Company registration number NI033675 (Northern Ireland)
TITANIC QUARTER LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
TITANIC QUARTER LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 12
TITANIC QUARTER LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
1,146,750
1,205,368
Current assets
Stocks
5
21,860,558
23,378,866
Debtors
6
7,740,148
5,140,757
Cash at bank and in hand
1,255,826
1,365,218
30,856,532
29,884,841
Creditors: amounts falling due within one year
7
(30,792,483)
(27,288,037)
Net current assets
64,049
2,596,804
Total assets less current liabilities
1,210,799
3,802,172
Creditors: amounts falling due after more than one year
8
(19,008,634)
(20,334,513)
Net liabilities
(17,797,835)
(16,532,341)
Capital and reserves
Called up share capital
21,000,001
21,000,001
Profit and loss reserves
(38,797,836)
(37,532,342)
Total equity
(17,797,835)
(16,532,341)
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.
TITANIC QUARTER LIMITED
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
31 December 2023
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 17 April 2024 and are signed on its behalf by:
Mr K J Craig
Director
Company Registration No. NI033675
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
1
Accounting policies
Company information
Titanic Quarter Limited is a private company limited by shares incorporated in Northern Ireland. The registered office is Titanic House, Queens Road, Queen's Island, Belfast, Co. Antrim, Northern Ireland, BT3 9DT.
1.1
Accounting convention
These financial statements have been prepared 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 financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company recorded a pre-tax trueloss of £1,265,494 for the year ended 31 December 2023 (2022: £3,094,276). The statement of financial position reflects a year end net liabilities position of £17,797,835 (2022: £16,532,341).
The Directors have valued the company's development land at £21,860,558 (2022: £23,378,866), as set out in Note 5. It remains the primary objective of the company that the development land be developed over the medium to long term (through to 2030).
In February 2017, the company refinanced its existing loans with a debt facility with Bottin (International) Investments B.V. In advance of the refinancing, the company's entire issued share capital was ultimately acquired by Titanic Property Development Limited as part of a restructuring of the existing single group of companies. On 31 March 2020, Bottin (International) Investments B.V. transferred all rights under the facility agreement to Realview Limited, an entity ultimately beneficially owned by Mr Dermot Desmond. The development land held by the group does not form part of the senior debt security provided to Danske Bank and forms the principal first ranking security for the subordinated debt provided by Realview Limited.
The company is dependent upon support from its Shareholders and related parties. The company's ultimate controlling parties of The Entice Limited Partnership and Dockside Investments Limited have confirmed they will not seek repayment of existing loans of £18,583,651 for the foreseeable future. The Shareholder loans are subordinated to Danske Bank and Realview Limited for the duration of the facilities provided by these parties. Harcourt Construction (NI) Limited, which is related to Dockside Investments Limited, will not seek repayment of amounts payable to it for the foreseeable future.
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.2
Going concern (cont.)
After making enquiries, the Directors have formed the judgement at the time of approving the financial statements that the company has adequate resources to continue in operational existence for the foreseeable future and therefore it is appropriate to prepare the financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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:
Leasehold property
5% - 10% straight line
Fixtures and fittings
10% - 50% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or 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 asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Development properties are properties acquired for future development. These are stated at the lower of cost and net realisable value. Cost comprises purchase price and, where initial planning and development work has commenced, development costs and interest.
Interest is calculated by reference to specific borrowings. Net realisable value is defined as the estimated selling price net of selling costs of the completed developments less all further costs to completion, as estimated by the Directors depending on agreed plans for the properties.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
1.9
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.
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 6 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.10
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.
1.11
Loans and borrowings
All loans and borrowings, both assets and liabilities are initially recorded at the present value of the cash payable to the lender in settlement of the liability discounted at the market interest rate.
Loans with no stated interest rate and repayable within one period or on demand are not amortised. Loans and borrowings are classified as current assets or liabilities unless the borrower has an unconditional right to defer settlement of the liability for at least twelve months after the financial reporting date.
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 7 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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
There were no significant judgements (apart from those involving estimations) that the Directors have made in the process of applying the company's accounting policies.
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 8 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible asset depreciation
Tangible fixed assets, other than investment properties, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Investment property valuation
Investment properties are valued annually by a Director using a yield methodology. This uses market rental values capitalised at a market capitalisation rate but there is an inevitable degree of judgement involved in that each property is unique and value can only ultimately be reliably tested in the market itself. Key inputs into the valuations are annual rent per square foot and property yields.
Development land valuation
Development land is stated at the lower of cost and estimated selling price less selling costs. Excess inventory is provided for on the basis of likely future usage and estimated net realisable value.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
16
15
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
4
Tangible fixed assets
Long leasehold property
Fixtures and fittings
Equipment
Investment Property
Total
£
£
£
£
£
Cost or valuation
At 1 January 2023
1,304,989
321,463
49,318
764,318
2,440,088
Additions
4,348
4,348
At 31 December 2023
1,304,989
325,811
49,318
764,318
2,444,436
Depreciation and impairment
At 1 January 2023
923,592
311,128
1,234,720
Depreciation charged in the year
56,052
6,914
62,966
At 31 December 2023
979,644
318,042
1,297,686
Carrying amount
At 31 December 2023
325,345
7,769
49,318
764,318
1,146,750
At 31 December 2022
381,397
10,335
49,318
764,318
1,205,368
Equipment includes £49,318 (2022: £49,318) of chattels which are not depreciated.
The Directors have performed an internal valuation and are of the opinion that the above valuations represent a prudent approximation of the open market value of the properties at 31 December 2023. The valuation of the investment property at the date of the approval of the financial statements is subject to uncertainty in light of current market conditions.
On the historical cost basis, investment property would have been included as follows:
2023
2022
£
£
Cost
764,318
764,318
Accumulated depreciation
(382,158)
(366,872)
Carrying value
382,160
397,446
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
5
Stocks
2023
2022
£
£
Development land
21,860,558
23,378,866
The Directors have performed an internal valuation and are of the opinion that the above valuations represent a prudent approximation of the open market value of the development land at 31 December 2023. The valuation of the development land at the date of the approval of the financial statements is subject to uncertainty.
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
101,111
33,396
Amounts owed by related parties
6,159,007
5,078,502
Other debtors
76,756
199
Prepayments and accrued income
1,403,274
28,660
7,740,148
5,140,757
All debtors are due within one year of the balance sheet date.
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
117,135
59,578
Amounts owed to group undertakings
4,763,837
2,313,581
Amounts owed to related parties
24,027,733
24,036,593
Taxation and social security
103,853
Other creditors
2,000
Accruals and deferred income
1,881,778
774,432
30,792,483
27,288,037
Details of any security held are included in note 8.
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
8
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to related parties
19,008,634
20,334,513
The following assets are held as security by Realview Limited whether or not formally charged to the Lender:
An all monies debenture from the company to Realview Limited conferring on the Lender fixed and floating security over the property, assets, undertakings, rights and revenues (both present and future) of the company.
Full cross intercompany guarantees between Titanic Quarter Limited, Titanic Properties Limited, Titanic Properties (Arc Management) Limited, Titanic Holdings Limited, Titanic Island Limited, Titanic Property Development Limited, and Titanic Trademark Limited, who had provided guarantees in relation to loan facilities between Realview Limited and the company.
There are no other amounts included under 'creditors' in respect of which any security has been given by the small entity.
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.
Senior Statutory Auditor:
Teresa Campbell
Statutory Auditors:
FPM Accountants Limited
Date of audit report:
17 April 2024
10
Operating lease commitments
The company has future operating lease commitments as a lessee of £959,990 (2022: £1,109,506).
The company has future operating lease commitments as a lessor of £702,638 (2022: £405,113).
TITANIC QUARTER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
11
Other services provided by auditors
In common with many other businesses of our size and nature we use our auditors to provide tax advice, prepare and submit returns to tax authorities and assist with the preparation of the financial statements.
12
Controlling party
The company is a subsidiary undertaking of Titanic Holdings Limited, a company incorporated in Northern Ireland. The results and business review of Titanic Holdings Limited and subsidiaries are included in the financial statements of Titanic Property Development Limited, which are publicly available at Companies House, 32-38 Linenhall Street, Belfast.
The Directors consider the ultimate parent company to be Titanic Property Development Limited, which is incorporated in Northern Ireland. The ultimate parent company is under the joint control of The Entice Limited Partnership which is ultimately beneficially owned by Mr D Desmond and Dockside Investments Limited which is under the control of the family of Mr P Doherty.
13
Contingencies
On 15 February 2022, Titanic Properties Limited, Titanic Properties (Arc Management) Limited, Titanic Holdings Limited, Titanic Island Limited, Titanic Property Development Limited, and Titanic Trademark Limited, entered into a 5 year refinancing agreement with Danske Bank. As part of this arrangement the entities have entered into a full cross intercompany guarantee.
In addition, on 15 February 2022, Titanic Quarter Limited, Titanic Properties Limited, Titanic Properties (Arc Management) Limited, Titanic Holdings Limited, Titanic Island Limited, Titanic Property Development Limited, and Titanic Trademark Limited entered into a 5 year refinancing agreement with Realview Limited (a related party of the company) alongside Danske Bank.
There was in place at the year end an all monies debenture conferring on Realview Limited a fixed and floating security over the group's property and assets. As part of this arrangement the entities have also entered into a full cross intercompany guarantee.
Due to the various factors that may impact on the above guarantees it is not possible to quantify the amounts that could be involved or give any indication as to the timing of when a liability may arise.
14
Related party transactions
Within creditors there is a balance of £23,990,151. This amount relates to a loan balance owed to the related parties of the company, being £8,751,957 owed to The Entice Limited Partnership, £9,831,694 to Harcourt Developments and £5,406,500 to Harcourt Construction (NI) Limited.
Within note 8, the balance totalling £19,008,634 relates to amounts owed to Realview Limited, a related party of the company, which is ultimately beneficially owned by Mr D Desmond.
There are no further transactions with related parties that are required to be disclosed under FRS 102 Section 1A.