The notes on pages 4 to 12 form part of these financial statements.
The notes on pages 4 to 12 form part of these financial statements.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £9,656 (2023 - £12,958 profit).
Drumcash Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Flat 5, 2 Gloucester Gate, London, NW1 4HG. The nature of the group's operations and its principal activities are that of property investment within the United Kingdom and the provision of finance to related parties.
The group consists of Drumcash Limited and all of its subsidiaries.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company and its subsidiaries. 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.
The consolidated group financial statements consist of the financial statements of the parent company Drumcash Limited together with all entities controlled by the parent company (its subsidiaries).
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The directors have have performed an assessment of the group and parent company's ability to continue as a going concern for the foreseeable future, being a period of at least 12 months from the date of approval of these financial statements.
The group generates positive cash flows from its rental activities which are sufficient to satisfy its ongoing administrative and debt service costs, and meet its liabilities as they fall due for payment. Accordingly, the directors continue consider it appropriate to continue to adopt the going concern basis of preparation for these financial statements.
Turnover comprises rental and associated income derived from the investment property in the United Kingdom (net of value added tax) and interest receivable on loans provided to related parties.
When the group provides incentives to a tenant of its investment property, the cost of incentives are recognised over the lease term, on a straight-line basis, as a reduction of rental income.
Interest receivable is recognised in profit and loss on an accruals basis, using the effective interest method, when it is considered probable that the interest will be collected.
Finance costs are charged to profit and loss over the term of the debt so that the amount charged is at a constant rate on the carrying amount. Finance costs include issue costs which, where material, are initially recognised as a reduction in the proceeds of the associated capital instrument.
Interest on borrowings to finance property development is capitalised. Interest is capitalised from the date work starts on the development to the date of practical completion. All borrowing costs which are not capital in nature are recognised in profit or loss in the year in which they are incurred.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include trade and other debtors, loans to related parties 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. Financial assets classified as receivable within one year are not amortised.
Financial assets 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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including trade and other creditors, loans, and amounts due to fellow group undertakings, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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. Amounts payable 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
In the application of the group’s accounting policies, the directors are 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.
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.
The investment property is valued by the directors at each reporting date using a yield methodology valuation technique and having regard to the most recent independent external valuation of the property. The key input to the valuation at the reporting date was the market capitalisation rate, an increase in which would have caused the valuation to decrease.
Deferred taxation is impacted by the estimation uncertainty arising within the investment property valuation through the timing difference that exists between the valuation and the tax base cost of the property.
At the reporting date, the directors are required to determine whether there are indicators of impairment in respect of amounts owed by related parties. Factors taken into consideration include the economic viability and expected future financial performance of the counterparty. Having performed this review, the directors have made provisions against the carrying value of certain related party receivables, to impair the carrying value to their best estimate of the recoverable amount at the reporting date.
The group and company had no employees during the current or preceding year other than the directors who did not receive any remuneration.
Included within the carrying value of investment properties at 30 November 2024 is £42,929 (2023: £44,151) of lease arrangement costs which are being amortised over the contractual lease term.
The historical cost of the freehold investment property is £3,282,312 (2023: £3,282,312), which includes all expenses of development including capitalised interest of £105,917 (2023: £105,917) on the borrowings drawn down to finance the development.
Details of the company's subsidiaries at 30 November 2024, each of which is incorporated in England and Wales, are as follows:
The loan attracts interest at a fixed rate of 3.58% and is secured by a first legal charge on the group's freehold investment property (see note 4) and a floating charge over all the assets of subsidiary undertaking Colne Bridge Investments Limited. It is repayable in full on 29 March 2029.
The provision for deferred tax is made up as follows:
At the reporting end date the group had future minimum lease payments receivable under non-cancellable operating leases due as follows:
At 30 November 2024, the group owed £2,471 (2023: £2,471) to Rosecreek Holdings Limited, its immediate parent company. This amount is unsecured, interest-free and repayable on demand.
Included within other debtors at 30 November 2024 is an amount of £386,850 (2023: £425,225) due from Coin Equity Limited, which includes accrued interest and is stated net of a provision of £1,724,691 (2023: £1,724,691) against amounts where recovery is considered uncertain. The balance is unsecured and repayable on demand. The loan attracts interest at a rate of 19% per annum, but no interest was accrued in the current or prior year due to its collectability being uncertain. D Woolf is a director of, and has a direct beneficial ownership interest in, Coin Equity Limited.
Also included within other debtors at 30 November 2024 is an amount of £975,739 (2023: £688,088) due from director D Woolf and an amount of £27,749 (2023: £27,749) due from WMD Music Limited. WMD Music Limited is owned by a close family member of directors D Woolf and V Woolf. No interest is being charged on these balances which are unsecured and repayable on demand. During the year, the group charged D Woolf fees of £38,000 (2023: £25,333) for the use of a company asset, and reimbursed D Woolf an amount of £37,918 (2023: £25,333) for costs paid personally in respect of that asset.