Registered number:
FOR THE YEAR ENDED 31 JANUARY 2024
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PALACE LAUNDRY LTD
COMPANY INFORMATION
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PALACE LAUNDRY LTD
CONTENTS
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PALACE LAUNDRY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The directors present their report and the audited financial statements for the year ended 31 January 2024.
The principal activity of the company is to provide premium quality laundry and dry cleaning services to the eight London hotels owned and operated by the Firmdale Group of Companies and some 15 third party clients.
It operates from a purpose built facility in Fulham, London SW6 and services the various hotel properties daily using a fleet of vans. Ongoing investment in equipment ensures both high staff productivity and also minimal use of water, gas and detergent. The laundry operation benefits from a highly motivated and experienced team of employees. Such is the reputation and standing of the service that new contracts are regularly declined due to capacity constraints. Despite a significant trading improvement to the prior year, the company suffered a loss of £843,412 (2023: loss of £1,208,318). EBITDA before property revaluation adjustments was positive £35,428 (2023 - positive £30,605).
The principal financial risks faced by the company, and the company's objectives and policies in relation to those risks are as follows:
Cash flow risk
The finance department closely manages the company's cash flow. Detailed cash flow forecasts are regularly prepared with the objective of alerting the directors to potential future risks. It is the company's policy to ensure that forecast funding requirements can be met with available committed facilities
Credit risk
Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the company if it is unable to recover sums due from clients and it is mitigated by setting maximum levels of credit tolerance for more significant clients.
Total revenues for the year were £3.3m (2023 - £2.9m) an increase of 0.4m over prior year.
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PALACE LAUNDRY LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis.
Following the elimination of all material Covid related travel restrictions in mid 2021, international and domestic demand for both accommodation and food & beverage including events recovered very quickly. By March 2022 both Revenues and Earnings started to exceed those achieved in pre-Covid financial year 2020, and continuing growth led to record profitability for the Group in the financial year to January 2023. The financial year to January 2024 delivered further growth in profitability, and the current financial year is expected to do likewise. Excellent room rate growth, whilst maintaining substantial occupancies, has helped offset the effects of high cost base inflation. Rising interest rates have not had a significant impact on the Group given that in excess of 90% of group debt is either fixed or has the benefit of an interest rate cap. The net current liabilities of £370,359 thousand at January 2024 are driven by three sizable long term loans maturing in November 2024, a total of £386,391 thousand. Heads of Terms for the two maturing UK loans have been agreed with two major high street banks, and the option to extend the US loan for a further twelve months will be exercised. In light of the cash reserves, positive trading projections, supportive banks and well progressed plans for the loan refinancing in November, the Board has a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts. The Board will continue to monitor developments closely and adjust their forecasting assumptions as required. Despite generating a loss before tax in the year to 31 January 2024 of £843,412 and net current liabilities at the reporting date of £8,979,697, the directors consider the company to remain a going concern. The net current liabilities position is largely driven by amounts due to fellow companies, who have confirmed this amount will not be recalled to the detriment of other creditors or the operations of the company. Operating loss before property revaluations for the reporting year was £398,426 in comparison to a of £399,818 in the year ended 31 January 2023, highlighting improved operating performance and the directors consider this function vital in supporting the activities of the wider Firmdale Group. The directors therefore consider the going concern basis to remain appropriate.
This report was approved by the board and signed on its behalf.
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PALACE LAUNDRY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The directors present their report and the financial statements for the year ended 31 January 2024.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £431,541 (2023 - loss £1,260,215).
The directors do not recommend the payment of a dividend (2023 - £Nil).
The directors who served during the year were:
There are no key future developments anticipated to the Company's usual trade.
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PALACE LAUNDRY LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
The company has established a risk and financial management framework whose primary objectives are to protect the company from events that hinder the achievement of the company's performance objectives. The objectives aim to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management of risk at a business unit level.
Further detail in respect of the company's exposure to risks such as cash flow and credit risk has been provided in the strategic report on page 1.
There have been no significant events affecting the Company since the year end.
The auditors, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD
We have audited the financial statements of Palace Laundry Ltd (the 'Company') for the year ended 31 January 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙enquiry of management, those charged with governance and Company legal advisors around actual and potential litigation and claims;
∙performing audit work over the risk and management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙reviewing minutes of meetings of those charged with governance; and
∙reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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PALACE LAUNDRY LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PALACE LAUNDRY LTD (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
London, United Kingdom
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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PALACE LAUNDRY LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
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PALACE LAUNDRY LTD
REGISTERED NUMBER: 11139452
STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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PALACE LAUNDRY LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
Palace Laundry Limited is a private company, limited by shares, registered and incorporated in England and Wales under the Companies Act. The company's registered office is 18 Thurloe Place, London, SW7 2SP.
The principal activity of the company is that of laundry and dry cleaning services. The Company's functional and presentational currency is pound sterling (GBP), rounded to the nearest £1.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Firmdale Holdings Limited as at 31 January 2024 and these financial statements may be obtained from the Registrar of Companies.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
The directors view the cashflows and liabilities of Firmdale Holdings Ltd and its subsidiaries (“the Group”) as a whole in making assessments of the group’s ability to meet its liabilities as they fall due. Therefore, as part of their assessment of going concern, the directors of the company have considered the funding and liquidity position of the Group to determine the appropriateness of preparing the financial statements on a going concern basis.
Following the elimination of all material Covid related travel restrictions in mid 2021, international and domestic demand for both accommodation and food & beverage including events recovered very quickly. By March 2022 both Revenues and Earnings started to exceed those achieved in pre-Covid financial year 2020, and continuing growth led to record profitability for the Group in the financial year to January 2023. The financial year to January 2024 delivered further growth in profitability, and the current financial year is expected to do likewise. Excellent room rate growth, whilst maintaining substantial occupancies, has helped offset the effects of high cost base inflation. Rising interest rates have not had a significant impact on the Group given that in excess of 90% of group debt is either fixed or has the benefit of an interest rate cap. The net current liabilities of £370,359 thousand at January 2024 are driven by three sizable long term loans maturing in November 2024, a total of £386,391 thousand. Heads of Terms for the two maturing UK loans have been agreed with two major high street banks, and the option to extend the US loan for a further twelve months will be exercised. In light of the cash reserves, positive trading projections, supportive banks and well progressed plans for the loan refinancing in November, the Board has a high degree of confidence that the company will be able to meet its liabilities as they fall due and meet its covenant obligations for a period of at least twelve months. The Directors have therefore concluded that the company can continue to adopt the going concern basis in preparing the annual report and accounts. The Board will continue to monitor developments closely and adjust their forecasting assumptions as required. Despite generating a loss before tax in the year to 31 January 2024 of £843,412 and net current liabilities at the reporting date of £8,979,697, the directors consider the company to remain a going concern. The net current liabilities position is largely driven by amounts due to fellow companies, who have confirmed this amount will not be recalled to the detriment of other creditors or the operations of the company. Operating loss before property revaluations for the reporting year was £398,426 in comparison to a of £399,818 in the year ended 31 January 2023, highlighting improved operating performance and the directors consider this function vital in supporting the activities of the wider Firmdale Group. The directors therefore consider the going concern basis to remain appropriate.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
To the extent that the holiday pay adjustments gives rise to an asset balance at the reporting date the amount is reported in prepayments.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
Provisions are changed as an expense to profit or loss in the year that the company becomes aware of the obligations, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried the Statement of financial position.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Statement of financial position 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
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Revaluation of tangible fixed assets The freehold property and freehold land is held under the revaluation model based on detailed valuation reports completed by independent valuation specialists. These valuers hold recognised and relevant professional qualifications. The valuations are based on estimated rental values in the surrounding area to the property which includes judgements relating to various market factors and conditions.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
The freehold property and freehold land were valued based on reports completed by independent valuation specialists, Cushman & Wakefield, Chartered Surveyors. The valuer holds a recognised and relevant professional qualification with recent experience in the location and category of the property being valued.
The valuations are based on estimated rental values in the surrounding area to the property which includes judgements relating to various market factors and conditions. The valuation was carried out on the basis of fair value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
9.Tangible fixed assets (continued)
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
13.Deferred taxation (continued)
Revaluation reserve
Profit and loss account
The company operates a defined contribution scheme for employees. The assets of the scheme are held separately from those of the company in independently administered funds. The pension cost charge for the year represents contributions payable by the company to the funds and amounted to £32,223 (2023 - £26,991). Included in other creditors are contributions totalling £7,693 (2023 - £7,166) which were payable to the fund at the reporting date.
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PALACE LAUNDRY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
The immediate and ultimate parent and controlling company is Firmdale Holdings Limited, head of the ultimate group and a company registered in England and Wales.
The company is included within the consolidation of the Firmdale Holdings Limited group and this is the parent of the smallest and largest group which draws up consolidated financial statements. Firmdale Holdings Limited registered office address is 18 Thurloe Place, London, SW7 2SP. The consolidated accounts of this group are publicly available from the Registrar of Companies. In the opinion of the directors, the Trustees of Kemp Family Foundation are the ultimate controlling party of the Group and therefore of this entity.
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