Company registration number 03978624 (England and Wales)
CITY LIFE PROJECTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
CITY LIFE PROJECTS LIMITED
COMPANY INFORMATION
Directors
Mr J Flanagan
Mr P Flanagan
Mr J Flanagan
(Appointed 12 April 2022)
Secretary
Mr P Flanagan
Company number
03978624
Registered office
Atlantic House
143 Sefton Street
Liverpool
England
L8 5SN
Auditor
Sedulo Audit Limited
Regency Court
62-66 Deansgate
Manchester
United Kingdom
M3 2EN
Bankers
Barclays Bank UK PLC
PO BOX 16275
One Snowhill
Snow Hill Queensway
Birmingham
B2 2XD
CITY LIFE PROJECTS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
3
Directors' responsibilities statement
2
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
9
Balance sheet
8
Statement of changes in equity
10
Notes to the financial statements
11 - 22
CITY LIFE PROJECTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 1 -

The directors present the strategic report for the period ended 31 October 2022.

Fair review of the business

Turnover for the year ended 31 October 2022 was £2,719K compared with £1,162K in the previous year. The results show that the company made an operating pre-tax loss of £255K before exceptional items for the year (2021: £125K loss). The company achieved a gross profit margin of 23% in the year compared to 19% in 2021. Overheads increased significantly during the year as the directors invested in infrastructure to provide a platform for business recovery.

 

The profit before tax after exceptional items for the year was £1,019K compared to a loss of £221K for the previous year. EBITDA (Earning before Interest,Tax, Depreciation and Amortisation) was a negative for the year of £119K compared to a positive £27K in 2021.

 

These results reflect the COVID-19 impact on the hospitality industry and the general uncertainty on the UK economy.

 

In light of the above the directors have undertaken an impairment review of the hotel portfolio included in tangible fixed assets. This resulted in a downward revaluation of the portfolio from the previous carrying value of £4,952K to £2,500K. This, together with an elimination of the deferred tax provision in respect of the revaluations is no longer required, results in an increase of net assets of £114K. Distributable reserves have increased to £41K. This is explained more fully in the Statement of Changes in Equity and notes 10 and 17 to the financial statements.

 

The business continues to undertake an appropriate refurbishment program to ensure the hotels reflect the quality of offering reflective of their rating.

 

Going Concern

 

The business has net current liabilities of £990,000 at 31 October 2022( 2021 adjusted £1,399,000).

 

The Flanagan Group Limited of which City Life Projects is a subsidiary refinanced its borrowing during the year. The company is now largely reliant on group financial support.

 

Principal risks and uncertainties

The principal risks facing the business will be to deal with the evolving impacts of the economy post COVID-19 and the level of consumer leisure spend.

Development and performance

In addition to countering the ongoing impact of the above, the directors are constantly reviewing innovative ways of attracting and retaining new customers.

Key performance indicators

The company continues to employ traditional hotel KPIs for monitoring the business including Revenue Per Average Room (RevPar), Gross profit margin and EBITDA.

On behalf of the board

Mr J Flanagan
Director
5 October 2023
CITY LIFE PROJECTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 2 -

The directors are responsible 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 Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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:

 

 

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.

CITY LIFE PROJECTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 3 -

The directors present their report and financial statements for the year ended 31st October 2022.

Principal activities

The principal activity of the company continued to be the operation of bars, restaurants and hotel accommodation.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr J Flanagan
Mr P Flanagan
Mr J Flanagan
(Appointed 12 April 2022)
Results and dividends

The results for the year are set out on page 7.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Future developments

The directors continue to invest suitably in the hotel portfolio to maintain operating capability.

Auditor

Sedulo Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr J Flanagan
Director
5 October 2023
CITY LIFE PROJECTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CITY LIFE PROJECTS LIMITED
- 4 -
Opinion

We have audited the financial statements of City Life Projects Limited (the 'company') for the year ended 31 October 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

CITY LIFE PROJECTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CITY LIFE PROJECTS LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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.

Auditor's 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 auditor’s 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that there are no particular principal risks of non-compliance with laws and regulations. We also considered those laws and regulations that have a direct impact on 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 profits, through management bias in manipulation of accounting for significant creditors and expenses.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.

CITY LIFE PROJECTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CITY LIFE PROJECTS LIMITED
- 6 -

Audit procedures performed included:

 

 

 

 

 

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report 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.

Mr Peter Alcock (Senior Statutory Auditor)
For and on behalf of Sedulo Audit Limited
5 October 2023
Chartered Accountants
Statutory Auditor
Regency Court
62-66 Deansgate
Manchester
United Kingdom
M3 2EN
CITY LIFE PROJECTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 7 -
2022
2021
Notes
£
£
Turnover
2
2,718,986
1,161,809
Cost of sales
(2,099,039)
(945,453)
Gross profit
619,947
216,356
Administrative expenses
174,189
(596,732)
Other operating income
12,160
255,343
Operating profit/(loss)
6
806,296
(125,033)
Interest receivable and similar income
7
-
0
94,279
Interest payable and similar expenses
8
(23,514)
(190,664)
Gain under settlement agreement
2,912,173
-
0
Impairment of freehold properties
(1,614,764)
-
0
Profit/(loss) before taxation
2,080,191
(221,418)
Tax on profit/(loss)
9
(94,951)
(4,030)
Profit/(loss) for the financial year
1,985,240
(225,448)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 11 to 22 form part of these financial statements.

CITY LIFE PROJECTS LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2022
31 October 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
2,719,293
5,003,187
Current assets
Stocks
11
32,134
27,709
Debtors
12
65,014
2,825,931
Cash at bank and in hand
34,347
198,173
131,495
3,051,813
Creditors: amounts falling due within one year
13
(1,122,669)
(1,652,059)
Net current (liabilities)/assets
(991,174)
1,399,754
Total assets less current liabilities
1,728,119
6,402,941
Creditors: amounts falling due after more than one year
14
(663,466)
(6,068,292)
Provisions for liabilities
Deferred tax liability
17
44,758
489,671
(44,758)
(489,671)
Net assets/(liabilities)
1,019,895
(155,022)
Capital and reserves
Called up share capital
19
1
1
Revaluation reserve
-
0
810,323
Distributable profit and loss reserves
1,019,894
(965,346)
Total equity
1,019,895
(155,022)

The notes on pages 11 to 22 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 5 October 2023 and are signed on its behalf by:
Mr J Flanagan
Mr P Flanagan
Director
Director
Company registration number 03978624 (England and Wales)
CITY LIFE PROJECTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2022
- 9 -
2022
2021
£
£
Profit/(loss) for the year
1,985,240
(225,448)
Other comprehensive income
-
-
Cash flow hedges gain reclassified to profit or loss
-
0
-
0
Total comprehensive income for the year
1,985,240
(225,448)
CITY LIFE PROJECTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 November 2020
1
812,028
(741,603)
70,426
Year ended 31 October 2021:
Loss and total comprehensive income for the year
-
-
(225,448)
(225,448)
Transfers
-
(1,705)
1,705
-
Balance at 31 October 2021
1
810,323
(965,346)
(155,022)
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
-
1,985,240
1,985,240
Other movements
-
(810,323)
-
(810,323)
Balance at 31 October 2022
1
-
0
1,019,894
1,019,895
CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 11 -
1
Accounting policies
Company information

City Life Projects Limited is a private company limited by shares incorporated in England and Wales. The registered office is Atlantic House, 143 Sefton Street, Liverpool, England, L8 5SN.

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.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Flanagan Group Limited. These consolidated financial statements may be obtained from Companies House,

1.2
Going concern

The hospitality industry continues to be impacted by the effects of the COVID pandemic. Atruet the time of approving the financial statements, the directors have recognise the company's requirement for additional financial support.The Flanagan Group Limited of which City Life Projects is a subsidiary refinanced its borrowing during the year. The company is now largely reliant on group financial support. In light of this the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

1.3
Turnover

Turnover is recognised when services have been rendered. The turnover of the Company is derived primarily from rental of rooms, conference and banqueting, food and beverage sales.

Turnover is all rendering of goods and services.

Turnover is measured at fair value of the consideration received, excluding discounts, rebates and value added tax.

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.

CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 12 -

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:

Freehold land and buildings
2% on valuation
Property improvements
2% on cost
Fixtures and fittings
10% on cost
Computers
25% reducing balance

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.

1.5
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. To the extent impairment loss exceeds the revaluation reserve relating to the assets that have been impaired, the the loss is recognised in the profit and loss account.

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.

1.6
Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

1.7
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.

CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 13 -
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.

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.

1.8
Taxation

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

1.9
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.

CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 14 -
1.10
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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.12
Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

 

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

 

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

2
Other revenue
2022
2021
£
£
Other revenue
Interest income
-
94,279
Grants received
12,000
255,343

All turnover arose in the UK.

3
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.

4
Exceptional item

Exceptional items are a credit of £2,912,173 in respect of a settlement agreement, and an expense of £1,614,764 for loss on revaluation of freehold properties.

CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 15 -
5
Employees

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

2022
2021
Number
Number
Directors
3
2
Bar and hotel staff
91
37
Total
94
39

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
1,208,216
587,825
Social security costs
76,451
33,403
Pension costs
12,268
8,258
1,296,935
629,486

Directors are remunerated in other Group entities.

6
Operating profit/(loss)
2022
2021
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Government grants
(12,000)
(255,343)
Fees payable to the company's auditor for the audit of the company's financial statements
10,000
5,360
Depreciation of owned tangible fixed assets
135,858
151,348
Depreciation of tangible fixed assets held under finance leases
-
1,083
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest receivable from group companies
-
0
94,279
CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 16 -
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
22,658
68,159
Interest payable to group undertakings
-
0
121,649
Interest on finance leases and hire purchase contracts
856
856
23,514
190,664
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
539,864
-
0
Deferred tax
Origination and reversal of timing differences
(444,913)
4,030
Total tax charge
94,951
4,030

The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Profit/(loss) before taxation
2,080,191
(221,418)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
395,236
(42,069)
Tax effect of expenses that are not deductible in determining taxable profit
38,288
25,939
Group relief
-
0
20,160
Other timing differences
(444,913)
-
0
Loss on revaluation of freehold
306,805
-
0
Intercompany balance write off
(200,465)
-
0
Taxation charge for the year
94,951
4,030
CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 17 -
10
Tangible fixed assets
Freehold land and buildings
Property improvements
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost or valuation
At 1 November 2021
5,375,290
198,920
918,800
23,710
6,516,720
Additions
-
0
219,892
53,039
4,120
277,051
Revaluation
(2,875,290)
(418,812)
-
0
-
0
(3,294,102)
At 31 October 2022
2,500,000
-
0
971,839
27,830
3,499,669
Depreciation and impairment
At 1 November 2021
750,266
11,277
730,173
21,817
1,513,533
Depreciation charged in the year
106,000
1,472
28,386
-
0
135,858
Revaluation
(856,266)
(12,749)
-
0
-
0
(869,015)
At 31 October 2022
-
0
-
0
758,559
21,817
780,376
Carrying amount
At 31 October 2022
2,500,000
-
0
213,280
6,013
2,719,293
At 31 October 2021
4,625,024
187,643
188,627
1,893
5,003,187

The carrying value of land and buildings comprises:

2022
2021
£
£
Freehold
2,500,000
4,626,531
Long leasehold
-
0
186,529
2,500,000
4,813,060

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2022
2021
£
£
Fixtures and fittings
8,032
9,115
CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
10
Tangible fixed assets
(Continued)
- 18 -

As explained in the Strategic review, the directors undertook an impairment review of the hotel portfolio within tangible fixed assets. They used a “bricks and mortar” professional valuation undertaken in 2019 as a reference point. These valuations were based on a rental yields appropriate for alternative use for short stay accommodation and excluded trading potential valuation elements that would perhaps be appropriate to hotel trading concerns. The directors consider the rentals and prospective rental yields as appropriate in the current economic climate.

 

Accordingly the freehold property has been revalued from the previous net book value of £4,625,024 to £2,500,000. The deficit of £2,425,087 has been firstly adjusted through the Revaluation reserve £810,323 and the balance of £1,614,764 through the statement of income in the current year.

Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £2,214,759 (2021 - £2,286,756), being cost £3,599,782 (2021 - £3,599,782) and depreciation £1,385,023 (2021 - £1,313,026).

2022
2021
£
£
Cost
3,599,782
3,599,782
Accumulated depreciation
(1,385,023)
(1,313,026)
Carrying value
2,214,759
2,286,756
11
Stocks
2022
2021
£
£
Finished goods and goods for resale
32,134
27,709
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
13,907
3,549
Other debtors
51,215
35,056
Prepayments and accrued income
(108)
160
65,014
38,765
CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
12
Debtors
(Continued)
- 19 -
2022
2021
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
-
0
2,787,166
Total debtors
65,014
2,825,931
13
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
15
-
0
699,934
Obligations under finance leases
16
2,707
2,708
Other borrowings
15
36,209
16,156
Trade creditors
87,790
105,913
Corporation tax
539,864
-
0
Other taxation and social security
172,689
127,765
Other creditors
204,178
650,101
Accruals and deferred income
79,232
49,482
1,122,669
1,652,059
14
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
15
-
0
2,359,609
Obligations under finance leases
16
1,128
3,836
Other borrowings
15
662,338
3,704,847
663,466
6,068,292

Fellow subsidiary undertakings are not seeking repayment of loans within the next twelve months.

CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 20 -
15
Loans and overdrafts
2022
2021
£
£
Bank loans
-
0
2,359,609
Bank overdrafts
-
0
699,934
Loans from group undertakings
-
0
3,667,576
Loans from related parties
662,338
-
0
Other loans
36,209
53,427
698,547
6,780,546
Payable within one year
36,209
716,090
Payable after one year
662,338
6,064,456

The bank overdraft is secured by a floating charge over the assets of the Company together with a cross guarantee between Flanagan Group Limited, Flanagan Building & Maintenance Services Limited, Flanagan Property Services Limited, and City Life Projects Limited.

 

The bank loans and bank overdraft have been cleared in the year end 31st October 2022, and the floating charges and cross guarantees have been released in respect to these.

On 24 June 2020, a government Bounce Back loan was taken out totalling £50,000.00 to help with difficulties as a result of the Coronavirus pandemic. The repayment terms of which are over 6 years with 1 year interest free with 2.5% interest on the subsequent 5 years.

16
Leasing agreements
2022
2021
Future minimum lease payments due under hire purchase:
£
£
Within one year
2,707
2,708
In two to five years
1,128
3,836
3,835
6,544
CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 21 -
17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
44,758
152,324
Revaluations
-
337,347
44,758
489,671
2022
Movements in the year:
£
Liability at 1 November 2021
489,671
Credit to profit or loss
(444,913)
Liability at 31 October 2022
44,758

The deferred tax liability set out above relates to accelerated capital allowances.

18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
12,268
8,258

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1

The company has one class of ordinary share which carries full voting rights, full rights in respect of dividends and full rights in respect of capital.

CITY LIFE PROJECTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 22 -
20
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Purchases
Purchases
2022
2021
£
£
Other related parties
128,591
64,273
Rent payable
2022
2021
£
£
Other related parties
3,600
3,600
2022
2021
Amounts due to related parties
£
£
Other related parties
5,391,490
2,226,357

During the year the company rented part of a property owned by a related party. Rent was charged at a commercial rate.

 

The balance outstanding due to directors' at year end was £15,574 (2021: £5,602)

 

No interest has been charged to the company in respect of these loans which are repayable on demand and classified as creditors due within one year.

 

21
Ultimate controlling party

Flanagan Group Limited is deemed to be the Company's controlling party by virtue of it's 100% holding of the entity's issued share capital. Voting rights follow the shareholdings

Flanagan Group Limited is the parent undertaking of the largest (and smallest) group for which group accounts are drawn and of which the reporting entity is a member. Copies of the group accounts can be obtained from Companies House.

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