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COMPANY REGISTRATION NUMBER: 03545454
PROPERTY RENAISSANCE LIMITED
FINANCIAL STATEMENTS
31 December 2022
PROPERTY RENAISSANCE LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2022
Contents
Pages
Officers and professional advisers 1
Strategic report 2
Directors' report 3 to 4
Independent auditor's report to the members 5 to 8
Profit and loss account 9
Balance sheet 10
Statement of changes in shareholders funds 11
Statement of cash flows 12
Notes to the financial statements 13 to 23
PROPERTY RENAISSANCE LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
The board of directors
W R Burton
D J Oates
Registered office
28 Kirkgate
Silsden
Keighley
West Yorkshire
BD20 0AL
Auditor
Wheawill & Sudworth Limited
Chartered Accountants & statutory auditor
35 Westgate
Huddersfield
HD1 1PA
PROPERTY RENAISSANCE LIMITED
STRATEGIC REPORT
YEAR ENDED 31 DECEMBER 2022
The directors present the strategic report for the year ended 31 December 2022. Fair review of the business The directors are pleased to present the financial statements for 2022. The company has continued to recover from the measures implemented by the government in response to the COVID 19 pandemic. Company sales have recovered and remain resilient. We continue to reinvest in the business to maintain and improve our product offering. This investment has earned a further five industry recognition awards, including a seventh Award for Excellence. Looking to the future, we have a loyal client base and a strong management team to ensure sales continue and the Company achieves its forecasts. The directors are confident the company will cope with any new challenges and we will continue to have an effective strategy to absorb and manage rising costs, including the next round of minimum wages increase.
This report was approved by the board of directors on 12 April 2024 and signed on behalf of the board by:
W R Burton
Director
PROPERTY RENAISSANCE LIMITED
DIRECTORS' REPORT
YEAR ENDED 31 DECEMBER 2022
The directors present their report and the financial statements of the company for the year ended 31 December 2022 .
Principal activities
The principal activity of the company during the year was that of a destination spa complex.
Directors
The directors who served the company during the year were as follows:
W R Burton
D J Oates
Dividends
The directors do not recommend the payment of a dividend.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 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 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 then apply them consistently; - make judgments 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 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 12 April 2024 and signed on behalf of the board by:
W R Burton
Director
PROPERTY RENAISSANCE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROPERTY RENAISSANCE LIMITED
YEAR ENDED 31 DECEMBER 2022
Opinion
We have audited the financial statements of Property Renaissance Limited (the 'company') for the year ended 31 December 2022 which comprise the profit and loss account, balance sheet, statement of changes in shareholders funds, statement of cash flows 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 FRS 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: - give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
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. 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. 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 such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in 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 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 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.
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: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
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. 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: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from out commercial knowledge and experience of the sector; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining and understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - reading minutes of meetings of those charged with governance; and - enquiring of management as to actual and potential litigation and claims. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 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 As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.
David Butterworth
(Senior Statutory Auditor)
For and on behalf of
Wheawill & Sudworth Limited
Chartered Accountants & statutory auditor
35 Westgate
Huddersfield
HD1 1PA
12 April 2024
PROPERTY RENAISSANCE LIMITED
PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 DECEMBER 2022
2022
2021
Note
£
£
Turnover
4
5,821,746
3,414,179
Cost of sales
( 1,330,845)
( 903,639)
------------
------------
Gross profit
4,490,901
2,510,540
Administrative expenses
( 3,997,802)
( 2,968,901)
Other operating income
5
720,794
------------
------------
Operating profit
6
493,099
262,433
Provisions made against loans due from connected companies
( 596,128)
( 388,157)
Other interest receivable and similar income
10
22,163
32,196
Interest payable and similar expenses
11
( 122,492)
( 120,000)
------------
------------
Loss before taxation
( 203,358)
( 213,528)
Tax on loss
12
( 80,454)
( 54,657)
------------
------------
Loss for the financial year
( 283,812)
( 268,185)
------------
------------
Tax relating to other comprehensive income
(114,300)
------------
------------
Total comprehensive income for the year
( 283,812)
( 382,485)
------------
------------
All the activities of the company are from continuing operations.
PROPERTY RENAISSANCE LIMITED
BALANCE SHEET
31 December 2022
2022
2021
Note
£
£
Fixed assets
Tangible assets
13
4,946,966
5,056,445
Current assets
Stocks
14
53,817
39,639
Debtors
15
1,241,617
1,927,872
Cash at bank and in hand
206,635
113,423
------------
------------
1,502,069
2,080,934
Creditors: amounts falling due within one year
16
( 1,894,695)
( 2,185,674)
------------
------------
Net current liabilities
( 392,626)
( 104,740)
------------
------------
Total assets less current liabilities
4,554,340
4,951,705
Creditors: amounts falling due after more than one year
17
( 1,404,331)
( 1,517,497)
Provisions
18
( 465,635)
( 466,022)
------------
------------
Net assets
2,684,374
2,968,186
------------
------------
Capital and reserves
Called up share capital
22
200,200
200,200
Revaluation reserve
23
2,783,264
3,024,159
Profit and loss account
23
( 299,090)
( 256,173)
------------
------------
Shareholders funds
2,684,374
2,968,186
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 12 April 2024 , and are signed on behalf of the board by:
W R Burton
Director
Company registration number: 03545454
PROPERTY RENAISSANCE LIMITED
STATEMENT OF CHANGES IN SHAREHOLDERS FUNDS
YEAR ENDED 31 DECEMBER 2022
Called up share capital
Revaluation reserve
Profit and loss account
Total
£
£
£
£
At 1 January 2021
200,200
3,138,459
12,012
3,350,671
Loss for the year
( 268,185)
( 268,185)
Other comprehensive income for the year:
Tax relating to other comprehensive income
(114,300)
(114,300)
------------
------------
------------
------------
Total comprehensive income for the year
( 114,300)
( 268,185)
( 382,485)
At 31 December 2021
200,200
3,024,159
( 256,173)
2,968,186
Loss for the year
( 283,812)
( 283,812)
Other comprehensive income for the year:
Transfer of depreciation
(240,895)
240,895
------------
------------
------------
------------
Total comprehensive income for the year
( 240,895)
( 42,917)
( 283,812)
------------
------------
------------
------------
At 31 December 2022
200,200
2,783,264
( 299,090)
2,684,374
------------
------------
------------
------------
PROPERTY RENAISSANCE LIMITED
STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2022
2022
2021
£
£
Cash flows from operating activities
Loss for the financial year
( 283,812)
( 268,185)
Adjustments for:
Depreciation of tangible assets
158,199
179,144
Government grant income
( 326,153)
Provisions made against loans due from connected companies
596,128
388,157
Other interest receivable and similar income
( 22,163)
( 32,196)
Interest payable and similar expenses
122,492
120,000
Tax on loss
80,454
54,657
Changes in:
Stocks
( 14,178)
21,054
Trade and other debtors
90,127
173,833
Trade and other creditors
( 277,816)
292,847
------------
------------
Cash generated from operations
449,431
603,158
Interest paid
( 122,492)
( 120,000)
Interest received
22,163
32,196
Tax paid
( 94,004)
( 653)
------------
------------
Net cash from operating activities
255,098
514,701
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 48,720)
( 13,240)
------------
------------
Net cash used in investing activities
( 48,720)
( 13,240)
------------
------------
Cash flows from financing activities
Repayments of borrowings
( 285,045)
Repayments of loans from group undertakings
( 113,166)
( 222,651)
Government grant income
326,153
------------
------------
Net cash used in financing activities
( 113,166)
( 181,543)
------------
------------
Net increase in cash and cash equivalents
93,212
319,918
Cash and cash equivalents at beginning of year
113,423
(206,495)
------------
------------
Cash and cash equivalents at end of year
206,635
113,423
------------
------------
PROPERTY RENAISSANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2022
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 28 Kirkgate, Silsden, Keighley, West Yorkshire, BD20 0AL.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Long leasehold property
-
2% on valuation
Plant and machinery
-
10% on cost or 25% on cost
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the balance sheet and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
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. 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. Other financial assets Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment. 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. Other financial liabilities Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge. Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy. Derecognition of financial liabilities Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2022
2021
£
£
Rendering of services
5,821,746
3,414,179
------------
------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2022
2021
£
£
Management charges receivable
26,000
Government grant income
326,153
Other operating income
368,641
------------
------------
720,794
------------
------------
6. Operating profit
Operating profit or loss is stated after charging:
2022
2021
£
£
Depreciation of tangible assets
158,199
179,144
Impairment of trade debtors
37,448
------------
------------
7. Auditor's remuneration
2022
2021
£
£
Fees payable for the audit of the financial statements
15,000
11,000
------------
------------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2022
2021
No.
No.
Total staff
124
107
------------
------------
The aggregate payroll costs incurred during the year, relating to the above, were:
2022
2021
£
£
Wages and salaries
1,970,176
1,459,901
Social security costs
194,990
102,784
Other pension costs
33,510
20,619
------------
------------
2,198,676
1,583,304
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2022
2021
£
£
Remuneration
138,622
125,680
Company contributions to defined contribution pension plans
10,935
2,153
------------
------------
149,557
127,833
------------
------------
The number of directors who accrued benefits under company pension plans was as follows:
2022
2021
No.
No.
Defined contribution plans
2
2
------------
------------
10. Other interest receivable and similar income
2022
2021
£
£
Interest on bank deposits
8,500
Other interest receivable and similar income
22,163
23,696
------------
------------
22,163
32,196
------------
------------
11. Interest payable and similar expenses
2022
2021
£
£
Interest due to group undertakings
120,000
120,000
Other interest payable and similar charges
2,492
------------
------------
122,492
120,000
------------
------------
12. Tax on loss
Major components of tax expense
2022
2021
£
£
Current tax:
UK current tax expense
93,442
63,294
Adjustments in respect of prior periods
( 12,601)
------------
------------
Total current tax
80,841
63,294
------------
------------
Deferred tax:
Origination and reversal of timing differences
( 387)
( 8,637)
------------
------------
Tax on loss
80,454
54,657
------------
------------
Reconciliation of tax expense
The tax assessed on the loss on ordinary activities for the year is higher than (2021: higher than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
2022
2021
£
£
Loss on ordinary activities before taxation
( 203,358)
( 213,528)
------------
------------
Loss on ordinary activities by rate of tax
( 38,638)
( 40,570)
Adjustment to tax charge in respect of prior periods
(13,054)
Effect of expenses not deductible for tax purposes
113,293
73,079
Effect of capital allowances and depreciation
18,883
18,913
Effect of revenue exempt from tax
( 158)
Effect of different UK tax rates on some earnings
(30)
3,393
------------
------------
Tax on loss
80,454
54,657
------------
------------
13. Tangible assets
Long leasehold property
Plant and machinery
Total
£
£
£
Cost
At 1 January 2022
5,419,921
1,354,399
6,774,320
Additions
48,720
48,720
------------
------------
------------
At 31 December 2022
5,419,921
1,403,119
6,823,040
------------
------------
------------
Depreciation
At 1 January 2022
430,758
1,287,117
1,717,875
Charge for the year
108,393
49,806
158,199
------------
------------
------------
At 31 December 2022
539,151
1,336,923
1,876,074
------------
------------
------------
Carrying amount
At 31 December 2022
4,880,770
66,196
4,946,966
------------
------------
------------
At 31 December 2021
4,989,163
67,282
5,056,445
------------
------------
------------
The directors revalued the leasehold property based on an external professional valuation which was carried out by Pinders, Chartered Surveyors, on an open market basis on 9 February 2018. The directors do not believe any further revaluation is needed this year .
Tangible assets held at valuation
In respect of tangible assets held at valuation, the aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:
Long leasehold property
£
At 31 December 2022
Aggregate cost
2,827,907
Aggregate depreciation
(920,716)
------------
Carrying value
1,907,191
------------
At 31 December 2021
Aggregate cost
2,827,907
Aggregate depreciation
(864,158)
------------
Carrying value
1,963,749
------------
14. Stocks
2022
2021
£
£
Finished goods and goods for resale
53,817
39,639
------------
------------
15. Debtors
2022
2021
£
£
Trade debtors
126,680
139,329
Prepayments and accrued income
90,334
64,048
Corporation tax repayable
217,938
213,650
Directors loan accounts
715,547
813,384
Other debtors
91,118
697,461
------------
------------
1,241,617
1,927,872
------------
------------
Part of the corporation tax debtor is recoverable more than one year after the balance sheet date.
16. Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
188,140
159,227
Accruals and deferred income
1,300,237
1,584,113
Corporation tax
237,993
251,156
Social security and other taxes
162,251
140,145
Other creditors
6,074
51,033
------------
------------
1,894,695
2,185,674
------------
------------
17. Creditors: amounts falling due after more than one year
2022
2021
£
£
Amounts owed to group undertakings
1,404,331
1,517,497
------------
------------
18. Provisions
Deferred tax (note 19)
£
At 1 January 2022
466,022
Charge against provision
( 387)
------------
At 31 December 2022
465,635
------------
19. Deferred tax
The deferred tax included in the balance sheet is as follows:
2022
2021
£
£
Included in provisions (note 18)
465,635
466,022
------------
------------
The deferred tax account consists of the tax effect of timing differences in respect of:
2022
2021
£
£
Accelerated capital allowances
17,253
17,022
Revaluation of tangible assets
449,000
449,000
Pension plan obligations
( 618)
------------
------------
465,635
466,022
------------
------------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution pension plans was £ 33,510 (2021: £ 20,619 ).
21. Government grants
The amounts recognised in the financial statements for government grants are as follows:
2022
2021
£
£
Recognised in other operating income:
Government grants recognised directly in income
326,153
------------
------------
22. Called up share capital
Issued, called up and fully paid
2022
2021
No.
£
No.
£
Ordinary shares of £ 1 each
200,100
200,100
200,100
200,100
A Ordinary shares of £ 1 each
100
100
100
100
------------
------------
------------
------------
200,200
200,200
200,200
200,200
------------
------------
------------
------------
23. Reserves
Revaluation reserve - This reserve records the value of asset revaluations and fair value movements on assets recognised in other comprehensive income. Profit and loss account - This reserve records retained earnings and accumulated losses.
24. Analysis of changes in net debt
At 1 Jan 2022
Cash flows
At 31 Dec 2022
£
£
£
Cash at bank and in hand
113,423
93,212
206,635
Debt due after one year
(1,517,497)
113,166
(1,404,331)
------------
------------
------------
( 1,404,074)
206,378
( 1,197,696)
------------
------------
------------
25. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2022
2021
£
£
Not later than 1 year
284,448
141,216
Later than 1 year and not later than 5 years
505,951
150,991
Later than 5 years
432,000
------------
------------
1,222,399
292,207
------------
------------
26. Charges on assets
The bank holds a charge over the company's long leasehold premises in respect of cross banking guarantees.
27. Other financial commitments
The company has entered into banking cross guarantee commitments. At 31 December 2022 the maximum potential commitment was £3,483,247 (2021: £3,895,014).
28. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2022
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
W R Burton
389,864
9,457
( 120,000)
279,321
D J Oates
423,520
12,706
436,226
------------
------------
------------
------------
813,384
22,163
( 120,000)
715,547
------------
------------
------------
------------
2021
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
W R Burton
268,830
121,034
389,864
D J Oates
259,508
164,012
423,520
------------
------------
------------
------------
528,338
285,046
813,384
------------
------------
------------
------------
These loans are unsecured, repayable on demand and bear interest at the HMRC official rate of interest.
PROPERTY RENAISSANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
YEAR ENDED 31 DECEMBER 2022
29. Controlling party
The company is a wholly-owned subsidiary of Titanic Spa Limited. There is no one controlling party of this company.