REGISTERED NUMBER: 09878652 (England and Wales) |
REPORT OF THE DIRECTORS AND |
AUDITED |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
MERCURY LAND HOLDINGS LIMITED |
REGISTERED NUMBER: 09878652 (England and Wales) |
REPORT OF THE DIRECTORS AND |
AUDITED |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
MERCURY LAND HOLDINGS LIMITED |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
Page |
Company Information | 1 |
Report of the Directors | 2 |
Report of the Independent Auditors | 4 |
Consolidated Income Statement | 7 |
Consolidated Other Comprehensive Income | 8 |
Consolidated Balance Sheet | 9 |
Company Balance Sheet | 10 |
Consolidated Statement of Changes in Equity | 11 |
Company Statement of Changes in Equity | 12 |
Consolidated Cash Flow Statement | 13 |
Notes to the Consolidated Financial Statements | 14 |
MERCURY LAND HOLDINGS LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MARCH 2024 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: | Shahid Hameed FCA FCCA |
AUDITORS: |
Chartered Accountants |
and Statutory Auditors |
34-40 High Street |
Wanstead |
London |
E11 2RJ |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 MARCH 2024 |
The directors present their report with the financial statements of the company and the group for the year ended 31 March 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of the renting and operating of owned or leased real estate. |
GOING CONCERN |
The group continued to generate significant operational cash flows and continued to increase operations year-on-year. Despite this, the group balance sheet as at 31 March 2024 shows net current liabilities of £5,505,505 (2023: £4,008,758) and negative retained earnings of £3,122,794 (2023: £2,782,649). These losses have been driven pre-dominantly by the interest and financing costs associated with the investment by the group in growing its property portfolio. The result of this investment is that the group has an exceptionally strong balance sheet position with net assets of £19,215,501 (2023: £19,555,646). The group also has a number of future schemes in hand that are expected to deliver significant profits in future years. |
The group continues to meet its day to day working capital requirements through operating cash flows and funds all investment via financing from the ultimate controlling entity, "The London Borough of Havering". |
The ultimate controlling entity continues to give financial support to the group by injecting funds as necessary and has confirmed it will continue this support for at least 12 months from the date of approving these accounts. |
Having considered all the relevant facts the directors consider it is appropriate to prepare the financial statements on a going concern basis. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 April 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
DIRECTORS' RESPONSIBILITIES STATEMENT |
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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information. |
AUDITORS |
The auditors, THP Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 MARCH 2024 |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MERCURY LAND HOLDINGS LIMITED |
Opinion |
We have audited the financial statements of Mercury Land Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement 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 group's and of the parent company affairs as at 31 March 2024 and of the group's loss 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 group 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 group's and the parent 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. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company 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 prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Group Strategic Report or in preparing the Report of the Directors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MERCURY LAND HOLDINGS LIMITED |
Responsibilities of directors |
As explained more fully in the Directors' Responsibilities Statement 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 group's and the parent 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 group or the parent 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 the audit was considered capable of detecting irregularities including fraud |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the group operates; |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, planning regulations, environmental and health and safety legislation; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC and any other relevant regulators as required. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MERCURY LAND HOLDINGS LIMITED |
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. |
for and on behalf of |
Chartered Accountants |
and Statutory Auditors |
34-40 High Street |
Wanstead |
London |
E11 2RJ |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
CONSOLIDATED INCOME STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
TURNOVER | 3 | 3,289,761 | 2,760,387 |
Cost of sales | 565,833 | 421,155 |
GROSS PROFIT | 2,723,928 | 2,339,232 |
Property related costs | 683,448 | 602,805 |
Administrative expenses | 417,956 | 455,771 |
1,101,404 | 1,058,576 |
1,622,524 | 1,280,656 |
Other operating income | 4,219 | 5,425 |
OPERATING PROFIT | 1,626,743 | 1,286,081 |
Gain on revaluation of |
investment property | - | 142,251 |
1,626,743 | 1,428,332 |
Interest payable and similar expenses | 2,078,850 | 2,003,419 |
LOSS BEFORE TAXATION | (452,107 | ) | (575,087 | ) |
Tax on loss | 5 | (103,962 | ) | 116,955 |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (348,145 | ) | (692,042 | ) |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
CONSOLIDATED OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ |
LOSS FOR THE YEAR | (348,145 | ) | (692,042 | ) |
OTHER COMPREHENSIVE INCOME |
Pension scheme surplus movement | 8,000 | 152,000 |
Income tax relating to other comprehensive income |
- |
(22,990 |
) |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
8,000 |
129,010 |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(340,145 |
) |
(563,032 |
) |
Total comprehensive income attributable to: |
Owners of the parent | (340,145 | ) | (563,032 | ) |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
CONSOLIDATED BALANCE SHEET |
31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 7 | - | - |
Investments | 8 | - | - |
Investment property | 9 | 55,517,926 | 54,532,189 |
55,517,926 | 54,532,189 |
CURRENT ASSETS |
Debtors | 10 | 404,012 | 370,291 |
Cash at bank | 11 | 566,689 | 590,778 |
970,701 | 961,069 |
CREDITORS |
Amounts falling due within one year | 12 | 6,476,206 | 4,969,827 |
NET CURRENT LIABILITIES | (5,505,505 | ) | (4,008,758 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
50,012,421 |
50,523,431 |
CREDITORS |
Amounts falling due after more than one year |
13 |
(30,007,758 |
) |
(30,074,661 |
) |
PROVISIONS FOR LIABILITIES | (789,162 | ) | (893,124 | ) |
NET ASSETS | 19,215,501 | 19,555,646 |
CAPITAL AND RESERVES |
Called up share capital | 15 | 17,515,950 | 17,515,950 |
Revaluation reserve | 16 | 4,822,345 | 4,822,345 |
Retained earnings | (3,122,794 | ) | (2,782,649 | ) |
SHAREHOLDERS' FUNDS | 19,215,501 | 19,555,646 |
The 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 26 November 2024 and were signed on its behalf by: |
G K Green - Director |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
COMPANY BALANCE SHEET |
31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 7 |
Investments | 8 |
Investment property | 9 |
CURRENT ASSETS |
Debtors | 10 |
Cash at bank | 11 |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Revaluation reserve | 16 |
Retained earnings | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
Company's loss for the financial year | (311,886 | ) | (620,561 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 MARCH 2024 |
Called up |
share | Retained | Revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 April 2022 | 11,305,950 | (2,490,182 | ) | 5,092,910 | 13,908,678 |
Changes in equity |
Issue of share capital | 6,210,000 | - | - | 6,210,000 |
Total comprehensive income | - | (292,467 | ) | (270,565 | ) | (563,032 | ) |
Balance at 31 March 2023 | 17,515,950 | (2,782,649 | ) | 4,822,345 | 19,555,646 |
Changes in equity |
Total comprehensive income | - | (340,145 | ) | - | (340,145 | ) |
Balance at 31 March 2024 | 17,515,950 | (3,122,794 | ) | 4,822,345 | 19,215,501 |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 MARCH 2024 |
Called up |
share | Retained | Revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 April 2022 | ( |
) |
Changes in equity |
Issue of share capital | - | - |
Total comprehensive income | - | ( |
) | ( |
) | ( |
) |
Balance at 31 March 2023 | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 March 2024 | ( |
) |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
CONSOLIDATED CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 19 | 1,953,377 | 754,030 |
Interest paid | (2,078,850 | ) | (2,003,419 | ) |
Net cash from operating activities | (125,473 | ) | (1,249,389 | ) |
Cash flows from investing activities |
Purchase of investment property | (985,737 | ) | (6,867,135 | ) |
Reversal of pre-acquisition costs | - | 23,268 |
Net cash from investing activities | (985,737 | ) | (6,843,867 | ) |
Cash flows from financing activities |
Movement in loan from group undertakings | 1,087,121 | 1,780,536 |
Share capital issue/(reduction) | - | 6,210,000 |
Net cash from financing activities | 1,087,121 | 7,990,536 |
Decrease in cash and cash equivalents | (24,089 | ) | (102,720 | ) |
Cash and cash equivalents at beginning of year |
20 |
590,778 |
693,498 |
Cash and cash equivalents at end of year |
20 |
566,689 |
590,778 |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
1. | STATUTORY INFORMATION |
Mercury Land Holdings Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements and going concern |
The group continued to generate significant operational cash flows and continued to increase operations year-on-year. Despite this, the group balance sheet as at 31 March 2024 shows net current liabilities of £5,505,505 (2023: £4,008,758) and negative retained earnings of £3,122,794 (2023: £2,782,649). These losses have been driven pre-dominantly by the interest and financing costs associated with the investment by the group in growing its property portfolio. The result of this investment is that the group has an exceptionally strong balance sheet position with net assets of £19,215,501 (2023: £19,555,646). The group also has a number of future schemes in hand that are expected to deliver significant profits in future years. |
The group continues to meet its day to day working capital requirements through operating cash flows and funds all investment via financing from the ultimate controlling entity, "The London Borough of Havering". |
The ultimate controlling entity continues to give financial support to the group by injecting funds as necessary and has confirmed it will continue this support for at least 12 months from the date of approving these accounts. |
Having considered all the relevant facts the directors consider it is appropriate to prepare the financial statements on a going concern basis |
Basis of consolidation |
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. All accounting policies as detailed below are applied consistently across the Group. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
Revenue recognition |
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for rents and consultancy fees, net of voids and value added taxes. |
Rental income is recognised in the accounting period to which the rents relate to. |
Revenue in relation to consultancy fees is recognised in the accounting period in which the services were rendered. |
Tangible fixed assets |
Fixtures and fittings | - |
Investment properties |
Investment properties are shown at fair values determined by 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. Any aggregate surplus or deficit that arises from a change in fair value is recognised in the Consolidated Income Statement, net of deferred tax. On an annual basis this surplus or deficit is transferred from retained profits into a separate, non-distributable reserve called the "Revaluation Reserve". |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, 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. |
Development costs |
Development expenditure is capitalised in accordance with company's accounting policy. Initial capitalisation of costs is based on management's judgement that technical and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
(i) Defined Contribution Scheme |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit and loss in the period to which they relate. |
(ii) Defined Benefit Scheme |
The group also operates a defined benefit scheme, as further explained in Note 17. |
Finance costs |
Finance costs are charged to the Consolidated Income Statement over the term of the debt using the effective interest method so that 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. |
Financial reporting standard 102 – reduced disclosure exemption |
The company has taken advantage of the following disclosure exemption 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 for the company in the group accounts |
3. | TURNOVER |
The turnover and loss before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2024 | 2023 |
£ | £ |
Rental income | 2,693,088 | 2,339,232 |
Consultancy fees | 596,673 | 421,155 |
3,289,761 | 2,760,387 |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
3. | TURNOVER - continued |
Consultancy fees relate to charges made to the parent entity, The London Borough of Havering, for work done in relation to their land and property. The related costs are included in cost of sales. |
4. | EMPLOYEES AND DIRECTORS |
The average number of employees during the year was |
The average number of employees by undertakings that were proportionately consolidated during the year was 4 (2023 - 4 ) . |
5. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the loss for the year was as follows: |
2024 | 2023 |
£ | £ |
Deferred tax | (103,962 | ) | 116,955 |
Tax on loss | (103,962 | ) | 116,955 |
Tax effects relating to effects of other comprehensive income |
2024 |
Gross | Tax | Net |
£ | £ | £ |
Pension scheme surplus movement | 8,000 | - | 8,000 |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Pension scheme surplus movement | 152,000 | (22,990 | ) | 129,010 |
It is group policy that no charge is made between group companies for group relief claims and the surrender of taxable losses. |
Factors that may affect future tax charges |
The deferred tax liability includes £1,607,449 which is the theoretical corporation tax that would be due if the properties were to be sold at their current revalued amount. |
The group also has property business tax losses of £3,273,147 (2023: £2,857,299) available to carry forward and utilise against future property business profits and a deferred tax asset of £818,287 on these losses has been recognised and netted off with the liability noted above. |
A net deferred tax liability of £789,162 has therefore been provided at 31 March 2024. This tax would only be payable in the event that the properties were actually sold. |
6. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
7. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
and |
fittings |
£ |
COST |
At 1 April 2023 |
and 31 March 2024 | 38,709 |
DEPRECIATION |
At 1 April 2023 |
and 31 March 2024 | 38,709 |
NET BOOK VALUE |
At 31 March 2024 | - |
At 31 March 2023 | - |
Company |
Fixtures |
and |
fittings |
£ |
COST |
At 1 April 2023 |
and 31 March 2024 |
DEPRECIATION |
At 1 April 2023 |
and 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
8. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 April 2023 |
and 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiary |
Registered office: Town Hall, Main Road, Romford RM1 3BB |
Nature of business: |
% |
Class of shares: | holding |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
9. | INVESTMENT PROPERTY |
Group |
Total |
£ |
FAIR VALUE |
At 1 April 2023 | 54,532,189 |
Additions | 985,737 |
At 31 March 2024 | 55,517,926 |
NET BOOK VALUE |
At 31 March 2024 | 55,517,926 |
At 31 March 2023 | 54,532,189 |
The investment properties were valued by Savills and Glenny Estate Agents at 31 March 2024 at an open market value. This includes properties of £8,881,037 that were in the course of construction at that date. |
The difference between the investment properties in the group and that in the company (in consolidated accounts) relates to the Mark Up from the subsidiary (Mercury Design & Build Ltd) which is eliminated on consolidation. |
The company has a formal agreement with a 3rd party to develop one of its properties under a jointly controlled operations. As required by FRS 102, the company only recognises in its financial statements the assets that it controls and the liabilities that it incurs. Once the construction is completed both parties will be entitled to equal income from sale and rental of the properties. |
Fair value at 31 March 2024 is represented by: |
£ |
Valuation in 2018 | 333,061 |
Valuation in 2020 | 69,531 |
Valuation in 2021 | 5,629,451 |
Valuation in 2022 | 255,500 |
Valuation in 2023 | 142,251 |
Cost | 49,088,132 |
55,517,926 |
Company |
Total |
£ |
FAIR VALUE |
At 1 April 2023 |
Additions |
At 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
The investment properties were valued by Savills and Glenny Estate Agents at 31 March 2024 at an open market value. This includes properties of £8,881,037 that were in the course of construction at that date. |
Fair value at 31 March 2024 is represented by: |
£ |
Valuation in 2018 | 333,061 |
Valuation in 2020 | 69,531 |
Valuation in 2021 | 5,629,451 |
Valuation in 2022 | 255,500 |
Valuation in 2023 | 142,251 |
Cost | 49,681,243 |
56,111,037 |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Trade debtors | 136,987 | 222,708 |
Amounts owed by group undertakings | - | - |
VAT | 41,208 | - |
Prepayments and accrued income | 225,817 | 147,583 |
404,012 | 370,291 |
11. | CASH AT BANK |
During the current and previous year, the company was required by the London Borough of Havering to earmark £200,000 of cash at bank due to a breach of a loan covenant whereby the Loan to Value Ratio (LTVR) exceeded the required minimum ratio. This retention will be released in part or in full on the basis that the market valuation increases in future valuations. |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Trade creditors | 185,969 | 142,792 |
Amounts owed to group undertakings | 5,737,506 | 4,583,482 |
Social security and other taxes | 10,157 | 7,711 |
VAT | - | 3,602 | - | 4,633 |
Accruals and deferred income | 542,574 | 232,240 |
6,476,206 | 4,969,827 |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Amounts owed to group undertakings | 30,007,758 | 30,074,661 | 30,007,758 | 30,074,661 |
14. | SECURED DEBTS |
Amounts owed to group undertakings are secured by fixed and floating charges over the investment properties of the group. |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number | Class | Nominal value | 2024 | 2023 |
£ | £ |
17,515,950 | Ordinary | £1 | 17,515,950 | 17,515,950 |
16. | RESERVES |
Group |
Revaluation |
reserve |
£ |
At 1 April 2023 |
and 31 March 2024 | 4,822,345 |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
16. | RESERVES - continued |
Company |
Revaluation |
reserve |
£ |
At 1 April 2023 |
and 31 March 2024 |
17. | EMPLOYEE BENEFIT OBLIGATIONS |
One of the company's employees is a member of a defined benefit pension scheme, the Local Government Pension Scheme Fund: London Borough of Havering Pension Fund. The assets of the scheme are held separately from those of participating group companies. A complete valuation of the scheme is undertaken by independently qualified actuaries at the year end and annual contributions to the scheme are required to be made accordance with their recommendations. |
The pension asset/(liability) under FRS 102 at the year end is as follows: |
31 March 2024 | 31 March 2023 |
£ | £ |
Assets | 156,000 | 130,000 |
Obligations | (124,000 | ) | (116,000 | ) |
--------------- | ----------------- |
Net asset/(liability) | 32,000 | 14,000 |
--------------- | ----------------- |
In accordance with FRS102, the scheme surplus has not been recognised as there is not an expectation that the employer is able to recover that surplus in future. |
The major categories of plan assets as a percentage of total plan assets |
The actuaries have used the most recent asset split provided to them and allowed for index returns, where required, on each asset category to determine the estimated split of assets as at 31 March 2024. |
31 March 2024 | 31 March 2023 |
Equities | 42% | 36% |
Bonds | 30% | 35% |
Property | 20% | 23% |
Cash | 8% | 6% |
Financial Assumptions |
The financial assumptions are summarised below: |
31 March 2024 | 31 March 2023 |
% p.a. | % p.a. |
Pension Increase Rate (CPI) | 2.75% | 2.95% |
Salary Increase Rate | 3.45% | 3.65% |
Discount Rate | 4.85% | 4.75% |
As at the date of the most recent valuation, the duration of the Employer’s funded liabilities is 40 years. |
Mortality |
Life expectancy is based on the Fund's VitaCurves with improvements in line with the CMI 2022 model, with a 25% weighting of 2022 data, a 0% weighing of 2021 (and 2020) data, standard smoothing (Sk7), initial adjustment of 0.25% and a long term rate of improvement of 1.5% p.a. for both males and females. Based on these assumptions, the average future life expectancies at age 65 for the Employer are summarised below: |
Males | Females |
Current Pensioners | 21.2 years | 23.9 years |
Future Pensioners* | 23.4 years | 25.3 years |
* Figures assume members aged 45 as at the last formal valuation date. |
MERCURY LAND HOLDINGS LIMITED (REGISTERED NUMBER: 09878652) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
18. | ULTIMATE CONTROLLING ENTITY |
The ultimate parent undertaking and ultimate controlling entity is considered to be The London Borough of Havering. Group financial statements can be obtained from: |
London Borough of Havering |
Town Hall |
Main Road |
Romford |
RM1 3BD |
19. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
Loss before taxation | (452,107 | ) | (575,087 | ) |
Gain on revaluation of fixed assets | - | (142,251 | ) |
Pension deficit charge | 8,000 | 31,000 |
Finance costs | 2,078,850 | 2,003,419 |
1,634,743 | 1,317,081 |
Increase in trade and other debtors | (33,721 | ) | (96,539 | ) |
Increase/(decrease) in trade and other creditors | 352,355 | (466,512 | ) |
Cash generated from operations | 1,953,377 | 754,030 |
20. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 March 2024 |
31.3.24 | 1.4.23 |
£ | £ |
Cash and cash equivalents | 566,689 | 590,778 |
Year ended 31 March 2023 |
31.3.23 | 1.4.22 |
£ | £ |
Cash and cash equivalents | 590,778 | 693,498 |
21. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.4.23 | Cash flow | At 31.3.24 |
£ | £ | £ |
Net cash |
Cash at bank | 590,778 | (24,089 | ) | 566,689 |
590,778 | (24,089 | ) | 566,689 |
Total | 590,778 | (24,089 | ) | 566,689 |