Company Registration No. 13995829 (England and Wales)
FF Propco 2 Limited
Financial statements
for the year ended 31 December 2023
Pages for filing with the registrar
FF Propco 2 Limited
Contents
Page
Statement of financial position
1
Notes to the financial statements
2 - 8
FF Propco 2 Limited
Statement of financial position
As at 31 December 2023
1
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
4
27,024,036
Current assets
Debtors
5
481,390
3,476,513
Cash at bank and in hand
367,680
5,360
849,070
3,481,873
Creditors: amounts falling due within one year
6
(6,659,256)
(3,533,600)
Net current liabilities
(5,810,186)
(51,727)
Total assets less current liabilities
21,213,850
(51,727)
Creditors: amounts falling due after more than one year
7
(21,445,387)
Net liabilities
(231,537)
(51,727)
Capital and reserves
Called up share capital
9
1,000
1,000
Profit and loss reserves
(232,537)
(52,727)
Total equity
(231,537)
(51,727)
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 12 May 2025 and are signed on its behalf by:
Mr K K Khimji
Director
Company Registration No. 13995829
FF Propco 2 Limited
Notes to the financial statements
For the year ended 31 December 2023
2
1
Accounting policies
Company information
FF Propco 2 Limited is a private company limited by shares incorporated in England and Wales. The registered office is 14 Bedford Square, London, United Kingdom, WC1B 3JA.
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 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.
1.2
Going concern
Although the company has a shareholder deficit it trades with the continued financial support of related partiestrue and group, as well as funding through an external loan provider.
At the time of approving the financial statements the directors have an expectation after considering its investment property development programme, funding sources and financial projections and that the company has adequate resources to continue in operational existence for the foreseeable future. The company investment property construction work was completed on 5 November 2024 and is now entering occupancy phase.
The company has an existing development loan facility with a third party lender, and at the date of approval of the financial statements has an extension on the loan maturity date of this facility until 14 May 2025. The directors are actively engaged in advanced discussions to refinance the existing facility with the intention to transition from the development loan arrangement to an investment loan for the longer term. The directors are confident in concluding the refinancing programme in the near future and they will meet obligations as they fall due.
The company also has continued financial support from its connected companies and connected parties confirming that they will continue to provide, or arrange to provide resources to enable them to continue that financial support, for a period of at least 12 months from date of signing of these financial statements.
In the preparation of future financial projections the company has considered the areas of uncertainty, in particular those relating to cost management and working capital management. Specifically, considering any ongoing impact of wider property market and macro-economic factors. From these considerations the directors deem that the company can continue to have sufficient levels of cash to meet its going concern requirements.
FF Propco 2 Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
3
1.3
Investment property
Investment property, which is property held to by the company to earn rentals or for capital appreciation, or both.
Investment property is initially recognised at purchase cost, including directly attributable acquisition expenses. It is subsequently measured at fair value, except for investment property under construction or redevelopment at the balance sheet date, which is held at cost until construction or redevelopment is complete.
The fair value of investment property reflects, among other things, rental income from current leases, assumptions about rental income from future leases in light of current market conditions and consideration of the return on development work.
Subsequent expenditure is added to the assets carrying amount only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit and loss account during the financial period in which they are incurred.
Any movement in the fair value of the properties is reflected within the profit and loss account for the year.
A gain or loss arising on the disposal of investment properties is determined as the difference between the net sales proceeds and the carrying value of the asset at the beginning of the period and is recognised in the profit and loss account.
1.4
Borrowing costs related to fixed assets
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
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 statement of financial position 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.
Basic financial assets
Basic financial assets, which include debtors, 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.
FF Propco 2 Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
4
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, 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.
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 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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
FF Propco 2 Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
5
2
Critical accounting 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.
Key sources of estimation uncertainty
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.
Fair value of investment properties
The company investment property at the balance sheet date was in the process of redevelopment. In accordance with the company accounting policy it is recognised at cost plus directly attributable expenses, then subsequently measured at fair value upon completion of development works. The directors have considered the fair value and potential impairment of costs at the year end. The annual consideration of investment property valuation is sensitive to the changes in property market and the economic climate of the surrounding area. The property is valued by either relevant property experts or the directors each year at the balance sheet date.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
4
Investment property
2023
£
Fair value
At 1 January 2023
Assets under development
27,024,036
At 31 December 2023
27,024,036
On 14 February 2023 the company acquired an investment property. Additions reflect the cost of the property as well as directly attributable costs of development work in period to 31 December 2023, The directors consider the carrying value of £27,024,036 for investment property to accurately reflect the value of the property at the balance sheet At the balance sheet date the property was in development stage.
FF Propco 2 Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
6
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Other debtors
326,326
3,302,688
Prepayments and accrued income
155,064
173,825
481,390
3,476,513
In the prior year a balance of £3,253,817 was included in other debtors which was a deposit for the purchase of the investment property. This has now been reclassified and capitalised as part of the investment property acquired during the year. At the date of approval of the financial statements has an extension on the loan maturity date of this facility until 14 May 2025. The directors are actively engaged in advanced discussions to refinance the existing facility with the intention to transition from the development loan arrangement to an investment loan for the longer term. The directors are confident in concluding the refinancing programme in the near future and they will meet obligations as they fall due.
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,403,947
79,657
Amounts owed to group undertakings
5,222,009
3,442,038
Other creditors
33,300
11,905
6,659,256
3,533,600
7
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans
21,445,387
8
Loans and overdrafts
2023
2022
£
£
Bank loans
21,445,387
Payable after one year
21,445,387
The bank loan due after one year is a loan of £21,445,387 which is secured by fixed and floating charges over the assets of the company and a first legal charge over the investment property held by the company. The loan agreement maturity date was extended to 14 May 2025.
FF Propco 2 Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
7
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
1 A Ordinary Shares of 1p each
26,900
50,000
269
500
1 B Ordinary Shares of 1p each
50,000
50,000
500
500
Deferred Shares of 1p each
23,100
-
231
-
100,000
100,000
1,000
1,000
On 3 February 2023 there was a re-designation of 23,082 A Ordinary Shares 1p to 23,082 1p Deferred Shares .
The rights to these shares were varied as Deferred Shares with having no rights, no rights of redemption, no income rights and a remote capital right of £1 as a class after £1m has been paid on each of the A ordinary and the B ordinary shares.
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Roger Weston
Statutory Auditors:
Saffery LLP
FF Propco 2 Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
8
11
Related party transactions
Soul Capital Holdings Limited
The balance due to Soul Capital Holdings Limited, a company incorporated in England & Wales, at the balance sheet date was £190,485. Mr K K Khimji is also a director of Soul Capital Holdings Limited. The loan is interest free and repayable upon demand. In addition, an expense transaction totalling £248,061 was incurred over the year with Soul Capital Holdings Limited. This fee resulted from interest on an intercompany loan.
Soul Development Services Limited
The balance due to Soul Development Services Limited, a company incorporated in England & Wales, at the balance sheet date was £220,900. Mr K K Khimji is also a director of Soul Development Services Limited. The loan is interest free and repayable upon demand. An income transaction totalling £489,043 was incurred over the year with Soul Capital Holdings Limited. This fee resulted from management of property activities.
110/116 Cheshire Street Limited
The balance due to 110/116 Cheshire Street Limited, a company incorporated in England & Wales, at the balance sheet date was £78,820. Mr K K Khimji, Mr M A Merchant and Mrs S A Merchant are also the directors 110/116 Cheshire Street Limited. The loan is interest free and repayable upon demand.
Soul Development Holdings Limited
The balance due to Soul Development Holdings Limited, a company incorporated in England & Wales, at the balance sheet date was £3,132,004. Mr K K Khimji and Mrs S A Merchant are also the directors Soul Development Holdings Limited. Part of the loan balances in year incurred interest of 5% up to repayment date with an additional 1.5% charge for each month after the planned date. The remaining loan balances are interest free and repayable on demand.
Shareholder loan
The balance due to FF Propco Ltd, a company incorporated in Jersey, at the balance sheet date was £1,599,800. Mrs S A Merchant is also a director of FF Propco Ltd. The loan is interest free and repayable upon demand.
12
Parent company
The parent company of FF Propco 2 Limited is Soul Development Holdings Limited and its registered office is 14 Bedford Square, London, United Kingdom, WC1B 3JA.
Ultimate Controlling Party
There is no one ultimate controlling party.