Company registration number 15069667 (England and Wales)
LONDON PROPCO 6 LIMITED
Annual report and consolidated financial statements
For the period ended 31 March 2024
Pages for filing with registrar
LONDON PROPCO 6 LIMITED
CONTENTS
Page
Group statement of financial position
1
Company statement of financial position
2
Notes to the financial statements
3 - 10
LONDON PROPCO 6 LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
As at 31 March 2024
- 1 -
2024
Notes
£
£
Non-current assets
Investment property
5
57,200,000
Current assets
Trade and other receivables
8
1,287,089
Cash and cash equivalents
15,581,892
16,868,981
Current liabilities
9
(1,404,840)
Net current assets
15,464,141
Total assets less current liabilities
72,664,141
Non-current liabilities
10
(20,557,228)
Provisions for liabilities
11
(494,801)
Net assets
51,612,112
Equity
Called up share capital
12
503,414
Share premium account
13
49,837,986
Retained earnings
1,270,712
Total equity
51,612,112

The directors of the group have elected not to include a copy of the income statement within the financial statements.

These financial statements have been prepared in accordance with the provisions applicable to groups and 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 15069667 (England and Wales)
LONDON PROPCO 6 LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2024
- 2 -
2024
Notes
£
£
Non-current assets
Investments
6
1
Current assets
Trade and other receivables
8
50,369,334
Current liabilities
9
(23,396)
Net current assets
50,345,938
Net assets
50,345,939
Equity
Called up share capital
12
503,414
Share premium account
13
49,837,986
Retained earnings
4,539
Total equity
50,345,939

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £254,555.

These financial statements have been prepared 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 15069667 (England and Wales)
LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
For the period ended 31 March 2024
- 3 -
1
Accounting policies
Company information

London Propco 6 Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Connect House, 133-137 Alexandra Road, London, SW19 7JY.

 

The group consists of London Propco 6 Limited and all of its subsidiaries.

1.1
Reporting period

These financial statements detail the results of the company for the period from incorporation on 14 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
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company London Propco 6 Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

1.5
Revenue and expenditure

Turnover comprises rental income receivable from the tenants of the investment properties. This turnover is recognised in the period to which the income is receivable.

 

Cost of sales represents the cost of providing service charges to residents of the investment property, together with certain management fees incurred by the group. Administrative expenses include costs associated with the operation of the group. Both are recognised in the period to which the expenses relates.

1.6
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.

LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
1
Accounting policies
(Continued)
- 4 -
1.7
Non-current investments

In the parent company financial statements, investments in subsidiaries 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.

1.8
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.

1.9
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 statement of financial position 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 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.

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.

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.

LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
1
Accounting policies
(Continued)
- 5 -
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 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 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 payables 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.

Derecognition of financial liabilities

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

1.10
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.

1.11
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
1
Accounting policies
(Continued)
- 6 -
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 if, and only if, there is 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.

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.

 

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 group and company
6,950
Audit of the financial statements of the company's subsidiaries
37,450
44,400
4
Employees

The average monthly number of persons (including directors) employed by the group and company during the period was:

Group
Company
2024
2024
Number
Number
Total
-
0
-
0
LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
- 7 -
5
Investment property
Group
Company
2024
2024
£
£
Fair value
At 14 August 2023
-
-
Additions
56,193,907
-
Revaluations
1,006,093
-
At 31 March 2024
57,200,000
-

The fair value of the investment properties at the year end is £57.2m. 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 for each 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 total asset value of £57.2m reflects the assumption the properties will be sold within their corporate wrappers and therefore the purchase cost allowances are 4.5% lower than an individual asset sale. If the properties were to be sold individually, the total asset value would be £54.8m.

6
Investments
Group
Company
2024
2024
£
£
Shares in group undertakings and participating interests
-
1
Movements in non-current investments
Company
Shares in subsidiaries
£
Cost or valuation
At 14 August 2023
-
Additions
1
At 31 March 2024
1
Carrying amount
At 31 March 2024
1
7
Subsidiaries

Details of the company's subsidiaries at 31 March 2024 are as follows:

LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
7
Subsidiaries
(Continued)
- 8 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
London Propco 5 Limited
United Kingdom
Ordinary
100
-
London Propco 7 Limited
United Kingdom
Ordinary
-
100
London Propco 8 Limited
United Kingdom
Ordinary
-
100
8
Trade and other receivables
Group
Company
2024
2024
Amounts falling due within one year:
£
£
Trade receivables
43,491
-
0
Amounts owed by group
-
0
50,352,884
Other receivables
1,243,598
16,450
1,287,089
50,369,334

Amounts owed by group are interest free and repayable on demand.

9
Current liabilities
Group
Company
2024
2024
£
£
Trade payables
20,410
12,244
Corporation tax payable
36,517
-
0
Other taxation and social security
304,449
-
0
Dividends payable
1
1
Other payables
1,043,463
11,151
1,404,840
23,396
10
Non-current liabilities
Group
Company
2024
2024
£
£
Bank loans and overdrafts
20,557,228
-
0

On 25 September 2023, the group obtained a bank loan of £20.8m. The bank loan is secured by a fixed and floating charge over the assets of the company's subsidiaries. The loan bears interest at the aggregate of the margin and cumulative reference rate of that day, which is 6.836%, and is repayable on 24 September 2026. The loan balance includes the loan net of transaction costs which are amortised over the period of the loan.

LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
- 9 -
11
Provisions for liabilities
Group
Company
2024
2024
£
£
Deferred tax liabilities
494,801
-
0
12
Share capital
Group and company
2024
2024
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
503,414
503,414
13
Share premium account
Group
Company
2024
2024
£
£
At the beginning of the period
-
0
-
0
Issue of new shares
49,837,986
49,837,986
At the end of the period
49,837,986
49,837,986
14
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:

Qualified Opinion

We have audited the financial statements of London Propco 6 Limited (the 'Parent Company') and its subsidiaries (together the 'Group') for the period ended 31 March 2024 which comprise the Group income statement, the Group statement of financial position, the company 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:

LONDON PROPCO 6 LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
For the period ended 31 March 2024
14
Audit report information
(Continued)
- 10 -

Basis for qualified opinion

Management has not impaired the Group's investment property assets so that they are 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 properties has been obtained. The independent valuation states the fair value of the investment properties, if they were sold as individual assets at the balance sheet date at £54,800,000.

Accordingly, the investment properties should be included in the balance sheet at a valuation of £54,800,000 and an impairment of £1,393,907 should be recognised in the statement of comprehensive income. A deferred tax credit of £348,477 would arise in respect of the impairment and would be available to reduce the deferred tax provision and the charge in the income statement.

The financial statements include the investment properties at a valuation of £57,200,000, being the independent valuation of the investment property assets if they were sold within the corporate wrapper of the subsidiary company by which they are owned. In showing this higher value as the carrying value of the investment property assets, the financial statements also include a revaluation of the investment properties of £1,006,093 and a related deferred tax charge of £251,523.

The adjustments to remove the £1,006,093 revaluation and recognise the £1,393,907 impairment along with the aggregate related £600,000 deferred tax credit would reduce the profit for the financial period and shareholders' equity at the balance sheet date by £1,800,000.

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 group and parent 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
Statutory Auditor:
WSM Advisors Limited
Date of audit report:
28 October 2024
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