Morpeth ll Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 05607094 (England and Wales)

Morpeth ll Limited

Financial Statements for the Year Ended 30th September 2019

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

M Dransfield

S J Stead

J E Shepherd

SECRETARY:

S Burgess

REGISTERED OFFICE:

Dransfield House

2 Fox Valley Way

Fox Valley

Sheffield

South Yorkshire

S36 2AB

REGISTERED NUMBER:

05607094 (England and Wales)

AUDITORS:

Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire HU2 8BA

FIXED ASSETS

Investment property

4

28,150,000

28,156,000

CURRENT ASSETS

Debtors

5

1,487,340

1,659,140

Cash at bank

279,108

232,786

1,766,448

1,891,926

CREDITORS

Amounts falling due within one year

6

2,660,658

2,300,368

NET CURRENT LIABILITIES

(894,210

)

(408,442

)

TOTAL ASSETS LESS CURRENT LIABILITIES

27,255,790

27,747,558

CREDITORS

Amounts falling due after more than one year

7

(17,797,500

)

(19,250,000

)

PROVISIONS FOR LIABILITIES

10

-

(7,537

)

NET ASSETS

9,458,290

8,490,021

CAPITAL AND RESERVES

Called up share capital

11

1,238,593

1,238,593

Non-distributable reserves

12

2,622,572

2,628,572

Retained earnings

12

5,597,125

4,622,856

SHAREHOLDERS' FUNDS

9,458,290

8,490,021

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Statement of Comprehensive Income has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 12th June 2020 and were signed on its behalf by:

M Dransfield - Director

1.	STATUTORY INFORMATION

Morpeth ll 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.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared in accordance with applicable accounting standards including

Section 1A "Small Entities" of Financial Reporting Standard 102 the Financial Reporting Standard Applicable in

the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The financial statements have been

prepared on a going concern basis under the historical cost convention, modified to include certain items at fair

value.

The significant accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all years presented unless otherwise stated.

Turnover

Turnover is measured at the fair value of the consideration received or receivable net of VAT. The policies

adopted for the recognition of turnover are as follows:

Turnover from the rental of premises and related service charges are accounted for on a straight line basis over

the lease term, save where under the transitional rules on the introduction of FRS 102, rental income on

pre-existing leases continues to be accounted for on a straight line basis over the shorter of the period from the

lease commencement date to the date of the first open market rent review or the lease break clause, whichever

is earlier. The company treats any general incentive for lessees to enter into a lease agreement as a revenue

cost and accounts for rental income from the lease commencement date. The cost of all lease incentives is

therefore offset against the total rent due.

Investment property

Investment properties are measured at fair value at each reporting date with changes in fair value recognised in

the statement of comprehensive income.

Tax

Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the

current or past reporting periods. It is measured as the amount expected to be paid or recovered using the tax

rates and laws have been enacted or substantively enacted by the balance sheet date.

Deferred tax represents the future tax consequences of transactions and events recognised in the financial

statements of current and previous periods. It is recognised in respect of all timing differences, with certain

exceptions. Timing differences are differences between taxable profits and total comprehensive income as

stated in the financial statements that arise from the inclusion of income and expense in tax assessments in

periods different from those in which they are recognised in the financial statements. 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. In addition deferred tax is only recognised on

accelerated capital allowances on plant in investment properties where the difference in tax treatment is not

considered to be permanent in view of the available tax elections on disposal.

Deferred tax is measured using the tax rates and laws, that have been enacted or substantively enacted by the

balance sheet date, that are expected to apply to the reversal of timing differences. Deferred tax on revalued

non-depreciable tangible fixed assets and investment properties is measured using the rates and allowances

that apply to the sale of the asset.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently,

they are measured at amortised cost using the effective interest rate method, less impairment.

Finance charges

Finance charges incurred relating directly to the construction of tangible fixed assets are capitalised as part of

that asset cost. Capitalisation is limited to the period during which the development is ongoing.

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at

transaction price. Any losses arising from impairment are recognised in the statement of comprehensive income

in other administrative expenses.

Impairment

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each

balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash

generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its

recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued

amount where the impairment loss is a revaluation decrease.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2018 - NIL).

4.	INVESTMENT PROPERTY

Total

£

FAIR VALUE

At 1st October 2018

28,156,000

Revaluations

(6,000

)

At 30th September 2019

28,150,000

NET BOOK VALUE

At 30th September 2019

28,150,000

At 30th September 2018

28,156,000

A completed investment property was valued as at 30th September 2019 by Jones Lang LaSalle at open market

value.

Finance costs

In order to show an asset's true cost, finance costs incurred whilst construction of an asset is ongoing, are

capitalised as part of that asset's cost. Total finance costs capitalised on the construction of the above

investment properties to date amount to £574,239.

5.

DEBTORS

2019

2018

£

£

Amounts falling due within one year:

Trade debtors

12,558

121,881

Amounts owed by group undertakings

-

109,192

Other debtors

1,049,683

884,963

Prepayments

88,132

131,525

1,150,373

1,247,561

Amounts falling due after more than one year:

Other debtors

336,967

411,579

Aggregate amounts

1,487,340

1,659,140

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Bank loans and overdrafts

1,452,500

500,000

Trade creditors

113,516

83,693

Amounts owed to group undertakings

302,992

764,325

Taxation and social security

150,619

252,591

Other creditors

641,031

699,759

2,660,658

2,300,368

7.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2019

2018

£

£

Bank loans

17,797,500

19,250,000

8.	LEASING AGREEMENTS

The investment property is divided into retail units which are let out to tenants under operating leases. At the

year end the committed lease receipts due under non-cancellable leases are as follows:

2019

2018

Falling due:

£

£

Within one year

1,818,195

2,063,091

Between one and five years

5,183,958

4,869,678

Over five years

1,908,412

2,955,305

8,910,565

9,888,074

9.	SECURED DEBTS

The following secured debts are included within creditors:

2019

2018

£

£

Bank loans

19,250,000

19,750,000

The bank loan is secured by fixed and floating charges.

10.	PROVISIONS FOR LIABILITIES

2019

2018

£

£

Deferred tax

Short term timing differences

-

7,537

Deferred

tax

£

Balance at 1st October 2018

7,537

Credit to Income Statement during year

(7,537

)

Balance at 30th September 2019

-

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2019

2018

value:

£

£

1

A Ordinary

£1

1

1

1,238,592

B Ordinary

£1

1,238,592

1,238,592

1,238,593

1,238,593

12.

RESERVES

Retained

Non-distributable

earnings

reserves

Totals

£

£

£

At 1st October 2018

4,622,856

2,628,572

7,251,428

Profit for the year

993,137

-

993,137

Dividends

(24,868

)

-

(24,868

)

Reclassification

6,000

(6,000

)

-

At 30th September 2019

5,597,125

2,622,572

8,219,697

Retained earnings

Retained earnings represents cumulative profits and losses net of dividends and other adjustments.

Non-distributable reserve

Where investment properties are measured at fair value a transfer is made to the non-distributable reserve,

instead of a transfer to retained earnings, to assist with the identification of profits available for distribution.

13.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Ian Lamb FCA CF (Senior Statutory Auditor)

for and on behalf of Smailes Goldie

14.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102A 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

15.	POST BALANCE SHEET EVENTS

The virus known as Covid-19 has spread worldwide leading to various restrictions on movement and businesses

being imposed.

Many of the company's tenants are in the retail sector which has been badly affected. The company has actively

engaged with those tenants to assist them where appropriate for the initial period affected. Whilst this will

necessarily affect the company's results for the current period the precise effect is commercially sensitive and for

that reason no further disclosure is made. Furthermore, it is difficult to say with any certainty the period for which

the company will be adversely affected.

As a consequence of the above the company has put several measures in place to mitigate the risks to the

business caused by Covid-19, including making cost savings. In addition, the company has agreed with its

bankers in principle capital repayment holidays and the suspension of financial covenants for two quarters. The

company has close relationships with its bankers such that it is confident that there will be sufficient flexibility to

deal with the situation as lockdown eases. It has not been necessary to apply for any of the governments

supported loan schemes.

There will inevitably be some adverse effect on investment property values in the short term. However, the

company believes its valuations to be robust and as a result of that and its strong tenant base those valuations

will, in the medium term, prove to be sound.

16.	CONTROL RELATIONSHIPS