Company Registration No. 09557982 (England and Wales)
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
COMPANY INFORMATION
Directors
Mr J S Goldstein
Mr S S Conway
Mr J Lang
Mr G Conway
(Appointed 4 January 2023)
Mr J Cole
(Appointed 27 March 2024)
Company number
09557982
Registered office
72 Welbeck Street
London
W1G 0AY
United Kingdom
Auditor
Ernst & Young LLP
Liberation House
Castle Street
St Helier
Jersey
JE1 1EY
Channel Islands
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for The Stage Shoreditch Residential Limited (the "Company") for the year ended 31 December 2023.

Fair review of the business

The principal activity of the Company is to develop and sell residential property on a site in Shoreditch, London. During the year, the Company's property under development reached practical completion and was available for its primary purpose being sale of residential property.

 

The Company’s development site is located within a prime London metropolitan area and is well-placed to benefit from the positive long-term outlook for the city.

Key performance indicators

Turnover for the year has increased significantly year on year. The turnover comprised of sale completion of exchanged contracts for the residential units during the year following the practical completion of the residential property. Gross profit is £9,531,123 in the year (2022 loss: £360,400).

Other performance indicators

A part of the Company's strategy is to identify risks and uncertainties in the course of its day to day operations and assess those risks with a view to minimising or mitigating these where possible. The directors consider that the principal risks and uncertainties faced by the Company are in the following categories:

 

Market risk

The sale of residential property susceptible to the macro-environment economic risks nationally and regionally. The primary market risk to the Company is the risk inflationary and interest rate increases adversely impacting the Company.

 

The Company ensures that these risks are effectively managed through suitable policies and procedures. The Company is committed to improving performance through regular review and continuous learning.

 

Liquidity risk

The liquidity risk faced by the Company is the inability to meet its financial obligations as it falls due. The Company manages this liquidity risks by continually monitoring its cash flow commitments and cash reserves and undrawn debt facilities with a wider focus on any potential economic impact of being able to service its existing debt facility.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Other information and explanations

The directors consider, both individually and together, that they have acted in the way they consider in good faith would be most likely to promote the success of the Company for the benefit of its stakeholders (having regard to matters set out in Section 172 (1) (a) to (f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2023. Such considerations are set out below, having regard for, amongst other matters, the following:

 

- the need for the Company to foster strong business relationships with all stakeholders;

- the likely long term consequences of any decision making during the financial year;

- the need to communicate strategic decisions to stakeholders and explain the thought process and impact;

- the desirability of the Company maintaining a reputation for high standards of business conduct;

- the impact of the Company's operations on the community and the environment;

- the health, safety and wellbeing of suppliers and those on-site; and

- the need to act fairly and with integrity.

 

Whilst the Company does not have any employees (refer to note 5), and does not envision any significant impact to the community or environment due to its operations, no disclosures in relation to the same have been made below. The directors understand the importance of maintaining positive relations with all stakeholders.

 

Suppliers

As part of ensuring that the Company’s and its stakeholders’ commercial dealings are aligned, regular meetings and other forms of engagement are undertaken. This allows the Company to build on the relationships, discuss the appropriate strategic decisions and ensure milestones are met. This is important to ensure that the principal activity of the Company meets the end customers'

requirements whilst suppliers are treated ethically and fairly.

 

Customers

The leaseholders of the residential property are the principal end customers of the Company. The Company continuously seeks to identify areas of the property which can be improved with the aim to provide an overall better area in which the leaseholders can operate. The Company through the operations of other intra-group entities also engage with leaseholders in order to identify areas which can be refined in order to provide a more engaging space to the local community which ultimately leads to increased performance.

 

Shareholders

The Company seeks to generate a long term and stable return for its shareholders. The completion of the development site with the sale of some of the residential properties demonstrates the Company's ultimate intention to serve its shareholders.

On behalf of the board

Mr J S Goldstein
Director
29 November 2024
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their report of The Stage Shoreditch Residential Limited (the "Company") for the year ended 31 December 2022.

Principal activities

The principal activity of the Company is to develop and sell residential property on a site in Shoreditch, London. During the year, the Partnership's property under development reached practical completion and was available for its primary purpose being sale of residential property.

Results and dividends

The loss for the period, after taxation, amounted to £28,511,172 (2022: 1,229,337). The directors do not recommend payment of a dividend.

Directors

The directors who held office during the year and up to the date of approval of the financial statements were as follows:

Mr J S Goldstein
Mr S S Conway
Mr R M Pilkington
(Resigned 27 March 2024)
Mr J Lang
Mr G Conway
(Appointed 4 January 2023)
Mr J M Morgan
(Resigned 4 January 2023)
Mr J Cole
(Appointed 27 March 2024)
Qualifying third party indemnity provisions

The Company has granted an indemnity to its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in section 234 of the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors' Report.

Future developments

The directors anticipate that the activity of the Company will continue up until all residential units are sold.

Going concern
The financial statements have been prepared on a going concern basis, which assumes the Company will be able to meet its
liabilities as and when they fall due from the date of approval of the financial statements through to 31 December 2025 (the ‘going concern period'). At 31 December 2023, the Company has net current liabilities of £45,798,625 (2022: £17,381,204) and net liabilities of £45,798,625 (2022: £17,287,454).

The directors have assessed the going concern period under assessment to be the period from the date of approval of the financial statements through the going concern period.

The directors of the Company have prepared a robust forecast of the anticipated operational outgoings of the Company over its going concern period which considers severe but plausible downside risks. In preparing the cash flow forecast for this Company as part of the group of companies (“Residential Group”) party to the Macquarie facility over the going concern period, the directors have considered all known operational expenses. Furthermore, the cash flow forecast demonstrates that the Company will be able to meet the liabilities as they fall due during the going concern period.

The directors therefore consider it appropriate to prepare the Company's accounts on a going concern basis for the going concern review period to 31 December 2025.
Auditor

Ernst & Young LLP were appointed as auditor to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the Company’s auditor is unaware. Having made enquiries of fellow directors and the Company's auditor, each director has taken all the steps that they are obliged to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the Company’s auditor is aware of that information.

Subsequent events

Details of any subsequent event are set out in note 19.

 

Statement of directors' responsibilities

The directors are responsible for preparing the Directors' Report 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) including Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland.' 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 of the profit or loss of the Company for that period. In preparing those

financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

This report has approved by the board on 29 November 2024 and has been prepared in accordance with the small companies regime of the Companies Act 2006.

On behalf of the board
Mr J S Goldstein
Director
29 November 2024
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE STAGE SHOREDITCH RESIDENTIAL LIMITED
- 5 -
Opinion

We have audited the financial statements of The Stage Shoreditch Residential Limited (the ‘Company’) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and the related notes 1 to 19, 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 FRS 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:

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 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 the provisions available for small entities, in the circumstances set out in note 1 to the financial statements, 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 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

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 course of 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 the other information, we are required to report that fact.

 

We have nothing to report in this regard.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE STAGE SHOREDITCH RESIDENTIAL LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 is 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 an auditor’s report 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.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE STAGE SHOREDITCH RESIDENTIAL LIMITED
- 7 -

Our approach was as follows:

 

 

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditors responsibilities. This description forms part of our auditor’s report.

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 an auditor’s report 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.

Christoper James Matthews, FCA (Senior statutory auditor)
For and on behalf of Ernst & Young LLP
Chartered Accountants
Statutory Auditor
Liberation House
Castle Street
St Helier
Jersey
JE1 1EY
Channel Islands
29 November 2024
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
159,419,336
33,330
Cost of sales
(149,888,213)
(393,730)
Gross profit/(loss)
9,531,123
(360,400)
Administrative expenses
(27,209,457)
(868,937)
Operating loss
4
(17,678,334)
(1,229,337)
Interest payable and similar expenses
(8,409,449)
-
0
Loss before taxation
(26,087,783)
(1,229,337)
Taxation
7
(2,423,389)
-
0
Loss after taxation
(28,511,172)
(1,229,337)
Other comprehensive income/(loss)
-
-
Total comprehensive loss for the year
(28,511,172)
(1,229,337)

The notes on pages 11 to 20 form part of these financial statements

 

The income statement has been prepared on the basis that all operations are continuing operations.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment properties
8
-
0
6,174,709
Current assets
Inventory
9
258,524,371
371,728,273
Debtors
10
63,069,730
11,571,639
Cash at bank and in hand
3,708,810
2,157,186
325,302,911
385,457,098
Creditors: amounts falling due within one year
11
(371,101,537)
(402,838,302)
Net current liabilities
(45,798,626)
(17,381,204)
Total assets less current liabilities
(45,798,626)
(11,206,495)
Creditors: amounts falling due after more than one year
12
-
0
(6,080,959)
Net liabilities
(45,798,626)
(17,287,454)
Capital and reserves
Called up share capital
15
100
100
Profit and loss reserves
(45,798,726)
(17,287,554)
Total equity
(45,798,626)
(17,287,454)

The notes on pages 11-20 form part of these financial statements.

The financial statements on pages 8 to 20 were approved by the board of directors and authorised for issue on 29 November 2024 and are signed on its behalf by:
Mr J S Goldstein
Director
Company Registration No. 09557982
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
100
(16,058,217)
(16,058,117)
Year ended 31 December 2022:
Total comprehensive loss for the year
-
(1,229,337)
(1,229,337)
Balance at 31 December 2022
100
(17,287,554)
(17,287,454)
Year ended 31 December 2023:
Total comprehensive loss for the year
-
(28,511,172)
(28,511,172)
Balance at 31 December 2023
100
(45,798,726)
(45,798,626)
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

The Stage Shoreditch Residential Limited is a private company limited by shares incorporated in England and Wales. The registered office was changed to 72 Welbeck Street, London, W1G 0AY on 23 April 2024 (previously 116 Upper Street London N1 1QP).

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.

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.

 

The results of the Company are included in the consolidated financial statements of The Stage Shoreditch LLP, an entity incorporated in England and Wales. The financial statements of The Stage Shoreditch LLP are prepared in accordance with FRS102 and can be obtained from 72 Welbeck Street, London W1G 0AY. Therefore, the Company has taken the exemption under section 1A.7 of FRS 102 from the requirement to prepare a statement of cash flows and related disclosures for the financial period.

1.2
Going concern

The financial statements have been prepared on a going concern basis, which assumes the Company will be able to meet itstrue liabilities as and when they fall due from the date of approval of the financial statements through to 31 December 2025 (the ‘going concern period’). At 31 December 2023, the Company has net current liabilities of £45,798,625 (2022:£17,381,204) and net liabilities of £45,798,625 (2022: £17,287,454).

 

The directors have assessed the going concern period under assessment to be the period from the date of approval of the financial statements through the going concern period.

 

The directors of the Company have prepared a robust forecast of the anticipated operational outgoings of the Company over its going concern period which considers severe but plausible downside risks. In preparing the cash flow forecast for this Company as part of the group of companies (“Residential Group”) party to the Macquarie facility over the going concern period, the directors have considered all known operational expenses. Furthermore, the cash flow forecast demonstrates that the Company will be able to meet the liabilities as they fall due during the going concern period.

 

The directors therefore consider it appropriate to prepare the Company’s accounts on a going concern basis for the going concern review period to 31 December 2025.

1.3
Turnover

Turnover from the sale of residential property is recognised when it is probable that the economic benefits from the transaction will flow to the Company, all significant risks and rewards of ownership have been passed to the purchaser and the amount of turnover earned can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates and value added tax.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Investment properties

Investment property is property held either to earn rental income or for long-term capital appreciation, or both. Investment property is measured initially at cost including related transaction costs and subsequently at fair value.

 

Independent valuations are conducted in accordance with RICS Appraisal and Valuation Standards which is mandatory for Chartered Surveyors for the United Kingdom properties. The investment property in the Company as at 31 December 2023 is held at fair value.

 

Under FRS 102, the Company can elect to capitalise borrowing costs that are directly attributable to the development of a qualifying asset. As a result, investment property under development include borrowing costs of £13,553,657 (2022: £12,298,283) relating to development which have been capitalised in the year. See Note 9 for details on the capitalisation rate applicable to borrowing costs.

 

Gains and losses arising from the changes in the fair value of the investment property are included in the Statement of Comprehensive income in the year in which they arise.

 

The Company’s development site has been pledged as security for a bank development loan held by the Group of which the Company is a member, the parent undertaking being The Stage Shoreditch LLP.

 

During the year, the investment property was impaired to £nil following the abolishment of ground rent which came into force under the leasehold reform (ground rent) act 2022.

1.5
Inventory

Inventory represents partially and completed development properties held with the intention of sale in the ordinary course of the Company's operations. Inventory is valued at the lower of cost and estimated selling price, net of selling costs, less cost to complete. Cost include all direct costs related to developing the properties for their intended use including the cash premium paid in advance to acquire the finance headlease which entitles the Company to utilise the land upon which the residential stock has been built.

 

Sales and marketing costs related to the completed properties are written off as cost of sales expenses when incurred.

 

Under FRS 102, the Company has elected to capitalise borrowing costs that are directly attributable to the development of a qualifying asset. As a result, inventory includes borrowing costs of £13,553,657 (2022: £12,298,283) relating to the development which have been capitalised in the year. The residential property under development was completed in December 2023. Borrowing costs incurred after the completion date have been expensed.

 

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventory over its estimated selling price less cost to complete and sell is recognised as an impairment loss in the Statement of Comprehensive Income. Reversals of impairment loss are also recognised in the Statement of Comprehensive Income.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash at bank and 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
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.

 

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.8
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.

 

1.9
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.

1.10
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.

1.11
Company as a lessee
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.  Assets held under finance leases are recognised as investment property at the lower of the asset's fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the Statement of Financial Position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. Each lease payment is allocated between repayment of the liability and a finance charge to achieve a constant rate of return on the outstanding liability. The investment properties held under finance leases are subsequently carried at their fair value as they are held for long term capital appreciation. At the reporting date, the cumulative interest of £nil (2022: £1,833,094) was capitalised during the period of development.  

The finance lease obligation is amortised using the effective rate method.

During the year, the Company's finance lease obligation was written off following abolishment of ground rent which came into force under the leasehold reform (ground rent) act 2022.
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
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 following are the Company's key sources of estimation uncertainty and the areas requiring significant judgement:

Judgements
Impairment of debtors

The Company makes a judgement of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management consider factors including the ageing profile and historical experience. The debtor balance at the reporting date includes a provision for impairment, see note 10 for carrying amount of debtors.

Impairment of residential units held as stocks

Stock is stated at the lower of cost or net realisable value (NRV). Where there are indicators of impairment of residential property stock, which indicate that the carrying value may not be recoverable, the Company performs impairment tests based on the fair value by comparing the carrying value with its recoverable amount, being the higher of its fair value, less costs to sell and its value in use. At the reporting date, there has been no impairment (2022: £nil)

Estimates
Valuation of finance lease recognised as investment property

Investment property is measured initially at cost including related transaction costs, and subsequently at fair value. The difference between the fair value of an investment property at the reporting date and its carrying amount prior to re-measurement is included is recognised in the Statement of Comprehensive Income. Investment property is presented on the Statement of Comprehensive Income within fixed assets. The fair value of the investment property is illustrated in note 8.

Taxation

The Company establishes provisions based on reasonable estimates based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies.

Accrued expenses

The Company recognises estimates in relation to accrued expenses recorded at the year end based on past experience of similar outgoings incurred or their knowledge of the expected outgoings to be incurred depending on the nature of goods or services rendered that are yet to be billed.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Residential property sales
159,047,336
-
Other income
-
33,330
Service charge income
372,000
-
159,419,336
33,330

Other income derived from the recession of a pre-sale contract for one of the residential units.

4
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Impairment of amount from group undertaking
21,729,893
-

The Company’s audit fees are borne by another member of the Group, The Stage Shoreditch Development Limited. The proportion of the audit fees that relates to this Company amounts to £12,250 (2022: £12,250). No non-audit services were provided during the year (2022: £nil).

5
Employees

The number of persons (including directors) employed by the Company during the year was nil (2022: nil).

 

 

 

 

6
Directors' remuneration

All directors of the Company received no remuneration during the current year (2022: £nil) from the Company or any entities within the Group. The directors believe that their qualifying services provided to the Company are incidental to the qualifying services provided to the members of The Stage Shoreditch LLP.

7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
2,423,389
-
0
THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 16 -

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(26,087,781)
(1,229,337)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(6,130,629)
(233,574)
Unutilised tax losses carried forward
-
0
233,574
Corporate interest restriction allocated disallowances
6,165,805
-
0
Relief for losses brought forward
(2,784,988)
-
0
Expenses not deductible for tax purposes
5,106,526
-
0
Residential property developer tax (RPDT) payable
66,675
-
0
Taxation charge for the year
2,423,389
-

In the March 2021 budget, it was announced that legislation would be introduced in the Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective April 2023. This was substantively enacted in May 2021 therefore, any closing deferred tax balance is calculated at 25%. The forthcoming change in the corporation tax rate in future years is not expected to materially affect the future tax charge.

 

The Company has cumulative taxable losses arising in the UK of £1,629,856 (2022: £17,285,479) that are available indefinitely for offset against future taxable profits.

8
Investment property
2023
£
Fair value
At 1 January 2023
6,174,709
Impairment
(6,174,709)
At 31 December 2023
-
0

The finance lease asset includes the present value of the future obligations discounted based on the interest rate of the acquisition loan at the date of acquisition. As a result the finance interest charge of £nil (2022 interest: £183,730) was capitalised/(deducted) in the year. Future lease payments are presented in note 14. The finance lease asset is amortised over the life of the lease on a straight-line basis.

 

During the year, the investment property was impaired to £nil following the abolishment of ground rent which came into force under the leasehold reform (ground rent) act 2022.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
9
Inventory
2023
2022
£
£
At 1 January
371,728,273
324,129,506
Additions of capitalised costs
24,538,661
47,598,767
Transfer to Cost of Sales
(137,742,563)
-
0
258,524,371
371,728,273
The carrying amount of inventory of 31 December is represented by:
Work in progress
194,260,807
321,018,366
Capitalised borrowing costs and amortisation of loan arrangement fees
64,263,564
50,709,907
258,524,371
371,728,273
Under FRS 102, the Company capitalises the development expenditure and can elect to capitalise borrowing costs that are directly attributable to the development of a qualifying asset. As a result, stock includes borrowing costs relating to the development which have been capitalised in the year of £13,553,657 (2022: £12,298,283). The total borrowing costs capitalised since the start of development is £64,263,564 (2022: £50,709,907).

These costs are recognised against the proceeds of the sales to determine the profit of the development.

The Company's development site has been pledged as security for a bank development loan by the Group.
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
53,905,888
518,145
Other debtors
8,913,255
11,053,494
Prepayments and accrued income
250,587
-
0
63,069,730
11,571,639

Amounts owed by group undertakings are unsecured, interest free and payable on demand without restrictions. Amounts due from group undertakings are stated after provisions for impairment of £21,729,893 (2022: £Nil).

 

Amounts falling within one year based on the contractual term of payable on demand, however these amounts are not expected to be realised within one year but intended to be settled within the foreseeable period.

 

Included in other debtors are deposits of £8,514,543 (2022: £11,050,219) paid to the Company's solicitors' bank account to secure sales of residential units. The corresponding liability is included in 'Other creditors' section of note 11. During the year, £2,303,589 (2022: £3,837,521) of deposits were paid to the Company's solicitors' bank account, and £2,140,642 (2022: £4,671,445) was released to the Company's current bank account to use towards construction costs.

 

 

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
13
201,823,626
222,212,793
Obligations under finance leases
14
-
0
93,750
Trade creditors
1,113,687
143,195
Amounts owed to group undertakings
156,924,766
143,999,634
Corporation tax
2,423,389
-
0
Other creditors
5,892,189
35,029,887
Accruals and deferred income
2,923,880
1,359,043
371,101,537
402,838,302

Amounts due to group undertakings are unsecured, interest free and payable on demand without restrictions.

 

Included in amounts due to group undertakings is an unsecured, interest free loan from The Stage Shoreditch LLP, the parent undertaking of the Group, of £65,175,657 (2022: £58,939,578) which is payable on demand without restrictions. Accordingly this has been classified as current.

 

The Company's development site has been pledged as security for a bank development loan held by the Group.

 

On 12 April 2018 the Company, along with other members of the Group, signed a loan facility agreement which was coordinated by lead arranger Lloyds Bank plc. The loan facility provided £390 million financing for the Group to complete the development. In 2023, the Company has total drawn balance including the capitalised interest of £223,929,776 (2022: £222,212,795). At 31 December 2023, the Group had an outstanding debt of £261,139,913 (2022: £369,355,510). On 5 January 2024 the existing loan was repaid in relation to the residential development and a new facility secured with Macquarie Principal Finance Pty Limited, UK granting the new lender security over the residential tower. The commitment on the new facility was £188 million reducing the commitment disclosed at the reporting date in Note 16.

 

The other creditor represents a liability relating to the deposits paid to secure sales of residential unit corresponding to 'other debtors' section in note 10.

 

12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
14
-
0
6,080,959

The finance lease obligation is the present value of the minimum lease payments which is calculated using the incremental borrowing rate of 4.57% per annum determined at the inception of the finance lease. The obligation is subsequently amortised using the effective interest method.

 

During the year, the Company's finance lease liability was effectively extinguished by the passing of the ground rent act 2022.

 

The Company's development site has been pledged as security for a bank development loan by the Group.

 

As at 31 December 2023, the bank loan has been classified under creditors falling due within one year, for details on the bank loan, see note 11 of the financial statements.

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Loans and overdrafts
2023
2022
£
£
Bank loans
201,823,626
222,212,793
Payable within one year
201,823,626
222,212,793

See note 16 for details of the fixed charges.

14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
-
93,750
In two to five years
-
500,000
In over five years
-
3,195,281,250
-
3,195,875,000
Less: future finance charges
-
(3,189,700,291)
-
6,174,709

Finance lease payments represent ground rent payable by the Company on a lease with a term of 250 years from 22 May 2015. The rent commencement date does not begin until the practical completion of the building. There are some general restrictions placed on the use of the leased asset. The lease is on a fixed repayment basis with an element of contingent rental payments.

 

During the year, the Company's finance lease liability was effectively extinguished by the passing of the ground rent act 2022.

 

 

 

15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Authorised, issued and fully paid
100 ordinary shares of £1 each
100
100
100
100
16
Commitments

As at 31 December 2023, the Company had provided a guarantee in respect of the Group’s £390 million development loan facility coordinated by lead arranger, Lloyds Bank plc, for the development site held by the Group via a fixed and floating charge on its assets and shares. Subsequent to the reporting date, this guarantee was ended and replaced with a new

guarantee in respect of the new facility as per note 19.

 

 

THE STAGE SHOREDITCH RESIDENTIAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
17
Related party transactions

Agent fees of £162,936 (2022: £121,551) were provided by Vanke Beijing Real Estate Agent Ltd., a member of China Vanke Co., Ltd. group, of which Abloom Homes Limited is also a member. There is a balance of £57,848 due to Vanke Beijing Real Estate Agent Ltd. as at 31 December 2023 (2022: £130,691).

 

The Company has been charged agent fees of £280,419 (2022: £nil) by Galliard Homes Limited, a subsidiary of Galliard Holdings Limited. There is no outstanding balance due to Galliard Homes Limited (2022: £nil).

 

All of the transactions are at market rates and considered to be arm's length.

 

Amounts due to the parent undertaking of the Group, The Stage Shoreditch LLP, are noted within note 11. At the reporting date, the amounts due from fellow members of the Group was £53,905,888 (2022: £518,145). At 31 December 2023, the amounts due to fellow members of the Group was £91,749,110 (2022: £85,060,056).

 

The Company has taken advantage of the exemption afforded by FRS 102.33.1A not to disclose transactions between wholly owned members of the Group.

 

18
Parent Undertaking

The Company's immediate parent undertaking is The Stage Shoreditch Residential Holdco Limited, an entity incorporated in England. The parent undertaking of the smallest group in which the results of the Company are consolidated is that prepared by The Stage Shoreditch LLP. Copies of the consolidated financial statements of The Stage Shoreditch LLP are publicly available from 72 Welbeck Street, London, W1G 0AY.

 

The largest group in which the results of the Company are consolidated is that prepared by Eldridge Industries LLC, of 600 Steamboat Road, Greenwich, CT 06830. The financial statements of this entity are not publicly available.

19
Subsequent events

The Company was party to a development loan facility provided to the Stage Shoreditch LLP group ("Group") by a syndicate ("existing lender") which was used to finance the Stage Shoreditch development. On 5 January 2024 the existing loan was repaid in relation to the Residential Development and a new facility secured with Macquarie Principal Finance Pty Limited, UK ("new lender"), granting the new lender security over the residential tower. The commitment on the new facility is £188 million reducing the commitment disclosed at the reporting date in Note 16.

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