Company registration number 15090929 (England and Wales)
LONDON PROPCO 7 LIMITED
Financial statements
For the period ended 31 March 2024
Pages for filing with registrar
LONDON PROPCO 7 LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 7
LONDON PROPCO 7 LIMITED
STATEMENT OF FINANCIAL POSITION
As at 31 March 2024
- 1 -
2024
Notes
£
£
Non-current assets
Investment property
5
31,700,000
Current assets
Trade and other receivables
6
646,795
Cash and cash equivalents
62,226
709,021
Current liabilities
7
(20,082,976)
Net current liabilities
(19,373,955)
Total assets less current liabilities
12,326,045
Non-current liabilities
8
(11,560,000)
Provisions for liabilities
9
(250,217)
Net assets
515,828
Equity
Called up share capital
10
1
Retained earnings
515,827
Total equity
515,828
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 October 2024 and are signed on its behalf by:
Mr N Thompson
Director
Company registration number 15090929 (England and Wales)
LONDON PROPCO 7 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 March 2024
- 2 -
1
Accounting policies
Company information
London Propco 7 Limited is a private company limited by shares incorporated in England and Wales. The registered office is Connect House, 133-137 Alexandra Road, London, SW19 7JY.
1.1
Reporting period
These financial statements detail the results of the company for the period from incorporation on 23 August 2023 to 31 March 2024. The accounting year-end was chosen to coincide with other group companies.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.3
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Revenue and expenditure
Revenue comprises rental income receivable from the tenants of the investment property. This revenue is recognised in the period to which the income is receivable.
Cost of sales represents the management fees incurred by the company. Administrative expenses include costs associated with the operation of the company. Both are recognised in the period to which the expenses relate.
1.5
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments' and Section 12 ‘Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
LONDON PROPCO 7 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
1
Accounting policies
(Continued)
- 3 -
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, 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 payables are obligations to pay for 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
LONDON PROPCO 7 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
- 4 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The key source of estimation uncertainty relates to the valuation of property where an external valuation is obtained and is inherently subjective due to the assumptions applied by the valuers.
3
Auditor's remuneration
2024
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the company
15,250
4
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2024
Number
Total
5
Investment property
2024
£
Fair value
At 23 August 2023
Additions
31,127,030
Revaluations
572,970
At 31 March 2024
31,700,000
LONDON PROPCO 7 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
5
Investment property
(Continued)
- 5 -
The fair value of the investment property at the year end is £31.7m. The basis for the valuation is in accordance with the latest version of the RICS Valuation - Global Standards. The fair value has been arrived at on the basis of a valuation carried out by CBRE Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties and taking into account a deduction for all costs necessary to complete the development program.
CBRE have provided two valuations of the investment property. The difference between the two valuations are the purchase cost allowances which vary depending on how the asset is sold: individually or within a corporate wrapper. The asset value of £31.7m reflects the assumption it will be sold within a corporate wrapper and therefore the purchase cost allowances are 4.5% lower than an individual asset sale. If the property were to be sold individually the asset value would be £30.4m
6
Trade and other receivables
2024
Amounts falling due within one year:
£
Other receivables
646,795
7
Current liabilities
2024
£
Trade payables
5,930
Amounts owed to group undertakings
19,365,108
Corporation tax
19,725
Other taxation and social security
194,021
Other payables
498,192
20,082,976
Amounts owed to group undertakings are interest free and repayable on demand.
8
Non-current liabilities
2024
£
Other payables
11,560,000
The company is a guarantor to a loan agreement between it’s parent company, London Propco 5 Limited as the borrower and Santander UK PLC as the Lender for a loan of £20.8m. The company has provided security for this loan by a fixed and floating charge over the assets of the company.
Income and expenses relating to the company are received into and paid out of bank accounts held by the parent company London Propco 5.
LONDON PROPCO 7 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
- 6 -
9
Provisions for liabilities
2024
£
Deferred tax liabilities
250,217
10
Called up share capital
2024
2024
Ordinary share capital
Number
£
Issued and fully paid
Ordinary share of £1 each
1
1
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was qualified and the auditor reported as follows:
We have audited the financial statements of London Propco 7 Limited (the 'Company') for the period ended 31 March 2024 which comprise the income statement, the statement of financial position 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 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, except for the effects of the matter described in the Basis for qualified opinion section of our report, the financial statements:
give a true and fair view of the state of the Company's affairs as at 31 March 2024 and of its profit for the period 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 qualified opinion
Management has not impaired the investment property asset so that it is stated at the lower of carrying amount and recoverable amount, which constitutes a departure from the requirements of Financial Reporting Standard 102.
As stated in note 5 of the financial statements, an independent valuation of the investment property has been obtained. The independent valuation states the fair value of the investment property, if it were sold as an individual asset by the Company at the balance sheet date, at £30,400,000.
Accordingly, the investment property should be included in the balance sheet at the recoverable amount of £30,400,000 and an impairment of £727,030 should be recognised in the income statement. A deferred tax credit of £181,758 would arise in respect of the impairment and would be available to reduce the deferred tax provision and the charge in the income statement.
LONDON PROPCO 7 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
11
Audit report information
(Continued)
- 7 -
The financial statements include the investment property at a valuation of £31,700,000, being the independent valuation of the asset if it were sold within the corporate wrapper of the Company. In showing this higher value as the carrying value of the investment property asset, the financial statements also include a revaluation of the investment property of £572,970 and a related deferred tax charge of £143,243.
The adjustments to remove the £572,970 revaluation and to recognise the £727,030 impairment along with the aggregate related £325,000 deferred tax credit would reduce the profit for the financial period and shareholders' equity at the balance sheet date by £975,000.
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.
Senior Statutory Auditor:
Simon Marsh FCA
Statutory Auditor:
WSM Advisors Limited
Date of audit report:
28 October 2024
12
Ultimate controlling party
At 31 March 2024 the company's immediate parent company is London Propco 5 Limited, a company incorporated in the UK with its registered office at Connect House, 133-137 Alexandra Road, London SW19 7JY.
At 31 March 2024 the ultimate controlling party is London Propco 6 Limited, a company incorporated in the UK with its registered office at Connect House, 133-137 Alexandra Road, London SW19 7JY.
The results of the company are consolidated into the financial statements of London Propco 6 Limited, the parent company, a company incorporated in the UK with its registered office at Connect House, 133-137 Alexandra Road, London SW19 7JY.