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REGISTERED NUMBER: 04893064 (England and Wales)




REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

FOR

MELL SQUARE LIMITED

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)






CONTENTS OF THE FINANCIAL STATEMENTS
for the year ended 31 December 2023




Page

Company Information 1

Report of the Directors 2

Report of the Independent Auditors 3

Statement of Comprehensive Income 6

Balance Sheet 7

Statement of Changes in Equity 8

Notes to the Financial Statements 9


MELL SQUARE LIMITED

COMPANY INFORMATION
for the year ended 31 December 2023







DIRECTORS: Mr P Q Carroll
Mr M Clayton





SECRETARY: Mr A P Kinsey





REGISTERED OFFICE: Council House
Manor Square
Solihull
West Midlands
B91 9QS





REGISTERED NUMBER: 04893064 (England and Wales)





AUDITORS: Luckmans Duckett Parker Limited
Chartered Accountants
Statutory Auditors
1110 Elliott Court
Herald Avenue
Coventry Business Park
Coventry
West Midlands
CV5 6UB

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

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.

DIVIDENDS
The directors have not paid or proposed any dividends during the year (2022: £Nil).

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

Mr P Q Carroll
Mr M Clayton

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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Luckmans Duckett Parker Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





Mr M Clayton - Director


5 September 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MELL SQUARE LIMITED

Opinion
We have audited the financial statements of Mell Square Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:
-give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' 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.

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.

Other information
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Directors has been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MELL SQUARE LIMITED


Matters on which we are required to report by exception
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 material misstatements in the Report of the Directors.

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:
- 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; or
- the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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 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.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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.

Our approach to designing audit procedures by tailoring and directing testing to aid and support the determined level of risk.
In response, the procedures we perform to determine the level of risk include:

- reference to history and experience of the Entity; and
- enquiry of management, including obtaining and reviewing supporting documentation concerning the
Entity's procedures relating to:

- identifying and complying with laws and regulations and whether they were aware of any instances
of non-compliance; and

- detection and response to risk of fraud and whether they were aware of any actual or suspected
instances of fraud; and
- assessment of the controls and processes that the Entity has in place to mitigate risk.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
MELL SQUARE LIMITED

Our assessments included the identification of the following potential areas for fraud:
- management override of control; and
- revenue recognition.

These procedures, and the extent to which they are capable of detecting irregularities, including fraud, are detailed below:
- critically assessed the appropriateness and testing the application of the revenue and cost recognition
policies; and
- testing the appropriateness of accounting estimates, journals and other adjustments made in the
preparation of the financial statements; and
- reviewing the Entity's accounting policies for non-compliance with relevant standards; and
- making enquiries of management and reviewing correspondence with the relevant authorities to
identify any irregularities or instances of non-compliance with laws and regulations.

In performing an audit in accordance with UK GAAP, we exercise professional judgement and maintain professional scepticism throughout the audit process.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion or override of internal controls. There are inherent limitations in the audit procedures performed.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.




Mr Ashwani Rishiraj FCA (Senior Statutory Auditor)
for and on behalf of Luckmans Duckett Parker Limited
Chartered Accountants
Statutory Auditors
1110 Elliott Court
Herald Avenue
Coventry Business Park
Coventry
West Midlands
CV5 6UB

5 September 2024

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

STATEMENT OF COMPREHENSIVE
INCOME
for the year ended 31 December 2023

2023 2022
Notes £    £   

TURNOVER 6,206,142 5,886,817

Cost of sales 3,908,338 3,226,132
GROSS PROFIT 2,297,804 2,660,685

Administrative expenses 216,973 345,175
2,080,831 2,315,510

Other operating income - 215,132
OPERATING PROFIT 5 2,080,831 2,530,642

Interest receivable and similar income 37,716 7,620
2,118,547 2,538,262
Gain/loss on revaluation of investment
property

(159,080

)

(2,109,988

)
1,959,467 428,274

Interest payable and similar expenses 6 1,962,263 1,970,378
LOSS BEFORE TAXATION (2,796 ) (1,542,104 )

Tax on loss 7 (39,770 ) (111,214 )
PROFIT/(LOSS) FOR THE FINANCIAL
YEAR

36,974

(1,430,890

)

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

36,974

(1,430,890

)

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

BALANCE SHEET
31 December 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Investment property 8 26,454,467 26,613,547

CURRENT ASSETS
Debtors 9 2,914,186 2,824,428
Cash at bank 971,420 5,993,281
3,885,606 8,817,709
CREDITORS
Amounts falling due within one year 10 2,973,361 40,439,657
NET CURRENT ASSETS/(LIABILITIES) 912,245 (31,621,948 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

27,366,712

(5,008,401

)

CREDITORS
Amounts falling due after more than one
year

11

(32,377,909

)

-

PROVISIONS FOR LIABILITIES 15 (695,890 ) (735,660 )
NET LIABILITIES (5,707,087 ) (5,744,061 )

CAPITAL AND RESERVES
Called up share capital 16 1,000 1,000
Share premium 17 15,058,226 15,058,226
Retained earnings 17 (20,766,313 ) (20,803,287 )
SHAREHOLDERS' FUNDS (5,707,087 ) (5,744,061 )

The financial statements were approved by the Board of Directors and authorised for issue on 5 September 2024 and were signed on its behalf by:





Mr M Clayton - Director


MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   
Balance at 1 January 2022 1,000 (19,372,397 ) 15,058,226 (4,313,171 )

Changes in equity
Total comprehensive income - (1,430,890 ) - (1,430,890 )
Balance at 31 December 2022 1,000 (20,803,287 ) 15,058,226 (5,744,061 )

Changes in equity
Total comprehensive income - 36,974 - 36,974
Balance at 31 December 2023 1,000 (20,766,313 ) 15,058,226 (5,707,087 )

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2023

1. STATUTORY INFORMATION

Mell Square Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies. Judgements made by the directors, in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 3.

The following principal accounting policies have been applied consistently to all periods presented in these financial statements, unless otherwise stated.

Going concern
At 31 December 2023 the company has net current assets of £912,245 (2022: net current liabilities £31,621,948) and net liabilities of £5,707,087 (2022: £5,744,061). The Directors have prepared cash flow forecasts for the period through to 31 August 2025 which shows that the company is able to meet its obligations as they fall due. The Directors would like to note that during the year, the terms of the loan agreement with the Parent Company were fully complied with, but a waiver of the covenants has been received. Having considered future cash flow scenarios, and whilst the expectation is that the terms of the loan agreement will be complied with, in a reasonable and plausible downside scenario the Company will require the Parent Company to either defer loan interest, capital repayments or head lease payments.

In preparing these cash flow forecasts, the Directors have received confirmation from its Parent Company, Solihull Metropolitan Borough Council ('the Council'), that it would be prepared to defer loan interest, capital repayments and head lease payments to 31 August 2025, in the event that this was required to enable the Company to maintain a positive cash balance. This confirmation is not legally binding but based on the previous support from the Parent Company, the Directors believe there is a reasonable expectation to rely on this and have concluded that is appropriate to prepare the financial statements on a going concern basis.

Preparation of financial statements
The Company’s ultimate parent undertaking, Solihull Metropolitan Borough Council (‘SMBC’), includes the Company in its consolidated financial statements. The consolidated financial statements of SMBC are prepared in accordance with proper accounting practices. The Council is required under the Accounts and Audit Regulations 2015 to prepare an annual Statement of Accounts in accordance with proper accounting practices. These practices primarily comprise the CIPFA/ LASAAC Code of Practice 2020/21, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 21 (2) of the Local Government Act 2003. The accounts are available to the public and may be obtained at https://www.solihull.gov.uk/About-the-Council/Financial-documents.

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows;
the requirement of paragraph 3.17(d);
the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and
11.48(c);
the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirement of paragraph 33.7.

Turnover
Turnover comprises of rents receivable less value added tax.

Rental income from operating leases is credited to the statement of comprehensive income on a straight-line basis over the term of the relevant lease.

Amounts paid and payable as an incentive to sign an operating lease are recognised as a reduction to income over the lease term on a straight-line basis unless another systematic basis is representative of the time pattern over which the lessor's benefit from the leased asset is diminished.

Interest income
Interest income is recognised in the statement of comprehensive income using the effective interest method.

Borrowing costs
All borrowing costs are recognised in the statement of comprehensive income in the year in which they are incurred.

Investment property
Investment property is measured on initial recognition at its cost. Subsequent to initial recognition, investment property is remeasured to fair value at the reporting date. The fair value of investment property is determined annually by the directors or external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in the fair value are recognised in the statement of comprehensive income.

Financial instruments
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors (excluding prepayments) and creditors (excluding deferred income), loans owed to parent undertakings and amounts owed to parent undertakings.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at the present value of the future cash flows and subsequently at amortised cost using the effective interest method.

Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the Balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.

Current taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Operating leases: the company as lessee
Rentals paid under operating leases are charged to the statement of comprehensive income on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

3. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION

In preparing the financial statements, the directors have made the following judgement:

(i) Valuations performed by the directors or external valuers have been used as the fair value of investment properties. The valuation is performed according to RICS rules, using appropriate levels of professional judgement for the prevailing market conditions. Professional judgement is applied in determining key inputs such as the appropriate yield for a given property and estimated rental values.

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

4. EMPLOYEES AND DIRECTORS

The directors, the only employees of the Company, did not receive remuneration for their services to the Company as these services were incidental to their wider responsibilities for Solihull Metropolitan Borough Council.

2023 2022
£    £   
Directors' remuneration - -

5. OPERATING PROFIT

The operating profit is stated after charging:

2023 2022
£    £   
Operating lease expense 2,320,301 2,320,301
Fair value loss on the remeasurement of investment property 159,080 2,109,988
Auditor's remuneration 18,500 50,175
Impairment loss on trade debtors - 79,709

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank loan interest 1,958,865 1,970,378
Financial arrangement fees 3,398 -
1,962,263 1,970,378

7. TAXATION

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax - 39,652

Deferred tax (39,770 ) (150,866 )
Tax on loss (39,770 ) (111,214 )

UK corporation tax has been charged at 23.50% (2022 - 19%).

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

7. TAXATION - continued

Reconciliation of total tax credit included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Loss before tax (2,796 ) (1,542,104 )
Loss multiplied by the standard rate of corporation tax in the UK of
23.500% (2022 - 19%)

(657

)

(293,000

)

Effects of:
Expenses not deductible for tax purposes 37,384 447,821
Capital allowances in excess of depreciation (99,406 ) (100,948 )
Adjustments to tax charge in respect of previous periods - (93,975 )
Impact of different deferred tax rates - (447,245 )
Deferred tax not recognised 22,909 376,133
Total tax credit (39,770 ) (111,214 )

Factors that may affect future tax charges

The Company currently has unused realised capital losses carried forward of £9,866,887 (2022: £9,866,887) and unrealised capital losses carried forward of £41,326,450 (2022: £41,167,370) which were fully provided for). No deferred tax asset in respect of these losses, which would amount to approximately £13,048,334 (2022: £13,008,564), has been recognised as there is insufficient certainty as to when the asset will be recovered.

As of 1 April 2023, the main rate of UK corporation tax increased from 19% to 25%. As the company's financial year straddles this date, a blended corporation tax rate of 23.5% has been applied which is calculated by apportioning the two tax rates on a weighted basis for the proportion of the financial year for which each main tax rate was applicable.

8. INVESTMENT PROPERTY
Total
£   
FAIR VALUE
At 1 January 2023 26,613,547
Revaluations (159,080 )
At 31 December 2023 26,454,467
NET BOOK VALUE
At 31 December 2023 26,454,467
At 31 December 2022 26,613,547

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

8. INVESTMENT PROPERTY - continued

The fair value of investment properties held as of 31 December 2023 was determined by an independent valuer, Cushman & Wakefield Debenham Tie Leung Limited, who are a member of the Royal Institute of Chartered Surveyors (RICS), on an open market value for existing use basis, having an appropriate recognised professional qualification and recent experience in the location and class of property being valued.

Investment properties are professionally valued annually using a yield methodology based upon comparable evidence available in the market. There is an inevitable degree of judgement involved in that each property is unique and its value can only ultimately be reliably tested in the market itself.

The valuations, which are supported by market evidence, are prepared by considering the aggregate of the net annual rent receivable from the properties and where relevant, associated costs, including assumptions for capital expenditure on planned refurbishment. A yield which reflects the specific risks inherent in the net cash flows is then applied to the net annual rentals to arrive at the property valuation.

The valuation has applied equivalent yields ranging between 5.85% and 20% (2022: 6.5% to 20%).

The historic cost of the freehold investment properties as at 31 December 2023 was £5,152,808 (2022: £5,152,808). The historic cost of the leasehold investment properties as at 31 December 2023 was £63,363,800 (2022: £63,363,800).

9. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 817,664 654,933
Other debtors 1,446,476 1,241,829
Prepayments and accrued income 650,046 927,666
2,914,186 2,824,428

All amounts shown under debtors fall due for payment within one year except for prepayments and accrued income amounting to £545,533 (2022: £601,265) which fall due after more than one year. Other debtors primarily comprise of amounts owed from a cash management agent and is repayable to the Company on demand. Trade debtors are shown net of a provision of £355,628 (2022: £460,798).

10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Loans owed to parent undertakings
(see note 12) 128,334 32,730,966
Amounts owed to group undertakings 1,579,586 5,770,445
Tax 39,652 39,652
VAT 341,634 331,422
Other creditors - 332,793
Accruals and deferred income 884,155 1,234,379
2,973,361 40,439,657

Amounts owed to the parent undertaking of £1,579,586 (2022: £5,770,445) relates to accrued interest and other balances settled by Solihull Metropolitan Borough Council ('SMBC') on the Company's behalf. This balance is payable on demand.

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

11. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
£    £   
Loans owed to parent undertakings
(see note 12) 32,377,909 -
32,377,909 -

12. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Loans owed to parent undertakings 128,334 32,730,966

Amounts falling due between one and two years:
Loans owed to parent undertakings 134,262 -

Amounts falling due in more than five years:

Repayable by instalments
Loans owed to parent
undertakings due over 5 years 32,243,647 -
32,243,647 -

Loans owed to the company's parent undertaking represents loans to Solihull Metropolitan Borough Council of £32,377,909 (2022: £32,730,966). The loan terms were documented in a facility agreement dated 20 July 2022 which confirmed the rate of interest from the loan inception on 9 April 2021 with a term of 50 years at 6.01%. Quarterly instalments of £518,633.25 inclusive of interest are scheduled up to the final repayment date on 9 April 2071.

13. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£    £   
Within one year 2,320,303 2,320,303
Between one and five years 9,281,208 9,281,208
In more than five years 141,048,933 143,369,235
152,650,444 154,970,746

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

13. LEASING AGREEMENTS - continued

The total future minimum lease payments receivable under non-cancellable operating leases are as follows:

2023 2022
£ £
Within one year 4,952,580 5,251,038
Between one and five years 11,980,093 14,634,452
After five years 49,487,917 53,842,006
66,420,591 71,518,325

14. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
£    £   
Loans owed to parent 32,377,909 32,730,966

Loans owed to the company's parent undertaking is secured against all assets of the company including investment property by way of a fixed charge.

15. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax 695,890 735,660

Deferred
tax
£   
Balance at 1 January 2023 735,660
Provided during year (39,770 )
Balance at 31 December 2023 695,890

16. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
1,000 Ordinary £1 1,000 1,000

17. RESERVES

The profit and loss account represents the accumulated comprehensive income for the current year and prior years, less cumulative dividends paid.

The share premium represents the amount received on the issue of share capital in excess of the nominal value.

MELL SQUARE LIMITED (REGISTERED NUMBER: 04893064)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 December 2023

18. RELATED PARTY DISCLOSURES

As at the year end, the Company is controlled by Solihull Metropolitan Borough Council.

The Company has taken advantage of the exemption conferred by FRS 102 paragraph 33.1A not to disclose transactions with wholly owned subsidiaries within the group.

19. ULTIMATE PARENT COMPANY AND PARENT UNDERTAKING OF LARGER GROUP

The Company's immediate and ultimate parent company is Solihull Metropolitan Borough Council.

The largest and smallest group in which the results of the Company is that headed by Solihull Metropolitan Borough Council. The consolidated financial statements are available to the public and may be obtained at https://www.solihull.gov.uk/About-the-Council/Financial-documents.