REGISTERED NUMBER: 04893064 (England and Wales)

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

MELL SQUARE LIMITED

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

3

Statement of Income and Retained Earnings

7

Balance Sheet

8

Notes to the Financial Statements

9

DIRECTORS:

P Q Carroll

M Clayton

SECRETARY:

A P Kinsey

REGISTERED OFFICE:

Council House

Manor Square

Solihull

West Midlands

B91 9QS

REGISTERED NUMBER:

04893064 (England and Wales)

AUDITORS:

Prime

Chartered Accountants

Statutory Auditor

Corner Oak

1 Homer Road

Solihull

B91 3QG

The directors present their report with the financial statements of the company for the year ended 31 December 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

P Q Carroll

M Clayton

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 profit or loss 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.

AUDITORS

Prime have been appointed for a 3-year period which ends after 2026 accounts, at that point re-appointment will be based on the Directors approval.

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:

M Clayton - Director

7 September 2026

Opinion

We have audited the financial statements of Mell Square Limited (the 'company') for the year ended 31 December 2025 which comprise the Statement of Income and Retained Earnings, 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 '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 2025 and of its loss 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 Report of the Auditors 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.

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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry sector;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence;

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC and other relevant parties.

There are inherent limitations in our audit procedures described above. 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 Report of the Auditors.

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 a Report of the Auditors 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.

Luke Edwards ACA FCCA (Senior Statutory Auditor)

for and on behalf of Prime

Chartered Accountants

Statutory Auditor

Corner Oak

1 Homer Road

Solihull

B91 3QG

7 September 2026

TURNOVER

5,129,874

5,993,588

Cost of sales

157,170

135,467

GROSS PROFIT

4,972,704

5,858,121

Administrative expenses

3,477,725

4,212,250

1,494,979

1,645,871

Other operating income

470,542

4,003

Gain/loss on revaluation of investment property

(2,300,000

)

(654,467

)

OPERATING (LOSS)/PROFIT

(334,479

)

995,407

Interest receivable and similar income

13,198

24,121

(321,281

)

1,019,528

Interest payable and similar expenses

1,825,615

1,946,220

LOSS BEFORE TAXATION

(2,146,896

)

(926,692

)

Tax on loss

(575,000

)

(163,499

)

LOSS FOR THE FINANCIAL YEAR

(1,571,896

)

(763,193

)

Retained earnings at beginning of year

(21,529,506

)

(20,766,313

)

RETAINED EARNINGS AT END OF YEAR

(23,101,402

)

(21,529,506

)

FIXED ASSETS

Investment property

4

23,525,153

25,800,000

CURRENT ASSETS

Debtors

5

2,121,258

2,638,499

Cash at bank

2,181,022

71,418

4,302,280

2,709,917

CREDITORS

Amounts falling due within one year

6

3,133,997

2,160,478

NET CURRENT ASSETS

1,168,283

549,439

TOTAL ASSETS LESS CURRENT LIABILITIES

24,693,436

26,349,439

CREDITORS

Amounts falling due after more than one year

7

(32,735,612

)

(32,247,676

)

PROVISIONS FOR LIABILITIES

-

(572,043

)

NET LIABILITIES

(8,042,176

)

(6,470,280

)

CAPITAL AND RESERVES

Called up share capital

1,000

1,000

Share premium

15,058,226

15,058,226

Retained earnings

(23,101,402

)

(21,529,506

)

SHAREHOLDERS' FUNDS

(8,042,176

)

(6,470,280

)

The financial statements have been prepared 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 7 September 2026 and were signed on its behalf by:

M Clayton - Director

1.	STATUTORY INFORMATION

Mell Square Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Going concern

At 31 December 2025 the company has net current assets of £4,302,280 (2024 £2,709,917) and net liabilities of £8,042,176 (2024 £6,470,280). The directors have prepared a cash flow for the period through to April 2026 which shows that the company is able to meet its obligations as they fall due. The directors would like to note that during the year, the terms of the loan agreement with the parent company were fully complied with, but a waiver of the covenants has been received. Having considered future cash flow scenarios, and whilst the expectation is that the terms of the loan agreement will be complied with, in a reasonable and plausible downside scenario the company will require the parent company to either defer loan interest, capital repayments or head lease payments.

In preparing these cash flow forecasts, the Directors have received confirmation from its parent company, SMBC, that it would be prepared to defer loan interest, capital repayments and head lease payments to 30 April 2027, in the event that this was required to enable the Company to maintain a positive cash balance. This confirmation is not legally binding but based on the previous support from the parent company, the directors believe there is a reasonable expectation to rely on this and have concluded that is appropriate to prepare the financial statements on a going concern basis.

Preparation of financial statements

The company's ultimate parent undertaking, Solihull Metropolitan Borough Council ('SMBC') includes the Company in its consolidated financial statements. The consolidated financial statements of SMBC are prepared in accordance with proper accounting practices. The council is required under the Accounts and Audit regulations 2015 to prepare an annual Statement of Accounts in accordance with proper accounting practices. These practices primarily comprise the CIPFA / LASAAC Code of Practice 2020/21, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 21(2) of the Local Government Act 2003. The accounts are available to the public and may be obtained at

https://www.solihull.gov.uk/About-the-Council/Financial-documents

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Income and Retained Earnings, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2024 - NIL).

4.	INVESTMENT PROPERTY

Total

£

FAIR VALUE

At 1 January 2025

25,800,000

Additions

25,153

Revaluations

(2,300,000

)

At 31 December 2025

23,525,153

NET BOOK VALUE

At 31 December 2025

23,525,153

At 31 December 2024

25,800,000

Fair value at 31 December 2025 is represented by:

£

Valuation in 2023

(39,393,904

)

Valuation in 2024

(654,466

)

Valuation in 2025

(2,300,000

)

Cost

65,873,523

23,525,153

The property was revalued on 17 Feb 2026 on an open market basis by Cushman & Wakefield.

The directors consider that this valuation represents fair value at 31 December 2025.

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025

2024

£

£

Trade debtors

579,526

725,485

Other debtors

1,541,732

1,913,014

2,121,258

2,638,499

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025

2024

£

£

Amounts owed to group undertakings

2,436,753

1,310,931

Taxation and social security

28,636

-

Other creditors

668,608

849,547

3,133,997

2,160,478

Amounts owed to the parent undertaking of £2,436,753 (2024: £1,310,931) relates to accrued interest and other balances settled by Solihull Metropolitan Borough Council ('SMBC') on the company's behalf. The balance is payable on demand.

7.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2025

2024

£

£

Loan over 1 year

32,735,612

32,247,676

Amounts falling due in more than five years:

Repayable otherwise than by instalments

Other loans more 5yrs non-inst

32,093,309

31,642,303

8.

LOANS

An analysis of the maturity of loans is given below:

2025

2024

£

£

Amounts falling due within one year or on demand:

Other loans

138,177

130,233

Amounts falling due between one and two years:

Other loans - 1-2 years

146,607

138,177

Amounts falling due between two and five years:

Other loans - 2-5 years

495,696

467,196

2025

2024

£

£

Amounts falling due in more than five years:

Repayable otherwise than by instalments

Other loans more 5yrs non-inst

32,093,309

31,642,303

Loans owed to the company's parent undertaking represents loans to Solihull Metropolitan Borough Council of £32,729,321 (2024: £32,241,747). The loan terms were documented in a facility agreement dated 20 July 2022 which confirmed the rate of interest from the loan inception on 9 April 2021 with the term of 50 years at 6.01%. Quarterly instalments of £518,633.25 inclusive of interest are schedule up to the final repayment date on 9 April 2071.There was an additional loan for Phase 1 of construction for £744,818.47 with the term of 30 years at 5.4%.

9.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2025

2024

£

£

Within one year

2,320,303

2,320,303

Between one and five years

9,281,208

9,281,208

In more than five years

136,408,329

138,728,631

148,009,840

150,330,142

The total future minimum lease payments receivable under non-cancellable operating leases are as follows:

2025

2024

£

£

Within one year

4,365,277

4,289,482

Between one year and five years

9,354,032

9,885,826

After five years

47,590,644

48,369,236

61,309,953

62,544,544

10.	RELATED PARTY DISCLOSURES

The company has taken advantage of the exception conferred by FRS 102 paragraph 33.1A not to disclose transactions with wholly owned subsidiaries within the group.

11.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party and parent is Solihull Metropolitan Borough Council.