Company registration number 03281940 (England and Wales)
NEWSLEASE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
NEWSLEASE LIMITED
COMPANY INFORMATION
Directors
Mr S Jivraj
Mr A Jivraj
Company number
03281940
Registered office
Kalamu House
11 Coldbath Square
London
EC1R 5HL
Auditor
KLSA LLP
Kalamu House
11 Coldbath Square
London
EC1R 5HL
Bankers
Barclays Bank Plc
1 Churchill Place
London
E14 5HP
NEWSLEASE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
NEWSLEASE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -
The directors present the strategic report for the year ended 31 October 2023.
Review of the business
Turnover for the year ended 31 October 2023 amounted to £2.44m compared to £2.49m for the previous year and the operating profit for the year was £132k compared to £367k in the previous year. The net assets position at the year-end was £5.9m (2022: £6.2m). The results for the year and the financial position at the year end were considered satisfactory by the directors.
The characteristics of the areas of the elderly and specialist markets within which we operate offer a highly stable business profile.
Principal risks and uncertainties
The company faces a number of operating risks and uncertainties. There are a small number of risks that could impact the company's long term performance and steps are taken to understand and evaluate these in order to achieve our objective of sustainable growth.
The management have a risk management process in place, which is designed to identify, manage and mitigate business risk.
The most fundamental business risks faced by the company are:
- If the company fails to comply with regulation, regulatory action could include the revocation of a care home's licence to operate;
- If the average weekly fee increases do not at least rise in line with costs;
- If the company fails to attract and retain nursing and other qualified staff, it may then have to employ agency staff which would have an impact on the EBITDA margin.
Financial risk management objectives and policies
The company uses various financial instruments that include cash, trade debtors and creditors that arise from its operations. The company is exposed to a number of financial risks, which are described in more detail below.
Interest rate risk
The directors monitors the banking facilities and interest rates on a regular basis to make sure that the company is not exposed to material levels of credit.
Liquidity risk
The directors closely manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs by monitoring the working capital requirements.
Credit risk
The company has no significant concentrations of credit risk. The company has implemented policies that require appropriate credit checks on potential residents before services commence.
Future Developments
The directors aim to continue with the management policies which have resulted in the company's steady growth in recent years.
Key performance indicators
The key financial performance indicators of the company is EBITDA margin- earnings before interest, taxation, depreciation and amortisation. During the year, the company achieved EBITDA margin of 7% (2022: 17%).
The key non financial performance indicators are home occupancy and quality of care provided to residents. The average occupancy rate was 90% (2022: 93%). The company is subject to a number of statutory inspections by the local authority and the Care Quality Commission. The company was compliant and met all of its statutory obligations. The home was last inspected by CQC in July 2023 and was rated as 'Good'.
NEWSLEASE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
Going Concern
The directors have assessed the value of reserves and the operations of the company and do not consider that there are material uncertainties related to events or conditions that cast significant doubts on the company’s ability to continue as a going concern. The financial statements are therefore prepared on a going concern basis. Refer to further details on note 1.2.
Mr A Jivraj
Director
25 July 2024
NEWSLEASE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 October 2023.
Principal activities
The principal activity of the company continued to be that of operating a nursing home.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £500,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Jivraj
Mr A Jivraj
Auditor
The auditor, KLSA LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors 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 auditors are aware of that information.
On behalf of the board
Mr A Jivraj
Director
25 July 2024
NEWSLEASE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
NEWSLEASE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NEWSLEASE LIMITED
- 5 -
Opinion
We have audited the financial statements of Newslease Limited (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as going concern.
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:
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.
NEWSLEASE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWSLEASE LIMITED
- 6 -
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 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities , including fraud and non-compliance with laws and regulations
To identify risks of material misstatement due to any irregularities, including fraud and non-compliance with laws and regulations, we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
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 our commercial knowledge and experience of the sector; and
we focused on specific laws and regulations which we considered may have a direct material effect on the operations of the company, financial statements including the Companies Act 2006, taxation legislation and data protection, employment, health and safety legislation and Care Quality Commission (registration) Rregulations' 2009.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an 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, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations
NEWSLEASE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWSLEASE LIMITED
- 7 -
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 set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
To address the risk of non-compliance with laws and regulations, we communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation) and taxation legislation (including payroll taxes) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statements items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Company’s license to operate. We identified the following areas as those most likely to have such an effect: Care Quality Commission’s Inspections and healthcare and safety legislation regulations. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards; for instance, any non-compliance with laws and regulations and fraud which is far removed from transactions reflected in the financial statements would diminish the likelihood of detection. Furthermore, the risk of not detecting a material misstatement due to fraud is greater than the risk of not detecting one resulting from error.
Fraud may involve deliberate concealment by, for example, forgery or intentional omissions, misrepresentation, or through an act of collusion that would mitigate internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
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.
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.
NEWSLEASE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWSLEASE LIMITED
- 8 -
Shilpa Chheda
Senior Statutory Auditor
For and on behalf of KLSA LLP
25 July 2024
Chartered Accountants
Statutory Auditor
Kalamu House
11 Coldbath Square
London
EC1R 5HL
NEWSLEASE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
2,442,393
2,494,526
Cost of sales
(143,167)
(118,361)
Gross profit
2,299,226
2,376,165
Administrative expenses
(2,185,431)
(2,095,897)
Other operating income
19,126
87,424
Operating profit
4
132,921
367,692
Interest receivable and similar income
7
41,262
Profit before taxation
174,183
367,692
Tax on profit
8
(78,879)
Profit for the financial year
174,183
288,813
Tax relating to other comprehensive income
6,491
(6,491)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NEWSLEASE LIMITED
BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
4,891,074
4,608,105
Current assets
Stocks
11
1,700
1,700
Debtors
12
526,110
346,638
Cash at bank and in hand
1,099,634
1,883,915
1,627,444
2,232,253
Creditors: amounts falling due within one year
13
(333,318)
(329,341)
Net current assets
1,294,126
1,902,912
Total assets less current liabilities
6,185,200
6,511,017
Provisions for liabilities
Deferred tax liability
14
255,170
261,661
(255,170)
(261,661)
Net assets
5,930,030
6,249,356
Capital and reserves
Called up share capital
15
100
100
Revaluation reserve
2,483,528
2,502,147
Profit and loss reserves
3,446,402
3,747,109
Total equity
5,930,030
6,249,356
The financial statements were approved by the board of directors and authorised for issue on 25 July 2024 and are signed on its behalf by:
Mr S Jivraj
Mr A Jivraj
Director
Director
Company registration number 03281940 (England and Wales)
NEWSLEASE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 November 2021
100
2,533,748
3,933,186
6,467,034
Year ended 31 October 2022:
Profit for the year
-
-
288,813
288,813
Other comprehensive income:
Tax relating to other comprehensive income
-
(6,491)
(6,491)
Total comprehensive income for the year
-
(6,491)
288,813
282,322
Dividends
9
-
-
(500,000)
(500,000)
Transfer of excess depreciation between historical cost depreciation charge and actual depreciation charge on the revalued amount
-
(25,110)
25,110
-
Balance at 31 October 2022
100
2,502,147
3,747,109
6,249,356
Year ended 31 October 2023:
Profit for the year
-
-
174,183
174,183
Other comprehensive income:
Tax relating to other comprehensive income
-
6,491
6,491
Total comprehensive income for the year
-
6,491
174,183
180,674
Dividends
9
-
-
(500,000)
(500,000)
Transfer of excess depreciation between historical cost depreciation charge and actual depreciation charge on the revalued amount
-
(25,110)
25,110
-
Balance at 31 October 2023
100
2,483,528
3,446,402
5,930,030
NEWSLEASE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
105,436
363,612
Income taxes paid
(96,000)
(94,912)
Net cash inflow from operating activities
9,436
268,700
Investing activities
Purchase of tangible fixed assets
(334,979)
(25,964)
Interest received
41,262
Net cash used in investing activities
(293,717)
(25,964)
Financing activities
Dividends paid
(500,000)
(500,000)
Net cash used in financing activities
(500,000)
(500,000)
Net decrease in cash and cash equivalents
(784,281)
(257,264)
Cash and cash equivalents at beginning of year
1,883,915
2,141,179
Cash and cash equivalents at end of year
1,099,634
1,883,915
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
1
Accounting policies
Company information
Newslease Limited is a private company limited by shares incorporated in England and Wales. The registered office is Kalamu House, 11 Coldbath Square, London, EC1R 5HL.
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, and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The financial performance of the company is set out in the report of the directors and in the statement of profit or loss and the other comprehensive income. The financial position of the company is set out in the statement of financial position.true
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.
1.3
Turnover
Turnover represents amounts receivable during the period in respect of care services provided.
Turnover is recognised when the company's contractual obligation is fulfilled, that is typically when the resident has received care service from the company. Where charges are billed in advance these are recorded as deferred income.
Grants income are recognised in profit and loss on a systematic basis.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold Buildings
2% straight line on buildings value
Plant and machinery
25% reducing balance
Fixtures, fittings & equipment
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.
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks comprise food and consumables used for own consumption and are valued on a First In First Out (FIFO) basis and are carried at the lower of cost and net realisable value.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its net realisable value is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -
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, and loans from fellow group companies, 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 receipts 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.
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgments (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of debtors
The company reviews their portfolio of trade debtors on an annual basis. In determining whether trade debtors are impaired, the management makes judgement as to whether there is any evidence indicating that there is a measurable decrease in the estimated future cash flows expected.
Key sources of estimation uncertainty
In the application of the 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 relevant factors. Such estimates and assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The directors have made the following assumptions that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Useful lives of property, plant and equipment
Management reviews the useful lives, depreciation methods and residual values of the items of property, plant and equipment, investment property accounted for using the cost model and intangible assets and on a regular basis. During the financial year, the directors determined no significant changes in the useful lives and residual values. The carrying amounts of property, plant and equipment are disclosed in note 11.
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Room fees and miscellaneous recharges
2,442,393
2,494,526
2023
2022
£
£
Other revenue
Interest income
41,262
-
Insurance Claim received
15,901
85,584
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,820
11,700
Depreciation of owned tangible fixed assets
52,010
51,081
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
5
3
Operational
45
42
Total
50
45
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,791,431
1,713,901
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
35,350
33,249
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
41,262
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
41,262
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
78,879
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
174,183
367,692
Expected tax charge based on the standard rate of corporation tax in the UK of 22.52% (2022: 19.00%)
39,226
69,861
Tax effect of expenses that are not deductible in determining taxable profit
138
(16)
Group relief
3,730
Permanent capital allowances in excess of depreciation
(40,420)
9,034
Revenue item capitalised
(2,674)
Taxation charge for the year
-
78,879
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2023
2022
£
£
Deferred tax arising on:
Revaluation of property
(6,491)
6,491
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
9
Dividends
2023
2022
£
£
Final paid
500,000
500,000
10
Tangible fixed assets
Freehold Buildings
Work in progress
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
£
Cost or valuation
At 1 November 2022
5,269,127
25,964
163,375
322,294
5,780,760
Additions
317,047
14,699
3,233
334,979
At 31 October 2023
5,269,127
343,011
178,074
325,527
6,115,739
Depreciation and impairment
At 1 November 2022
703,707
160,291
308,657
1,172,655
Depreciation charged in the year
47,665
2,568
1,777
52,010
At 31 October 2023
751,372
162,859
310,434
1,224,665
Carrying amount
At 31 October 2023
4,517,755
343,011
15,215
15,093
4,891,074
At 31 October 2022
4,565,420
25,964
3,084
13,637
4,608,105
Freehold land and buildings are carried at deemed cost. If they were measured using the actual cost, the carrying amounts would have been £1,779,056 (2022 - £1,803,943), being cost £ 2,130,386 (2022 - £2,130,386) and depreciation £351,330 (2022 - £326,443).
Work in progress relates to improvements on the freehold buildings.
11
Stocks
2023
2022
£
£
Food and consumables
1,700
1,700
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
341,115
291,631
Corporation tax recoverable
62,071
Amounts owed by group undertakings
55,279
10,184
Other debtors
45,458
23,062
Prepayments and accrued income
22,187
21,761
526,110
346,638
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
90,875
65,034
Corporation tax
33,929
Other taxation and social security
42,082
33,899
Other creditors
159,938
161,991
Accruals and deferred income
40,423
34,488
333,318
329,341
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Revaluations
255,170
261,661
2023
Movements in the year:
£
Liability at 1 November 2022
261,661
Credit to profit or loss
(6,491)
Liability at 31 October 2023
255,170
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
15
Share capital
(Continued)
- 22 -
16
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
1,500,000
-
17
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
214,175
75,179
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Other information
Included in the balance due from other creditors and due to other creditors at the year end are;
i) amounts due from parent company of £55,279 (2022: £10,184).
ii) amount due from connected company amounting to £42,758 (2022: £21,949). The company is connected to Newslease Limited by virtue of common control.
18
Ultimate controlling party
The parent company of Newslease Limited is Bayswift Limited, a company registered in the UK and its registered office is c/o BMS (Sussex) Limited, Second Floor West, Ivy House, Ivy Terrace, Eastbourne, East Sussex, BN21 4QT.
The parent company, Bayswift Limited prepares consolidated financial statements and the copies of can be obtained from Second Floor West, Ivy House, Ivy Terrace, Eastbourne, East Sussex, BN21 4QT.
The ultimate parent entities are Akash Trust and Shizfaz Trust.
NEWSLEASE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
19
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
174,183
288,813
Adjustments for:
Taxation charged
78,879
Investment income
(41,262)
Depreciation and impairment of tangible fixed assets
52,010
51,081
Movements in working capital:
Increase in debtors
(117,401)
(123,341)
Increase in creditors
37,906
68,180
Cash generated from operations
105,436
363,612
20
Analysis of changes in net funds
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
1,883,915
(784,281)
1,099,634
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