PLJ Mezz Holdco UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 843 Finchley Road, London, NW11 8NA.
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 £.
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.
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, including creditors, bank loans, loans from fellow companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The directors have not had to make any significant judgements in preparing the financial statements.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year concerns the valuation of the London property development which forms the inventory included the company's assets at the reporting date.
The property development was completed in December 2018. It had become clear to the directors that due to cost overruns and negative movements in the high end London property market that at that point the capitalised cost of the development was likely to exceed its net realisable value and was therefore likely to be impaired. A professional valuation was sought in October 2018 and an impairment of £23,163,943 was recorded at 31 December 2018. As part of a refinancing process with the company's third party lender, DB Bank UK Limited, CBRE were engaged to undertake a second professional valuation of the development during 2020.
The unsold units were valued at £87,850,000 in October 2020. Once adjusted for actual outcomes on subsequent sales, the value of the inventory at 31 December 2020 was assessed to be £88,750,950 and an impairment charge of £3,590,441 was recorded to write the inventory down to that value as at 31 December 2020.
During 2022 and in 2023/4 through to the reporting date, it has generally been observed that units are selling at prices above the October 2020 CBRE valuation. Management do not therefore believe there to be any indication of a further impairment at 31 December 2022. Cumulative impairment charges recorded to date amount to £26,754,384.
Given the nature of this estimate, it is likely the actual outcome will not equal this cumulative impairment estimate. There is therefore a risk that the actual value of the inventory may be higher or lower than the £60,550,451 recorded in the company's current assets at the year end.
The average monthly number of persons (including directors) employed by the company during the year was:
Included in amounts owed by group undertaking is loan principal of £75,154,623 (2022 - £67,102,824 ) which attracts interest at 12% p.a Accrued interest rolled up into the principal on 1 January each year. The loan is repayable on demand, subject to the condition that the borrower must first repay the bank loan. The balance at the year end also includes accrued interest for the year of £9,018,015 (2022 - £8,051,799)
Also included in amounts owed by group undertaking is an interest free loan of £28,438,206 (£2022-£28,438,206). The loan also repayable on demand, subject to the condition that borrower must first repay the bank loan.
Cumulative provision for impairment totalling £60,923,522 (2022 - £60,923,522) have been recorded against the bank loan.
PLJ Chelsea S.a.r.l. has historically provided various working capital loans to the company. At the year end, the principal outstanding on these loans was £75,150,124 (2022 - £67,098,325). Interest is charged at 12% p.a. on the principal, with accrued interest rolled up into the principal on 1 January each year. At the year end, accrued interest amounted to £9,018,015 (2022 - £8,051,799 ). The loan and interest is unsecured and repayable on demand (subject to the condition the company must first repay the bank loan).
Golden Line SA has historically provided various working capital loans to the company. At the year end, the principal outstanding on these loans was £25,123,875 (2022 - £25,123,875). The loan is interest free, unsecured and repayable on demand (subject to the condition the company must first repay the bank loan).
LJ Management (IOM) Limited invoiced the company £Nil (2022 - £7,597) during the year for support services provided. A balance of £22,423 (2022 - £22,423) was outstanding at the year end and included in trade creditors. A significant shareholder in PLJ Chelsea S.a.r.l. has an indirect significant shareholding in LJ Management (IOM) Limited.
AlTi RE Limited, has historically incurred expenditure on behalf of the company. A balance of £13,826 (2022 - £13,826) is included in other creditors at the year end. A significant shareholder in PLJ Chelsea Sarl has an indirect significant interest in AITi RE Limited.