Company registration number 12327422 (England and Wales)
M&GP (NO. 2) LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
PAGES FOR FILING WITH REGISTRAR
M&GP (NO. 2) LTD
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 7
M&GP (NO. 2) LTD
BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 1 -
2023
2022
Notes
£
£
£
£
Current assets
Stocks
4
14,623,516
12,950,471
Debtors
5
105,354
38,044
Cash at bank and in hand
247,116
244,534
14,975,986
13,233,049
Creditors: amounts falling due within one year
6
(9,876,361)
(6,049,345)
Net current assets
5,099,625
7,183,704
Creditors: amounts falling due after more than one year
7
(4,580,619)
(6,380,340)
Net assets
519,006
803,364
Capital and reserves
Called up share capital
9
125
125
Equity reserve
10
641,987
821,670
Profit and loss reserves
(123,106)
(18,431)
Total equity
519,006
803,364

The directors of the company have elected not to include a copy of the profit and loss account 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 27 November 2024 and are signed on its behalf by:
Mr T Markham
Director
Company registration number 12327422 (England and Wales)
M&GP (NO. 2) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
1
Accounting policies
Company information

M&GP (No. 2) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 6 Lancaster Way, Ermine Business Park, Huntingdon, Cambridgeshire, United Kingdom, PE29 6XU.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 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. The principal accounting policies adopted are set out below.

1.2
Going concern

At 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.

1.3
Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured at the fair value of the consideration received or receivable, excluding discounts and net of VAT.

Turnover comprises sales of private housing and development properties recognised on legal completion and the invoiced value of other sales after trade discounts, other sales taxes and net of VAT.

1.4
Borrowing costs related to stock

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

1.5
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

M&GP (NO. 2) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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 balance sheet 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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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 creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

M&GP (NO. 2) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 4 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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.

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.

Critical judgements

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

Estimation of deferred consideration on purchase of land

On the purchase of the site, the company entered into a deferred consideration agreement to pay instalments of the liability as the development proceeds, the quantum of which is linked to the final sales value of the properties, subject to minimum values payable. As the timing and amount of the future payments are uncertain, there are key judgements required in the estimation of the cost of the site and the subsequent liability.

Estimation of costs to complete

In order to determine the profit that the company is able to recognise on its developments in a specific period, the company has to allocate site-wide development costs between units built in the current year and in future years. It also has to estimate costs to complete on such developments. In making these assessments there is a degree of inherent uncertainty. The company has developed internal controls to assess and review carrying values and the appropriateness of estimates made.

Carrying value of land and work in progress

The company’s principal activity is residential property development. The majority of the development activity is not contracted prior to the development commencing. The company’s internal controls are designed to identify where the estimated net realisable value of a site is less than its current carrying value within the Balance Sheet. The key judgements in these reviews were estimating the realisable value of a site, which is determined by forecast sales rates, expected sales prices and estimated costs to complete. If the UK housing market were to change beyond management expectations in the future, in particular with regards to the assumptions around sales prices and estimated costs to complete, further adjustments to the carrying value of land and work in progress may be required.

M&GP (NO. 2) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -
3
Employees

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

2023
2022
Number
Number
Total
4
4

The directors did not receive any remuneration (2022: £Nil).

4
Stocks
2023
2022
£
£
Stocks
14,623,516
12,950,471

The company has a capital commitment of £14,359,426 (2022: £14,359,426) as part of the design and build contract to develop the site.

5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
20,000
-
0
Other debtors
82,354
38,044
102,354
38,044
2023
2022
Amounts falling due after more than one year:
£
£
Trade debtors
3,000
-
0
Total debtors
105,354
38,044
6
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
5,907,333
1,748,890
Trade creditors
3,627,475
4,283,442
Other creditors
341,553
17,013
9,876,361
6,049,345
M&GP (NO. 2) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 6 -
7
Creditors: amounts falling due after more than one year
2023
2022
£
£
Trade creditors
2,226,717
4,383,998
Other creditors
2,353,902
1,996,342
4,580,619
6,380,340

A creditor of £5,155,837 (2022: £8,238,200) included within the trade creditor balances represents a deferred consideration agreement on the purchase of the site. The deferred land acquisition costs are payable as the development proceeds, the quantum of which is linked to the final sales values of the properties but is subject to minimum values payable. As this agreement bears no interest, the expected payments have been discounted on inception by a deemed market rate of interest of 8% per annum, the rate being derived based on benchmarking to other finance arrangements of the company. The accrued interest to date of £1,155,031 (2022: £628,190) has been capitalised within work in progress.

8
Loans and overdrafts
2023
2022
£
£
Bank loans
5,907,333
1,748,890
Loans from group undertakings and related parties
950,073
708,425
Other loans
1,403,829
1,287,917
8,261,235
3,745,232
Payable within one year
5,907,333
1,748,890
Payable after one year
2,353,902
1,996,342

The bank loan is secured by fixed charges over the freehold property at Alconbury Weald.

A loan of £5,907,333 (2022: £1,748,890) included within bank loans falling due within one year is secured against the development within work in progress. This loan is repayable on demand and interest accrues on this balance at 6% plus the Bank of England base rate (restricted to at least 0.75%) per annum. Interest accrued on this balance totalled £373,388 (2022: £33,196). This was capitalised against work in progress.

 

A loan of £1,403,829 (2022: £1,287,917) included in other borrowings greater than one year, is a shareholder loan entered into in 2021. As the loan was interest free over five years repayable on 18 November 2026, the loan was discounted on inception by a deemed market rate of interest of 9% per annum.

 

A loan of £950,073 (2022: £708,425) included in other borrowings greater than one year, is a shareholder loan entered into in 2021. As the loan was interest free over five years repayable on 18 November 2026, the loan was discounted on inception by a deemed market rate of interest of 9% per annum.

 

M&GP (NO. 2) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
50
50
50
50
B Ordinary shares of £1 each
75
75
75
75
125
125
125
125

A ordinary shares carry voting rights of one vote per share held while the B ordinary shares carry one third of a vote per share held. Both classes of shares rank pari passu in the right to receive distributions and are not redeemable.

10
Equity reserve

The two shareholder loans are fixed term loans which do not bear any interest. As such, fair value adjustments have been made to these balances to reflect their fair value at drawdown. The balance of the loans which have been drawn down have been discounted over the loan term at a market rate of 9% per annum.

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 unqualified.

Senior Statutory Auditor:
Giuseppe Scozzaro
Statutory Auditor:
Goodman Jones LLP
Date of audit report:
27 November 2024
12
Related party transactions
Transactions with related parties

At the balance sheet date, included within other creditors due within year, is an amount of £322,110 (2022: £nil) relating to amounts loaned from a company controlled by a director. This loan is repayable on demand.

 

At the balance sheet date, included within other borrowings due after more than one year, is loan of £1,403,829 (2022: £1,287,917) from a shareholder. This loan is interest free and repayable on 18 November 2026 unless otherwise agreed by the parties.

 

At the balance sheet date, included within other borrowings due after more than one year, is loan of £950,073 (2022: £708,425) from a shareholder. This loan is interest free and repayable on 18 November 2026 unless otherwise agreed by the parties.

13
Ultimate controlling party

The company's parent entity is Markham & George Property Limited.

 

There is no ultimate controlling party.

M&GP (NO. 2) LTD
MANAGEMENT INFORMATION
FOR THE YEAR ENDED 30 NOVEMBER 2023
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