As part of our audit plan we identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.
As part of our audit work, we obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Among the laws and regulations we considered in this context were Laws regulating leases and licences, Dilapidations Protocol, legislative guidance in relation to rent arrears and disputes, Companies Act 2006,and UK and Irish Tax Legislation. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the company's ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the company for fraud. The laws and regulations considered in this context would include, Health and Safety Requirements and Building and Environmental legislation which is in place to ensure that premises are well maintained, safe and healthy places to work.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory and legal correspondence, if any. Our audit procedures to respond to risks include enquiries of management, sample testing, reviewing accounting estimates, reviewing minutes of management meetings.
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 example, the further removed non-compliance with laws and regulations (irregularities) is from events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
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2. |
Summary of Significant Accounting Policies |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
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Statement of compliance |
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The financial statements of the company for the year ended 5 April 2024 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. |
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Basis of preparation |
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The financial statements have been prepared on the going concern basis and in accordance with the historical cost convention except for certain properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. |
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Revenue |
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(i) Rental income
Turnover represents the gross amounts derived from the rental of investment properties during the period and arises from those activities which fall within the ordinary activities of the company. Rental income is recognised in the profit and loss account on an accruals basis. Any lease incentives granted are recognised as an integral part of the total rental income.
(ii) Interest Interest receivable or payable is credited or charged to the income and expenditure account in the financial year to which it relates. |
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Related party transactions |
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The company discloses transactions with related parties which are not wholly owned within the same group. It does not disclose transactions with its' parent or with members of the same group that are wholly owned. |
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Investment properties |
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Investment property is property held either to earn rental income, or for capital appreciation (including future re-development) or for both, but not for sale in the ordinary course of business.
Investment property is initially measured at cost, which includes the purchase cost and any directly attributable expenditure. Investment property is subsequently valued at its fair value at each reporting date, by professional external valuers. The difference between the fair value of an investment property at the reporting date and its carrying value prior to the valuation is recognised in the Income Statement as a fair value gain or loss. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in the Income Statement. |
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Trade and other debtors |
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Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. |
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Cash and cash equivalents |
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Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the Balance Sheet bank overdrafts are shown within Creditors. |
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Trade and other creditors |
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Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost. |
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Taxation and deferred taxation |
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Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements.
Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
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Dividends |
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Dividend distribution to the company's shareholders is recognised as a liability in the company's financial statements in the period in which the dividends are approved by the company's shareholders. These amounts are recognised in the statement of changes in equity. |
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Foreign currencies |
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(i) Functional and presentation currency
The company's functional and presentation currency is the pound sterling.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. |
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Financial Instruments |
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i. Financial assets |
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Basic financial instruments, including trade and other receivables, cash and bank balances, are initially recognised at transaction price, 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. |
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ii. Financial liabilities |
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Basic financial liabilities, including trade and other payables, bank loans and loans from 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.
Debt instruments are subsequently carried at amortised cost using the effective interest method. |
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Ordinary share capital |
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The ordinary share capital of the company is presented as equity. |
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9. |
Creditors |
2024 |
2023 |
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Amounts falling due within one year |
£ |
£ |
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Trade creditors |
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138 |
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Amounts owed to group undertakings |
530,000 |
249,536 |
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Amounts owed to related parties (Note 13) |
389,627 |
258,376 |
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Taxation |
67,169 |
142,014 |
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Accruals |
148,497 |
148,171 |
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1,135,293 |
798,235 |
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Amounts included within creditors, including amounts owing to both group companies and related parties, which are not covered by specific note disclosures are unsecured, interest free and repayable on demand.
Taxation is subject to the terms of the relevant legislation.
The terms of the accruals are based on underlying contracts.
Account balance reclassifications: (i) Amounts owing to group undertakings for the comparative year includes a sum of £121,000, which in the prior year was included within amounts owed to connected parties. (ii) Amounts owed to related parties for the comparative year includes a sum of £258,376 which in the prior year was included with amounts owed to connected parties. (iii) As stated in Note 8 an amount receivable from a group debtor of £301,320 which was included within amounts owing to group undertakings in the prior year has been reclassified and included with amounts owed by group undertakings. The net effect of these reclassifications is that overall debtors increase by £301,320 and creditors amounts falling due within one year increase by £301,320. Overall net assets remain unchanged.
These sums have been reclassified from a prior period for comparability with the current period.
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13. |
Related party transactions |
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The company has availed of the exemption under FRS 102 Section 1A in relation to the disclosure of transactions with group undertakings. |
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Revenue in the income statement includes the sum of £22,800 (2023: £22,800) for rent received from a related party. There was no amount receivable from that related party at the year end (2023: £0).
Management expenses in the income statement include the sum of £23,746 (2023: £22,927) for services rendered by a related party and the sum of £282,122 (2023:£258,376) is included within amounts owed to related parties as at the balance sheet date.
Included within creditors is the sum of £107,505 (2023:£119,728) payable to the Company's former parent company Likeford Unlimited Company. Also as outlined in Note 11, a subordinated loan is payable to Likeford Unlimited Company of £9,186,914 (2023: £9,186,914). It is perpetual, unsecured and interest free and not repayable at the discretion of the lender. |