Company registration number 09154166 (England and Wales)
CLARGES MAYFAIR PROPERTIES LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
PAGES FOR FILING WITH REGISTRAR
CLARGES MAYFAIR PROPERTIES LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
CLARGES MAYFAIR PROPERTIES LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2021
31 December 2021
- 1 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
4
172,920
200,000
Investment properties
5
9,200,000
8,855,990
9,372,920
9,055,990
Current assets
Debtors
6
59,586
78,752
Cash at bank and in hand
489,210
303,917
548,796
382,669
Creditors: amounts falling due within one year
7
(9,756,986)
(4,927,591)
Net current liabilities
(9,208,190)
(4,544,922)
Total assets less current liabilities
164,730
4,511,068
Creditors: amounts falling due after more than one year
8
(4,800,000)
Provisions for liabilities
(86,002)
Net assets/(liabilities)
78,728
(288,932)
Capital and reserves
Called up share capital
10
100
100
Profit and loss reserves
78,628
(289,032)
Total equity
78,728
(288,932)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 27 July 2022 and are signed on its behalf by:
Mr S K Gulhati
Director
Company Registration No. 09154166
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
1
Accounting policies
Company information
Clarges Mayfair Properties Limited is a private company limited by shares incorporated in England and Wales. The registered office is 7-12 Half Moon Street, Mayfair, London, W1J 7BH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company has net assets of £78,728 (2020: net liabilities of £288,932) as at 31 December 2021. The company's parent undertaking, Veladail Hotels Limited, has pledged its continuing support to the company. As at the balance sheet date, the company owed its parent £4,500,000 (2020: £4,700,000).
These financial statements are prepared on the going concern basis. The directors have carried out a detailed review of the company’s financial position including a review of cash flows and forecasts. Within this review, the directors have considered the increasingly broad effects of COVID-19 and events in Ukraine and their impact on the global economy and the company's trading position, together with the financial implications of the option agreement explained in more detail in the investment property note. Having considered the aforementioned, and at the time of approving the financial statements, the directors are of the opinion that the company will continue to be able to meet its financial obligations as they fall due and to continue in operational existence for at least the next twelve months from the date of approval of the accounts, subject to the ongoing option right referred to elsewhere in these accounts.
Therefore the directors consider it is appropriate to prepare the financial statements on the going concern basis.
1.3
Turnover
Turnover represents rents receivable from lettings of properties.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
10% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 3 -
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss. .
The company recognises investment property when the risks and rewards of ownership remain with the company.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 4 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 5 -
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Employees
There are no employees in the company (2020: Nil).
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2021 and 31 December 2021
270,796
Depreciation and impairment
At 1 January 2021
70,796
Depreciation charged in the year
27,080
At 31 December 2021
97,876
Carrying amount
At 31 December 2021
172,920
At 31 December 2020
200,000
5
Investment property
2021
£
Fair value
At 1 January 2021
8,855,990
Revaluations
344,010
At 31 December 2021
9,200,000
In July 2020, the company entered into a tenancy agreement attached to which is an option held by the tenant to buy the company’s investment property. The option must be exercised during the period up to 31 January 2025 and is divided into five option periods. The contractual amount of the property is £10,300,000, plus £200,000 for chattels. In order to maintain the option throughout the period to 31 January 2025, the tenant must pay a non-refundable purchase deposit before the beginning of each option period. As at 31 December 2021, total non-refundable purchase deposits received in respect of the agreement amounted to £350,000, which are presented as part of other creditors.
In accordance with the terms of the tenancy agreement and associated option, the property continues to be recognised as an investment property and presented at its fair value, as the risks and rewards of ownership remain with the company.
As at 31 December 2021, the investment property has been stated at the directors' estimate of its fair value at that date. The directors’ valuation takes account of a valuation carried out in March 2018 by a firm of independent Chartered Surveyors, and all relevant factors during the period from April 2018 to 31 December 2021, including the above tenancy agreement and associated option. As such they have valued the property at 31 December 2021 at £9,200,000 (2020: £8,855,990).
On a historical cost basis the investment property would have been included at an original cost of £8,855,990 (2020: £8,855,990) and aggregate depreciation of £Nil (2020: Nil).
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
6
Debtors
2021
2020
Amounts falling due within one year:
£
£
Other debtors
53,946
53,946
Prepayments and accrued income
5,640
24,806
59,586
78,752
7
Creditors: amounts falling due within one year
2021
2020
£
£
Bank loans
9
4,800,000
Trade creditors
245
Amounts owed to group undertakings
4,500,000
4,700,000
Other creditors
403,846
203,846
Accruals and deferred income
53,140
23,500
9,756,986
4,927,591
8
Creditors: amounts falling due after more than one year
2021
2020
£
£
Bank loans and overdrafts
4,800,000
9
Loans and overdrafts
2021
2020
£
£
Bank loans
4,800,000
4,800,000
Payable within one year
4,800,000
Payable after one year
4,800,000
Bank loans are secured by a fixed and floating charge over the company's assets and by a corporate guarantee given by Veladail Hotels Limited. The facility is available to the company until November 2022.
CLARGES MAYFAIR PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
10
Called up share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
11
Audit report information
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.
The senior statutory auditor was David Truscott and the auditor was PK Audit LLP.
12
Events after the reporting date
The company is closely monitoring the impact of COVID-19 on the business and continues to implement a range of business support measures, tailored to the current situation, to continue to operate the business as a going concern.
During the post year end period, the tenant made the third option payment thereby securing the ongoing right to exercise the separate options detailed elsewhere in there financial statements.
13
Parent company
The immediate parent company is Veladail Hotels Limited, a company registered in England and Wales.
Veladail Hotels Limited prepares group financial statements and copies can be obtained from 7-12 Half Moon Street, London W1J 7BH.
The ultimate holding company is Arrow Trading & Investment Est. 1920, a company incorporated in Vaduz.
In July 2020, the parent company Veladail Hotels Limited, entered into a tenancy agreement with an option to buy the shares in the company during a specific period up to 31 January 2025, divided into five option periods. The contractual amount of the agreement is £10,500,000. To secure each option period, the buyer needs to pay a non-refundable deposit before the beginning of each option period. As at 31 December 2021, total non-refundable purchase deposits amounted to £350,000.