Company Registration No. 04627713 (England and Wales)
APARTMENT 1 LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2019
APARTMENT 1 LIMITED
COMPANY INFORMATION
Director
D Fisher
Secretary
A J Fisher
Company number
04627713
Registered office
The Apartment Group 1st Floor, Two
Jesmond Three Sixty
Newcastle upon Tyne
NE2 1DB
Auditor
RMT Accountants & Business Advisors Ltd
Gosforth Park Avenue
Newcastle upon Tyne
NE12 8EG
Business address
26-32 Collingwood Street
Newcastle upon Tyne
NE1 1JF
APARTMENT 1 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
APARTMENT 1 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2019
- 1 -
The director presents the strategic report for the year ended 31 July 2019.
Principal activity
The principal activity of the company is that of a wine bar and night club operator.
Financial performance, financial position and key performance indicators
The director consider
s
turnover, gross profit and EBITDA (earnings before interest, tax, depreciation and amortisation) to be the key measures of the company's performance:
-
EBITDA for the year was £
1
,
208,841
(2018
-
£1,288,326).
The balance sheet shows that the company net assets have increased to £
8,
085,898 from £7,
408,021
.
The company generated cash from operations of £
3,
607,139 and invested £141,269 in fixed assets over the period. During the period the company refinanced its loan facility, repaying the full outstanding amount of £5,092,901 on the previous loan and drawing down £5,100,000 of the new loan facility. Repayments of £170,932 have been made against the current loan borrowings. Cash levels have therefore increased to £
3,79
6
,
558 from £2,
044,709
over the year.
The director consider
s
the company's
financial performance and position
to be
satisfactory in the light of current trading conditions.
Fixed assets
In the opinion of the director, the value of the company's land and buildings are not materially in excess of that shown in the financial statements when considered in relation to its use in the company's trade.
Post balance sheet events
On the 20
March 2020, the UK Government announced the temporary closure of all pubs, restaurants and hotels following the outbreak of COVID-19 in the UK. Although venues have re-opened since that date, trading restrictions in place have had a detrimental impact on the trading performance of the business.
APARTMENT 1 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 2 -
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 some key employees. The company provides competitive remuneration packages to ensure key employees are both retained and incentivised.
Environment, health and safety incidents
Appropriate measures are implemented to ensure the risk of any environmental and health and safety issues are minimised. The company strives to maintain high standards in these areas.
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 monitor
s
the financial information to ensure that any risks in this area are considered on a timely basis.
Credit risk
The director regularly monitor
s
debtors
to ensure that any risk
s of bad and doubtful debts
are
provided for
on a timely basis.
Brexit risk
The UK's decision to leave the European Union continues to generate a significant level of uncertainty in the economy. The director regularly assesses the likely effects on company revenue and profitability in an attempt to mitigate the risk as far as possible.
COVID-19 risk
The ongoing COVID-19 pandemic continues to generate a significant level of uncertainty in the economy. Following the temporary closure of all pubs, restaurants and hotels on 20 March 2020 by UK Government, the director regularly assesses the likely effects on company operations going forward. The company has been able to reduce administrative costs across the business and has taken advantage of government assistance in the form of the Coronavirus job retention scheme in an attempt to mitigate the risk as far as practicable. This has ensured company cash flow has been positively managed and the impact on the company’s operations has been mitigated.
Future developments
The director believes that the company is well placed in terms of strategic and market position to maximise its ability to generate sales and satisfy customer demand, in spite of the difficult economic conditions currently facing the business.
D Fisher
Director
Approved by the board on 30 July 2020
APARTMENT 1 LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JULY 2019
- 3 -
The director presents his annual report and financial statements for the year ended 31 July 2019.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
D Fisher
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Auditor
In accordance with the company's articles, a resolution proposing that RMT Accountants & Business Advisors Ltd 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;
-
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 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.
APARTMENT 1 LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 4 -
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of
future developments.
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.
Going concern
The director has adopted the going concern basis in preparing these financial statements after assessing the principal risks and having considered the impact of COVID-19.
On the 20
March 2020, the UK Government announced the temporary closure of all pubs, restaurants and hotels following the outbreak of COVID-19 in the UK. Although venues have re-opened since that date, trading restrictions in place have had a detrimental impact on the trading performance of the business.
The director considered the impact of the current COVID-19 environment on the business for the next 12 months from the approval of the balance sheet date and concluded the business has access to adequate financial resources to enable it to trade at a reduced level for the foreseeable future.
However, the director acknowledges the depth and duration of COVID-19 is an unknown factor and as such a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern due to the uncertainty on the full impact of COVID-19 on future trading, the timing of cash flows and financial resources which creates a risk the company may be unable to meet its financial obligations within the next 12 months.
D Fisher
Director
Approved by the board on 30 July 2020
APARTMENT 1 LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF APARTMENT 1 LIMITED
- 5 -
Opinion
We have audited the financial statements of Apartment 1 Limited (the 'company') for the year ended 31 July 2019 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 the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 July 2019 and of its profit 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.
The impact of uncertainties due to the United Kingdom exiting the European Union on our audit
Brexit is one of the most significant economic events for the UK in recent history, and at the date of this report its effects are subject to unprecedented levels of uncertainty, with the full range of possible consequences unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing the company's future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.
Emphasis of matter - Material uncertainty relating to going concern
We draw attention to Note 1.2 in the financial statements which discloses the impact of COVID-19 on the operations of the company. The uncertainty of the full impact of COVID-19 on future trading, the timing of cash flows and financial resources creates a risk that the company may be unable to meet its financial obligations within the next 12 months.
These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The director is 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.
We have nothing to report in this regard.
APARTMENT 1 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF APARTMENT 1 LIMITED
- 6 -
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 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 director's report have been prepared in accordance with applicable legal requirements.
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 identifie
d
material misstatements in the strategic report and the director's
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 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
r
esponsibilities
s
tatement, 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.
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.
APARTMENT 1 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF APARTMENT 1 LIMITED
- 7 -
Use of our 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 him 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 RMT Accountants & Business Advisors Ltd
Statutory Auditor
Gosforth Park Avenue
Newcastle upon Tyne
NE12 8EG
Date: 30 July 2020
APARTMENT 1 LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
3,855,482
4,389,878
Cost of sales
(571,316)
(710,135)
Gross profit
3,284,166
3,679,743
Administrative expenses
(3,316,594)
(3,424,517)
Other operating income
1,131,921
914,947
Operating profit
4
1,099,493
1,170,173
Interest receivable and similar income
7
1,129
-
Interest payable and similar expenses
8
(253,072)
(169,933)
Profit before taxation
847,550
1,000,240
Tax on profit
9
(169,973)
(192,832)
Profit for the financial year
677,577
807,408
The profit and loss account has been prepared on the basis that all operations are continuing operations.
APARTMENT 1 LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2019
- 9 -
2019
2018
£
£
Profit for the year
677,577
807,408
Other comprehensive income
-
-
Total comprehensive income for the year
677,577
807,408
APARTMENT 1 LIMITED
BALANCE SHEET
AS AT
31 JULY 2019
31 July 2019
- 10 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
11
4,540,546
4,508,625
Current assets
Stocks
13
106,944
97,174
Debtors falling due after more than one year
14
3,318,616
5,849,364
Debtors falling due within one year
14
2,327,821
1,284,605
Cash at bank and in hand
3,796,558
2,044,709
9,549,939
9,275,852
Creditors: amounts falling due within one year
15
(1,223,394)
(1,764,752)
Net current assets
8,326,545
7,511,100
Total assets less current liabilities
12,867,091
12,019,725
Creditors: amounts falling due after more than one year
16
(4,673,017)
(4,514,201)
Provisions for liabilities
18
(108,476)
(97,503)
Net assets
8,085,598
7,408,021
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
8,085,498
7,407,921
Total equity
8,085,598
7,408,021
The financial statements were approved and signed by the director and authorised for issue on 30 July 2020
D Fisher
Director
Company Registration No. 04627713
APARTMENT 1 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2019
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2017
100
7,150,513
7,150,613
Year ended 31 July 2018:
Profit and total comprehensive income for the year
-
807,408
807,408
Dividends
10
-
(550,000)
(550,000)
Balance at 31 July 2018
100
7,407,921
7,408,021
Year ended 31 July 2019:
Profit and total comprehensive income for the year
-
677,577
677,577
Balance at 31 July 2019
100
8,085,498
8,085,598
APARTMENT 1 LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2019
- 12 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
3,607,139
1,572,580
Interest paid
(253,072)
(169,933)
Income taxes paid
(202,700)
(567,552)
Net cash inflow from operating activities
3,151,367
835,095
Investing activities
Purchase of tangible fixed assets
(141,269)
(37,619)
Other investments and loans made
(1,095,545)
-
Interest received
1,129
-
Net cash used in investing activities
(1,235,685)
(37,619)
Financing activities
Proceeds of new bank loans
5,100,000
-
Repayment of bank loans
(5,263,833)
(571,840)
Dividends paid
-
(550,000)
Net cash used in financing activities
(163,833)
(1,121,840)
Net increase/(decrease) in cash and cash equivalents
1,751,849
(324,364)
Cash and cash equivalents at beginning of year
2,044,709
2,369,073
Cash and cash equivalents at end of year
3,796,558
2,044,709
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2019
- 13 -
1
Accounting policies
Company information
Apartment 1 Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
The Apartment Group 1st Floor, Two, Jesmond Three Sixty, Newcastle upon Tyne, NE2 1DB. The principal business address is 26-36 Collingwood Street, NE1 1JF.
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. The principal accounting policies adopted are set out below.
1.2
Going concern
The director has adopted the going concern basis in preparing these financial statements after assessing the principal risks and having considered the impact of COVID-19.
On the 20
March 2020, the UK Government announced the temporary closure of all pubs, restaurants and hotels following the outbreak of COVID-19 in the UK. Although venues have re-opened since that date, trading restrictions in place have had a detrimental impact on the trading performance of the business.
The director considered the impact of the current COVID-19 environment on the business for the next 12 months from the approval of the balance sheet date and concluded the business has access to adequate financial resources to enable it to trade at a reduced level for the foreseeable future.
However, the director acknowledges the depth and duration of COVID-19 is an unknown factor and as such a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern due to the uncertainty on the full impact of COVID-19 on future trading, the timing of cash flows and financial resources which creates a risk the company may be unable to meet its financial obligations within the next 12 months.
1.3
Turnover
Turnover represents
the total value of bar and door takings, excluding value added tax. Turnover is attributable to the continuing principal activity of the company and arose wholly within the United Kingdom.
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:
Tenants improvements
Straight line over the life of the lease
Leasehold property
Straight line over the life of the lease
Plant and machinery
10% reducing balance
Fixtures, fittings and equipment
15% reducing balance
Motor vehicles
20% reducing balance
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
.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 14 -
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).
1.6
Stocks
Stock is valued at the lower of cost and
estimated selling price less costs to complete and sell.
Cost is calculated on goods for resale as the purchase price on the cost of the stock.
Net realisable value is based on estimated selling price
.
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.
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.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 15 -
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
and
loans from
connected
companies, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
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
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.
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.
1.10
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.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 16 -
1.11
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.
1.12
Government grants
Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.
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 indications 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 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 £4,540
,
546 (201
8
- £4,508,625
).
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
Bar and door takings
3,855,482
4,389,878
2019
2018
£
£
Other significant revenue
Room hire
12,877
30,580
Head office recharges
1,099,798
882,490
Turnover has arisen wholly within the UK.
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(500)
(500)
Fees payable to the company's auditor for the audit of the company's financial statements
6,000
6,000
Depreciation of owned tangible fixed assets
109,348
118,153
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Director
1
1
Operational
107
96
Administration and finance
16
23
124
120
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
946,451
1,109,425
Social security costs
41,216
47,457
Pension costs
18,291
10,343
1,005,958
1,167,225
6
Director's remuneration
2019
2018
£
£
Remuneration for qualifying services
21,967
17,716
7
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
1,129
-
8
Interest payable and similar expenses
2019
2018
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
247,570
158,965
Other finance costs:
Other interest
5,502
10,968
253,072
169,933
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 19 -
9
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
155,402
200,352
Adjustments in respect of prior periods
3,598
13
Total current tax
159,000
200,365
Deferred tax
Origination and reversal of timing differences
10,973
(7,533)
Total tax charge
169,973
192,832
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Profit before taxation
847,550
1,000,240
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
161,035
190,046
Tax effect of expenses that are not deductible in determining taxable profit
118
2,040
Adjustments in respect of prior years
3,598
13
Permanent capital allowances in excess of depreciation
(5,752)
8,266
Deferred tax adjustment
10,974
(7,533)
Taxation charge for the year
169,973
192,832
10
Dividends
2019
2018
£
£
Ordinary interim paid
-
550,000
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 20 -
11
Tangible fixed assets
Tenants improvements
Leasehold property
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 August 2018
594,805
3,235,417
1,195,418
961,468
35,721
6,022,829
Additions
-
-
39,866
101,403
-
141,269
At 31 July 2019
594,805
3,235,417
1,235,284
1,062,871
35,721
6,164,098
Depreciation
At 1 August 2018
134,781
34,846
762,097
565,314
17,166
1,514,204
Charge for the year
11,896
3,242
44,787
45,712
3,711
109,348
At 31 July 2019
146,677
38,088
806,884
611,026
20,877
1,623,552
Carrying amount
At 31 July 2019
448,128
3,197,329
428,400
451,845
14,844
4,540,546
At 31 July 2018
460,024
3,200,571
433,321
396,154
18,555
4,508,625
12
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
5,362,885
6,846,574
Carrying amount of financial liabilities
Measured at amortised cost
5,507,865
5,842,526
13
Stocks
2019
2018
£
£
Goods for resale
106,944
97,174
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 21 -
14
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
40,504
37,189
Amounts due from connected companies
796,708
881,529
Other debtors
1,207,057
78,492
Prepayments and accrued income
283,552
287,395
2,327,821
1,284,605
Amounts falling due after more than one year:
Amounts due from connected companies
3,318,616
5,849,364
Total debtors
5,646,437
7,133,969
15
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans and overdrafts
17
272,550
595,699
Trade creditors
271,021
382,699
Amounts due to connected companies
89,963
91,168
Corporation tax
143,036
186,736
Other taxation and social security
229,011
232,692
Other creditors
64,402
123,213
Accruals and deferred income
153,411
152,545
1,223,394
1,764,752
16
Creditors: amounts falling due after more than one year
2019
2018
Notes
£
£
Bank loans and overdrafts
17
4,656,518
4,497,202
Government grants
16,499
16,999
4,673,017
4,514,201
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 22 -
17
Loans and overdrafts
2019
2018
£
£
Bank loans
4,929,068
5,092,901
Payable within one year
272,550
595,699
Payable after one year
4,656,518
4,497,202
The
bank loan
is secured
by way of
an unlimited guarantee granted by Apartment 1 Limited and associated companies Newton Hall (Northumberland) Limited, Manners (Newcastle) Limited and Vibrant Ventures Limited. The loan is also secured by way of a debenture over all four companies and a fixed and floating legal charge over the assets of these companies.
The company's previous loan with the Co-Operative Bank Plc (2018 reporting date carrying amount £5,092,901) was refinanced by Natwest Bank plc in December 2018 with a loan of £5,100,000 repayable in December 2023. The new loan accrues interest at 2.5% per annum over the Bank's Base rate at the relevant time.
18
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
19
108,476
97,503
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
2019
2018
Balances:
£
£
Accelerated capital allowances
108,476
97,503
2019
Movements in the year:
£
Liability at 1 August 2018
97,503
Charge to profit or loss
10,973
Liability at 31 July 2019
108,476
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 23 -
20
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
18,291
10,343
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.
21
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary of £1 each
100
100
The company has one class of ordinary shares which do not carry a right to fixed income.
22
Financial commitments, guarantees and contingent liabilities
The company has given an unlimited cross guarantee in respect of the bank borrowings with Newton Hall (Northumberland) Limited and Manners (Newcastle) Limited. No liability is expected to arise as a result of this guarantee.
23
Events after the reporting date
On the 20
March 2020, the UK Government announced the temporary closure of all pubs, restaurants and hotels following the outbreak of COVID-19 in the UK. Although venues have re-opened since that date, trading restrictions in place have had a detrimental impact on the trading performance of the business.
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2019
2018
£
£
Aggregate compensation
21,967
17,716
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
24
Related party transactions
(Continued)
- 24 -
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Head office recharges:
2019
2018
£
£
Other related parties
1,099,798
882,490
The following amounts were outstanding at the reporting end date:
2019
2018
Amounts owed to related parties
£
£
Other related parties
89,963
91,168
89,963
91,168
The following amounts were outstanding at the reporting end date:
2019
2018
Amounts owed by related parties
£
£
Other related parties
4,115,324
6,730,893
4,115,324
6,730,893
25
Directors' transactions
Dividends totalling £0 (2018 - £550,000) were paid in the year in respect of shares held by the company's director.
Included within
debtors
due within one year is an amount owed
by
D Fisher, director and shareholder of the company amounting to £
1,
095,545 (
2018 - £41,776
creditor).
26
Ultimate controlling party
D Fisher is the controlling party by virtue of his interest in the issued share capital of the company.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 25 -
27
Cash generated from operations
2019
2018
£
£
Profit for the year after tax
677,577
807,408
Adjustments for:
Taxation charged
169,973
192,832
Finance costs
253,072
169,933
Investment income
(1,129)
-
Depreciation and impairment of tangible fixed assets
109,348
118,153
Movements in working capital:
(Increase)/decrease in stocks
(9,770)
32,900
Decrease in debtors
2,583,077
209,046
(Decrease)/increase in creditors
(174,509)
42,808
Decrease in deferred income
(500)
(500)
Cash generated from operations
3,607,139
1,572,580
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CCH Software
CCH Accounts Production 2020.200
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