REGISTERED NUMBER: |
Strategic Report, Report of the Director and |
Financial Statements for the Year Ended 31 December 2023 |
for |
ISMET TUREN LIMITED |
REGISTERED NUMBER: |
Strategic Report, Report of the Director and |
Financial Statements for the Year Ended 31 December 2023 |
for |
ISMET TUREN LIMITED |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Contents of the Financial Statements |
for the year ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Director | 5 |
Report of the Independent Auditors | 7 |
Statement of Comprehensive Income | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 13 |
Cash Flow Statement | 14 |
Notes to the Cash Flow Statement | 15 |
Notes to the Financial Statements | 16 |
ISMET TUREN LIMITED |
Company Information |
for the year ended 31 December 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Chartered Accountants |
Preston Park House |
South Road |
Brighton |
East Sussex |
BN1 6SB |
BANKERS: |
PO Box 544 |
54 Lombard Street |
London |
EC3V 9EX |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Strategic Report |
for the year ended 31 December 2023 |
The director presents her strategic report for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
The results for the year and the financial position are shown in the annexed financial statements. |
As an operator of a chain of franchisee restaurants, the director considers the key performance indicators to be turnover, gross profit and net profit. |
The key financial highlights are as follows: |
Year ended | Year ended |
31.12.23 | 31.12.22 |
£ | £ |
Turnover | 26,147,490 | 25,587,692 |
Gross profit | 16,897,040 | 16,641,331 |
Operating profit/(loss) | 304,821 | (736,154 | ) |
Profit/(Loss) before tax | 144,498 | (860,394 | ) |
Gross profit % | 64.62% | 65.04% |
Operating profit % | 1.17% | (2.87% | ) |
The company has experienced an increase in sales of £559,798 (2.2%) compared to last year of an increase of £624,054 (2.5%). This increase is mainly due to price inflation and increase in customer orders. |
The company has been impacted by rising food and utilities costs during the year however the company had looked to reduce costs in other areas to return a profit this year. |
The company's gross profit margin has decreased from 65.04% in 2022 to 64.62% in 2023. However, due to cost mitigation and a reduction in store rent, the company's operating profit has increased by £1,040,975 and the company has generated a profit this year. |
The company has and will continue to closely monitor costs and it will continue its aim to maximise its profit margins. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Strategic Report |
for the year ended 31 December 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The key risks to the company and mitigating measures in place are considered to be: |
Market conditions |
The principal risk affecting the company is sales performance and retention of market share to enable the company to continue to generate and grow revenue in future years. |
The fast food restaurant market place continues to be competitive but the company is confident it is well placed to continue reporting operating profits as a result of being a franchise member of the largest fast food provider in the UK, which continues to innovate with regard to its offerings to the public. This innovation mitigates the risks associated with operating in a highly competitive marketplace which may see customers switch spending to other restaurant offerings. |
The company has suffered a fall in gross margin due to cost inflation and being unable to fully pass this on to the customer. |
Employee Retention |
This is mitigated by competitive reward structures and comprehensive training and development programmes. |
Regulatory risks |
The company's operations demand very high levels of compliance within a wide range of regulatory requirements. In particular: |
Health and safety |
Food hygiene procedures |
Employment laws |
Licencing |
The above along with a number of other areas, are monitored in detail by McDonalds, as being in the fast food industry brings a high level of regulatory concerns. |
Liquidity risks |
The company has debt financing outstanding, and as such the Director monitors liquidity closely to ensure that the company can continue to meet its liabilities as they fall due. The interest rate increased through the year however currently has remained the same after the year end, which if remains or reduces will ease the pressure on cashflow, subject to the market conditions noted above. |
The Director continues to monitor the situation on a monthly basis and is closely managing cashflow to ensure a stable trading position. |
AUDITOR'S REPORT |
The auditor's report on the annual accounts for the year ended 31 December 2022 was unqualified. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Strategic Report |
for the year ended 31 December 2023 |
GOING CONCERN |
The company is showing a profit before tax of £144,498 (2021: £860,394 loss) in the current financial year and a negative balance sheet showing net current liabilities of £1,920,740 (2022: £1,494,542) as at 31 December 2023. Of the liabilities owed by the company as at 31 December 2023, £3,463,020 (2022: £4,623,412 ) is owed in bank loans and overdrafts. The bank loans are included as long term liabilities as per the terms of the loans. |
The director regularly prepares and monitors 5 year forecasts using a franchisee business tool supplied by the franchisor to assist in cashflow forecasting and regularly discusses the headroom position on these with its franchisor. This tool also helps the director closely manage costs to ensure that the company will maintain profitability. |
The director is in regular contact with the franchisor and the company's bank to ensure the company continues to receive the necessary support to be able to manage the franchises for the foreseeable future and enable the company to return to profitability. The director is satisfied that the company will receive continuing support from its bank and its franchisor. |
After reviewing the 5 year forecasts and conversations with the franchisor and bank, the director has a reasonable expectation that the company has adequate resources to continue in existence for the foreseeable future, |
The company, therefore, continues to adopt the going concern basis in preparing its financial statements. |
FUTURE DEVELOPMENTS |
The company will continue with the strategy to maintain profits by ensuring high levels of service. |
ON BEHALF OF THE BOARD: |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Report of the Director |
for the year ended 31 December 2023 |
The director presents her report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of providing fast food catering facilities under a franchise agreement. |
DIVIDENDS |
The company paid no dividends in the year (2022: £nil). The director recommends that no final dividend will be paid or proposed. |
DIRECTOR |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
The company's financial assets and liabilities consist of trade debtors and creditors, cash and bank balances, tangible and intangible assets, stock and bank loans. |
The company does not trade speculatively in derivatives or similar instruments. |
DONATIONS AND EXPENDITURE |
During the year, the company made charitable donations of £16,088 (2022: £15,261) to the Ronald McDonald House Charity, a UK registered charity that provides free accommodation to families of patients in hospitals and hospice. |
EMPLOYEES |
The company ensures communication with all employees who, subject to practical and commercial considerations, should be consulted on and involved in decisions that affect their current jobs and future prospects. |
The company gives full consideration to applications for employment by disabled persons. In the event of employees becoming disabled whilst in service of the company, every effort is made to continue their employment by transfer to alternative duties, if required and by provision of such training as is appropriate. |
DISCLOSURE IN THE STRATEGIC REPORT |
Certain matters required by regulation to be dealt with in the annual report have been dealt with in the Strategic Report rather than the Directors' Report. These include principle risks and uncertainties, going concern and future developments. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless she is 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 director is required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is 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. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Report of the Director |
for the year ended 31 December 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Feist Hedgethorne Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Ismet Turen Limited |
Opinion |
We have audited the financial statements of Ismet Turen Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 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. |
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 director's 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 director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
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 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 the audit: |
- | the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Ismet Turen Limited |
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 Report of the Director. |
We have nothing to report in respect of the following matters where 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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page five, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Ismet Turen Limited |
Auditors' 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 a Report of the Auditors 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. |
The extent to which the audit was considered capable of detecting irregularities including fraud |
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 our commercial knowledge and experience of the fast food restaurant 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, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental, food hygiene and health and safety legislation; |
- | 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 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. |
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. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Ismet Turen Limited |
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 a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
Chartered Accountants |
Preston Park House |
South Road |
Brighton |
East Sussex |
BN1 6SB |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Statement of Comprehensive |
Income |
for the year ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
189,691 | (819,612 | ) |
Other operating income |
OPERATING PROFIT/(LOSS) | ( |
) |
Interest receivable and similar income |
308,736 | (736,154 | ) |
Interest payable and similar expenses | 4 | ( |
) | ( |
) |
PROFIT/(LOSS) BEFORE TAXATION | 5 | ( |
) |
Tax on profit/(loss) | 6 | ( |
) |
PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
( |
) |
OTHER COMPREHENSIVE INCOME |
Share buy back | ( |
) |
Income tax relating to other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 7 |
Tangible assets | 8 |
Investments | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 | ( |
) | ( |
) |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) | ( |
) |
NET LIABILITIES | ( |
) | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Capital redemption reserve | 20 |
Retained earnings | 20 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
The financial statements were approved by the director and authorised for issue on |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Statement of Changes in Equity |
for the year ended 31 December 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Issue of share capital | ( |
) | - | - | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2023 | ( |
) | ( |
) |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Cash Flow Statement |
for the year ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Tax paid | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) | ( |
) |
Amount introduced by directors | (300 | ) | - |
Share issue | ( |
) |
Share buyback | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
1,986,236 |
Cash and cash equivalents at end of year | 2 | 830,544 | 1,349,148 |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Cash Flow Statement |
for the year ended 31 December 2023 |
1. | RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit/(loss) before taxation | ( |
) |
Depreciation charges |
Finance costs | 164,238 | 124,240 |
Finance income | (3,915 | ) | - |
1,034,986 | 5,516 |
Decrease/(increase) in stocks | ( |
) |
Decrease/(increase) in trade and other debtors | ( |
) |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 830,544 | 1,349,148 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 1,349,148 | 1,986,236 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 1,349,148 | (518,604 | ) | 830,544 |
1,349,148 | ( |
) | 830,544 |
Debt |
Debts falling due within 1 year | (1,089,626 | ) | 198,035 | (891,591 | ) |
Debts falling due after 1 year | (3,533,786 | ) | 962,358 | (2,571,428 | ) |
(4,623,412 | ) | 1,160,393 | (3,463,019 | ) |
Total | (3,274,264 | ) | 641,789 | (2,632,475 | ) |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements |
for the year ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Ismet Turen Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page. The registered office address and business address are the same. |
The presentational currency of the financial statements is the Pound Sterling (£). |
Monetary amounts in these financial statements are rounded to the nearest pound. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Significant judgements and estimates |
Preparation of the financial statements requires management to make significant judgements and estimates and these 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The items in the financial statements where these judgements and estimates have been made include the useful economic life of intangible and tangible fixed assets, the depreciation and amortisation of these assets, stock obsolescence and provisions. Depreciation of the lease and improvements to property are on a rolling lease basis due the the nature of the McDonalds franchise lease agreement. |
Key sources of estimation uncertainty: |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. Cost less residual value is depreciated over the approved franchisee depreciation rate. The carrying amount of tangible fixed assets is £3,061,174 (2022: £3,447,939) as noted in note 8. |
The company considers whether intangible assets are impaired. Where an indication of impairment is identified the recoverable value requires estimation. The useful economic lives of the franchise rights are amortised over the length of the lease. The carrying amount of intangible assets is £1,205,359 (2022: £1,322,489) as noted in note 7. |
No significant judgements have been made by management in preparing these financial statements. |
Turnover |
Turnover represents the fair value of consideration received or receivable net of VAT. Revenue from the sale of food and drink is recognised at the point of sale. No credit is given. |
Franchise rights |
The franchise rights purchased between 2004 and 2019 are being amortised over their 20 year lease term. Amortisation is included as an administrative expense in the statement of comprehensive income. |
Franchise rights represent the McDonald's franchise and the remaining amortisation period is in accordance with the remaining length of the lease. |
Goodwill |
The goodwill purchased between 2004 and 2014 is being amortised over the length of the franchise lease of 20 years. Amortisation is included as an administrative expense in the statement of comprehensive income. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended by management. |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. |
Lease costs | - straight line over 20 years |
Improvements to property | - straight line over 20 years |
Plant and equipment | - 10% on cost |
Depreciation of the lease and improvements to property are on a rolling lease basis due the the nature of the McDonalds franchise lease agreement. |
Stocks |
Stocks are valued at the lower of cost and estimated selling price, after making due allowance for obsolete and slow moving items. |
The stock consists of food and drink as well as non-perishable stock items such as paper items and happy meal toys. |
Financial instruments |
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities such as trade and other accounts receivable and payable, loans from banks and loans to and from related parties. |
Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are |
measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However if the arrangements of a short-term instrument constitutes a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. |
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. If evidence of impairment is found, an impairment loss is recognised in the profit and loss account. |
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date. If evidence of impairment is found, an impairment loss is recognised in the profit and loss account. |
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an |
enforceable right to set off the recognised amounts and there is an intention to settle on a net basis as to realise the asset and settle the liability simultaneously. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. |
Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. |
The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the company in independently administered funds. |
Impairment |
At each balance sheet date, the company reviews the carrying amount of its assets to determine whether there is any indication that any items have suffered an impairment loss. |
If any such indication exists, the recoverable amount of an 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 asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Holiday pay accrual |
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. |
This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance Sheet date. |
Cash and cash equivalents |
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. |
Equity instruments |
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
3. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 7,279,025 | 7,425,206 |
Social security costs | 290,056 | 301,744 |
Other pension cost | 56,198 | 55,004 |
7,625,279 | 7,781,954 |
The average number of employees during the year was as follows: |
Operational and admin | 697 | 645 |
A defined contribution pension scheme is operated by the company. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension charge represents contributions payable by the company to the fund and amounted to £56,198 (2022: £55,044). Contributions amounting to £8,836 (2022: £nil) were payable to the fund at year end and are included in creditors. |
£ | £ |
Director's remuneration | 83,535 | 79,667 |
Director's social security | 10,273 | 6,736 |
Director's pension | 1,681 | 2,375 |
95,489 | 88,778 |
The director is the only key management personnel. |
4. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
5. | PROFIT/(LOSS) BEFORE TAXATION |
The profit is stated after charging: |
2023 | 2022 |
£ | £ |
Other operating leases | 2,028,346 | 2,684,385 |
Depreciation - owned assets | 602,169 | 612,768 |
Goodwill amortisation | 119,430 | 119,430 |
Franchise Rights amortisation | 9,000 | 9,000 |
Auditors remuneration | 8,750 | 8,250 |
6. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Deferred tax | ( |
) | ( |
) |
Tax on profit/(loss) | ( |
) |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit/(loss) before tax | ( |
) |
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Disallowed amortisation | 24,958 | 20,160 |
Disallowed depreciation of non-qualifying assets | 16,952 | 13,594 |
Capital allowance super deduction | (42 | ) | (2,059 | ) |
Deferred tax at increased rate | (2,118 | ) | (17,984 | ) |
Total tax charge/(credit) | 76,440 | (147,731 | ) |
Tax effects relating to effects of other comprehensive income |
There were no tax effects for the year ended 31 December 2023. |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Share buy back | ( |
) | - | (3,919,976 | ) |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
6. | TAXATION - continued |
Factors that may affect future tax charges |
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2021 (on 24 May 2021). These include increases to the main rate to increase the rate to 25% from 1 April 2023. Deferred taxes at the Balance Sheet date have been measured using this enacted tax rate and reflected in these financial statements. |
7. | INTANGIBLE FIXED ASSETS |
Franchise | Computer |
Goodwill | Rights | software | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
After an impairment review was carried out, no losses were recognised in the period. |
8. | TANGIBLE FIXED ASSETS |
Improvements |
Lease | to | Plant and |
Costs | property | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
After an impairment review was carried out, no losses were recognised in the period. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
9. | FIXED ASSET INVESTMENTS |
Unlisted |
investments |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
10. | STOCKS |
2023 | 2022 |
£ | £ |
Stock |
Stock recognised in cost of sales during the year as an expense was £9,250,450 (2022: £8,946,361). |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Other debtors |
Director's current account | 300 | - |
Tax |
Called up share capital not paid |
Prepayments |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 14) |
Trade creditors |
Corporation tax |
Other taxation and social |
security |
Other creditors |
Accruals |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans (see note 14) |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
14. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loan |
Amounts falling due between one and two years: |
Bank loan - 1-2 years |
Amounts falling due between two and five years: |
Bank loan - 2-5 years |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loan - more than 5 years | 285,715 | 866,392 |
Bank loans are repaid and interest rates are charged according to the terms of the loan agreements. The interest rates charged are between 1.2% and 1.4% plus the Bank of England base rate. Two current loans will be repaid during 2024, with the final loan being repaid in 2029. |
15. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
The total fixed lease payments recognised as an expense is £673,680 (2022: £673,680). |
There is also a variable element to the operating lease that is not included in the lease commitment figure above. This is based on in-store sales and the percentage differs for each store. |
The variable amount for this year was £1,354,666 (2022: £2,010,705). |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
2023 | 2022 |
£ | £ |
Bank loans |
The bank loan from Barclays Bank is secured by means of a fixed and floating charge on the company's assets. |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
17. | FINANCIAL INSTRUMENTS |
2023 | 2022 |
Financial assets | £ | £ |
Financial assets at amortised cost | 7,500 | 7,500 |
Financial assets that are debt instruments measured at amortised cost | 1,012,567 | 1,770,595 |
1,020,067 | 1,778,095 |
Financial liabilities |
Financial liabilities measured at amortised cost | (5,441,774 | ) | (6,915,243 | ) |
(5,441,774 | ) | (6,915,243 | ) |
18. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax | 338,778 | 374,571 |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Accelerated capital allowances | (35,793 | ) |
Balance at 31 December 2023 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 34 | 34 |
Ordinary shares rank pari passu and entitle the holder to voting rights and the right to dividends. |
20. | RESERVES |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£ | £ | £ |
At 1 January 2023 | ( |
) | (625,005 | ) |
Profit for the year | 68,058 |
At 31 December 2023 | ( |
) | (556,947 | ) |
21. | RELATED PARTY DISCLOSURES |
During the year, the estate of I. Turen repaid £200,000 to the company. At the balance sheet date, the Estate owed the company £29,460 (2022: £229,460). |
ISMET TUREN LIMITED (REGISTERED NUMBER: 04624537) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
22. | ULTIMATE CONTROLLING PARTY |
The controlling party is Y Turen. |
23. | EQUITY RESERVE |
Share capital - This represents the nominal value of shares that have been issued. |
Retained earnings - Includes all current and prior period retained profits and losses. |