TIDM85QW
RNS Number : 7542Z
Broadgate Financing PLC
21 May 2019
The Annual Report and Accounts for the year ended 31 March 2019,
attached below in accordance with DTR 6.3.5R, has been submitted to
the Financial Conduct Authority through the National Storage
Mechanism and will shortly be available for inspection at:
http://www.morningstar.co.uk/uk/NSM
The Annual Report and Accounts are also available at:
http://www.britishland.com/investors/strategic-partnerships/broadgate-financing-plc
For a printable version of the Annual Report and Accounts,
please follow link below:
http://www.rns-pdf.londonstockexchange.com/rns/7542Z_1-2019-5-21.pdf
Registration number: 05316365
Broadgate Financing PLC
Annual Report and Financial Statements for the Year Ended 31
March 2019
Strategic Report for the Year Ended 31 March 2019
The directors present their Strategic Report for the year ended
31 March 2019.
Business review and principal activities
Broadgate Financing PLC ("the company") is a wholly owned
subsidiary of Broadgate Property Holdings Limited and operates as a
constituent of Broadgate REIT Limited group of companies ("the
group"). Broadgate REIT Limited operates as a joint venture between
Euro Bluebell LLP, an affiliate of GIC, Singapore's sovereign
wealth fund, and BL Bluebutton 2014 Limited, a wholly owned
subsidiary of The British Land Company PLC.
The company's principal activity is to provide funding to fellow
subsidiaries within the group.
As shown in the company's Profit and Loss Account on page 10,
the company has no turnover and this has remained consistent with
the prior year. Profit on ordinary activities before taxation is
GBP6,654 compared to a profit on ordinary activities before
taxation of GBP6,014 in the prior year.
Dividends of GBPnil (2018: GBPnil) were paid in the year.
The Balance Sheet on page 12 shows that the company's financial
position at the year end has, in net assets terms, increased
compared with the prior year, predominantly as a result of
derivative valuation movements.
The expected future developments of the company are determined
by the strategy of the group. There are no future developments
outside of the company's current operations planned.
For more information also see Broadgate REIT Limited group
annual report.
The performance of the group, which includes the company, is
discussed in the group's annual report which does not form part of
this report.
Key performance indicators
The directors measure how the group, of which this company is a
member, is delivering its strategy through the key performance
indicators.
The directors consider the primary measure of performance of the
group to be net asset value.
Principal risks and uncertainties
This company is part of a large property investment group. As
such, the fundamental underlying risks for this company are those
of the property group. The key risks of this group are the
performance of the properties and tenant default, as this ensures
necessary funds are available to repay securitisation interest and
principal. These risks are mitigated by preference for tenants with
strong covenants on long leases and by using highly rated
counterparties and monitoring those ratings.
These risks have high visibility to senior executives and are
considered and managed on a continuous basis. Executives use their
knowledge and experience to knowingly accept a measured degree of
market risk.
The group's preference for prime assets and their secure long
term contracted rental income, primarily with upward only rent
review clauses, presents lower risks than many other property
portfolios.
Credit risk is the risk that one party to a financial instrument
will fail to discharge an obligation and cause the other party to
incur a financial loss. In order to manage this risk, management
regularly monitors the credit rating of credit counterparties and
monitors all amounts that are owed to the company.
Liquidity risk is the risk that the entity will encounter
difficulty in raising funds to meet commitments associated with
financial liabilities. This risk is managed through day to day
monitoring of future cash flow requirements to ensure that the
company has enough resources to repay all future liabilities as
they fall due.
The company holds no derivatives as at 31 March 2019 (2018:
three). These were previously used to fix the LIBOR rate on
external debt, but were closed out in the year when the relevant
floating rate bonds were repaid. The fair value of interest rate
derivatives at the year end is a liability of GBPnil (2018:
GBP37.5m liability).
Approved by the Board on 14 May 2019 and signed on its behalf
by:
H Shah
Director
Directors' Report for the Year Ended 31 March 2019
The directors present their report and the audited financial
statements for the year ended 31 March 2019.
Directors of the company
The directors, who held office during the year, and up to the
date of signing the financial statements, were as follows:
T Roberts (resigned 31 March 2019)
H Shah
D Lockyer
D Richards (appointed 31 March 2019)
Directors' responsibilities statement
The directors acknowledge their responsibilities for preparing
the Annual Report 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 Accounting Standards (United Kingdom Generally
Accepted Accounting Practice), including FRS 101 'Reduced
Disclosure Framework' ('FRS 101'). 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 apply them consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- state whether FRS 101 has been followed, subject to any material
departures disclosed and explained in the financial statements;
and
-- 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.
The directors of the ultimate parent company are responsible for
the maintenance and integrity of the of the ultimate parent
company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The company has indemnified one or more of its current
directors. The indemnity arrangements are qualifying indemnity
provisions under the Companies Act 2006 and are currently in force
at the date of this Annual Report.
A number of associated companies within the group have
indemnified one or more of their current directors. The indemnity
arrangements are qualifying indemnity provisions under the
Companies Act 2006 and are currently in force at the date of this
Annual Report.
Environmental matters
The company recognises the importance of its environmental
responsibilities, monitors its impact on the environment, and
designs and implements policies to reduce any damage that might be
caused by the company's activities. The company operates in
accordance with best practice policies and initiatives designed to
minimise the company's impact on the environment including the safe
disposal of manufacturing waste, recycling and reducing energy
consumption.
Going concern
The directors consider the company to be a going concern and the
financial statements are prepared on this basis. Details of this
are shown in note 2 of the financial statements.
Subsequent Events
Details of significant events since the Balance Sheet date, if
any, are contained in note 17.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the company's auditors are aware
of that information. The directors confirm that there is no
relevant information that they know of and of which they know the
auditors are unaware.
Reappointment of independent auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their
willingness to continue in office and a resolution concerning their
re-appointment will be proposed at the next Board Meeting.
Approved by the Board on 14 May 2019 and signed on its behalf
by:
H Shah
Director
Independent Auditors' Report to the Members of Broadgate
Financing PLC
Report on the audit of the financial statements
Opinion
In our opinion, Broadgate Financing PLC's financial
statements:
-- give a true and fair view of the state of the company's affairs
as at 31 March 2019 and of its profit for the year then ended;
-- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 "Reduced Disclosure Framework",
and applicable law); and
-- have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements, included within the
Annual Report and Financial Statements (the "Annual Report"), which
comprise: the Balance Sheet as at 31 March 2019; the Profit and
Loss Account, the Statement of Comprehensive Income, the Statement
of Changes in Equity for the year then ended; and the notes to the
financial statements, which include a description of the
significant accounting policies.
Our opinion is consistent with our reporting to those charged
with governance.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities under ISAs (UK) are further described in the
Auditors' responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remained independent of the company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC's Ethical
Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC's Ethical Standard were
not provided to the company.
We have provided no non-audit services to the company in the
period from 1 April 2018 to 31 March 2019.
Our audit approach
Overview
Materiality
-- Overall materiality: GBP14,746,000 (2018: GBP17,800,000),
based on 1% of total assets.
Audit Scope
Our 2019 audit was planned and executed having regard to the
fact that the company's operations were largely unchanged in nature
from the previous year. Additionally, there have been no
significant changes to the accounting standards relevant to the
company. In light of this, our approach to the audit in terms of
scoping and areas of focus was largely unchanged.
Key Audit Matters
-- We have no key audit matters to report.
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain.
Capability of the audit in detecting irregularities, including
fraud
Based on our understanding of the company and industry, we
identified that the principal risks of non-compliance with laws and
regulations related to the Companies Act 2006 and the Listing
Rules, and we considered the extent to which non-compliance might
have a material effect on the financial statements. We also
considered those laws and regulations that have a direct impact on
the preparation of the financial statements such as the Companies
Act 2006. We evaluated management's incentives and opportunities
for fraudulent manipulation of the financial statements (including
the risk of override of controls), and determined that the
principal risks were related to posting inappropriate journal
entries to increase revenue or reduce expenditure. Audit procedures
performed by the engagement team included:
-- Discussions with management and internal audit, including
consideration of known or suspected instances of non-compliance
with laws and regulations and fraud, and review of the reports made
by management and internal audit;
-- Understanding of management's internal controls designed to
prevent and detect irregularities, risk-based monitoring of
customer processes;
-- Assessment of matters reported on the company's
whistleblowing helpline and the results of management's
investigation of such matters;
-- Reviewing the company's litigation register in so far as it
related to non-compliance with laws and regulations and fraud;
-- Reviewing relevant meeting minutes;
-- Review of tax compliance with the involvement of our tax
specialists in the audit;
-- Designing audit procedures to incorporate unpredictability
around the nature, timing or extent of our testing of interest
income on bank deposits, a balance which would otherwise be
immaterial;
-- Testing transactions entered into outside of the normal
course of the company's business;
There are inherent limitations in the audit procedures described
above and the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it.
Also, the risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through
collusion.
Key audit matters
Key audit matters are those matters that, in the auditors'
professional judgement, were of most significance in the audit of
the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had
the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the
engagement team. We determined that there were no key audit matters
applicable to the company to communicate in our report.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
company, the accounting processes and controls, and the industry in
which it operates.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Overall materiality GBP14,746,000 (2018: GBP17,800,000)
------------------------------- -----------------------------------
How we determined it 1% of total assets
------------------------------- -----------------------------------
Rationale for benchmark applied We believe that total assets is
the primary measure used by the
shareholders in assessing the
performance of the entity, and
is a generally accepted auditing
benchmark.
We agreed with those charged with governance that we would
report to them misstatements identified during our audit above
GBP737,300 (2018: GBP891,000) as well as misstatements below that
amount that, in our view, warranted reporting for qualitative
reasons.
Conclusions relating to going concern
ISAs (UK) require us to report to you when:
--the directors' use of the going concern basis of accounting in
the preparation of the financial statements is not appropriate;
or
--the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the company's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
We have nothing to report in respect of the above matters.
As not all future events or conditions can be predicted, this
statement is not a guarantee as to the company's ability to
continue as a going concern. For example, the terms on which the
United Kingdom may withdraw from the European Union are not clear,
and it is difficult to evaluate all of the potential implications
on the company's trade, customers, suppliers and the wider
economy.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our auditors'
report thereon. The directors are responsible for the other
information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or, except to the extent otherwise explicitly stated in
this report, any form of assurance 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 an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other information. 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 based on these
responsibilities.
With respect to the Strategic Report and Directors' Report, we
also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on the responsibilities described above and our work
undertaken in the course of the audit, ISAs (UK) require us also to
report certain opinions and matters as described below.
Strategic Report and Directors' Report
In our opinion, based on the work undertaken in the course of
the audit, the information given in the Strategic Report and
Directors' Report for the year ended 31 March 2019 is consistent
with the financial statements and has been prepared in accordance
with applicable legal requirements.
In light of the knowledge and understanding of the company and
its environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic Report and
Directors' Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Directors' responsibilities
statement set out on page 3, the directors are responsible for the
preparation of the financial statements in accordance with the
applicable framework and for being satisfied that they give a true
and fair view. The directors are also responsible for such internal
control as they determine is 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 an
auditors' report 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.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors' report.
Use of this report
This report, including the opinions, has been prepared for and
only for the company's members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- we have not received all the information and explanations
we require for our audit; or
-- adequate accounting records have not been kept by the company,
or returns adequate for our audit have not been received from
branches not visited by us; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- the financial statements are not in agreement with the accounting
records and returns.
We have no exceptions to report arising from this
responsibility.
Appointment
We were appointed by the directors on 27 March 2015 to audit the
financial statements for the year ended 31 March 2015 and
subsequent financial periods. The period of total uninterrupted
engagement is 5 years, covering the years ended 31 March 2015 to 31
March 2019.
John Waters (Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
14 May 2019
Profit and Loss Account for the Year Ended 31 March 2019
2019 2018
Note GBP GBP
Turnover - -
Administrative expenses (1,000) (1,000)
------------- ------------
Operating loss (1,000) (1,000)
Loss on ordinary activities before
interest and taxation (1,000) (1,000)
Interest receivable and similar income 4 109,234,930 80,337,864
Interest payable and similar expenses 5 (109,227,276) (80,330,850)
------------- ------------
Profit on ordinary activities before
taxation 6,654 6,014
Tax on profit on ordinary activities 8 (1,264) (1,142)
------------- ------------
Profit for the year 5,390 4,872
============= ============
Turnover and results were derived from continuing operations
within the United Kingdom. The company has only one class of
business, that of to provide funding to fellow subsidiaries within
the group.
Statement of Comprehensive Income for the Year Ended 31 March
2019
2019 2018
GBP GBP
Profit for the year 5,390 4,872
---------- ----------
Items that may be reclassified subsequently
to profit or loss
Gain on interest rate derivatives 4,530,473 13,352,923
Interest rate derivatives transferred to
income statement (cash flow hedges) 30,686,000 -
---------- ----------
35,216,473 13,352,923
---------- ----------
Total comprehensive income for the year 35,221,863 13,357,795
========== ==========
Broadgate Financing PLC
(Registration number: 05316365)
Balance Sheet as at 31 March 2019
31 March 31 March
2019 2018
Note GBP GBP
Current assets
Debtors due within one year 9 38,397,318 70,521,068
Cash at bank and in hand 10 150,573,967 200,130,844
Debtors due after more than one year 9 1,285,735,154 1,513,252,868
--------------- ---------------
1,474,706,439 1,783,904,780
Creditors due within one year 11 (44,510,811) (82,989,922)
--------------- ---------------
Total assets less current liabilities 1,430,195,628 1,700,914,858
Loans and borrowings 12 (1,429,774,154) (1,735,715,247)
--------------- ---------------
Net assets/(liabilities) 421,474 (34,800,389)
=============== ===============
Capital and reserves
Share capital 13 12,500 12,500
Cash flow hedging reserve - (35,216,473)
Profit and loss account 408,974 403,584
--------------- ---------------
Shareholders' funds/(deficit) 421,474 (34,800,389)
=============== ===============
Approved by the Board on 14 May 2019 and signed on its behalf
by:
H Shah
Director
Statement of Changes in Equity for the Year Ended 31 March
2019
Cash flow Profit and
Share capital hedging reserve loss account Total
GBP GBP GBP GBP
Balance at 1 April
2017 12,500 (48,569,396) 398,712 (48,158,184)
Profit for the year - - 4,872 4,872
Derivative valuation
movements on cash
flow hedges - 13,352,923 - 13,352,923
------------- ---------------- ------------- ------------
Total comprehensive
income for the year - 13,352,923 4,872 13,357,795
------------- ---------------- ------------- ------------
Balance at 31 March
2018 12,500 (35,216,473) 403,584 (34,800,389)
============= ================ ============= ============
At 1 April 2018 12,500 (35,216,473) 403,584 (34,800,389)
Profit for the year - - 5,390 5,390
Derivative valuation
movements on cash
flow hedges - 4,530,473 - 4,530,473
Interest rate derivatives
transferred to income
statement (cash flow
hedges) - 30,686,000 - 30,686,000
------ ------------ ------- ------------
Total comprehensive
income for the year - 35,216,473 5,390 35,221,863
------ ------------ ------- ------------
Balance at 31 March
2019 12,500 - 408,974 421,474
====== ============ ======= ============
Broadgate Financing PLC
Notes to the Financial Statements for the Year Ended 31 March
2019
1 General information
The company is a public limited company limited by share capital
and incorporated and domiciled in England, United Kingdom.
The address of its registered office is:
York House
45 Seymour Street
London
W1H 7LX
2 Accounting policies
Summary of significant accounting policies and key accounting
estimates
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
Basis of preparation
These financial statements were prepared in accordance with
Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS
101").
In preparing these financial statements, the company applies the
recognition, measurement and disclosure requirements of
International Financial Reporting Standards as adopted by the EU
("Adopted IFRSs"), but makes amendments where necessary in order to
comply with Companies Act 2006 and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken.
The financial statements have been prepared under the historical
cost convention, modified to include the revaluation of derivative
financial instruments. Historical cost is generally based on the
fair value of the consideration given in exchange for the
assets.
These financial statements are separate financial
statements.
Summary of disclosure exemptions
The company has taken advantage of the following disclosure
exemptions under FRS 101:
(a) The requirements of IAS 1 to provide a Balance Sheet at
the beginning of the year in the event of a prior year adjustment;
(b) The requirements of IAS 1 to provide a Statement of Cash
flows for the year;
(c) The requirements of IAS 1 to provide a statement of compliance
with IFRS;
(d) The requirements of IAS 1 to disclose information on the
management of capital;
(e) The requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors to
disclose new IFRS's that have been issued but are not yet
effective;
(f) The requirements in IAS 24 Related Party Disclosures to
disclose related party transactions entered into between
two or more members of a group, provided that any subsidiary
which is a party to the transaction is wholly owned by such
a member;
(g) The requirements of paragraph 17 of IAS 24 Related Party
Disclosures to disclose key management personnel compensation;
(h) The requirements of IFRS 7 to disclose financial instruments;
and
(i) The requirements of paragraphs 91-99 of IFRS 13 Fair Value
Measurement to disclose information of fair value valuation
techniques and inputs.
Disclosure exemptions for subsidiaries are permitted where the
relevant disclosure requirements are met in the consolidated
financial statements. Where required, equivalent disclosures are
given in the group financial statements of Broadgate REIT Limited.
The group financial statements of Broadgate REIT Limited are
available to the public and can be obtained as set out in note
18.
Going concern
Having reviewed the company's forecast working capital and cash
flow requirements, in addition to making enquiries and examining
areas which could give risk to financial exposure, the directors
have a reasonable expectation that the company has adequate
resources to continue its operations for at least twelve months
after the signing of these financial statements. As a result they
continue to adopt the going concern basis in preparing the
accounts.
None of the standards, interpretations and amendments effective
for the first time from 1 April 2018 have had a material effect on
the financial statements.
Taxation
Current tax is based on taxable profit for the year and is
calculated using tax rates that have been enacted or substantively
enacted. Taxable profit differs from net profit as reported in the
Profit and Loss Account because it excludes items of income or
expense that are not taxable (or tax deductible).
Deferred tax is provided on items that may become taxable at a
later date, on the difference between the balance sheet value and
tax base value, on an undiscounted basis.
Trade debtors
Trade and other debtors are initially recognised at fair value
and subsequently measured at amortised cost and discounted as
appropriate.
Cash and cash equivalents
Cash and cash equivalents are limited to instruments with
maturity of less than three months.
Financial assets
The company classifies all financial assets, with the exception
of derivative financial instruments into the category financial
assets less amortised costs. Financial assets less amortised costs
are initially measured at fair value including any transaction
costs. They are subsequently measured at amortised cost using the
effective interest rate method.
Foreign currencies
The company's financial statements are presented in pounds
sterling, which is the functional currency of the company.
Financial liabilities - borrowings
Debt instruments are initially stated at their net proceeds on
issue and subsequently at amortised cost. Finance charges including
premiums payable on settlement or redemption and direct issue costs
are spread over the period to redemption, using the effective
interest method.
Trade creditors
Trade and other creditors are initially recognised at fair value
and subsequently measured at amortised cost and discounted as
appropriate.
2 Accounting policies (continued)
Interest payable and receivable
Interest payable and receivable is recognised as incurred under
the accruals concept. Interest payable includes financing charges
which are spread over the period to redemption, using the effective
interest method. Commitment fees on non-utilised facilities are
also included within interest payable.
Premiums payable and receivable on early redemption are
recognised as finance charges and income when incurred.
3 Significant accounting judgements and key sources of estimation
uncertainty
Determining the carrying amount of some assets requires
estimation of the effect of uncertain future events. The major
sources of estimation uncertainty that have a significant risk of
resulting in a material adjustment to the carrying amounts of
assets are noted below.
Trade and other debtors
The company makes an estimate of the recoverable value of trade
and other debtors. When assessing impairment of trade and other
debtors, the Directors consider factors including the current
credit rating of the debtor, the ageing profile of debtors and
historical experience.
4 Interest receivable and similar income
2019 2018
GBP GBP
Interest income on bank deposits 1,181,134 501,274
Interest receivable on amounts due from
related parties 71,353,186 79,836,590
Premium income on early repayment due from
related parties 6,014,610 -
Derivative close out costs due from related
parties 30,686,000 -
-------------------- ------------------
109,234,930 80,337,864
==================== ==================
5 Interest payable and similar expenses
2019 2018
GBP GBP
Interest on derivatives 4,391,982 10,492,420
Interest payable on bonds and borrowings 68,052,145 69,739,466
Premium costs on early repayment 6,014,610 -
Derivative close out costs* 30,686,000 -
Interest payable on amounts due to related
parties 82,539 98,964
-------------------- -----------------
109,227,276 80,330,850
==================== =================
* Hedging instruments were closed out when the relevant floating
rate bonds were repaid on 5 October 2018.
6 Auditors' remuneration
A notional charge of GBP4,040 (2018: GBP7,820) is deemed payable
to PricewaterhouseCoopers LLP in respect of the audit of the
financial statements for the year ended 31 March 2019. Actual
amounts payable to PricewaterhouseCoopers LLP are paid by
Bluebutton Properties UK Limited. Bluebutton Properties UK Limited
is a holding company within the group.
No non-audit fees (2018: GBPnil) were paid to
PricewaterhouseCoopers LLP.
7 Staff costs
No director (2018: nil) received any remuneration for services
to the company in either year. The remuneration of the directors
was borne by another company, for which no apportionment or
recharges were made. The value of this service was negligible.
Average number of employees, excluding directors, of the company
during the year was nil (2018: nil).
8 Taxation
Tax charged in the profit and loss account
2019 2018
GBP GBP
Current taxation
UK corporation tax 1,264 1,142
===== =====
8 Taxation (continued)
2019 2018
GBP GBP
Tax reconciliation
Profit on ordinary activities 6,654 6,014
---------- ----------
Tax on profit on ordinary activities at
UK corporation tax rate of 19% (2018 :
19%) 1,264 1,142
========== ==========
Effects of:
Income tax expense (1,264) (1,142)
========== ==========
A reduction in the UK corporation tax rate from 19% to 17%
(effective from 1 April 2020) was substantially enacted on 6
September 2016.
9 Debtors
31 March 31 March
2019 2018
GBP GBP
Debtors due within one year
Amounts due from related parties 23,173,628 52,056,319
Accrued income 15,221,842 18,462,901
Corporation tax asset 1,848 1,848
------------- -------------
38,397,318 70,521,068
============= =============
Debtors due after more than one year
Amounts due from related parties - Long
term loans 1,285,735,154 1,513,252,868
------------- -------------
1,285,735,154 1,513,252,868
============= =============
The company's interest on outstanding debt is discussed in note
12 and applied to amounts owing from related parties in the same
manner. Amounts due from related parties relate to amounts owed
from group companies and are repayable on demand.
10 Cash and cash equivalents
31 March 31 March
2019 2018
GBP GBP
Cash at bank 130,967 130,844
Short-term deposits 150,443,000 200,000,000
--------------- --------------
150,573,967 200,130,844
=============== ==============
11 Creditors due within one year
31 March 31 March
2019 2018
GBP GBP
Accruals 15,280,467 16,215,169
Amounts due to related parties 14,730,575 14,705,434
Debenture Loans 14,484,504 52,056,318
Other creditors 15,265 13,001
--------------- --------------
44,510,811 82,989,922
=============== ==============
Amounts due to related parties relate to amounts owed to group
companies and are repayable on demand. There is no interest charged
on these balances.
12 Loans and borrowings
2019 2018
GBP GBP
Loans
Loans due 1 to 2 years 15,265,245 52,842,563
Loans due 2 to 5 years 50,243,793 105,067,795
Loans due after 5 years 1,364,265,116 1,540,342,510
Interest rate derivative liabilities - 37,462,379
------------- -------------
1,429,774,154 1,735,715,247
============= =============
Amounts due after five years include the term loan of GBP144m
which represents a revolving liquidity facility with NatWest
Markets PLC. The cash received is held on deposit.
Hedge accounting
The company used interest rate swaps to hedge exposure to the
variability in cash flows on floating rate debt. At 31 March 2019
the market value of those derivatives, which had been designated
cash flow hedges under IFRS 9, is GBPnil (2018: GBP37.5m liability)
as the derivatives were closed out on 5 October 2018.
The ineffectiveness recognised in the income statement on cash
flow hedges in the year ended 31 March 2019 was GBPnil (2018:
GBPnil).
2019 2018
GBP GBP
Borrowings repayment analysis
Borrowing repayments due within one year 14,484,504 52,056,318
Borrowing repayments due within 1-2 years 15,265,245 52,842,563
Borrowing repayments due within 2-5 years 50,243,793 105,067,795
------------- -------------
79,993,542 209,966,676
After 5 years 1,364,265,116 1,540,342,510
------------- -------------
Total borrowings 1,444,258,658 1,750,309,186
Fair value of interest rate derivatives - 37,462,379
------------- -------------
Gross debt 1,444,258,658 1,787,771,565
============= =============
2 Loans and borrowings (continued)
2019 2018
GBP GBP
Borrowings repayment analysis
Class A1 floating rate bonds due 2032 - 163,636,200
Class A2 4.949% bonds due 2031 158,522,490 200,680,830
Class A3 4.851% bonds due 2033 175,000,000 175,000,000
Class A4 4.821% bonds due 2036 400,000,000 400,000,000
Class B 4.999% bonds due 2033 365,313,979 365,325,647
Class C1 floating rate bonds due 2022 - 39,166,510
Class C2 5.098% bonds due 2035 201,383,190 204,250,000
Class D floating rate bonds due 2025 - 17,250,000
---------------- ----------------
Total secured bond borrowings 1,300,219,659 1,565,309,187
Other borrowings
Fair value of interest rate derivative
liabilities - 37,462,379
Term loan 144,039,000 185,000,000
---------------- ----------------
Total secured borrowings 1,444,258,659 1,787,771,566
================ ================
At 31 March 2019, 100% (2018: 100% taking into account the
effect of derivatives) of the bonds were fixed. The bonds amortise
between 2005 to 2036, and are secured on properties of the group
valued at GBP3,602m (2018: GBP3,667m) and cash of GBPnil (2018:
GBPnil). The weighted average interest rate of the bonds is 4.93%
(2018: 5.01% including derivatives). The weighted average maturity
of the bonds is 11.0 years (2018: 10.8 years).
At 31 March 2019 the company was financed by GBP1,300m bonds
(2018: GBP1,565m).
The fair values of the bonds have been established by obtaining
quoted market prices from brokers. The derivatives have been valued
by calculating the present value of future cash flows, using
appropriate market discount rates, by an independent treasury
advisor.
Except as detailed below, the carrying amounts of financial
assets and financial liabilities recorded at amortised cost in the
financial statements are approximately equal to their fair
values:
2019 2018
GBP GBP
Secured bonds at fair value 1,614,373,908 1,883,259,680
============= =============
12 Loans and borrowings (continued)
Risk Management
Capital risk management:
The company finances its operations by a mixture of equity and
public debt issues to support the property strategy of the
group.
The approach adopted has been to engage in debt financing with
long term maturity dates and as such the bonds issued are due
between 2022 and 2036. Including debt amortisation 94.5% (2018:
86.0%) of the total borrowings is due for payment after 5
years.
The company aims to ensure that potential debt providers
understand the business and a transparent approach is adopted with
lenders so they can understand the level of their exposure within
the overall context of the group.
Details of bond covenants are outlined in the bonds Offering
Circular, accessible via
http://www.britishland.com/investors/strategic-partnerships/broadgate-financing-plc.aspx.
Liquidity risk:
Liquidity risk is the risk that the entity will encounter
difficulty in raising funds to meet commitments associated with
financial liabilities. This risk is managed through day to day
monitoring of future cash flow requirements to ensure that the
company has enough resources to repay all future amounts
outstanding.
13 Share capital
Allotted, called up and fully paid shares
31 March 31 March
2019 2018
No. GBP No. GBP
Ordinary shares of GBP0.25
each 50,000 12,500 50,000 12,500
14 Capital commitments
The total amount contracted for but not provided in the
financial statements was GBPnil (2018: GBPnil).
15 Contingent liabilities
The company has no contingent liabilities as at 31 March 2019 of
GBPnil (2018: GBPnil).
16 Related party transactions
The company has taken advantage of the exemption granted to
wholly owned subsidiaries not to disclose transactions with group
companies under the provisions of FRS 101.
17 Subsequent events
There have been no significant events since the year end.
18 Parent and ultimate parent undertaking
The immediate parent company is Broadgate Property Holdings
Limited.
The ultimate parent company is Broadgate REIT Limited. Broadgate
REIT Limited operates as a joint venture between Euro Bluebell LLP,
an affiliate of GIC, Singapore's sovereign wealth fund, and BL
Bluebutton 2014 Limited, a wholly owned subsidiary of The British
Land Company PLC.
Broadgate REIT Limited is the smallest and largest group for
which group accounts are available and which include the company.
The ultimate holding company and controlling party is Broadgate
REIT Limited. Group accounts for this company are available on
request from British Land, York House, 45 Seymour Street, London,
W1H 7LX.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEFFIFFUSEDI
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