REGISTERED NUMBER: |
REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
ELEPHANT CENTRAL MANAGEMENT LIMITED |
REGISTERED NUMBER: |
REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
ELEPHANT CENTRAL MANAGEMENT LIMITED |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Report of the Directors | 2 |
Independent Auditors' Report | 4 |
Income Statement | 7 |
Balance Sheet | 8 |
Notes to the Financial Statements | 9 |
ELEPHANT CENTRAL MANAGEMENT LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditors |
12 Melcombe Place |
London |
NW1 6JJ |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
QUALIFYING THIRD PARTY INDEMNITY PROVISIONS |
The company's Articles of Association provide, subject to the provisions of UK legislation, an indemnity for directors and officers of the company in respect of liabilities they may incur in defending certain proceedings against them. |
GOING CONCERN |
The Company's operations are financed by service charge income, other operating income such as Homeplus Services, the release of deferred funding (to fund the initial set-up of the site's management) and the recovery of fire safety costs from the Get Living PLC group (in compliance with the Building Safety Act 2022). |
The directors are aware of legislation to protect certain leaseholders from the burden of building safety costs, in particular the Building Safety Act 2022 and the associated regulations that implement and supplement its provisions. The directors recognise that, by reason of Schedule 8 of the Building Safety Act 2022, the company will be unable to recover some of the costs of remedying and mitigating building safety defects through the service charge. However, the directors do not believe that there is any uncertainty as to how the company will fund future costs in respect of these required fire safety works. The directors have been provided assurance from Get Living PLC, on behalf of the group, that it will financially support all currently known future obligations to remedy fire safety defects, recognised as a provision in these accounts of £32,000,000 (2022 £Nil).. |
The directors are not aware of any material uncertainties as to the company's ability to continue as a going concern. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
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 of the surplus or deficit of the company 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 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. |
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 company'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 company's auditors are aware of that information. |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
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: |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
ELEPHANT CENTRAL MANAGEMENT LIMITED |
Opinion |
We have audited the financial statements of Elephant Central Management Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Balance Sheet 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 Section 1A '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 company's affairs as at 31 December 2023 and of its result 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
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. |
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 Auditors' Report 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. |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
ELEPHANT CENTRAL MANAGEMENT LIMITED |
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 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, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the 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 Strategic Report or in preparing the Report of the Directors. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities 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 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. |
There are inherent limitations in our audit procedures. 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 Auditors' Report. |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
ELEPHANT CENTRAL MANAGEMENT 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 an Auditors' 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. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
12 Melcombe Place |
London |
NW1 6JJ |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER |
Cost of sales | ( |
) | ( |
) |
GROSS SURPLUS |
OPERATING SURPLUS and |
SURPLUS BEFORE TAXATION |
Tax on surplus |
SURPLUS FOR THE FINANCIAL YEAR |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
BALANCE SHEET |
31 DECEMBER 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 5 |
CURRENT ASSETS |
Debtors | 6 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 7 | ( |
) | ( |
) |
NET CURRENT ASSETS/(LIABILITIES) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | ( |
) | ( |
) |
NET LIABILITIES |
RESERVES | - | - |
The financial statements were approved by the Board of Directors and authorised for issue on |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Elephant Central Management Limited is a private company, limited by guarantee, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page. |
These accounts report the transactions of Elephant Central Management Limited only and the presentation currency of the financial statements is the Pound Sterling (£). |
The company's principal place of business is Elephant Central, Elephant Road, London SE17 1LA. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
These financial statements have been prepared in accordance with the provisions of Section 1A "Small Entities" of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. |
The financial statements are also prepared in accordance with the Institute of Chartered Accountants in England and Wales ("ICAEW") Technical Release "Tech 03/11" and taking account of subsequent legal counsel's opinion obtained separately by both ICAEW and the Financial Reporting Council in determining whether a management company acts as principal when contracting with third party suppliers to the property's service charge. |
Turnover |
Turnover comprises: |
- Service charge income receivable from leaseholders (including insurance) |
- Homeplus income |
- Funding from Get Living PLC group in respect of surveys to external wall systems and in respect of works to fulfil the Company's legal obligations to remediate or mitigate reported building safety defects;and |
- Funding from DV4 Eadon Co Limited. |
Get Living PLC is the ultimate controlling party, details of which are set out in Note 11 to these accounts. |
DV4 Eadon Co Limited is a group company registered in the British Virgin Islands and the funding provided is for the set-up and preparation of the site known as Elephant Central, Elephant Road, London SE17 1LA in preparation for its future leasehold occupation. |
The funding used for the purchase of tangible fixed assets is deferred on the balance sheet and released to the profit and loss account over the useful economic life of each asset. |
Service charge income and funding income are recognised in line with the recognition of expenditure which is being funded. |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. |
Plant and machinery etc - 20% on cost and 10% on cost |
Going concern |
The Company's operations are financed by service charge income, other operating income such as Homeplus Services, the release of deferred funding (to fund the initial set-up of the site's management) and the recovery of fire safety costs from the Get Living PLC group (in compliance with the Building Safety Act 2022). |
The directors are aware of legislation to protect certain leaseholders from the burden of building safety costs, in particular the Building Safety Act 2022 and the associated regulations that implement and supplement its provisions. The directors recognise that, by reason of Schedule 8 of the Building Safety Act 2022, the company will be unable to recover some of the costs of remedying and mitigating building safety defects through the service charge. However, the directors do not believe that there is any uncertainty as to how the company will fund future costs in respect of these required fire safety works. The directors have been provided assurance from Get Living PLC, on behalf of the group, that it will financially support all currently known future obligations to remedy fire safety defects, recognised as a provision in these accounts of £32,000,000 (2022: £Nil). |
The directors are not aware of any material uncertainties as to the company's ability to continue as a going concern. |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Value added tax |
Throughout the year, the company has held an interest in Elephant Central by way of an over-riding lease. Therefore all service charge expenditure in relation to the residential units of the property is included inclusive of VAT. |
The company has elected to waive the exemption from VAT in respect of its interest in Elephant Central. Therefore all service charge expenditure in relation to the commercial units of the property is included exclusive of VAT. |
All other expenditure is included exclusive of VAT. |
3. | EMPLOYEES AND DIRECTORS |
Due to the Company's workforce being outsourced during the previous financial year, the average number of persons employed by the company during the year (excluding directors) was Nil (2022 : 26). |
The directors received no remuneration during the year. |
4. | OPERATING SURPLUS |
The operating surplus is stated after charging: |
31.12.23 | 31.12.22 |
£ | £ |
Depreciation - owned assets |
Auditors' remuneration |
5. | TANGIBLE FIXED ASSETS |
Plant and |
machinery |
etc |
£ |
COST |
At 1 January 2023 |
Disposals | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
6. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
6. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR - continued |
Other debtors includes accrued income of £30,708,952 (2022: £Nil) in respect of the provision for fire safety works detailed in note 8, Provisions for Liabilities, net of deferred income of £1,291,048. The amount of accrued income will not crystallise until such time as the cost included in provisions for liabilities is incurred. The directors recognise that, by reason of Schedule 8 to the Building Safety Act 2022, the company will be unable to recover the costs of remedying and mitigating building safety defects through the service charge. Therefore, it is anticipated that this income will derive from the Get Living PLC group, being group undertakings. |
The following balances as at 31 December 2022 are also recognised in other debtors: |
Monies held in a designated client account managed by Savills. The balance of company funds held was £1,995,810 (2022 : £784,945). |
A balance of £1,356,539 (2022 : £388,720) due from Elephant Central service charge trust. |
During the year, service charge monies were held in trust in designated client accounts managed by Savills. Such balances are not recognised on the company's balance sheet, in accordance with the Institute of Chartered Accountants in England and Wales ("ICAEW") Technical Release "Tech 03/11". At 31 December 2023 the company held service charge funds of £1,168,033 (2022 : £671,082) in trust. |
7. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Taxation and social security |
Other creditors |
Amounts owed to group undertakings are interest free, unsecured and repayable on demand. |
8. | PROVISIONS FOR LIABILITIES |
Balance at 01 January 2023 £ 78,581 |
Provided during year £32,079,810 |
Balance at 31 December 2023 £32,158,391 |
Included in the amount provided during the year is an amount of £32,000,000 (2022: £Nil) recognised as the Company's cost to fulfil its obligations for fire safety works to be incurred after the accounting year end. The company's commitment to fulfil its duty in respect of the fire safety works is considered a legal obligation as defined by paragraph 2.20 of FRS102 and has been recognised in the balance sheet as a provision to the extent that the value can be measured reliably (applying paragraph 2.30 of FRS 102) as at the date of finalising these financial statements (applying paragraph 32.4 of FRS102). |
9. | EVENTS AFTER THE END OF THE REPORTING PERIOD |
In respect of the company's overall liability for obligatory fire safety works, the directors have applied the provisions of paragraph 32.4 of FRS 102 to adjust the amounts recognised in the financial statements, including the related disclosures, to reflect adjusting events after the end of the reporting period. |
10. | COMPANY LIMITED BY GUARANTEE |
The company is limited by guarantee and does not have a share capital. In the event that the company is wound up, the members have undertaken to contribute up to £1 each towards any deficit. |
ELEPHANT CENTRAL MANAGEMENT LIMITED (REGISTERED NUMBER: 10238166) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | FRC ETHICAL STANDARD - PROVISIONS AVAILABLE FOR SMALL ENTITIES |
In common with many other businesses of our size and nature we use our auditors to prepare and submit returns to the tax authorities and to assist with the preparation of the financial statements. |
12. | CONTROLLING PARTY |
The parent company of the smallest group for which consolidated financial statements are drawn up is Get Living Plc, a company registered in England and Wales whose registered office address is 1 East Park Walk, London E20 1JL. |