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REGISTERED NUMBER: 03358695 (England and Wales)

















AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST AUGUST 2023

FOR

CHEEMA SERVICES LTD

CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST AUGUST 2023










Page

Company Information 1

Statement of Financial Position 2

Notes to the Financial Statements 3


CHEEMA SERVICES LTD

COMPANY INFORMATION
FOR THE YEAR ENDED 31ST AUGUST 2023







DIRECTOR: Mr S S Cheema





SECRETARY: Mrs P K Cheema





REGISTERED OFFICE: New Marlborough House
90c Wrotham Road
Gravesend, Kent
DA11 0QQ





REGISTERED NUMBER: 03358695 (England and Wales)





INDEPENDENT AUDITORS: Watergates Ltd (Statutory Auditor)
109 Coleman Road
Leicester
Leicestershire
LE5 4LE

CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

STATEMENT OF FINANCIAL POSITION
31ST AUGUST 2023

31/8/23 31/8/22
Notes £    £   
CURRENT ASSETS
Debtors 5 730,041 953,615
Cash at bank 10,186 27,525
740,227 981,140
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR

6

(3,621,722

)

(3,837,876

)
NET CURRENT LIABILITIES (2,881,495 ) (2,856,736 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

(2,881,495

)

(2,856,736

)

CAPITAL AND RESERVES
Called up share capital 7 2 2
Retained earnings (2,881,497 ) (2,856,738 )
SHAREHOLDERS' FUNDS (2,881,495 ) (2,856,736 )

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the director and authorised for issue on 28th August 2024 and were signed by:





Mr S S Cheema - Director


CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST AUGUST 2023


1. STATUTORY INFORMATION

Cheema Services Ltd 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 presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

BASIS OF PREPARING THE FINANCIAL STATEMENTS
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

GOING CONCERN
The business is financed through cash generated from operating activities. Cash on the balance sheet is £10,185 (2022: £27,525) at 31 August 2023. The Company was in a net liability position at the year end of £2,881,495 (2022: £2,856,736).

As described in Note 9 of the financial statements, the Company has significant potential tax liabilities for VAT and Corporation tax relating to earlier years. The going concern basis assumes that the Company will be able to discharge the debt due to HMRC for VAT and Corporation taxes that arise and that the cost of any statute based penalties will be manageable.

This indicates that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern, subject to the outcome of negotiations with HMRC.

The director has reviewed future projections, which they feel adequately reflect the current uncertain economic environment and they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

TURNOVER
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the rendering of services.

Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably.

In the year under review, the company provides labours supply mainly to its fellow subsidiary.

Turnover in respect of provision of labour is recognised when the service has been provided and accepted by the fellow subsidiary.

CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST AUGUST 2023


2. ACCOUNTING POLICIES - continued

FINANCIAL INSTRUMENTS
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and loans to related parties.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, 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 constitute 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 or in case of an out-right short-term loan not at 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.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of comprehensive income.

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 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.

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 of the recoverable amount, 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.

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 or to realise the asset and settle the liability simultaneously.

TAXATION
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 statement of financial position date.

DEFERRED TAX
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST AUGUST 2023


2. ACCOUNTING POLICIES - continued

PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3. EMPLOYEES AND DIRECTORS

The average number of employees during the year was 8 (2022 - 26 ) .

4. AUDITORS' REMUNERATION
31/8/23 31/8/22
£    £   
Fees payable to the Company's auditors for the audit of the
Company's financial statements

4,500

6,000
Other non- audit services 3,000 -

5. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31/8/23 31/8/22
£    £   
Amounts owed by group undertakings 730,041 953,615

Amounts owed from group undertakings are unsecured, interest free, and repayable on demand.

6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31/8/23 31/8/22
£    £   
Trade creditors 12,952 4,056
Corporation tax 234,375 233,514
Social security and other taxes 3,264 19,830
VAT 2,487,295 2,733,244
Other creditors 7,555 9,229
Accruals and deferred income 876,281 838,003
3,621,722 3,837,876

Amounts owed to group undertakings are unsecured, interest free, and repayable on demand.

7. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31/8/23 31/8/22
value: £    £   
2 Ordinary £1 2 2

CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST AUGUST 2023


8. DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

2016 comparatives
We draw attention to note 9 in the financial statements which describes the uncertain future outcome with regards to potential historical overclaims of VAT and corporation tax. Provisions have been made on the estimated impact however the final outcome is not known as the matter is yet to be concluded.

The Company has reflected in these financial statements adequate provisions for liabilities that have arisen for incorrect claims for VAT and corporation tax in earlier years together with an estimate of the likely interest charges that will apply.

We would also draw to your attention that no additional provisions have been made in the accounts associated with the matter including that of surcharges and penalties associated with any historic liabilities payable to HMRC due to the material uncertainty as the outcome is not yet known. Other than a liability for interest, corporation tax and VAT overclaimed amounts, no additional provision have been made in the financial statements.

Our opinion is not modified in respect of this matter.

Nazir Malida FCCA (Senior Statutory Auditor)
for and on behalf of Watergates Ltd (Statutory Auditor)

9. CONTINGENT LIABILITIES

Following a routine VAT inspection in 2019 by HMRC, input reclaims relating to earlier years were raised. The company subsequently carried out an internal VAT review and identified an overclaim of VAT input in the sum of £2.243m with additional interest provision. In addition to this, further cumulative interest was made in the accounts to reflect a separate matter relating to corporation tax currently under review with HMRC. A corporation tax provision of £234k has been made in the accounts in line with assessment made by HMRC. During the current year a further £74k has been provided as additional interest for VAT and corporation tax.

Whilst the impact of these historical issues have been significant, both in terms of management time and financial consequence, positive steps that have been taken to address the structure and reporting procedures to minimise failings of this type in the future. The Company continues to cooperate fully with HMRC with a view to bringing these matters to a conclusion as soon as possible.

The directors consider that no additional provisions have been made in the accounts associated with the matter including that of surcharges and penalties associated with any historic liabilities payable to HMRC due to the material uncertainty as the outcome is not yet known. Other than a liability for interest, corporation tax and VAT overclaimed amounts, no additional provision have been made in the financial statements.

10. OTHER FINANCIAL COMMITMENTS

Havenhill Limited holds a debenture taking a fixed and floating charge over all the assets of the company.

11. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

CHEEMA SERVICES LTD (REGISTERED NUMBER: 03358695)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST AUGUST 2023


11. RELATED PARTY DISCLOSURES - continued

Included within the financial statements are amounts with entities which have common directorship as follows:

31/8/23 31/8/22
£    £   
Management charges receivable 78,000 78,000

12. ULTIMATE CONTROLLING PARTY

Cheema Holdings Limited, a company registered in England and Wales, is regarded by the director as being the Company's ultimate parent company and the registered office is New Marlborough House, 90c Wrotham Road, Gravesend, DA11 0QQ.

The ultimate controlling party are the shareholders of the parent company, in the current and preceding year.