Registered number: 13968212
AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
UNAUDITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
COMPANY INFORMATION
Page 1
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
REGISTERED NUMBER: 13968212
BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Page 2
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
REGISTERED NUMBER: 13968212
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The Directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the income statement in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 10 form part of these financial statements.
Page 3
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
AG Grafton Centre Unitholder 1 Limited is a private company, limited by shares, registered in England and Wales. The Company's registered number and registered office can be found on the Company Information page.
The principal activity of the Company is the acquisition, development for investment purposes and long-term active management of property in the United Kingdom.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The financial statements for the period ended 31 December 2023 have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the annual budget and future cash flows in making their assessment.
As at 31 December 2023, whilst the Company has net current liabilities of £40,671,544 and net liabilities of £8,328,026, the net current liabilities position was created as a result of borrowing funds from an overseas group entity. This loan will not be repaid until the Company has adequate cash.
The company has taken advantage of the exemption, under the terms of Financial Reporting Standard 102 'The Financial Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
Rental income represents amounts receivable as rent net of VAT and non recoverable property expenses. Rental income that has been invoiced in a period but relates to the subsequent period has been treated as deferred income in the balance sheet. All rental income is earned in the UK and the Company has only one class of business. Any lease incentives are spread over the term of the lease or to the first break if sooner.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Page 4
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Investment properties are stated at fair value. The fair value of investment properties is estimated based on the expected price if the property was sold in an orderly transaction on the open market at the measurement date. The Company will revalue the investment property annually to fair value with the aggregate surplus or deficit being recognised in the profit and loss. In general the Company considers multiple valuation techniques when measuring the fair value of an investment. However in certain circumstances a single valuation technique may be appropriate. Key inputs and assumptions include rental income and expenses projections, related rental income growth rates, occupancy levels, capital improvement costs, discount rates, whether stamp duty is expected to apply, and capitalisation rates.
Investments in unlisted assets are measured at cost less accumulated impairment.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Page 5
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
Financial instruments, or their component parts, are classified on initial recognition as either a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised on the trade date when the Company becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value. Financial instruments are derecognised on the trade date when the Company is no longer a party to the contractual provisions of the instrument.
Financial assets
Financial assets are stated at amortised cost using the effective interest method which is a method of calculating the amortised cost of a financial asset, where this differs from the original transaction value, and of allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial asset.
(i) Cash and cash equivalents - cash comprises cash in hand and on-demand deposits less overdrafts. Cash equivalents comprise short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in fair value.
(ii) Trade receivables - trade receivables are recognised and carried at the original transaction value. A provision for impairment is established where there is evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables concerned.
Financial liabilities
Financial liabilities and equity are classified according to the substance of the financial instruments contractual obligations, rather than the financial instruments legal form.
(i) Bank loans and fixed rate loans - bank loans and fixed rate loans are included as financial liabilities on the balance sheet at the amounts drawn on the particular facilities, less costs directly attributable to the arrangement of those facilities. Such arrangement costs are charged to profit or loss over the period of the facilities and credited to the loan balance. Interest payable is expensed as a finance cost in the year to which it relates.
(ii) Interest rate derivatives - the Company uses derivative financial instruments to manage the interest rate risk associated with the financing of the Company's business. At each reporting date, these interest rate derivatives are measured at fair value, being the estimated amount that the Company would receive or pay to terminate the agreement at the balance sheet date, taking into account current interest rates and the current credit rating of the counterparties. The gain or loss at each fair value remeasurement is recognised in the income statement because the Company does not apply hedge accounting.
(iii) Trade payables - trade payables are recognised and carried at the original transaction value.
Page 6
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of financial statements in accordance with FRS 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland, requires the use of certain critical accounting estimates and judgements. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on the Company's best knowledge of the amount, event or actions, actual results may differ from those estimates. The following is intended to provide an understanding of the policies that the Company consider critical because of the level of complexity, judgement or estimation involved in their application and their impact on the financial statements.
Investment property valuation
Investment property is revalued annually to fair value using an income capitalisation technique. The valuation is based upon assumptions including future rental value, anticipated property costs, future development costs and the appropriate discount rate. Reference is also made to market evidence of transaction prices for similar properties.
Fair value measurement of derivatives
The Company uses derivative financial instruments to hedge against the exposure to fluctuations in interest rates. Fair value measurement of derivatives is inherently complex and is carried out by a third party with the necessary expertise to mitigate the estimation uncertainty.
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The average monthly number of employees, including directors, during the year was 0 (2022 - 0).
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During the period, the Company purchased units in a unit trust. These units are held at cost less impairment.
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Page 7
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Freehold investment property
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The Company appointed Cushman and Wakefield Limited to carry out an external valuation of the investment property at 31 December 2022. The valuation has been carried out in accordance with RICS Valuation - Global Standards and the market value has primarily been derived using comparable recent market transactions on arm's length terms. For 2023, the Directors carried out an internal valuation of the Company's investment property using an income capitalisation technique, whereby contracted and market rental values are capitalised with a market capitalisation rate. The resulting valuations are crosschecked against the equivalent yields and the fair market values per square foot derived from comparable recent market transactions on arm's length terms. For investment properties under construction, the fair value is calculated by estimating the fair value of the completed property using the income capitalisation technique less estimated costs to completion and a risk premium.
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Due after more than one year
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Derivative financial instruments (after 1 yr)
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On 1 November 2022, the Company purchased an interest rate cap at a cost of £1,712,500 and at an interest rate of 3.5%. The interest rate cap matures on 28 February 2026 and the notional value is £35,000,000. The derivative financial instruments are reported at fair value in these financial statements. The fair values have been estimated using the mid-point of the yield curves prevailing at the balance sheet date and represent the net present value of the differences between the contracted rate and the valuation rate when applied to the projected balances for the period from the reporting date to the contracted expiry dates.
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Prepayments and accrued income
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Page 8
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Creditors: Amounts falling due within one year
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Amounts owed to related parties
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Accruals and deferred income
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The amounts owed to related parties represents a Bridge Facility Loan. The rate of interest is 8% per annum compounding monthly and the repayment date will be mutually agreed with the lenders.
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Creditors: Amounts falling due after more than one year
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Amounts owed to related parties
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The amounts owed to related parties represents a non-interest bearing loan.
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The Company's financial instruments may be analysed as follows:
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Financial assets measured at fair value through profit or loss
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Financial assets measured at amortised cost
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Page 9
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AG GRAFTON CENTRE UNITHOLDER 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Financial liabilities measured at amortised cost
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The Company entered into interest rate cap arrangements described in note 7. These derivative financial instruments are reported at fair value in these financial statements. The fair values of the Company's interest rate cap have been estimated using the mid-point of the yield curves prevailing at the balance sheet date and represent the net present value of the differences between the contracted rate and the valuation rate when applied to the projected balances for the period from the reporting date to the contracted expiry dates.
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Charged to profit or loss
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Authorised, allotted, called up and fully paid
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1 (2022 - 1) Ordinary share of £1.00
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Page 10
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