European Property Investors Special Opportunities (General Partner) Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 06477842 (England and Wales)
European Property Investors Special Opportunities (General Partner) Limited
Company Information
Directors
I P Laming
R W I Wilkinson
C J Spry
Company number
06477842
Registered office
Berkeley Square House
8th Floor
Berkeley Square
London
W1J 6DB
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
European Property Investors Special Opportunities (General Partner) Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 25
European Property Investors Special Opportunities (General Partner) Limited
Strategic Report
For the year ended 31 December 2023
Page 1

The directors present the strategic report for the year ended 31 December 2023.

Principal activity and fair review of the business

During the year, the company continued to be the general partner of European Property Investors Special Opportunities (General Partner) LP, a Limited Partnership which has an interest in European Property Investors Special Opportunities LP ("the Fund"). The investment period for the Fund closed in May 2012.

 

As at 31 December 2023, the group had net liabilities of €0.625m (2022: €0.465m). The group loss for the financial year was €0.018m compared to a profit of €0.084m for the year ended 31 December 2022.

Principal risks and uncertainties

The principal risk facing the group is poor investment performance. The future health of the business is dependent upon good investment performance, if (for whatever reason) assets do not increase then this could jeopardize the future business profits. This risk is minimal due to the overall profitability of the group, which has already been returned a significant portion of its original investment and the nature of the assets, which are high quality, revenue generating real estate assets.

Future developments

The Fund is in the process of selling its assets although the timeframe for a formal liquidation is not yet certain. The group will continue its commitment to the Fund and providing the loan note to EPISO Special Limited Partner LLC, however due to the stage of the Fund life it is expected that no further capital will be called by the Fund. As a result the directors have prepared the financial statements on a basis other than a going concern.

Analysis based on Key Performance Indicators (KPIs)

The KPIs of the group are the return on their investment in the Fund, as indicated by the income and distributable yield, the internal rate of return from the Fund and the net asset value of their investment in the Fund. The group monitors its performance against these KPIs on a quarterly basis

 

Forecast IRR        6.4% net (2022 - 6.4% net)

Investment valuation    €0.20m (2022 - €0.37m)

Revenue        €nil (2022 - €644k)

 

There has been minimal activity within the company in the 2023 financial year due the Outlook of the Fund, as the fund is close to termination. The Fund is in the process of disposing of its assets although the timeframe for a formal liquidation is not yet certain, it is expected to be in the next 12 to 18 months. The group will continue its commitment to the Fund, however due to the stage of the Fund life it is expected that no further capital will be called by the Fund. The small IRR movement of the Fund in 2023 has been driven by the return of €4m of capital to its investors and the time value of money. The group received one distribution of €0.178m consisting wholly of return of capital from the Fund, this derived the change in Investment Valuation for the year. Subsequently, in 2023 revenue is €nil as the group has not received distributions of income or gains from the Fund which it has in previous years.

European Property Investors Special Opportunities (General Partner) Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2
Going concern

As the fund is disposing of their final real estate asset, the directors have prepared the financial statements on a basis other than going concern. No adjustments have been required to be made to the financial statements as a result of this basis of preparation.

On behalf of the board

I P Laming
Director
13 September 2024
European Property Investors Special Opportunities (General Partner) Limited
Directors' Report
For the year ended 31 December 2023
Page 3

The directors present their annual report and financial statements for the year ended 31 December 2023.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

I P Laming
R W I Wilkinson
R P Jewell
(Resigned 9 February 2023)
C J Spry
Results and dividends

The consolidated profit and loss account sets out the results for the year.

Future developments

In accordance with section 414C(11) of the Companies Act 2006, the directors have chosen to include information about future developments in the Strategic Report.

Auditor

In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the group will be put at a General Meeting.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
I P Laming
Director
13 September 2024
European Property Investors Special Opportunities (General Partner) Limited
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 4

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). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

European Property Investors Special Opportunities (General Partner) Limited
Independent Auditor's Report
To the Members of European Property Investors Special Opportunities (General Partner) Limited
Page 5
Opinion

We have audited the financial statements of European Property Investors Special Opportunities (General Partner) Limited (the ‘parent company’) and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard Applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

 

Basis for opinion

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 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 opinion.

 

Emphasis of matter - financial statements prepared on a basis other than going concern

We draw attention to note 1.3 to the financial statements, which discloses that the Fund is in the process of selling its assets and will be wound up in due course. Therefore, the company itself will be wound up although the timeframe for liquidation is not yet certain. As a result of this matter, together with the other matters referred to in note 1.3, the financial statements have been prepared on a basis other than that of a going concern. Our opinion is not modified in respect of this matter.

Other information

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 there is 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.

 

We have nothing to report in this regard.

European Property Investors Special Opportunities (General Partner) Limited
Independent Auditor's Report
To the Members of European Property Investors Special Opportunities (General Partner) Limited
Page 6

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

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 group's and parent 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 group or parent company or to cease operations, or have no realistic alternative but to do so.

European Property Investors Special Opportunities (General Partner) Limited
Independent Auditor's Report
To the Members of European Property Investors Special Opportunities (General Partner) Limited
Page 7
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

 

 

 

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

European Property Investors Special Opportunities (General Partner) Limited
Independent Auditor's Report
To the Members of European Property Investors Special Opportunities (General Partner) Limited
Page 8

Explanation as to what extent 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.

 

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

 

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

 

Other matters we are required to address

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

European Property Investors Special Opportunities (General Partner) Limited
Independent Auditor's Report
To the Members of European Property Investors Special Opportunities (General Partner) Limited
Page 9

Use of our report

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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.

Thomas Moore (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
17 September 2024
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
European Property Investors Special Opportunities (General Partner) Limited
Group Statement of Comprehensive Income
For the year ended 31 December 2023
Page 10
2023
2022
Notes
€000
€000
Turnover
3
-
644
Administrative expenses
-
(12)
Operating profit
-
632
Interest receivable and similar income
11
1
Changes in fair value of investments
6
7
(717)
Profit/(loss) before taxation
18
(84)
Taxation
7
-
0
-
0
Profit/(loss) for the financial year
18
(84)
Profit/(loss) for the financial year is attributable to:
- Owners of the parent company
-
0
-
0
- Non-controlling interests
18
(84)
18
(84)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

European Property Investors Special Opportunities (General Partner) Limited
Group Balance Sheet
As at 31 December 2023
31 December 2023
Page 11
2023
2022
Notes
€000
€000
€000
€000
Fixed assets
Investments
9
199
370
Current assets
Debtors
11
960
958
Cash at bank and in hand
796
777
1,756
1,735
Creditors: amounts falling due within one year
12
(2,580)
(2,570)
Net current liabilities
(824)
(835)
Total assets less current liabilities
(625)
(465)
Non-controlling interests
(625)
(465)
(625)
(465)
The financial statements were approved by the board of directors and authorised for issue on 13 September 2024 and are signed on its behalf by:
13 September 2024
I P Laming
Director
European Property Investors Special Opportunities (General Partner) Limited
Company Balance Sheet
As at 31 December 2023
31 December 2023
Page 12
2023
2022
Notes
€000
€000
€000
€000
Current assets
-
-
Creditors: amounts falling due within one year
12
-
0
-
0
Net assets
-
0
-
0
Capital and reserves
Called up share capital
13
-
0
-
0
Total equity
-
-

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account ands related notes. The company's profit for the year was £nil (2022 - £nil)

The financial statements were approved by the board of directors and authorised for issue on 13 September 2024 and are signed on its behalf by:
13 September 2024
I P Laming
Director
Company Registration No. 06477842
European Property Investors Special Opportunities (General Partner) Limited
Group statement of changes in equity
For the year ended 31 December 2023
Page 13
Non-controlling interest
Total
€000
€000
Balance at 1 January 2022
(13,934)
(13,934)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
(84)
(84)
Distributions paid to minority interest
(638)
(638)
Return of capital for the year
(24)
(24)
Return of incentive distribution
14,215
14,215
Balance at 31 December 2022
(465)
(465)
Year ended 31 December 2023:
Profit for the year
18
18
Other comprehensive income:
Return of capital for the year
(178)
(178)
Total comprehensive income for the year
(160)
(160)
Balance at 31 December 2023
(625)
(625)
European Property Investors Special Opportunities (General Partner) Limited
Company Statement of Changes in Equity
For the year ended 31 December 2023
Page 14
Profit and loss reserves
€000
Balance at 1 January 2022
-
0
Period ended 31 December 2022:
Profit and total comprehensive income for the year
-
0
Balance at 31 December 2022
-
0
Period ended 31 December 2023:
Profit and total comprehensive income for the year
-
0
Balance at 31 December 2023
-
0
European Property Investors Special Opportunities (General Partner) Limited
Group Statement of Cash Flows
For the year ended 31 December 2023
Page 15
2023
2022
Notes
€000
€000
€000
€000
Cash flows from operating activities
Cash generated from/(absorbed by) operations
18
8
(15,754)
Investing activities
Distribution received from investments
178
24
Interest received
11
1
Net cash generated from investing activities
189
25
Financing activities
Return of incentive distribution
-
14,215
Return of capital for the year
(178)
(24)
Distributions paid
-
(638)
Net cash (used in)/generated from financing activities
(178)
13,553
Net increase/(decrease) in cash and cash equivalents
19
(2,176)
Cash and cash equivalents at beginning of year
777
2,953
Cash and cash equivalents at end of year
796
777
European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements
For the year ended 31 December 2023
Page 16
1
Accounting policies
Company information

European Property Investors Special Opportunities (General Partner) Limited (“the Company”) is a limited company incorporated in England and Wales. The registered office is Berkeley Square House, 8th Floor, Berkeley Square, London, W1J 6DB.

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.

The financial statements are presented in Euros, the functional currency, rounded to the nearest thousand Euros. The year end exchange rate for Pounds Sterling to Euros is 1.15.

The financial statements have been prepared on the historical cost convention, modified to include the revaluation of investments. The principal accounting policies adopted are set out below.

1.2
Basis of consolidation

The consolidated profit and loss account and balance sheet include the financial statements of the company and its subsidiary undertakings made up to 31 December 2023. The results of subsidiaries sold or acquired are included in the profit and loss account up to, or from the date control passes. Intra-group sales and profits are eliminated fully on consolidation.

European Property Investors Special Opportunities (SLP) L.P. and European Property Investors Special Opportunities (General Partner) L.P. have been consolidated in to the group accounts. They are consolidated due to the company's ability to control them through the terms of each entity's Partnership Agreement. The company has no rights to the assets or liabilities of each undertaking and therefore they are shown as wholly attributable to minority interests in the group balance sheet.

1.3
Going concern

The company's balance sheet shows both net current assets and net assets of €nil whilst the group shows net liabilities of €0.625m. On consolidation, as set out in the basis of consolidation accounting policy, the group incorporates the assets and liabilities of subsidiary undertakings on a line by line basis. However, none of the assets and liabilities of the subsidiaries are attributable to the shareholders of the company. The group’s net liabilities of €0.625m arise as a result of the provision for clawback of carried interest as set out in the partnership agreement of European Property Investors Special Opportunities (SLP) LP. This clawback crystallises on termination of the underlying fund at which point the Special Limited Partner will have an obligation to pay these amounts to the Fund. As the Fund is in the processing of disposing its final asset, the directors have prepared the financial statements on a basis other than a going concern. No adjustment to the recognition and measurements of assets and liabilities has been required as a result of adopting a basis other than going concern.

European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 17
1.4
Turnover

Turnover represents amounts receivable as carried interest payable to the group in accordance with the European Property Investors Special Opportunities LP (“the Fund”) Limited Partnership Agreement. The carried interest payable is calculated at Fund level based on the return generated by each realised investment. However on disposal of the final investment the overall level of the performance fee will be calculated based on the total sums generated. This may result in a claw back to the Fund of carried interest already calculated or an additional payment. At the end of each financial year, the General Partner is required to make an estimate of the level of the carried interest at that date based on returns generated and expected future returns. Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured.

 

Income also includes distributions received from investments, rental income and gains or losses on property sales.

1.5
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.6
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.

European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.7
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 19
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 group 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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 group after deducting all of its liabilities.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 20
1.8
Equity instruments

Equity instruments issued by the group 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 group.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Value of investments

The group periodically revalues its investments based on its share of the underlying value of the net assets of the investments of the Fund. The share of net assets is determined by reference to a valuation of the Fund's assets prepared by independent external fund managers.

Performance fee true up (clawback of carried interest)

In accordance with the European Property Investors Special Opportunities LP’s (‘the Fund’) Limited Partnership Agreement, the carried interest is calculated by the Fund based on the return generated by each realised investment. At the end of each financial year, the General Partner is required to make an estimate of the level of the carried interest at that date based on returns generated and expected future returns.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
€000
€000
Turnover
Carried interest in partnership
-
6
Share of revenue from sale of investment properties held by the fund
-
638
-
644
European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
3
Turnover and other revenue
(Continued)
Page 21
Other significant revenue
Interest income
11
1
4
Auditors' remuneration
The company audit fee of €17,000 (2022: €15,000) and the total subsidaries' audit fee of €25,000 (2022: €15,000) are borne by the Fund.
5
Employees
The company has no employees other than the directors.
6
Other gains and losses
2023
2022
€000
€000
Fair value gains/(losses) on financial instruments
Change in fair value of investments
7
(717)
7
Taxation

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
€000
€000
Profit/(loss) before taxation
18
(84)
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
3
(16)
Fair value adjustments not subject to tax
1
(136)
(Income)/losses not subject to corporation tax
(4)
152
Tax expense for the year
-
-
European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
Page 22
8
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking and country of incorporation or residency
Nature of business
% Held
Direct
European Property Investors Special Opportunites (SLP) L.P.
England and Wales
Investment
-
European Property Investors Special Opportunities (General Partner) L.P.
England and Wales
Investment
-

The above entities are controlled by virtue of the powers granted to European Property Investors Special Opportunities (General Partner) Limited under the respective partnership agreements of each entity.

9
Fixed asset investments
Group
Company
2023
2022
2023
2022
€000
€000
€000
€000
Unlisted investments
199
370
-
0
-
0
Movements in fixed asset investments
Group
Investments other than loans
€000
Cost or valuation
At 1 January 2023
370
Valuation changes
7
Distributions
(178)
At 31 December 2023
199
Carrying amount
At 31 December 2023
199
At 31 December 2022
370
European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
Page 23
10
Financial instruments
Group
Company
2023
2022
2023
2022
€000
€000
€000
€000
Carrying amount of financial assets
Debt instruments measured at amortised cost
960
958
-
-
Equity instruments measured at fair value through profit or loss
199
370
-
-
Carrying amount of financial liabilities
Measured at amortised cost
2,580
2,570
-
-
11
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
€000
€000
€000
€000
Other debtors
960
958
-
0
-
0
12
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
€000
€000
€000
€000
Other creditors
2,580
2,570
-
0
-
0

The company has outstanding charges over its assets in favour of the group's bankers and a fellow group undertaking. At the balance sheet date the potential liability under these charges was €nil.

13
Share capital
Group and company
2023
2022
€000
€000
Issued and fully paid
100 ordinary shares of £1 each
-
-
European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
Page 24
14
Financial commitments, guarantees and contingent liabilities

Under the Limited Partnership Agreement of European Property Investors Special Opportunities LP, the group is entitled to a portion of the profits made by the Fund over a minimum rate of return for investors. The group's portion of profits, over the minimum return for investors, made on realised deals has been recognised in the group's Statement of Comprehensive Income. There may be a contingent liability in respect of a true-up of income by the Fund. It would only become payable by the group if future deals did not achieve the minimum rate of return for investors. The General Partner of the Fund is of the opinion of that, at this point in time, it is not possible to accurately estimate the future performance and potential true-up. On this basis, the group has not recognised a contingent liability in this set of financial statements.

 

The group has an obligation for the remaining capital commitment of €3.6m (2022: €3.6m) to European Property Investors Special Opportunities LP.

15
Related party transactions

During the year, the group adjusted incentive income upwards by €nil to reflect the increase in the amount expected from the Fund (2022: €0.006m upwards revaluation) and received no investment income (2022: €nil) from European Property Investors Special Opportunities LP, an entity in which the group has a material interest. The group also received finance income of €11k (2022: €1k) from EPISO Special Limited Partner LLC, who have an interest in one of the subsidiaries.

At year end, the group owed €0.839 million (2022: €0.839m) to European Property Investors Special Opportunities LP. The group also owed €0.930m (2022: €0.930m) to European Property Investors Special Opportunities LP in respect of tax advances transferred to the group to be forwarded to EPISO Special Limited Partner LLC.

The group was owed €0.960m (2022: €0.958m) at year end by EPISO Special Limited Partner LLC, in respect of advances made by the group. The group also owed €0.099 million (2022: €0.089m) to European Property Investors Special Opportunities LLC at the year end.

At year end, the group owed €0.696 million (2022: €0.696m) to Natixis Global Asset Management SA, a member of one of the subsidiaries, in respect of distributions payable.

16
Controlling party

The immediate parent company is AEW Europe Holding Limited, a company registered in England and Wales.

The ultimate controlling party is Natixis Asset Management SA, an entity registered in France, by virtue of its ultimate beneficial ownership of the company.

17
Analysis of changes in net funds - group
1 January 2023
Cash flows
31 December 2023
€000
€000
€000
Cash at bank and in hand
777,000
19,000
796,000
European Property Investors Special Opportunities (General Partner) Limited
Notes to the financial statements (Continued)
For the year ended 31 December 2023
Page 25
18
Cash generated from group operations
2023
2022
€000
€000
Profit/(loss) for the year after tax
18
(84)
Adjustments for:
Investment income
(11)
(1)
Changes in fair value of investments
(7)
717
Movements in working capital:
(Increase) in debtors
(2)
-
Increase/(decrease) in creditors
10
(16,386)
Cash generated from/(absorbed by) operations
8
(15,754)
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