Registered number:
FOR THE YEAR ENDED 31 JANUARY 2023
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PALACE LAUNDRY LTD
COMPANY INFORMATION
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PALACE LAUNDRY LTD
CONTENTS
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PALACE LAUNDRY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
The directors present their report and the audited financial statements for the year ended 31 January 2023.
The principal activity of the company is to provide premium quality laundry and dry cleaning services to the eight London hotels owned and operated by the Firmdale Group of Companies and some 15 third party clients.
It operates from a purpose built facility in Fulham, London SW6 and services the various hotel properties daily using a fleet of vans. Ongoing investment in equipment ensures both high staff productivity and also minimal use of water, gas and detergent. The laundry operation benefits from a highly motivated and experienced team of employees. Such is the reputation and standing of the service that new contracts are regularly declined due to capacity constraints. Despite a significant trading improvement to the prior year, the company suffered a loss of £1,208,318 (2022: profit of £729,953). EBITDA before property revaluation adjustments was positive £30,605 (2022 - negative £332,124).
The principal financial risks faced by the company, and the company's objectives and policies in relation to those
risks are as follows:
Cash flow risk
The finance department closely manages the company's cash flow. Detailed cash flow forecasts are regularly prepared with the objective of alerting the directors to potential future risks. It is the company's policy to ensure that forecast funding requirements can be met with available committed facilities
Credit risk
Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the company if it is unable to recover sums due from clients and it is mitigated by setting maximum levels of credit tolerance for more significant clients.
Total revenues for the year were £2.9m (2022 - £1.2m) an increase of 2.4 fold over prior year.
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PALACE LAUNDRY LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis.
The outbreak of the global Covid-19 pandemic in early 2020 had a very significant impact on the operations of the group in common with the majority of businesses worldwide, and the hospitality sector in particular. Following the elimination of all material UK restrictions with effect from 19th July 2021, and the gradual restoration of international travel thereafter, trading demand recovered quickly and since March 2022 both Revenues and Earnings have exceeded those achieved in pre-Covid 2019, a significant milestone in recovery. The continuing growth led to record profitability for the Group in the financial year to January 2023. Furthermore, rising interest rates have not had a significant impact on the Group given that 67% of group debt is fixed and a further 31% has the benefit of an interest rate cap should LIBOR exceed 3.5%. The trading results for the first six months of the new financial year are slightly ahead of budget and the outlook for the remainder of the year and beyond remains positive. The lenders remained very supportive during the Covid period and the relationships remain strong with comfortable delivery of financial covenant hurdles now firmly re-established. The Board will continue to monitor developments closely and adjust their forecasting assumptions as required, but have a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts. Despite generating a loss before tax in the year to 31 January 2023 of £1,208,318 and net current liabilities at the reporting date of £8,902,963, the directors consider the company to remain a going concern. The net current liabilities position is largely driven by amounts due to fellow companies, who have confirmed this amount will not be recalled to the detriment of other creditors or the operations of the company. Operating loss before property revaluations for the reporting year was £399,818 in comparison to a loss of £717,423 in the year ended 31 January 2022, highlighting improved operating performance and the directors consider this function vital in supporting the activities of the wider Firmdale Group. The directors therefore consider the going concern basis to remain appropriate.
This report was approved by the board and signed on its behalf.
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PALACE LAUNDRY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
The directors present their report and the financial statements for the year ended 31 January 2023.
The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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 loss for the year, after taxation, amounted to £1,260,215 (2022 - profit £297,377).
The directors do not recommend the payment of a dividend (2022 - £Nil).
The directors who served during the year were:
There are no key future developments anticipated to the Company's usual trade.
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PALACE LAUNDRY LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
There have been no significant events affecting the Company since the year end.
Following a rebranding exercise on 15 May 2023 the trading name of the company's independent auditor changed from MHA MacIntyre Hudson to MHA. A resolution to reappoint MHA as independent auditor will be proposed at the next Annual General Meeting.
This report was approved by the board and signed on its behalf.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD
We have audited the financial statements of Palace Laundry Ltd (the 'Company') for the year ended 31 January 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
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.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙enquiry of management, those charged with governance and Company legal advisors around actual and potential litigation and claims;
∙performing audit work over the risk and management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙reviewing minutes of meetings of those charged with governance; and
∙reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)
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 Auditors' 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.
for and on behalf of
Statutory Auditor
London, United Kingdom
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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PALACE LAUNDRY LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2023
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PALACE LAUNDRY LTD
REGISTERED NUMBER: 11139452
STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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PALACE LAUNDRY LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
Palace Laundry Limited is a private company, limited by shares, registered and incorporated in England and Wales under the Companies Act. The company's registered office is 18 Thurloe Place, London, SW7 2SP.
The principal activity of the company is that of laundry and dry cleaning services. The Company's functional and presentational currency is pound sterling (GBP), rounded to the nearest £1.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Firmdale Holdings Limited as at 31 January 2023 and these financial statements may be obtained from the Registrar of Companies.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis.
The outbreak of the global Covid-19 pandemic in early 2020 had a very significant impact on the operations of the group in common with the majority of businesses worldwide, and the hospitality sector in particular. Following the elimination of all material UK restrictions with effect from 19th July 2021, and the gradual restoration of international travel thereafter, trading demand recovered quickly and since March 2022 both Revenues and Earnings have exceeded those achieved in pre-Covid 2019, a significant milestone in recovery. The continuing growth led to record profitability for the Group in the financial year to January 2023. Furthermore, rising interest rates have not had a significant impact on the Group given that 67% of group debt is fixed and a further 31% has the benefit of an interest rate cap should LIBOR exceed 3.5%. The trading results for the first six months of the new financial year are slightly ahead of budget and the outlook for the remainder of the year and beyond remains positive. The lenders remained very supportive during the Covid period and the relationships remain strong with comfortable delivery of financial covenant hurdles now firmly re-established. The Board will continue to monitor developments closely and adjust their forecasting assumptions as required, but have a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts. Despite generating a loss before tax in the year to 31 January 2023 of £1,208,318 and net current liabilities at the reporting date of £8,902,963, the directors consider the company to remain a going concern. The net current liabilities position is largely driven by amounts due to fellow companies, who have confirmed this amount will not be recalled to the detriment of other creditors or the operations of the company. Operating loss before property revaluations for the reporting year was £399,818 in comparison to a loss of £717,423 in the year ended 31 January 2022, highlighting improved operating performance and the directors consider this function vital in supporting the activities of the wider Firmdale Group. The directors therefore consider the going concern basis to remain appropriate.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
To the extent that the holiday pay adjustments gives rise to an asset balance at the reporting date the amount is reported in prepayments.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of financial position. The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
Revaluation of tangible fixed assets The freehold property is held under the revaluation model based on the directors' conclusions, having consulted and reviewed the previous valuations completed by independent valuation specialists. These valuers hold recognised and relevant professional qualifications. The valuations are based on discounted cash flow models which include judgements surrounding future performance and market factors.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
8.Taxation (continued)
The standard rate of corporation tax in the UK has increased on a sliding scale based on profits from 19% to 25%, effective from 1 April 2023.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
The freehold property was valued by the directors, with support of Cushman & Wakefield, Chartered Surveyors, an independent valuer with a recognised and relevant professional qualification and with recent experience in the location and category of the property being valued. A formal valuation was carried out at the previous reporting date, 31 January 2022 and since then an assessment has been carried out by the directors with guidance from Cushman & Wakefield as at 31 January 2023, on the basis of fair value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
13.Deferred taxation (continued)
Revaluation reserve
Profit and loss account
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
A prior year adjustment has been processed in relation to the revaluation of freehold property and associated movements to correct the position between the Revaluation reserve and Profit and loss account.
For the year ended 31 January 2022, which is the earliest and only material prior period correction presented, an increase in depreciation expense of £8,876 was recorded, alongside an associated revaluation reversal to the profit or loss account for the same amount. A further reclassification of £173,200 was processed between 'Reversals of revaluation decreases previously recognised in profit or loss' to 'Unrealised surplus on revaluation of tangible fixed assets' in the Statement of comprehensive income.
The company operates a defined contribution scheme for employees. The assets of the scheme are held separately from those of the company in independently administered funds. The pension cost charge for the year represents contributions payable by the company to the funds and amounted to £26,991 (2022 - £17,795). Included in other creditors are contributions totalling £7,166 (2022 - £5,149) which were payable to the fund at the reporting date.
The immediate and ultimate parent and controlling company is Firmdale Holdings Limited, a company registered in England and Wales.
The company is included within the consolidation of the Firmdale Holdings Limited group and this is the parent of the smallest and largest group which draws up consolidated financial statements. Firmdale Holdings Limited registered office address is 18 Thurloe Place, London, SW7 2SP. The consolidated accounts of this group are publicly available from the Registrar of Companies.
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