For the financial year ending 31 December 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

In prior years, the Company recognised changes in the fair value of investment property in other comprehensive income and a revaluation reserve. Under FRS 102 Section 16, such changes must be recognised in the profit and loss account with no revaluation reserve.

Accordingly, the comparative figures for the year ended 31 December 2023 have been restated.

The effect of this adjustment was to:
– Increase the reported loss for 2023 by £1,673,761
– Eliminate other comprehensive income of £1,673,761
– Eliminate the revaluation reserve of £1,673,761 and transfer the balance to retained earnings.

There was no effect on net assets at either 31 December 2023 or 31 December 2024.

Revenue recognition

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Interest-bearing borrowings are initially recorded at the proceeds received, net of any directly attributable transaction costs.

In accordance with FRS 102, borrowings are ordinarily measured subsequently at amortised cost using the effective interest method. However, for the Company’s interest-only borrowings, the directors consider that applying the effective interest method would not provide relevant information about the Company’s financial performance, as it would result in recognising non-cash finance charges which do not reflect the actual interest profile of the loan.

As such, the Company has accounted for these loans at their nominal value, with interest expenses recognised on a cash basis as incurred. The directors consider this treatment to be appropriate on grounds of materiality and that it gives a true and fair view of the Company’s financial position and performance.

Loan arrangement and legal fees are recognised in the profit and loss account as incurred. For group reporting purposes, adjustments are made to align with the Group’s accounting policy, which applies the effective interest method and amortises loan fees over the life of the facility.

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

An independent firm of professional valuers has been instructed to carry out a valuation of the investment property at Somerset House, 37 Temple Street, Birmingham B2 5DP at the year of the financial year, and a valuation report showed the fair value of the property was £15,290,000.