Company Registration No. 03631066 (England and Wales)
GATE CAPITAL GROUP LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
GATE CAPITAL GROUP LTD
COMPANY INFORMATION
Directors
S K Ranchhoddas
J Jenk
Company number
03631066
Registered office
71-75 Shelton Street
Covent Garden
London
WC2H 9JQ
Auditor
Clarkson Hyde LLP
3rd Floor
Chancery House
St Nicholas Way
Sutton
Surrey
SM1 1JB
GATE CAPITAL GROUP LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
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 - 21
GATE CAPITAL GROUP LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 1 -
The directors present the strategic report for the year ended 31 March 2020.
Fair review of the business
The management team was strengthened at the end of the last financial year. The Firm underwent a change in control during the year. The Firm continues to advise and execute trading activities in equities, futures and options while further consolidating its operations, limiting its Wealth Management service while growing investment assets under management.
Principal risks and uncertainties
The core risks remain the utilisation of experienced resource to grow relationships and increase revenue.
In addition, the Firm has taken steps to deal with the negative effects of Brexit, Covid19, Capital Markets turmoil. These effects are being mitigated by management actions, continued consolidation of the Firm as well as expanded development of relationships with other organisations in all areas of business.
The restrictions on the face to face meetings are severely limiting the activities of Wealth Management and its development.
Key performance indicators
Overhead costs are being closely managed. The business has set key performance indicators against quarterly gross income from the 3 main departments, Markets, Asset Management and Wealth Management.
S K Ranchhoddas
Director
30 September 2020
GATE CAPITAL GROUP LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2020.
Principal activities
The principal activity of the company continued to be that of investment management activities.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S K Ranchhoddas
J Jenk
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
In accordance with the company's articles, a resolution proposing that Clarkson Hyde LLP be reappointed as auditor of the company will be put at a General Meeting.
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 auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
The directors are of the belief that the company is trading on a solid and sustainable basis
.
The ongoing challenged of operating in this sector have been exacerbated by the twin effects of Covid-19 as well as the related turmoil of the capital markets have been met with proactive and effective action by the management to protect clients' interests as well as the viability of the Firm.)
.
Despite these extraordinary dynamics: new clients have been secured, costs trimmed, and certain productivity gains made following investments in; skills assets, processes and procedures. New line of business continue to be explored. These improvements have been offset by significant increases in costs: for insurance (related to market conditions), as well as increased regulatory demands. Trading conditions remain challenging. HM Government requirements for Covid-19 containment and social distancing practices aw well as related work measure (remote/at home) has been adhered to, with productive changed made to physical working locations and processes. The company have been recapitalised to offset the effects of the JSK Capital debt issue, (as per Note 11) which remains unresolved as discussions are ongoing with the relevant authorities , and the debt issue is the sole item in the Auditor's ''opinion''. It should be noted that the company has a loan obligation to JSK Capital (Notes 13 and 14)
.
The directors continue to take, as a priority, responsible actions to protect the integrity of the company as well as the interests of its clients.
Pillar III disclosures
The Company has documented the disclosures required by FCA under BIPRU 11, these are available from the registered office.
GATE CAPITAL GROUP LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 3 -
On behalf of the board
S K Ranchhoddas
J Jenk
Director
Director
30 September 2020
GATE CAPITAL GROUP LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2020
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have 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 directors must not approve the financial statements unless they are 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 directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are 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. They are 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.
GATE CAPITAL GROUP LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GATE CAPITAL GROUP LTD
- 5 -
Qualified opinion on financial statements
We have audited the financial statements of Gate Capital Group Ltd (the 'company') for the year ended 31 March 2020 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 a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph
,
the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2020 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.
Basis for qualified opinion
The company is reporting significant debts due
from
2 companies including
JSK Capital Ltd, a
n
approved controller of the company
, We have been unable to get confirmation of these debts by usual audit methods, no information has been received
from the debtor
regarding their recovery and there has been ongoing legal action regarding this. If the debts are not recoverable then the company would have negative net assets.
In respect solely of the limitation on our work relating to
certain debtors
, described above:
Conclusions relating to going concern
Apart from the matter described in our basis for qualifies opinion section we have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
As described in the basis for qualified opinion section of our report we have been unable to satisfy ourselves as to the recoverability of
the
significant debt. We have concluded that where other information refers to assets or related balances it may be misstated for the same reason
GATE CAPITAL GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GATE CAPITAL GROUP LTD
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our reportin our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
Except for the matter described in the basis of opinion section of our report in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where 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 directors' remuneration specified by law are not made; or
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are 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 directors determine 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
GATE CAPITAL GROUP LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GATE CAPITAL GROUP LTD
- 7 -
This report is made solely to the company's members, as a body, 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 members those matters we are required to state to them 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 members, as a body, for our audit work, for this report, or for the opinions we have formed.
Graham Speck (Senior Statutory Auditor)
for and on behalf of Clarkson Hyde LLP
30 September 2020
Chartered Accountants
Statutory Auditor
3rd Floor
Chancery House
St Nicholas Way
Sutton
Surrey
SM1 1JB
GATE CAPITAL GROUP LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2020
- 8 -
2020
2019
Notes
£
£
Turnover
3
1,317,205
1,216,665
Cost of sales
(819,168)
(758,771)
Gross profit
498,037
457,894
Administrative expenses
(711,336)
(427,973)
Operating (loss)/profit
4
(213,299)
29,921
Interest receivable and similar income
7
57
60
Interest payable and similar expenses
8
(13,411)
-
(Loss)/profit before taxation
(226,653)
29,981
Tax on (loss)/profit
9
-
-
(Loss)/profit for the financial year
(226,653)
29,981
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GATE CAPITAL GROUP LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
- 9 -
2020
2019
£
£
(Loss)/profit for the year
(226,653)
29,981
Other comprehensive income
-
-
Total comprehensive income for the year
(226,653)
29,981
GATE CAPITAL GROUP LTD
BALANCE SHEET
AS AT 31 MARCH 2020
31 March 2020
- 10 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
10
23,346
31,621
Current assets
Debtors
11
472,431
368,882
Cash at bank and in hand
12,872
97,188
485,303
466,070
Creditors: amounts falling due within one year
12
(265,339)
(214,057)
Net current assets
219,964
252,013
Total assets less current liabilities
243,310
283,634
Creditors: amounts falling due after more than one year
13
(100,000)
(100,000)
Net assets
143,310
183,634
Capital and reserves
Called up share capital
17
101,634
16,939
Share premium account
914,049
812,415
Capital redemption reserve
330,000
330,000
Profit and loss reserves
(1,202,373)
(975,720)
Total equity
143,310
183,634
The financial statements were approved by the board of directors and authorised for issue on 30 September 2020 and are signed on its behalf by:
S K Ranchhoddas
J Jenk
Director
Director
Company Registration No. 03631066
GATE CAPITAL GROUP LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2018
16,939
812,415
330,000
(1,005,701)
153,653
Year ended 31 March 2019:
Profit and total comprehensive income for the year
-
-
-
29,981
29,981
Balance at 31 March 2019
16,939
812,415
330,000
(975,720)
183,634
Year ended 31 March 2020:
Loss and total comprehensive income for the year
-
-
-
(226,653)
(226,653)
Issue of share capital
17
84,695
101,634
-
-
186,329
Balance at 31 March 2020
101,634
914,049
330,000
(1,202,373)
143,310
GATE CAPITAL GROUP LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
- 12 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
20
(257,045)
(49,406)
Interest paid
(13,411)
-
Net cash outflow from operating activities
(270,456)
(49,406)
Investing activities
Purchase of tangible fixed assets
(384)
(585)
Interest received
57
60
Net cash used in investing activities
(327)
(525)
Financing activities
Proceeds from issue of shares
186,329
-
Net cash generated from/(used in) financing activities
186,329
-
Net decrease in cash and cash equivalents
(84,454)
(49,931)
Cash and cash equivalents at beginning of year
97,188
147,119
Cash and cash equivalents at end of year
12,734
97,188
Relating to:
Cash at bank and in hand
12,872
97,188
Bank overdrafts included in creditors payable within one year
(138)
-
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
- 13 -
1
Accounting policies
Company information
Gate Capital Group Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
71-75 Shelton Street, Covent Garden, London, WC2H 9JQ.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Commissions are recognised on execution of the underlying trade. Introductory fees are recognised when they become payable.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
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.
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:
Plant and equipment
20% straight line
Fixtures and fittings
20% 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
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 14 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
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 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.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
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 creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 16 -
1.8
Equity instruments
Equity instruments issued by the company 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 company.
1.9
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.
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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 lease
s
asset are consumed.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Principal activity
1,317,205
1,216,665
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 17 -
4
Operating (loss)/profit
2020
2019
Operating (loss)/profit for the year is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
1,197
24
Fees payable to the company's auditor for the audit of the company's financial statements
12,500
12,000
Depreciation of owned tangible fixed assets
8,659
8,582
Operating lease charges
60,318
56,396
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
5
6
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
296,287
103,954
Social security costs
26,012
8,918
Pension costs
4,275
726
326,574
113,598
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
166,522
16,343
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
57
60
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
57
60
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 18 -
8
Interest payable and similar expenses
2020
2019
£
£
Other finance costs:
Other interest
13,411
-
9
Taxation
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:
2020
2019
£
£
(Loss)/profit before taxation
(226,653)
29,981
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
(43,064)
5,696
Tax effect of expenses that are not deductible in determining taxable profit
-
603
Tax effect of utilisation of tax losses not previously recognised
41,419
(7,930)
Depreciation on assets not qualifying for tax allowances
1,645
1,631
Taxation charge for the year
-
-
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 April 2019
7,744
37,562
45,306
Additions
-
384
384
At 31 March 2020
7,744
37,946
45,690
Depreciation and impairment
At 1 April 2019
1,549
12,136
13,685
Depreciation charged in the year
1,549
7,110
8,659
At 31 March 2020
3,098
19,246
22,344
Carrying amount
At 31 March 2020
4,646
18,700
23,346
At 31 March 2019
6,195
25,426
31,621
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 19 -
11
Debtors
2020
2019
Amounts falling due within one year:
£
£
Other debtors of which JSK Capital Ltd (£295,120)
402,124
285,854
Prepayments and accrued income
70,307
83,028
472,431
368,882
12
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Bank loans and overdrafts
14
138
-
Trade creditors
93,614
41,520
Taxation and social security
19,184
10,311
Other creditors
10,245
67,812
Accruals and deferred income
142,158
94,414
265,339
214,057
13
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Other borrowings (JSK Capital Ltd)
14
100,000
100,000
14
Loans and overdrafts
2020
2019
£
£
Bank overdrafts
138
-
Loans from group undertakings (JSK Capital Ltd)
100,000
100,000
100,138
100,000
Payable within one year
138
-
Payable after one year
100,000
100,000
The subordinated debt shall have a maturity of at least five years and shall be fully paid up. Except where the firm is being wound up the debt shall not become repayable before this date unless the FCA approves the repayment. The lender shall be entitled to interest on the subordinated debt for the period for which the subordinated debt is outstanding at a rate of 5.75%, except that where before payment the insolvency of the firm commences, no such payment may be made without the prior consent of the FCA.
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 20 -
15
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
4,275
726
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.
16
Deferred taxation
Deferred tax is not recognised in respect of
tax
losses of £318,148 as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.
17
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
101,634 (2019: 16,939) Ordinary of £1 each
101,634
16,939
18
Operating lease commitments
Lessee
At the reporting end date the company
was a guarantor
for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Between two and five years
-
69,520
GATE CAPITAL GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 21 -
19
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
During the year Gate Capital Group Ltd was charged £
Nil
(201
9
: £
35,671
) by Sloane and Hyde Ltd for services provided. At the year end a balance of £
82
,000 (201
9
: £
82
,000) was due from Sloane and Hyde Ltd. K Vora is a director and beneficial shareholder
of Sloane and Hyde Ltd and a shareholder of JSK Capital Ltd.
At the year end a balance of
£295,120
(201
9
: £
191,877
) was owed by JSK Capital Ltd
, a shareholder of Gate Capital Limited
. The loan referred to in note 12 is a subordinated loan from JSK Capital Ltd.
During the year Gate Capital Group Ltd was charged
£120,000 (2019:
£15,000
)
for consultancy services by J Jenk a director of the company.
During the year Gate Capital Group ltd was charged £
Nil
(201
9
: £
33
,000) for consultancy services by T Everson a director of the company
, who resigned on 1 October 2018.
20
Cash absorbed by operations
2020
2019
£
£
(Loss)/profit for the year after tax
(226,653)
29,981
Adjustments for:
Finance costs
13,411
-
Investment income
(57)
(60)
Depreciation and impairment of tangible fixed assets
8,659
8,582
Movements in working capital:
Increase in debtors
(103,549)
(232,125)
Increase in creditors
51,144
144,216
Cash absorbed by operations
(257,045)
(49,406)
21
Analysis of changes in net debt
1 April 2019
Cash flows
31 March 2020
£
£
£
Cash at bank and in hand
97,188
(84,316)
12,872
Bank overdrafts
-
(138)
(138)
97,188
(84,454)
12,734
Borrowings excluding overdrafts
(100,000)
-
(100,000)
(2,812)
(84,454)
(87,266)
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