REGISTERED NUMBER: |
Report of the Directors and |
Unaudited Financial Statements for the Year Ended 31 December 2023 |
for |
London BTR Investments |
(Alma Block 34&35) Limited |
REGISTERED NUMBER: |
Report of the Directors and |
Unaudited Financial Statements for the Year Ended 31 December 2023 |
for |
London BTR Investments |
(Alma Block 34&35) Limited |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Contents of the Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company information | 1 |
Report of the directors | 2 |
Statement of comprehensive income | 4 |
Balance sheet | 5 |
Statement of changes in equity | 7 |
Notes to the financial statements | 8 |
London BTR Investments |
(Alma Block 34&35) Limited |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of investment in and development of build to rent property ("BTR") in Greater London. |
DIRECTORS |
Other changes in directors holding office are as follows: |
RESULTS AND DIVIDENDS |
The loss for the year is £48,338 (2022 period: profit £282,077). The directors do not recommend the payment of a dividend for the current or prior periods. |
GOING CONCERN |
The directors have a reasonable expectation that there are adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Further detail is provided in the accounting policies of the financial statements. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Report of the directors 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). 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; |
- | 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. |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Report of the Directors |
for the Year Ended 31 December 2023 |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
ON BEHALF OF THE BOARD: |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Statement of Comprehensive Income |
for the Year Ended 31 December 2023 |
Period |
18.8.21 |
Year Ended | to |
31.12.23 | 31.12.22 |
as restated |
Notes | £ | £ |
TURNOVER |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT/(LOSS) | ( |
) |
Other income | 47,250 | - |
Interest receivable and similar income |
185,646 | 18,767 |
(Loss)/gain on revaluation of investment property |
(94,530 |
) |
418,708 |
PROFIT BEFORE TAXATION | 5 |
Tax on profit | 6 | ( |
) | ( |
) |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR |
( |
) |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Balance Sheet |
31 December 2023 |
2023 | 2022 |
as restated |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
Investments | 9 |
Investment property | 10 |
CURRENT ASSETS |
Debtors | 11 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 12 | ( |
) | ( |
) |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
PROVISIONS FOR LIABILITIES | 15 | ( |
) | ( |
) |
NET ASSETS |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Balance Sheet - continued |
31 December 2023 |
2023 | 2022 |
as restated |
Notes | £ | £ |
CAPITAL AND RESERVES |
Called up share capital | 16 |
Retained earnings | 17 | 233,738 | 282,077 |
SHAREHOLDERS' FUNDS |
The directors acknowledge their responsibilities for: |
(a) | ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and |
(b) | preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company. |
The financial statements were approved by the Board of Directors and authorised for issue on |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Changes in equity |
Issue of share capital | - |
Total comprehensive income | - |
Balance at 31 December 2022 | 282,077 |
Changes in equity |
Total comprehensive loss | - | ( |
) | ( |
) |
Balance at 31 December 2023 | 100 | 233,739 | 233,839 |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
London BTR Investments (Alma Block 34&35) Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparation |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework": |
• | the requirements of IFRS 7 Financial Instruments: Disclosures; |
• | the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement; |
• | the requirements of IAS 7 Statement of Cash Flows; |
• | the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures; |
• | the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group. |
Turnover |
Rental income from investment property is accounted for under an accruals basis. |
Tangible fixed assets |
Fixtures and fittings | - |
Investment property |
Investment property, including that which is being constructed for future use as investment property, is measured initially at its cost including related transaction costs. After initial recognition, investment property is carried at fair value. The investment properties are valued by CBRE who are qualified valuation experts and hold a recognised and relevant professional qualification. The valuation basis of market value conforms to international valuation standards. The valuation is based on market evidence of investment yields, expected gross to net income rates and actual and expected rental values. Gains or losses arising from arising from changes in the fair value of the investment property are included in profit from operations in the income statement of the period in which they arise. |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial assets and financial liabilities are recognised on the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument. |
The company uses derivatives financial instruments, specifically caps, to manage interest rate risk. The group does not use derivative financial instruments for speculative purposes. Derivatives are recognised in the Statement of Financial Position at fair value on the date the transaction is entered into and are subsequently re-measured at their fair values at year end. Changes in the fair value of derivatives are recognised in the Statement of Comprehensive Income. |
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire, or when the financial asset and substantially all the risk and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. |
Taxation |
Tax on the profit or loss for the period comprises current tax and deferred tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in respect of previous years. |
Deferred tax is recognised in respect of all material timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at the date that will result in an obligation to pay more, or a right to pay less or to receive more tax with the following exceptions: |
1) The recognition of deferred tax assets is limited to the extent that the Company anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences. |
2) Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Impairment |
When there is an indication of impairment, the company reviews the carrying value of its assets to determine whether those assets have suffered an impairment loss. The recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to determine the recoverable amount of an individual asset the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately. |
Where an impairment subsequently reverses, the carrying amount of the asset (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 (cash-generating unit) in prior years. |
Finance income |
Interest income from interest rate derivative hedges are accounted for on an accruals basis. |
Investments |
Fixed asset investments are stated at cost less provision for permanent diminution in value. |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
The directors have reviewed the trading prospects and projected cash flows of the business, which include the re-tendering of construction contracts relating to two sites within the same debt pool as London BTR Investments (Alma 34&35) Ltd ("the Company") which were originally contracted to be constructed by a contractor which entered Administration in October 2023. |
Following this, contract works on the two sites were re-tendered to third parties to enable completion of the developments. The re-tendering process is at an advanced stage and nearing finalisation. Once complete, this will enable the construction works to recommence in 2024. |
The administration of the contractor triggered a breach of covenants relating to certain of the debt pool's bank facilities. However, the Group has strong relationships with its lenders and continues to work and communicate with them to find an optimum solution to the benefit of all stakeholders. The lenders remain supportive and the Board is confident that it will be able to resolve the breach and enable debt funding to resume once the contract re-tendering is complete and construction re-commences. |
Until the appointment of alternative contractors under construction contracts to the satisfaction of lenders, the Group will remain in breach of the bank facilities related to these sites. As a result of this technical breach, the lenders could call upon their debt and as such the debt related to this facility has been classified as repayable on demand. The directors consider that action by the lenders to call upon its debt is unlikely, but acknowledge that this represents a material uncertainty. |
The directors believe that adopting the going concern basis in preparing the consolidated financial statements is appropriate. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION |
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below: |
Investment property valuation |
Investment properties both completed and under construction are held at fair value, based on independent CBRE (UK) Limited valuations, acting in the capacity of External Valuers as defined in the RICS Red Book. |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
4. | OTHER INCOME |
Period |
18.8.21 |
Year Ended | to |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Other income |
Other income represents amounts payable by a contractor in respect of later than expected delivery of assets where the delay is attributable to the contractor. |
5. | PROFIT BEFORE TAXATION |
The profit before taxation is stated after charging: |
Period |
18.8.21 |
Year Ended | to |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Depreciation - owned assets |
6. | TAXATION |
Analysis of tax expense |
Period |
18.8.21 |
Year Ended | to |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Deferred tax |
Total tax expense in statement of comprehensive income |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
6. | TAXATION - continued |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
Period |
18.8.21 |
Year Ended | to |
31.12.23 | 31.12.22 |
as restated |
£ | £ |
Profit before income tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
21,430 |
83,120 |
Effects of: |
Disallowed expenses | 2,659 | 1,824 |
Losses carried forward | 107,113 | - |
Tax rate changes | 8,252 | 37,296 |
Group relief | - | 33,158 |
Tax expense |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
7. | PRIOR YEAR ADJUSTMENT |
In 2022, interest rate caps were taken out to give greater certainty over cashflow with regards to interest on the loans. The costs associated with this were previously accounted for within prepayments and amortised over the period of the hedge. In 2023, the hedges have been recognised at fair value. In order to provide clarity, as the hedges were entered into prior to 2023, the comparatives have been restated accordingly. |
2022 |
£'000 |
Net Assets - Original | 311,041 |
Trade & other receivables (amortised cost to derivatives and recognising accrued income) | 19,680 |
Deferred Tax Creditor (implications on fair value adjustment on deferred tax) | (48,544 | ) |
Net Assets - Restated | (282,177 | ) |
The effect of the restatement on the Income Statement is as follows |
Profit per Original statement | 310,941 |
Reduction in fair value uplift of Investment Property (uncapitalising interest receipts from the derivative) | (8,709 | ) |
Additional Finance Income (accrued income; and reflecting interest receipts from derivatives in the income statement) | 28,389 |
Additional Deferred Tax (implications on fair value adjustment on deferred tax) | (48,544 | ) |
Profit Restated | (282,077 | ) |
8. | TANGIBLE FIXED ASSETS |
Fixtures |
and |
fittings |
£ |
COST |
Additions |
At 31 December 2023 |
DEPRECIATION |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
9. | INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 | 100 |
NET BOOK VALUE |
At 31 December 2023 | 100 |
At 31 December 2022 | 100 |
The company's investments at the Balance sheet date in the share capital of companies include the following: |
Registered office: Floor 3, 1 St. Ann Street, Manchester, M2 7LR |
Nature of business: |
% |
Class of shares: | holding |
10. | INVESTMENT PROPERTY |
Total |
£ |
FAIR VALUE |
At 1 January 2023 |
Additions |
Revaluations | (94,530 | ) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Fair value at 31 December 2023 is represented by: |
£ |
Valuation in 2022 | 418,708 |
Valuation in 2023 | (94,530 | ) |
Cost | 15,025,823 |
15,350,001 |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
as restated |
£ | £ |
Other debtors |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
as restated |
£ | £ |
Bank loans (see note 14) |
Trade creditors |
Amounts owed to group undertakings |
Other creditors |
Accrued expenses |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
as restated |
£ | £ |
Bank loans (see note 14) |
14. | FINANCIAL LIABILITIES - BORROWINGS |
The financial liability borrowing at 31 December 2023 was £8,674,196 (2022: £6,966,998), which is made up of a current bank loan (2022: non-current bank loan). |
The bank loan is utilised to fund the Company’s investment in private rented sector property. Interest is charged at commercial rates and the loan facility is secured on the company’s investment property. |
The developer contracted to build some of the Group’s sites, entered administration in October 2023. This event triggered a breach of the long stop date of some of the bank facilities within the debt pool. As outlined earlier in these financial statements, the Group is at an advanced stage in re-tendering the remaining construction work to be completed with alternative parties. Pending the appointment of alternative contractors and finalisation of construction contracts to the satisfaction of lenders, the Company remains in technical breach of the bank facilities. As a result of the technical breach, the debt related to these facilities has been classified as repayable on demand. |
15. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
as restated |
£ | £ |
Deferred tax |
London BTR Investments |
(Alma Block 34&35) Limited (Registered number: 13571957) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
15. | PROVISIONS FOR LIABILITIES - continued |
Deferred tax |
£ |
Balance at 1 January 2023 |
Provided during year | 139,454 |
Balance at 31 December 2023 |
16. | CALLED UP SHARE CAPITAL |
Allotted and issued: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | as restated |
£ | £ |
Ordinary Shares | £1 | 100 | 100 |
17. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Deficit for the year | ( |
) |
At 31 December 2023 |
18. | POST BALANCE SHEET EVENT REGARDING ULTIMATE CONTROLLING PARTY |
With effect from 29 July 2024, London BTR Investments LP is regarded by the directors as being the company's ultimate parent company. Prior to this date London BTR Investments Ltd was regarded by the directors as the company's ultimate parent company. |