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Registered number: 11602360
EARTH CREATION LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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EARTH CREATION LIMITED
CONTENTS
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Statement of changes in equity
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Notes to the financial statements
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EARTH CREATION LIMITED
COMPANY INFORMATION
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Sheikh Hamad Saoud Al-Thani
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REGISTERED NUMBER:11602360
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EARTH CREATION LIMITED
BALANCE SHEET
AS AT 31 OCTOBER 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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REGISTERED NUMBER:11602360
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EARTH CREATION LIMITED
BALANCE SHEET (CONTINUED)
AS AT 31 OCTOBER 2024
The director considers that the company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and signed by the sole director.
Sheikh Hamad Saoud Al-Thani
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The notes on pages 5 to 12 form part of these financial statements.
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EARTH CREATION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2024
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Capital loan contribution
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Interest income transferred to profit and loss account
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Distribution arising on below-market intra-group loan (note 10)
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The notes on pages 5 to 12 form part of these financial statements.
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
Earth Creation Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 16 Great Queen Street, Covent Garden, London, WC2B 5AH.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies.
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis. The company is funded by loans from the director. The director has confirmed that he intends to continue providing financial support to the company for a period of at least twelve months from the date of approval of these financial statements and that the monies advanced by him will not be called for repayment, unless the company has adequate resources to make repayment. Accordingly, the director considers it appropriate to prepare the accounts on a going concern basis.
Turnover comprises rental income and other recoveries from tenants of the company’s investment properties net of value added tax. Rental income is recognised on an accruals basis in the period in which it is earned, in accordance with the terms of the lease.
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.
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.
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances, intercompany working capital balances, and intercompany financing are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
Financial liabilities
Basic financial liabilities, including trade and other 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investment property is carried at fair value determined annually by the director and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
Ordinary shares are classified as equity.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated financial instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
2.Accounting policies (continued)
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Current tax is the amount of corporation tax payable in respect of taxable profit for the year or prior years.
The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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The average monthly number of employees, including director, during the year was 2 (2023 - 2).
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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Freehold investment property
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The company is party to a sub-ordination agreement in favour of the Bank of London and the Middle East under which all of the assets of the company are subject to a first charge, including the investment property, in favour of the Bank.
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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Due after more than one year
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Amounts owed by group undertakings (see note 10)
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Amounts owed by group undertakings
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Creditors: amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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EARTH CREATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
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Allotted, called up and fully paid
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100 (2023 - 100) Ordinary shares of £1.00 each
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The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
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Other reserves
Other reservess include amounts arising from intra-group financing arrangements.
Earth Creation Limited advanced interest-free loans to a fellow group undertakings, Galaxy HBS Ltd and Celestial HBS Ltd totalling £32,960,343 in October 2024 In accordance with applicable accounting standards, the loans were initially recognised at their present value, discounted using a deemed market rate of interest of 12.5%, based on comparable external financing arrangements available to the company. The discounted present value of the loans calculated is £11,320,288.
The difference between the loans advanced and their discounted present value represents a non-cash distribution to fellow group undertakings of £21,310,674. This amount has been recognised directly in equity and reported within other reserves. The unwinding of the discount in future years will be recognised as interest income in the profit and loss account over the term of the loans, with the corresponding increase in the amount recorded within amounts due from group undertakings.
As at 31 October 2024, the total receivable value of the loans due from Galaxy HBS Ltd and Celestial HBS Ltd amounted to £16,200,000 & £16,760,342 respectively.
The interest income reported in respect of these loans in the year to 31 October 2024 is £1,271,348 (2023: NIL).
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Related party transactions
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Included in other creditors due less than one year is an amount owed to the director of £39,314,682 (2023: £34,405,645). The amount is interest free and payable on demand.
Creditors due after more than one year consist of a loan provided by the director. Interest at 4.5% per annum is charged on the balance of the loan. Interest payable of £1,353,699 (2023: £1,350,000) has been charged to the profit and loss account. The loan is repayable in 10 years.
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The ultimate controlling party is Sheikh Hamad Saoud Al-Thani.
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