599
49,858,501
(14,641,372)
35,217,728
Total comprehensive loss for the year
-
-
(13,292,027)
(13,292,027)
Issue of share capital
19
516
51,657,484
-
51,658,000
At 31 December 2023
1,115
101,515,985
(27,933,399)
73,583,701
The notes on pages 9 to 20 form an integral part of the financial statements.
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ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
1
Accounting policies
Company information
Eldon Street Limited is a private company limited by shares incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The registered office is Connect House, 133-137 Alexandra Road, London, SW19 7JY.
1.1
Accounting convention
The company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standards 100) issued by the Financial Reporting Council. Accordingly, the financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards. The financial statement have been prepared in accordance with accounting policies disclosed in note 1.
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 financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
related party disclosures for transactions with the parent or wholly owned members of the group; and
disclosure of prior year comparatives of investment property.
Where required, equivalent disclosures are given in the group accounts of Rosp Corunna SL, which are available to the public and can be obtained from the Central Mercantile Register in Spain.
New and amended standards adopted by the company:
There are no amendments to accounting standards or IFRIC interpretations that are effective for the year ended 31 December 2023 which have a material impact on the company.
1.2
Going concern
The company has net current liabilities due to amounts owed to group companies that are interest free and have no predetermined repayment date and therefore are treated as current liabilities. The Company has the support of the parent company to meet it’s financial obligations as and when they fall due. The directors have also reviewed the current and projected financial position of the company, making reasonable assumptions about future trading performance and cash flow requirements. On the basis of this review, the directors have reasonable expectation that the company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements.true
1.3
Revenue and expenditure
Revenue comprises rental income and service charge income receivable from the tenants of the investment property. This revenue is recognised in the period to which the income is receivable. Rental and service charge income received in advance is deferred in the balance sheet to the following period.
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ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Cost of sales represents the cost of providing service charges to residents of the investment property, together with certain management fees incurred by the company. Administrative expenses include costs associated with the operation of the company. Both are recognised in the period to which the expenses relate.
Interest payable and similar expenses are charged to the profit and loss in the period to which they relate using the effective interest rate method.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
3 Years Straight Line Basis
1.5
Investment properties
The company has three investment properties, which are held to earn rentals and/or for capital appreciation, are initially measured at cost and subsequently at cost less accumulated depreciation and accumulated impairment losses (cost model).
Buildings are depreciated over fifty years on a straight line basis and land is not depreciated.
1.6
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its portfolio (Cash-generating unit) to determine whether there is any indication that the cash-generating unit have suffered an impairment loss. If any such indication exists, the recoverable amount of the cash-generating unit is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
Fair value less costs to sell has been determined by external valuers and includes an adjustment for purchasers' sales costs of 1.8% and SDLT of 0.5%.
If the recoverable amount of a cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant cash-generating unit is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant cash-generating unit is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash at bank and in hand
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.
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ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
1.8
Financial assets
Financial assets are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
Financial assets are initially measured at fair value, plus transaction costs. They are subsequently measured at amortised cost.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
On initial recognition the company calculates the expected credit loss for debtors based on lifetime expected credit losses under the IFRS 9 simplified approach.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.9
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities initially measured at fair value, plus transaction costs. They are subsequently measured at amortised cost.
Financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense on an accruals basis.
2
Critical accounting estimates, judgments 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The directors believe that the impairment assessment made in relation to the investment property is a key source of estimation uncertainty. The company uses external professional valuers to determine the fair value that is considered as part of the impairment review. The valuation is based upon a number of assumptions including future rental income, anticipated maintenance costs, future development costs and an appropriate discount rate. The primary source of evidence for property valuations should be recent, comparable market transactions on an arms-length basis. Please refer to Note 12 for further disclosures on the investment property.
The directors have not identified any critical judgements made.
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ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Rental income
1,820,417
1,730,907
Service charge receivable
669,731
666,049
Recharge of utilities and insurance
218,511
58,194
Service charge shortfall
674,367
166,442
Lease incentive
622,692
319,025
4,005,718
2,940,617
4
Impairment
2023
2022
Note
£
£
Expenditure
Investment properties impairment
12
11,585,542
14,410,368
As a result of the valuation, which was carried out by an external Chartered Surveyor, an impairment loss of £11,585,542 has been recognised. The properties have been impaired due to combination of global inflationary pressures, higher interest rates and the recent geopolitical events.
5
Cost of sales
2023
2022
£
£
Service charge costs
2,160,010
1,023,917
Other property costs
351,321
176,063
2,511,331
1,199,980
6
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
72,600
30,000
Depreciation of property, plant and equipment
748
88
Depreciation of investment property
1,785,306
1,090,308
No other amounts were paid to the auditor for any other services.
- 14 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
7
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
2
1
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
115,531
47,025
Social security costs
7,379
2,471
Employee benefits
7,691
2,088
130,601
51,584
No compensation was paid to key management for employee services in the period.
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
113,821
685
Interest income is made up of interest earned on bank balances as well as outstanding amounts receivable from HMRC for VAT and corporation tax.
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
392,655
Fee chargeable in relation to parent company corporate guarantee
94,744
487,399
In September 2022 the bank loan for £23m was repaid. The loan had an interest rate of 1.695% which increased to 4.03% effective from June 2022. Prior to the repayment the loan had a repayment date of June 2025.
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
-
(89,924)
- 15 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
10
Taxation
(Continued)
2023
2022
£
£
Deferred tax
Origination and reversal of temporary differences
935,056
267,923
Adjustments to tax charge in respect of prior periods
67,058
129,691
Remeasurement of deferred tax for changes in tax rates
63,964
84,608
1,066,078
482,222
Total tax charge
1,066,078
392,298
The charge for the year can be reconciled to the loss per the profit and loss account as follows:
2023
2022
£
£
Loss before taxation
(12,225,949)
(14,685,616)
Expected tax credit based on a standard UK corporation tax rate of 23.50% (2022: 19.00%)
(2,873,098)
(2,790,267)
Fixed asset differences
344,432
89,739
Other permanent differences
24,479
-
Deferred tax not recognised
3,439,243
2,968,452
Adjustments to tax charge in respect of previous periods
67,058
39,766
Remeasurement of deferred tax for changes in tax rates
63,964
84,608
Taxation charge for the year
1,066,078
392,298
The standard rate of corporation tax applicable to taxable profit was 25% (2022: 19%). The corporation tax rate has increased to 25% (effective 1 April 2023) following the enactment of Finance Act 2021 on 10 June 2021.
11
Tangible fixed assets
Computers
£
Cost
At 1 January 2023
2,244
At 31 December 2023
2,244
- 16 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
11
Tangible fixed assets
(Continued)
Computers
£
Accumulated depreciation and impairment
At 1 January 2023
88
Charge for the year
748
At 31 December 2023
836
Carrying amount
At 31 December 2023
1,408
At 31 December 2022
2,156
12
Investment property
2023
£
Cost
At 1 January 2023
103,759,127
Additions
50,470,848
At 31 December 2023
154,229,975
Accumulated depreciation
At 1 January 2023
16,359,127
Charge for the year
1,785,306
Impairment losses
11,585,542
At 31 December 2023
29,729,975
Carrying value
At 31 December 2023
124,500,000
At 31 December 2022
87,400,000
The buildings and capitalised costs have been depreciated over their useful economic life, but no depreciation has been charged over the value of the land (see Note 1.5).
Additions include capital expenditure on the refurbishment of vacant space and the acquisition of a property on 22nd September 2023. The property was acquired via a forward purchase agreement originally entered into by the group company, London Propco 2 Limited, to acquire a property by a group company was novated to Eldon Street at a value of £5,095,787.
- 17 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
12
Investment property
(Continued)
The fair value of the investment properties is £124.5m at year end. The basis for the valuation is in accordance with the latest version of the RICS Valuation - Global Standards and the UK national supplement, Red Book. The fair value has been arrived at on the basis of a valuation carried out by CBRE Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Property valuations are inherently subjective and derived using comparable market transactions which are not publicly available and involve an element of judgement. For these reasons, we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. The inputs to the valuations are defined as ‘unobservable’ by IFRS 13. These key unobservable inputs are net equivalent yield and estimated rental values.
The carrying value of the buildings amounts to more than the fair value at the period end, therefore impairment has been recognised for both properties in the financial period.
In assessing the impairment for December 2023 and 2022 the Directors engaged CBRE to prepare a 3rd party valuation of the 3 properties held within the Company. On the assumption that the assets would be sold as a portfolio in a corporate vehicle, the Directors believe the appropriate valuation as at December 2023 to be £124.5m. This is the sum of the CBRE valuations assuming the properties are sold within a corporate wrapper, which is consistent with the approach taken in the prior year accounts and the auditors did not disagree with this treatment in the prior period.
13
Debtors
2023
2022
£
£
Trade debtors
243,254
93,588
Corporation tax recoverable
-
80,219
VAT recoverable
602,841
473,428
Other debtors
2,143,272
1,995,543
Prepayments and accrued income
376,746
51,553
3,366,113
2,694,331
14
Creditors
2023
2022
Notes
£
£
Other creditors
15
62,247,884
56,767,539
Taxation and social security
3,854
1,242
Deferred income
16
363,510
400,391
62,615,248
57,169,172
- 18 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
15
Other creditors
2023
2022
£
£
Trade creditors
1,361,173
964,917
Amount owed to group companies
59,603,839
55,009,903
Accruals
799,953
311,998
Other payables
482,919
480,721
62,247,884
56,767,539
Amounts owed to group companies are interest free and repayable on demand.
16
Deferred revenue
2023
2022
£
£
Arising from rental
363,510
400,391
17
Deferred taxation
2023
2022
£
£
Fixed asset timing differences
1,548,300
482,222
1,548,300
482,222
The following is the deferred tax liability recognised by the company and movement thereon during the current reporting period.
Total
£
£
Balance at 1 January 2022
-
-
Deferred tax movements in prior year
Charge to profit or loss
482,222
482,222
Balance at 1 January 2023
482,222
482,222
Deferred tax movements in current year
Charge to profit or loss
1,066,078
1,066,078
Liability at 31 December 2023
1,548,300
1,548,300
- 19 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
17
Deferred taxation
(Continued)
Tax losses of £4.5m (2022: £1.2m) and unrealised capital losses of £29.3m (2022: £16.2m) have not been recognised for deferred tax purposes on the basis there is uncertainty whether there will be future taxable profits to enable the utilisation.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
7,691
2,088
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued, authorised and fully paid
Ordinary shares of 1p each
10,000
10,000
100
100
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued, authorised and fully paid
Redeeemable preference shares of 1p each
101,517
49,859
1,015
499
Total equity share capital
1,115
599
During the year, the company issued 51,658 (2022: 28,800) redeemable preference shares of £0.01 each at an issue price of £1,000. These shares carry no voting rights, no entitlement to dividends, but are redeemable at the issue price at the option of the company or with priority to the ordinary shareholders on a winding up.
The ordinary shares carry one vote each, entitle the holder to dividends and to participate in a distribution arising from a winding up, but only after the redeemable shareholders have been repaid the full issue price of the redeemable shares.
20
Share premium account
2023
2022
£
£
At the beginning of the year
49,858,501
21,058,789
Issue of new shares
51,657,484
28,799,712
At the end of the year
101,515,985
49,858,501
- 20 -
ELDON STREET LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2023
21
Credit facility
There is a credit facility within the group and Eldon Street Limited is liable for any amounts that will be drawn down on this facility.
On 17th April 2023, Eldon Street Limited, along with other companies within the group entered into a 150 million Euro Group Credit Facility with Caixa Bank for the purpose of general corporate needs. The drawdown period is 1 year with the possibility of two 1-year extensions up to a total extended drawdown period of 3 years. Interest is chargeable at 0.50% to 0.64% plus EURIBOR/SOFR/SONIA depending on the currency of the drawdown. All borrowing entities (which includes Eldon Street Ltd) are liable for any amounts drawn from the facility. There is no security granted over the shares or assets of Eldon Street Limited. As at the date of signing, Eldon Street Limited has not drawn down on the facility.
22
Other leasing information
Lessor
The operating leases represent tenancy agreements with third parties to occupy the three properties within Eldon Street Limited. The leases are negotiated over terms of two to fifteen years and rentals are typically fixed for between five and ten years, although most longer leases include a provision for five-yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2023
2022
£
£
Within one year
1,688,384
1,858,379
Between two and five years
5,976,168
9,509,105
Over five years
5,051,398
12,121,025
Total undiscounted lease payments receivable
12,715,950
23,488,509
23
Capital commitments
The company has commitments for future capital expenditure not provided for in the accounts of £8.64m.
24
Events after the reporting date
On 24th July 2024, the company issued 4,600 redeemable preference shares for £1,000 per share to its parent company.
25
Controlling party
The immediate parent company of Eldon Street Limited is Ferrado Inmuebles SL, while the ultimate parent company is Rosp Corunna SL whose registered office address is Plaza Maria Pita 17, 5001, A Coruna, Spain. The ultimate controlling party is Sandra Ortega Mera.
The smallest and largest group in which the results of the company are included within is that headed by Rosp Corunna SL. Copies of these consolidated financial statements are publicly available from the Central Mercantile Register in Spain.
- 21 -
2023-12-312023-01-01Mr N ThompsonMr J A Fresnedo AmadotruefalseCCH SoftwareiXBRL Review & Tag 2024.2125465882023-01-012023-12-3112546588bus:Director12023-01-012023-12-3112546588bus:Director22023-01-012023-12-3112546588bus:RegisteredOffice2023-01-012023-12-31125465882023-12-31125465882022-01-012022-12-3112546588core:ContinuingOperations2023-01-012023-12-3112546588core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3112546588core:RetainedEarningsAccumulatedLosses2022-01-012022-12-31125465882022-12-3112546588core:ShareCapital2023-12-3112546588core:ShareCapital2022-12-3112546588core:SharePremium2023-12-3112546588core:SharePremium2022-12-3112546588core:RetainedEarningsAccumulatedLosses2023-12-3112546588core:RetainedEarningsAccumulatedLosses2022-12-3112546588core:SharePremium2021-12-3112546588core:RetainedEarningsAccumulatedLosses2021-12-31125465882021-12-3112546588core:ShareCapital2022-01-012022-12-3112546588core:SharePremium2022-01-012022-12-3112546588core:ShareCapital2023-01-012023-12-3112546588core:SharePremium2023-01-012023-12-3112546588core:Held-to-maturityFinancialAssets2023-01-012023-12-3112546588core:ComputerEquipment2022-12-3112546588core:ComputerEquipment2023-12-3112546588core:ComputerEquipment2023-01-012023-12-3112546588core:ComputerEquipment2022-12-31125465882022-12-3112546588core:CurrentFinancialInstruments2023-12-3112546588core:CurrentFinancialInstruments2022-12-3112546588core:WithinOneYear2023-12-3112546588core:WithinOneYear2022-12-3112546588bus:PrivateLimitedCompanyLtd2023-01-012023-12-3112546588bus:FRS1012023-01-012023-12-3112546588bus:Audited2023-01-012023-12-3112546588bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP