Company registration number 14551933 (England and Wales)
ARK UP3 LIMITED
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
ARK UP3 LIMITED
COMPANY INFORMATION
Directors
H T Owen
A J Pettit
D McDonald
A D Garvin
(Appointed 4 September 2023)
I S Perryment
(Appointed 4 September 2023)
R P Silvester
(Appointed 4 September 2023)
Secretary
Dr P T Singh
Company number
14551933
Registered office
Spring Park
Westwells Road
Hawthorn
Corsham
Wiltshire
SN13 9GB
Independent auditors
PricewaterhouseCoopers CI LLP
37 Esplanade
St Helier
Jersey
JE1 4XA
ARK UP3 LIMITED
CONTENTS
Page(s)
Directors' report
1 - 2
Independent auditors' report
3 - 7
Profit and loss account
8
Balance sheet
9
Notes to the financial statements
10 - 15
ARK UP3 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -

The directors present their annual report and audited financial statements for the year ended 30 June 2024.

Principal activities

The principal activity of the company is the ownership, development and leasing of data centres.

Results and dividends

The results for the year are set out on page 8.

 

The results for the year and the financial position at the year end were considered satisfactory by the directors.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend (2023: nil).

Directors

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

H T Owen
A J Pettit
D McDonald
Dr P T Singh
(Resigned 4 September 2023)
A D Garvin
(Appointed 4 September 2023)
I S Perryment
(Appointed 4 September 2023)
R P Silvester
(Appointed 4 September 2023)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

 

Going concern

The directors have prepared the financial statements on a going concern basis.

 

At 30 June 2024 the company had net current liabilities of £12,724,709 (2023: £83,815). As disclosed in Note 11, by issuing unsecured loan notes on The International Stock Exchange ("TISE") to a related party, the company has access to liquidity and sufficient undrawn group finance facilities to be able to meet all liabilities and commitments as they fall due. In addition to this, on 22 October 2024 Ark UP3 Limited obtained a bank loan facility of £200m of which £44.5m has been drawn down at the date of approving these financial statements.

 

The directors are therefore satisfied that the company has sufficient group finance facilities and support from the ultimate parent at their disposal to meet working capital requirements, finance the capital commitments disclosed in Note 13 and meet other obligations and commitments as they fall due and for a period of at least 12 months from the date of approval of the financial statements.

Independent auditors

In accordance with the company's articles, a resolution proposing that PricewaterhouseCoopers CI LLP be reappointed as auditor of the company will be put at a General Meeting.

ARK UP3 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Companies Act 2006 ("company law") requires the directors to prepare financial statements for each financial year. Under that law the directors have have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" Section 1A, 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 of the profit or loss of the company for that period. In preparing these 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. The directors confirm that they have complied with these responsibilities.

Statement of disclosure to auditor

In the case of each director in office at the date the Directors' Report is approved:

 

 

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
H T Owen
Director
17 December 2024
  
- 3 -

Independent auditors’ report to the members of Ark UP3 Limited

Report on the audit of the financial statements

 

Opinion

In our opinion, Ark UP3 Limited’s financial statements:

We have audited the financial statements, included within the Annual Report and Audited Financial Statements (the “Annual Report”), which comprise: the balance sheet as at 30 June 2024; the profit and loss account for the year then ended and the notes to the financial statements, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Our audit approach

Context

The company is an English company limited by shares. The company's principal activities are the ownership, development and leasing of a data centre in the United Kingdom financed principally by the issuance of loan notes listed on The International Stock Exchange (“TISE”). In the prior year the company’s principal activities were financed by shareholder loans. These shareholder loans were converted to the TISE listed loan notes on 19 March 2024.

Overview

Audit scope

Key audit matters

Materiality

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

  
- 4 -

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

As a result of the company issuing loan notes on The International Stock Exchange (“TISE”), key audit matters have been included for the first time this year.

This is not a complete list of all risks identified by our audit.

Key audit matter

How our audit addressed the key audit matter

Valuation of Investment Property as at 30 June 2024

 

Please refer to note 1.4 and 8 to the financial statements.

The company owns an investment property under development which is carried at fair value through profit or loss.

The valuation of investment property under development is inherently subjective due to, among other factors, the individual nature of the investment property, its location, stage of development and expected future rental income.

The valuation of the company’s investment property under development was carried out by an independent professional valuer ("management’s expert") who performed their work in accordance with the latest version of the RICS Valuation – Global Professional Standards (known as the “Red Book”) current as at the valuation date.

In determining the valuation of the investment property under development, management’s expert takes into account property specific current information such as planning permission, the stage of development and committed costs to complete the development. Assumptions are then applied in relation to capitalisation rates, current market rent and growth (based on available market data and transactions), variable costs of the development, developer’s profit on cost and purchaser’s costs at the Gross Development Value (GDV) / Net Development Value (NDV) and residual land value levels to arrive at a range of valuation outcomes, from which they derive a point estimate.

The directors have scrutinised and then adopted management’s expert value for financial reporting purposes.

Understood and evaluated the controls and appropriateness of accounting policy in place in respect of investment property valuations and management’s engagement with management’s expert and the scope of their work;

Obtained and read management’s expert report on the valuation of the company’s investment property as at the year end;

Assessed management’s expert qualification, expertise and independence;

Confirmed that management’s expert report was prepared in accordance with professional valuation standards and suitable for use in determining the fair value of investment properties as at 30 June 2024;

Engaged our auditors expert to support our critique and challenge of the work performed and assumptions used by management’s expert. In particular, the valuation assumptions used by management's expert were compared to recent comparable market activity and industry indices and significant movements in the valuation were challenged; and

Assessed the appropriateness of disclosures made within the company’s financial statements.

Based on the audit work detailed above we have nothing to report to those charged with governance.

 

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined the principal risks were related to posting of inappropriate journal entries to increase revenue, and management bias in accounting estimates and judgemental areas of the financial statements such as valuation of investment property. We engaged our own internal auditor's expert to review the valuation of investment property as at 30 June 2024. Our findings are documented in the Key Audit Matter "Valuation of investment property".

The audit was led, directed and controlled by PricewaterhouseCoopers CI LLP and all audit work for material items within the financial statements was performed in Jersey and the United Kingdom.

  
- 5 -

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the company’s financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall company materiality

£826k (2023: £9k).

How we determined it

1% of Total Assets (2023: 3% of Total Assets)

Rationale for benchmark applied

We believe total assets to be the appropriate basis for determining materiality since this is a key consideration for members of the company when assessing financial performance. It is also a generally accepted measure used for companies in this industry.

 We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 50%) of overall materiality, amounting to £620k (2023: £4.3k) for the company financial statements.

 

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with those charged with governance that we would report to them misstatements identified during our audit above £82.6k (2023: £854) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included:

 

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.

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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

  
- 6 -

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance 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 an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

 

With respect to the Directors' report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

 

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Directors' report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Directors' report for the year ended 30 June 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Directors' report.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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.

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 an auditors’ 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we considered the principal risks of non-compliance with laws and regulations, including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue and the potential for management bias in accounting estimates and key judgements impacting the financial statements such as valuation of investment property.

  
- 7 -

Audit procedures performed by the engagement team included:

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

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

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

We have no exceptions to report arising from this responsibility.

Entitlement to exemptions

Under the Companies Act 2006 we are required to report to you if, in our opinion, the directors were not entitled to: prepare financial statements in accordance with the small companies regime; and take advantage of the small companies exemption from preparing a strategic report. We have no exceptions to report arising from this responsibility.

Ian Tait (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers CI LLP
Chartered Accountants and Statutory Auditors
Jersey
18 December 2024
ARK UP3 LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
Year
Period
ended
20 December 2022 to
30 June 2024
30 June 2023
Notes
£
£
Property expenses
(4,127,885)
(100,000)
Administrative expenses
(334,663)
(189,636)
Operating loss
(4,462,548)
(289,636)
Interest receivable and similar income
30,636
1,421
Interest payable and similar expenses
5
(3,491,094)
(99)
Change in fair value of investment property
6
(63,478,982)
-
Loss before taxation
(71,401,988)
(288,314)
Taxation
7
-
0
0
-
0
Loss for the financial year/period
(71,401,988)
(288,314)

The notes on pages 10 to 15 form part of these financial statements.

ARK UP3 LIMITED
BALANCE SHEET
AS AT
30 JUNE 2024
30 June 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investment property
8
75,800,000
-
0
Current assets
Debtors
9
2,680,960
33,598
Cash at bank and in hand
4,139,013
1,711
6,819,973
35,309
Creditors: amounts falling due within one year
10
(19,544,682)
(119,124)
Net current liabilities
(12,724,709)
(83,815)
Total assets less current liabilities
63,075,291
(83,815)
Creditors: amounts falling due after more than one year
11
(134,280,427)
(204,399)
Net liabilities
(71,205,136)
(288,214)
Capital and reserves
Called up share capital
12
485,166
100
Profit and loss reserves
(71,690,302)
(288,314)
Total equity
(71,205,136)
(288,214)

The notes on pages 10 to 15 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 1A - small entities.

The financial statements on pages 8 to 15 were approved by the board of directors and authorised for issue on
17 December 2024
17 December 2024
and are signed on its behalf by:
H T Owen
I S Perryment
Director
Director
Company registration number 14551933
ARK UP3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
1
Accounting policies
Company information

Ark UP3 Limited is a private company limited by shares incorporated in England and Wales. The registered office is Spring Park, Westwells Road, Hawthorn, Corsham, Wiltshire, SN13 9GB.

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, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors have prepared the financial statements on a going concern basis.true

 

At 30 June 2024 the company had net current liabilities of £12,724,709 (2023: £83,815). As disclosed in Note 11, by issuing unsecured loan notes on The International Stock Exchange ("TISE") to a related party, the company has access to liquidity and sufficient undrawn group finance facilities to be able to meet all liabilities and commitments as they fall due. In addition to this, on 22 October 2024 Ark UP3 Limited obtained a bank loan facility of £200m of which £44.5m has been drawn down at the date of approving these financial statements.

 

The directors are therefore satisfied that the company has sufficient group finance facilities and support from the ultimate parent at their disposal to meet working capital requirements, finance the capital commitments disclosed in Note 13 and meet other obligations and commitments as they fall due and for a period of at least 12 months from the date of approval of the financial statements.

1.3
Property expenses

Property expenses includes those costs directly attributable to the maintenance, security, running and fit out of its data centres. Costs are recognised in the period to which they relate, exclusive of VAT.

1.4
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.5
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.

1.6
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.

ARK UP3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 11 -
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, listed loan notes and loans from fellow group companies, 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. Listed loan notes represent unsecured, unsubordinated fixed rate funding loan notes issued by the company to fund the principal activities. These are initially recognised at amounts drawn and subsequently measured at amounts drawn plus interest less payments made.

 

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.

1.7
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.

1.8
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 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.

 

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 profit and loss account, 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.

ARK UP3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
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. Judgements, estimates and assumptions have been made in relation to the valuation of the company's investment property (see note 8). 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.

3
Auditor's remuneration
Year
Period
ended
20 Dec 2022 to
30 June 2024
30 June 2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
17,550
10,000
For other services
Other taxation services
45,000
-
0
4
Employees

There were no employees during the year (2023: none).

 

No directors' remuneration was paid in either the current year or prior period. The directors are remunerated by other group undertakings for which no allocations are made to the company.

5
Interest payable and similar expenses
Year
Period
ended
20 Dec 2022 to
30 June 2024
30 June 2023
£
£
Interest payable to related undertakings (see note 11):
- On TISE loan notes
1,981,881
-
- On other loans
1,509,213
99
3,491,094
99
6
Change in fair value of investment property
Year
Period
ended
20 Dec 2022  to
30 June 2024
30 June 2023
£
£
Fair value losses
Change in the fair value of investment property
63,478,982
-
ARK UP3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 13 -
7
Taxation

No deferred tax has been recognised at 30 June 2024 or 30 June 2023 in relation to carried forward losses or capital allowances. This is due to the uncertainty and judgement associated with both the estimation of the financial value, as well as uncertainty around the timing of when such assets would be utilised.

8
Investment property
2024
2023
£
£
Fair value
At 1 July
-
0
-
0
Additions
139,278,982
-
Net fair value loss on investment property
(63,478,982)
-
At 30 June
75,800,000
-

Investment property represents the data centre campus known as Union Park Block 3. The investment property has been revalued as at 30 June 2024 at fair value by the directors with reference to market-based evidence and expected future cash flows derived from the assets. An independent professional valuation of Union Park was carried out by a RICS qualified valuer as at 30 June 2024 and this was taken into consideration in the directors' assessment of the fair value. The valuation methodology used to establish the value of the investment property includes a number of key assumptions. These include, but are not limited to; occupancy rates, contracted and uncontracted income forecasts, operational costs, capital replacement costs, planning permission, the stage of development, committed costs to complete the development, discount rates and exit yields.

On 10 July 2023 investment property was transferred to the company at fair value from Ark Estates 2 Limited for £16,654,031. The fair value of the investment property at the transfer date was determined by the independent professional valuation of Union Park carried out by a RICS qualified valuer as at 30 June 2023 as the directors did not consider the value of the investment property at 10 July 2023 to have significantly changed since that valuation.

If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2024
2023
£
£
Cost
139,278,982
-
9
Debtors
2024
2023
Amounts falling due within one year:
£
£
Other debtors
2,680,960
26,985
Prepayments and accrued income
-
0
6,613
2,680,960
33,598
ARK UP3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 14 -
10
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
15,709,644
101,911
Other creditors - construction retentions
3,738,142
-
0
Accruals
96,896
17,213
19,544,682
119,124
11
Creditors: amounts falling due after more than one year
2024
2023
£
£
Amounts owed to related undertakings:
- TISE loan notes
133,728,637
-
0
- Interest accrued on TISE loan notes
551,790
-
0
- Other loans
-
0
204,399
134,280,427
204,399

Amounts owed to related undertakings are owed to subsidiaries of Ark Capital Partners I LP Inc., the ultimate parent of Ark UP3 Limited. The amounts owed at 30 June 2023 were repayable on 30 September 2025 and interest was payable at a rate of 5.9% per annum. On 31 December 2023 485,066 ordinary shares of £1 each were issued at par in exchange for a decrease in amounts owed to related undertakings (see note 12). On 19 March 2024 the amount owed to related undertakings was converted into unsecured loan notes due 31 December 2038 listed on TISE. Interest is payable on the loan notes at a fixed rate of 8.4% per annum and is converted into unsecured loan notes on a quarterly basis. During the year £1,430,091 (2023: £Nil) of interest was capitalised.

12
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
485,166
100
485,166
100

On 31 December 2023 485,066 ordinary shares of £1 each were issued at par in exchange for a decrease in amounts owed to related undertakings (see note 11).

13
Capital commitments

Amounts contracted for but not provided in the financial statements:

2024
2023
£
£
Investment property development expenditure
239,625,721
-
ARK UP3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
14
Events after the reporting date

On 22 October 2024 Ark UP3 Limited obtained a bank loan facility of £200m of which £44.5m has been drawn down. The bank loan is repayable on 22 October 2029 and interest is payable on a quarterly basis at a rate of SONIA plus 2.75%.

 

There have been no other post balance sheet events requiring disclosure in the notes to the financial statements.

15
Control

The immediate parent company is UP3 Holdings Limited, a company registered in England and Wales, and the ultimate parent undertaking is Ark Capital Partners I LP Inc., a limited partnership registered in the Isle of Man. The limited partnership is controlled by its partners.

Ark Estates 2 Limited is the parent undertaking of the smallest group of undertakings to consolidate these financial statements at 30 June 2024. The consolidated financial statements of Ark Estates 2 Limited are available from Companies House.

 

Ark Capital Partners I LP Inc. is the parent undertaking of the largest group of undertakings to consolidate these financial statements at 30 June 2024. The consolidated financial statements of Ark Capital Partners I LP Inc. are available from its general partner Goshawk GP Limited, First Names House, Victoria Road, Douglas, Isle of Man IM2 4DF.

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