Company registration number 08132730 (England and Wales)
A KHAN RESTAURANTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
A KHAN RESTAURANTS LIMITED
COMPANY INFORMATION
Director
A A H Khan
Company number
08132730
Registered office
2nd Floor, Bradburn House
64-68 Northumberland Street
Newcastle upon Tyne
NE1 7DF
Auditor
Sumer Auditco Limited
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
Bankers
HSBC Bank Plc
110 Grey Street
Newcastle upon Tyne
NE1 6JG
A KHAN RESTAURANTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
A KHAN RESTAURANTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 1 -
The director presents the strategic report for the year ended 31 August 2024.
Review of the business
The company continued to operate 3 fast food restaurants in the North East of England. The company ceased trading on 27 April 2025.
Difficult economic conditions have resulted in inflationary rises in food, packaging, energy and labour costs. This ongoing cost of living crisis coupled with other challenges in the hospitality sector has led to a decrease in turnover, net profit and EBITDA. The company reported a decrease in turnover of 6.6% and a decrease of 41.6% in EBITDA in the year.
The director is aware of the challenges the business will face during the next 12 months but has a strategy to mitigate the effect of cost rises to safeguard the business.
Principal risks and uncertainties
The management of the business and the execution of the company's strategy are subject to a number of risks. The board reviews these risks and puts in place policies to mitigate them. The key business and financial risks are:
Employees
The company's performance depends largely on its employees and the loss of key employees could potentially adversely effect the business. Employees are encouraged to stay by having a competitive pay and conditions package.
Environment, health and safety incidents
Appropriate measures are implemented to ensure the risk of any environmental and health and safety issues are minimised.
Interest rate risk
The company monitors interest rate risk and considers that its current policy meets its objectives of managing its exposure.
Liquidity risk
The director regularly monitors the financial information to ensure that any risks in this area are considered on a timely basis.
Key performance indicators
The director considers turnover, gross profit, EBITDA and shareholder's funds to be the key measures of the company's performance:
The director considers the results of the company to be satisfactory for the year ended 31 August 2024 given the current economic climate.
A KHAN RESTAURANTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 2 -
A A H Khan
Director
15 May 2025
A KHAN RESTAURANTS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 3 -
The director presents his annual report and financial statements for the year ended 31 August 2024.
Principal activities
The principal activity of the company continued to be that of fast food restaurateur. The company ceased trading on 27 April 2025.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £151,000. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
A A H Khan
Post reporting date events
On 27 April 2025 the company sold its restaurants to another operator and therefore ceased trading on this date.
The director intends to invest the surplus cash in future business interests and is currently assessing his options.
Auditor
In accordance with the company's articles, a resolution proposing that Sumer Auditco Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of director's responsibilities
The director is responsible for preparing the annual report 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). Under company law, the director must not approve the financial statements unless he 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; and
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 them to ensure that the financial statements comply with the Companies Act 2006. He 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the director individually has taken all the necessary steps that they ought to have taken as a director in order to make themself aware of all relevant audit information and to establish that the company’s auditors are aware of that information.
A KHAN RESTAURANTS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 4 -
Going concern
After the year end the company sold it’s restaurants. The consideration received is enough to cover the company’s obligations with external lenders as they fall due. The director intends to invest the surplus cash in future business interests and is currently assessing his options. The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and therefore, the director has concluded that the going concern assumption is appropriate in preparing these financial statements.
On behalf of the board
A A H Khan
Director
15 May 2025
A KHAN RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF A KHAN RESTAURANTS LIMITED
- 5 -
Opinion
We have audited the financial statements of A Khan Restaurants Limited (the 'company') for the year ended 31 August 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 August 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
A KHAN RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF A KHAN RESTAURANTS LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 director's responsibilities statement, 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
A KHAN RESTAURANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF A KHAN RESTAURANTS LIMITED (CONTINUED)
- 7 -
Capability of the audit in detecting irregularities, including fraud
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Paul Gainford (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
16 May 2025
A KHAN RESTAURANTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
12,132,136
12,983,049
Cost of sales
(4,155,985)
(4,568,557)
Gross profit
7,976,151
8,414,492
Administrative expenses
(7,969,460)
(8,012,210)
Other operating income
21,930
21,930
Operating profit
4
28,621
424,212
Interest receivable and similar income
1,536
Interest payable and similar expenses
7
(208,369)
(137,901)
(Loss)/profit before taxation
(179,748)
287,847
Tax on (loss)/profit
8
(14,963)
(107,268)
(Loss)/profit for the financial year
(194,711)
180,579
The profit and loss account has been prepared on the basis that all operations are continuing operations.
A KHAN RESTAURANTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
- 9 -
2024
2023
£
£
(Loss)/profit for the year
(194,711)
180,579
Other comprehensive income
-
-
Total comprehensive income for the year
(194,711)
180,579
A KHAN RESTAURANTS LIMITED
BALANCE SHEET
AS AT 31 AUGUST 2024
31 August 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
10
656,036
738,036
Other intangible assets
10
61,781
72,565
Total intangible assets
717,817
810,601
Tangible assets
11
1,832,123
1,807,574
Investment property
12
45,000
45,000
Investments
13
3,750
3,750
2,598,690
2,666,925
Current assets
Stocks
14
72,180
70,993
Debtors
15
478,577
371,640
Cash at bank and in hand
254,568
227,710
805,325
670,343
Creditors: amounts falling due within one year
16
(2,079,230)
(2,243,223)
Net current liabilities
(1,273,905)
(1,572,880)
Total assets less current liabilities
1,324,785
1,094,045
Creditors: amounts falling due after more than one year
17
(580,812)
(79,656)
Provisions for liabilities
Deferred tax liability
19
337,643
262,348
(337,643)
(262,348)
Net assets
406,330
752,041
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
406,230
751,941
Total equity
406,330
752,041
The financial statements were approved and signed by the director and authorised for issue on 15 May 2025
A A H Khan
Director
Company registration number 08132730 (England and Wales)
A KHAN RESTAURANTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2022
100
965,362
965,462
Year ended 31 August 2023:
Profit and total comprehensive income
-
180,579
180,579
Dividends
9
-
(394,000)
(394,000)
Balance at 31 August 2023
100
751,941
752,041
Year ended 31 August 2024:
Loss and total comprehensive income
-
(194,711)
(194,711)
Dividends
9
-
(151,000)
(151,000)
Balance at 31 August 2024
100
406,230
406,330
A KHAN RESTAURANTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
225,065
1,489,433
Interest paid
(208,369)
(137,901)
Income taxes paid
(69,219)
(371,382)
Net cash (outflow)/inflow from operating activities
(52,523)
980,150
Investing activities
Purchase of tangible fixed assets
(482,539)
(355,303)
Interest received
1,536
Net cash used in investing activities
(482,539)
(353,767)
Financing activities
Net amounts (drawn)/introduced from director
(98,518)
(151,308)
Proceeds from borrowings
2,063,335
Repayment of borrowings
(605,363)
Proceeds from new bank loans
955,947
Repayment of bank loans
(797,534)
(1,522,219)
Net cash generated from/(used in) financing activities
561,920
(717,580)
Net increase/(decrease) in cash and cash equivalents
26,858
(91,197)
Cash and cash equivalents at beginning of year
227,710
318,907
Cash and cash equivalents at end of year
254,568
227,710
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
- 13 -
1
Accounting policies
Company information
A Khan Restaurants Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2nd Floor, Bradburn House, 64-68 Northumberland Street, Newcastle upon Tyne, NE1 7DF.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
After the year end the company sold it’s restaurants. The consideration received is enough to cover the company’s obligations with external lenders as they fall due. The director intends to invest the surplus cash in future business interests and is currently assessing his options. The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and therefore, the director has concluded that the going concern assumption is appropriate in preparing these financial statements. true
1.3
Turnover
Revenue is recognised on the sale of food and drinks to customers, excluding value added tax and arose wholly within the United Kingdom. Revenue is measured at fair value of the consideration received or receivable and represent amounts for the sale of food and beverages.
1.4
Intangible fixed assets - goodwill
Goodwill representing the excess of the purchase price of the sole trader business over the fair value of the net assets of undertakings is capitalised on the balance sheet and is amortised by equal annual instalments over the expected useful economic life of 20 years.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.
Other intangible assets comprise of franchise rights, franchise fees and leasehold property fees. These are shown in the financial statements at cost. Other intangible assets are amortised through the profit and loss account in equal annual instalments over the estimated useful life of the asset.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Other intangibles
11 - 20 years straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
5% to 20% straight line
Motor vehicles
14% reducing balance and 10% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials of food and beverages.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other creditors, bank loans and overdrafts, 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 rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Creditors are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received, if considered material to the financial statements.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company provides a defined contribution pension scheme, the assets of which are held separately from those of the company in an independently administered fund. Contributions payable to the company's pension scheme are charged to the profit and loss account in the period to which they relate.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Capital contributions provided by the landlords in relation to refurbishments of restaurants are recognised as deferred income and released to the profit and loss in line with depreciation.
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Determining residual values and useful economic lives of tangible fixed assets
The company depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices. The carrying amount of tangible fixed assets at the reporting end date was £1,832,123 (2023 - £1,807,574).
Goodwill and intangible assets
The company establishes a reliable estimate of the useful life of goodwill and intangible assets arising on business combinations. This estimate is based on a variety of factors such as the expected use of the incorporated business, the expected use of the franchise fees and licenses and any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses. The carrying amount of goodwill and intangible assets at the reporting end date was £717,817 (2023- 810,601).
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Food and beverages
12,132,136
12,983,049
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
3
Turnover and other revenue
(Continued)
- 18 -
2024
2023
£
£
Other revenue
Interest income
-
1,536
Turnover and grants received have arisen wholly within the UK.
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
7,100
7,200
Depreciation of owned tangible fixed assets
457,990
475,441
Amortisation of intangible assets
92,784
92,852
Operating lease charges
1,614,830
1,672,024
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Office and management
10
10
Restaurant crews
230
234
Total
240
244
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,692,439
2,675,153
Social security costs
127,453
125,156
Pension costs
45,203
54,348
2,865,095
2,854,657
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
8,591
8,591
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 19 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
198,542
137,901
Other finance costs:
Other interest
9,827
208,369
137,901
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(60,337)
69,214
Adjustments in respect of prior periods
5
Total current tax
(60,332)
69,214
Deferred tax
Origination and reversal of timing differences
75,295
38,054
Total tax charge
14,963
107,268
The main rate of corporation tax increased to 25% from 1 April 2023 under the Finance Bill 2021. Deferred tax has been provided at the rates expected to be in place when the timing differences reverse. Full rate of 25% has been used for the period to 31 August 2024 when assessing the corporation tax charge as below.
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(179,748)
287,847
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.52%)
(44,937)
61,945
Tax effect of expenses that are not deductible in determining taxable profit
1,999
2,376
Tax effect of income not taxable in determining taxable profit
(5,483)
(5,373)
Adjustments in respect of prior years
5
Tax rate changes
(11,916)
5,305
Permanent differences
75,295
43,015
Taxation charge for the year
14,963
107,268
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 20 -
9
Dividends
2024
2023
£
£
Interim paid
151,000
394,000
10
Intangible fixed assets
Goodwill
Other intangibles
Total
£
£
£
Cost
At 1 September 2023 and 31 August 2024
1,640,000
197,921
1,837,921
Amortisation and impairment
At 1 September 2023
901,964
125,356
1,027,320
Amortisation charged for the year
82,000
10,784
92,784
At 31 August 2024
983,964
136,140
1,120,104
Carrying amount
At 31 August 2024
656,036
61,781
717,817
At 31 August 2023
738,036
72,565
810,601
11
Tangible fixed assets
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
Cost
At 1 September 2023
5,392,262
19,115
5,411,377
Additions
426,404
56,135
482,539
At 31 August 2024
5,818,666
75,250
5,893,916
Depreciation and impairment
At 1 September 2023
3,595,421
8,382
3,603,803
Depreciation charged in the year
452,843
5,147
457,990
At 31 August 2024
4,048,264
13,529
4,061,793
Carrying amount
At 31 August 2024
1,770,402
61,721
1,832,123
At 31 August 2023
1,796,841
10,733
1,807,574
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 21 -
12
Investment property
2024
£
Fair value
At 1 September 2023 and 31 August 2024
45,000
The property was acquired by the company on 18 March 2016 to support a local school and their enterprise scheme. The director considers the value per the financial statements to reflect the fair value as at the year end.
13
Fixed asset investments
2024
2023
£
£
Unlisted investments
3,750
3,750
14
Stocks
2024
2023
£
£
Raw materials and consumables
72,180
70,993
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
8,128
Corporation tax recoverable
60,337
Other debtors
268,299
273,396
Prepayments and accrued income
149,941
90,116
478,577
371,640
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
18
23,686
797,122
Other borrowings
18
910,788
Trade creditors
340,273
570,912
Corporation tax
69,214
Other taxation and social security
459,951
353,520
Deferred income
20
21,930
21,930
Other creditors
262,656
358,836
Accruals and deferred income
59,946
71,689
2,079,230
2,243,223
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 22 -
17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
7,909
32,007
Other borrowings
18
547,184
Deferred income
20
25,719
47,649
580,812
79,656
Creditors which fall due after five years are payable as follows:
Payable by instalments
14,982
-
18
Loans and overdrafts
2024
2023
£
£
Bank loans
31,595
829,129
Other loans
1,457,972
1,489,567
829,129
Payable within one year
934,474
797,122
Payable after one year
555,093
32,007
Bank loans are repayable in monthly instalments until May 2026 and interest is charged between 1.6% and 2.5% per annum above the Bank of England base rate.
Other loans are repayable in monthly instalments until October 2029 and interest is charged at varying rates from 2.05% to 12.4% per annum. The other loans are secured by way of personal guarantees from the director.
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
337,643
262,348
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
19
Deferred taxation
(Continued)
- 23 -
2024
Movements in the year:
£
Liability at 1 September 2023
262,348
Charge to profit or loss
75,295
Liability at 31 August 2024
337,643
20
Deferred income
2024
2023
£
£
Other deferred income
47,649
69,579
Included in the financial statements as follows:
Current liabilities
21,930
21,930
Non-current liabilities
25,719
47,649
47,649
69,579
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
45,203
54,348
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
At the balance sheet date, contributions amounting to £13,415 (2023 - £11,805) were payable to the fund and included within creditors due within one year.
22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
The company has one class of ordinary shares which carry no right to fixed income.
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 24 -
23
Operating lease commitments
As lessee
Operating lease payments represent rentals payable by the company for its restaurants and offices in Newcastle and Gateshead. Leases are negotiated for an average term of 20 years and rentals are fixed with no option to extend further, although this may be renewed at the end of the rental term.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within 1 year
524,868
524,868
Years 2-5
2,099,472
2,099,472
After 5 years
174,956
699,824
2,799,296
3,324,164
24
Events after the reporting date
On 27 April 2025 the company sold its restaurants to another operator and therefore ceased trading on this date.
25
Directors' transactions
Dividends totalling £151,000 (2023 - £394,000) were paid in the year in respect of shares held by the company's directors.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Loan account
-
150,723
98,518
(151,000)
98,241
26
Ultimate controlling party
The director, A A H Khan, is the controlling party by virtue of his interest in the issued share capital of the company.
The company was incorporated in England and Wales.
A KHAN RESTAURANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 25 -
27
Cash generated from operations
2024
2023
£
£
(Loss)/profit after taxation
(194,711)
180,579
Adjustments for:
Taxation charged
14,963
107,268
Finance costs
208,369
137,901
Investment income
(1,536)
Amortisation and impairment of intangible assets
92,784
92,852
Depreciation and impairment of tangible fixed assets
457,990
475,441
Movements in working capital:
(Increase)/decrease in stocks
(1,187)
2,241
(Increase)/decrease in debtors
(99,082)
111,227
(Decrease)/increase in creditors
(232,131)
405,390
Decrease in deferred income
(21,930)
(21,930)
Cash generated from operations
225,065
1,489,433
28
Analysis of changes in net debt
1 September 2023
Cash flows
31 August 2024
£
£
£
Cash at bank and in hand
227,710
26,858
254,568
Borrowings excluding overdrafts
(829,129)
(660,438)
(1,489,567)
(601,419)
(633,580)
(1,234,999)
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