HMT_CANNON_PLACE_LIMITED - Accounts

The directors of the company have elected not to include a copy of the income statement within the financial statements.

HMT Cannon Place Limited is a private company limited by shares incorporated in England and Wales. The registered office is Connect House, 133-137 Alexandra Road, Wimbledon, London, SW19 7JY.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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. The principal accounting policies adopted are set out below.

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover comprises rental income receivable from the tenants of the investment property. This turnover is recognised in the period to which the income is receivable. Rental income received in advance is deferred in the balance sheet to the following period.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

The investment property is depreciated over 289 years, which is the length of the long lease, on a straight line basis.

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

Financial assets are initially measured at fair value, plus transaction costs. They are subsequently measured at amortised cost.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

On initial recognition the company calculates the expected credit loss for debtors based on lifetime expected credit losses under the IFRS 9 simplified approach.

Investment property held at amortised cost is compared to an external valuation at the balance sheet date to determine if an impairment is required.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable.

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.

Cashflow statement

The company prepares its statement of cashflows using the indirect method.

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The company uses external professional valuers to determine the fair value that is considered as part of the impairment review. The valuation is based upon a number of assumptions including future rental income, anticipated maintenance costs, future development costs and an appropriate discount rate. The primary source of evidence for property valuations should be recent, comparable market transactions on an arms-length basis. Total impairment loss of £6,048,837 was recognised for the financial period ended December 2022. Following the valuation at the end of current year £194,734 of this impairment was reversed.

The average monthly number of persons (including directors) employed by the company during the year was:

No depreciation has been charged over the value of the land.

The fair value of investment property amounts to £50m. The fair value has been arrived at on the basis of a valuation carried out by CBRE Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

The fair value of the investment property amounts to not less than the carrying value of the investment property at the period end and therefore total reversal of impairment of £194,734 has been recognised for the financial period.

The loan of £32.5m (2022: £33m) from parent undertaking bears a fixed interest per annum at a rate based on arm's length basis which has been determined by a transfer pricing study prepared by an external independent advisor. Per the Interest rate benchmarking report the transaction should bear an interest rate between 1.95% and 2.25% p.a. to comply with the arm's length principle. An average rate of 2.1% has been used by the entity based on the Interest rate benchmarking report. Total interest payable for the period is £687,247.

The loan is unsecured.

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.

Included in borrowings is a loan of £32.5m (2022: £33m) from its parent company for the purpose of funding the acquisition of the investment property. The loan is payable after 5 years. The market interest of 2.1% was charged by the parent company, which is payable annually.

The ultimate parent company is Amcotec NV whose registered office address is 79 Huette Eupen, Belgium 4700.