Echo Liverpool Limited - Limited company accounts 23.1

REGISTERED NUMBER: 11474633 (England and Wales)

Echo Liverpool Limited

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2022

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

3

Consolidated Statement of Profit or Loss

7

Consolidated Statement of Profit or Loss and Other Comprehensive Income

8

Consolidated Statement of Financial Position

9

Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Consolidated Statement of Cash Flows

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

TJ Hardwick

S Sinha

REGISTERED OFFICE:

Bridge House

12 Market Street

Glossop

United Kingdom

SK13 8AR

REGISTERED NUMBER:

11474633 (England and Wales)

AUDITORS:

McMillan & Co LLP

Chartered Accountants and

Statutory Auditor

28 Eaton Avenue

Matrix Office Park

Buckshaw Village

Chorley

Lancashire

PR7 7NA

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2022.

DIRECTORS

TJ Hardwick has held office during the whole of the period from 1 January 2022 to the date of this report.

Other changes in directors holding office are as follows:

S Sinha was appointed as a director after 31 December 2022 but prior to the date of this report.

I Liaqat ceased to be a director after 31 December 2022 but prior to the date of this report.

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 UK-adopted international accounting standards. 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information.

AUDITORS

The auditors, McMillan & Co LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

S Sinha - Director

30 May 2023

Opinion

We have audited the financial statements of Echo Liverpool Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion:

-	the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2022 and of the group's loss for the year then ended;

-	the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK;

-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and

-	the financial statements 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 group 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 group's and the parent 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 group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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.

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 group's and the parent 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 group or the parent 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 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; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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, and

- tested journal entries to identify 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;

- reading the minutes of meetings of those charged with governance;

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

- reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company's legal advisors.

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.

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.

Neil McMillan FCA (Senior Statutory Auditor)

for and on behalf of McMillan & Co LLP

Chartered Accountants and

Statutory Auditor

30 May 2023

CONTINUING OPERATIONS

Revenue

2,412,158

1,133,188

Cost of sales

-

(77,028

)

GROSS PROFIT

2,412,158

1,056,160

Administrative expenses

(1,136,293

)

(876,365

)

OPERATING PROFIT

1,275,865

179,795

Finance costs

4

(1,921,418

)

(548,732

)

Finance income

4

53,447

-

LOSS BEFORE INCOME TAX

5

(592,106

)

(368,937

)

Income tax

6

-

32,870

LOSS FOR THE YEAR

(592,106

)

(336,067

)

Loss attributable to:

Owners of the parent

(592,106

)

(336,067

)

LOSS FOR THE YEAR

(592,106

)

(336,067

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(592,106

)

(336,067

)

Total comprehensive income attributable to:

Owners of the parent

(592,106

)

(336,067

)

ASSETS

NON-CURRENT ASSETS

Investment property

8

38,240,184

39,075,193

Investments

9

-

-

38,240,184

39,075,193

CURRENT ASSETS

Trade and other receivables

10

2,255,671

1,296,438

Cash and cash equivalents

11

185,452

42,403

2,441,123

1,338,841

TOTAL ASSETS

40,681,307

40,414,034

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

12

1,000

1,000

Retained earnings

13

(1,091,783

)

(499,677

)

TOTAL EQUITY

(1,090,783

)

(498,677

)

LIABILITIES

NON-CURRENT LIABILITIES

Financial liabilities - borrowings

Interest bearing loans and borrowings

15

22,325,000

-

CURRENT LIABILITIES

Trade and other payables

14

19,447,090

40,912,711

TOTAL LIABILITIES

41,772,090

40,912,711

TOTAL EQUITY AND LIABILITIES

40,681,307

40,414,034

The financial statements were approved by the Board of Directors and authorised for issue on 30 May 2023 and were signed on its behalf by:

S Sinha - Director

ASSETS

NON-CURRENT ASSETS

Investment property

8

38,240,184

39,075,193

Investments

9

100

100

38,240,284

39,075,293

CURRENT ASSETS

Trade and other receivables

10

2,225,019

1,099,661

Cash and cash equivalents

11

184,559

22,456

2,409,578

1,122,117

TOTAL ASSETS

40,649,862

40,197,410

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

12

1,000

1,000

Retained earnings

13

(1,168,648

)

(552,506

)

TOTAL EQUITY

(1,167,648

)

(551,506

)

LIABILITIES

NON-CURRENT LIABILITIES

Financial liabilities - borrowings

Interest bearing loans and borrowings

15

22,325,000

-

CURRENT LIABILITIES

Trade and other payables

14

19,492,510

40,748,916

TOTAL LIABILITIES

41,817,510

40,748,916

TOTAL EQUITY AND LIABILITIES

40,649,862

40,197,410

The financial statements were approved by the Board of Directors and authorised for issue on 30 May 2023 and were signed on its behalf by:

S Sinha - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2021

1,000

(163,610

)

(162,610

)

Changes in equity

Total comprehensive income

-

(336,067

)

(336,067

)

Balance at 31 December 2021

1,000

(499,677

)

(498,677

)

Changes in equity

Total comprehensive income

-

(592,106

)

(592,106

)

Balance at 31 December 2022

1,000

(1,091,783

)

(1,090,783

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2021

1,000

(303,750

)

(302,750

)

Changes in equity

Total comprehensive income

-

(248,756

)

(248,756

)

Balance at 31 December 2021

1,000

(552,506

)

(551,506

)

Changes in equity

Total comprehensive income

-

(616,142

)

(616,142

)

Balance at 31 December 2022

1,000

(1,168,648

)

(1,167,648

)

Cash flows from operating activities

Cash generated from operations

1

334,493

(10,456,717

)

Interest paid

(1,921,418

)

(548,732

)

Net cash from operating activities

(1,586,925

)

(11,005,449

)

Cash flows from investing activities

Cost of investment property development

(19,886

)

(1,682,914

)

Group loans repaid

(20,628,587

)

-

Group loans advanced

-

12,466,002

Interest received

53,447

-

Net cash from investing activities

(20,595,026

)

10,783,088

Cash flows from financing activities

New loans in year

22,325,000

-

Net cash from financing activities

22,325,000

-

Increase/(decrease) in cash and cash equivalents

143,049

(222,361

)

Cash and cash equivalents at beginning of year

2

42,403

264,764

Cash and cash equivalents at end of year

2

185,452

42,403

1.	RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

2022

2021

£

£

Loss before income tax

(592,106

)

(368,937

)

Depreciation charges

854,895

284,965

Finance costs

1,921,418

548,732

Finance income

(53,447

)

-

2,130,760

464,760

Increase in trade and other receivables

(959,233

)

(420,890

)

Decrease in trade and other payables

(837,034

)

(10,500,587

)

Cash generated from operations

334,493

(10,456,717

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2022

31/12/22

1/1/22

£

£

Cash and cash equivalents

185,452

42,403

Year ended 31 December 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

42,403

264,764

1.	STATUTORY INFORMATION

Echo Liverpool 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 General Information page.

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

The amounts in the financial statements have been rounded to the nearest £1.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Going concern

Despite the fact that the company has consolidated net current liabilities of £17,005,967 and net liabilities of £1,090,783, the financial statements have been prepared on a going concern basis which the directors consider to be appropriate.

The directors are of the opinion that the company will have sufficient funds to meet its liabilities as they fall due. Funds will be provided through funding from the ultimate parent company, Select Group Limited, if required, and funds have been secured post year end from an external funders.

The directors have considered the ability of Select Group Limited to provide financial support based on information provided by Select Group Limited. The ability of Select Group Limited to continue to provide this support is dependent on the group achieving its own cash flow forecast and the continued availability of shareholder loans to the Group. The legacy of the recent COVID-19 pandemic has caused significant global economic uncertainty and the impact of the pandemic may result in variability in the group's actual results compared to its forecast.

Based on these indications, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Basis of consolidation

These consolidated account incorporate the accounts of the Company and its subsidiary, which has been consolidated on a line-by-line basis. The financial accounts of the subsidiary have been prepared up to 31 December.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power of the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Transactions eliminated on consolidation

All intra-group balances and transactions, and any unrealised gains or losses and income or expenses arising from intra-group transactions, are eliminated in full in preparing these consolidated financial statements. Unrealised gains arising from transactions with equity accounted investments are eliminated to the extent of the Group's interest in the entity.

Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Critical accounting judgements and key sources of estimation uncertainty

The critical accounting judgement is the valuation of property, and the depreciation rate applied to it.

The property is maintained at cost, less depreciation. The useful economic life has been set at 50 years. The property has been professionally valued in the year, but the financial statements are not updated to reflect the uplift in the valuation as a cost model has been adopted.

Revenue recognition

Under IFRS 15 Revenue is recognised when the following criteria are met;

- the parties to the contract have approved the contract;

- the entity can identify each parties rights regarding the goods to be transferred;

- the entity can identify the payment terms;

- the contract has commercial substance;

- it is probable that the entity will collect the consideration we are entitled to in respect to the goods to be transferred.

Turnover from apartment rental is recognised on a straight line basis over the term of the rental contract, to the extent that it is probable that the economic benefits will flow to the company and it can be reliably measured.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position.

Investment property

IAS 40 allows for two methods of measurement for Investment property following the initial measurement at cost, the fair value method or the cost method. The company's accounting policy is to use the cost model and therefore the property is held at cost and then depreciated.

Depreciation is calculated using a straight-line method to allocate the depreciation amounts over the estimated useful lives. The useful economic life of the property is 50 years. The property included an element of land, which is not depreciated.

Financial instruments

Financing expenses include interest payable, finance charges on shares classified as liabilities and finance charges on lease liabilities recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the income statement. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset.

Financing income comprise interest receivable on funds invested, dividend income, interest income on lease receivables and net foreign exchange gains.

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity's right to receive payments is established. Foreign currency gains and losses are reported on a net basis.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

3.	EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 December 2022 nor for the year ended 31 December 2021.

The average number of employees during the year was NIL (2021 - NIL).

2022

2021

£

£

Directors' remuneration

-

-

4.	NET FINANCE COSTS

2022

2021

£

£

Finance income:

Interest received

53,447

-

Finance costs:

Interest payable

1,921,418

548,732

Net finance costs

1,867,971

548,732

5.	LOSS BEFORE INCOME TAX

The loss before income tax is stated after charging:

2022

2021

£

£

Cost of inventories recognised as expense

-

77,028

Depreciation - owned assets

854,895

284,965

Auditors' remuneration

21,900

30,000

6.	INCOME TAX

Analysis of tax income

2022

2021

£

£

Current tax:

Tax relating to earlier year

-

(32,870

)

Total tax income in consolidated statement of profit or loss

-

(32,870

)

7.	LOSS OF PARENT COMPANY

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was £(616,142) (2021 - £(248,756)).

8.	INVESTMENT PROPERTY

Group

Total

£

COST

At 1 January 2022

39,360,158

Additions

19,886

At 31 December 2022

39,380,044

DEPRECIATION

At 1 January 2022

284,965

Charge for year

854,895

At 31 December 2022

1,139,860

NET BOOK VALUE

At 31 December 2022

38,240,184

At 31 December 2021

39,075,193

The investment property was professionally valued on 27 September 2021 by JLL at £44.65m.

The property is being depreciated over 50 years. The cost includes a value attributed to land of £3.9m, which is not subject to depreciation.

9.	INVESTMENTS

Company

Unlisted

investments

£

COST

At 1 January 2022

and 31 December 2022

100

NET BOOK VALUE

At 31 December 2022

100

At 31 December 2021

100

The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiary

Echo Building (Liverpool) Limited

Registered office:

Nature of business: Property development

%

Class of shares:

holding

Ordinary

100.00

2022

2021

£

£

Aggregate capital and reserves

76,965

52,959

Profit/(loss) for the year

24,036

(87,311

)

10.	TRADE AND OTHER RECEIVABLES

Group

Company

2022

2021

2022

2021

£

£

£

£

Current:

Trade debtors

1,851,893

819,661

1,851,893

819,661

Amounts owed by group undertakings

300,000

300,000

280,000

280,000

VAT

-

166,025

-

-

Called up share capital not paid

-

100

-

-

Prepayments and accrued income

103,778

10,652

93,126

-

2,255,671

1,296,438

2,225,019

1,099,661

11.	CASH AND CASH EQUIVALENTS

Group

Company

2022

2021

2022

2021

£

£

£

£

Bank accounts

185,452

42,403

184,559

22,456