Company Registration No. SC156400 (Scotland)
CHALLEN PROPERTIES LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2017
PAGES FOR FILING WITH REGISTRAR
CHALLEN PROPERTIES LIMITED
COMPANY INFORMATION
Directors
David Campbell
Carolyn Challen
Secretary
Carolyn Challen
Company number
SC156400
Registered office
1/2 Sciennes Gardens
Edinburgh
EH9 1NR
Accountants
Springfords LLP
Dundas House
Westfield Park
Eskbank
Edinburgh
EH22 3FB
Bankers
Clydesdale Bank Plc
29-30 Nicolson Square
Edinburgh
EH8 9BX
CHALLEN PROPERTIES LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
4 - 12
CHALLEN PROPERTIES LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2017
31 January 2017
- 1 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
3
1,050,000
950,000
Investments
4
1
1
1,050,001
950,001
Current assets
Debtors
6
1,519
231
Cash at bank and in hand
4,416
87,353
5,935
87,584
Creditors: amounts falling due within one year
7
(359,406)
(417,330)
Net current liabilities
(353,471)
(329,746)
Total assets less current liabilities
696,530
620,255
Creditors: amounts falling due after more than one year
8
(107,161)
(122,767)
Provisions for liabilities
10
(61,446)
(50,840)
Net assets
527,923
446,648
Capital and reserves
Called up share capital
11
100
100
Other reserves
317,429
231,605
Profit and loss reserves
210,394
214,943
Total equity
527,923
446,648
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
CHALLEN PROPERTIES LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 JANUARY 2017
31 January 2017
- 2 -
For the financial year ended 31 January 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
T
he directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
The financial statements were approved by the board of directors and authorised for issue on
17 July 2017 and are signed on its behalf by:
2017-07-17
David Campbell
Director
Company Registration No. SC156400
CHALLEN PROPERTIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2017
- 3 -
Share capital
Revaluation reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 February 2015
100
-
225,956
206,914
432,970
Year ended 31 January 2016:
Profit and total comprehensive income for the year
-
-
-
63,029
63,029
Dividends
-
-
-
(55,000)
(55,000)
Deferred tax on revaluation
-
-
5,649
-
5,649
Balance at 31 January 2016
100
-
231,605
214,943
446,648
Year ended 31 January 2017:
Profit and total comprehensive income for the year
-
-
-
50,451
50,451
Dividends
-
-
-
(55,000)
(55,000)
Revaluation of property
-
-
100,000
-
100,000
Deferred tax on revaluation
-
-
(14,176)
-
(14,176)
Balance at 31 January 2017
100
-
317,429
210,394
527,923
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2017
- 4 -
1
Accounting policies
Company information
Challen Properties Limited is a
private
company
limited by shares
incorporated in Scotland.
The registered office is
1/2 Sciennes Gardens, Edinburgh, EH9 1NR.
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 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.
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.
These financial statements for the year ended 31 January 2017
are the
first
financial statements of Challen Properties Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 February 2015. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 14.
1.2
Going concern
The company made profits this year and at the balance sheet date it had net assets. It is dependent upon its bank loan facility and trade with its subsidiary company to meet its future financial commitments. The directors consider that this support will continue for the foreseeable future and that the accounts should therefore be prepared on a going concern basis.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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:
Land and buildings freehold
Nil
Fixtures, fittings & equipment
25% 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
.
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
1
Accounting policies
(Continued)
- 5 -
The company's freehold land and buildings are held for long term investment, and are treated in accordance with FRS 102 as follows:
(i) their fair values are considered annually by the directors and any aggregate surplus of deficit is transferred to a non-distributable reserve;
(ii) the deferred taxation arising on any movement in the fair values of the properties is provided for and set against the non-distributable reserve;
(iii) no depreciation is provided in respect of freehold land and buildings.
The requirement of the Companies Act 2006 is to depreciate all properties, but that requirement conflicts with the generally accepted principle set out in FRS 102. The directors consider that, as these properties are not held for consumption but for investment, to depreciate them would not give a true and fair view, and that it is necessary to adopt the requirements of FRS 102 in order to give a true and fair view.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
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.
1.7
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.
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
1
Accounting policies
(Continued)
- 6 -
1.8
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.
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.
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 receipts 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.
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
1
Accounting policies
(Continued)
- 7 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 3 (2016 - 4).
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 8 -
3
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost or valuation
At 1 February 2016
950,000
4,621
954,621
Revaluation
100,000
-
100,000
At 31 January 2017
1,050,000
4,621
1,054,621
Depreciation and impairment
At 1 February 2016 and 31 January 2017
-
4,621
4,621
Carrying amount
At 31 January 2017
1,050,000
-
1,050,000
At 31 January 2016
950,000
-
950,000
The properties were revalued
this year
at current market value as estimated by the directors
.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2017
2016
£
£
Cost
667,555
667,555
Accumulated depreciation
-
-
Carrying value
667,555
667,555
The revaluation surplus is disclosed in note 14.
4
Fixed asset investments
2017
2016
£
£
Investments
1
1
The above investment is stated at cost less provision for diminution in value rather than at market value. The reason for this is that an open market value is not readily available due to the investment being in an unlisted company.
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
4
Fixed asset investments
(Continued)
- 9 -
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 February 2016 & 31 January 2017
1
Carrying amount
At 31 January 2017
1
At 31 January 2016
1
5
Subsidiaries
Details of the company's subsidiaries at 31 January 2017 are as follows:
Name of undertaking and country of
Nature of business
Class of
% Held
incorporation or residency
shareholding
Direct
Indirect
Campbell & Co Design Consultants Ltd
Scotland
Exhibition design and construction
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Profit/(Loss)
Capital and Reserves
£
£
Campbell & Co Design Consultants Ltd
6,845
212,248
6
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
718
-
Other debtors
801
231
1,519
231
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 10 -
7
Creditors: amounts falling due within one year
2017
2016
£
£
Bank loans and overdrafts
14,818
11,163
Trade creditors
1,646
1,234
Amounts due to group undertakings
150,405
210,237
Corporation tax
15,223
16,819
Other taxation and social security
5,802
4,414
Other creditors
171,512
173,463
359,406
417,330
The bank loan is secured by a standard security and floating charge over the assets of the company.
Included within other creditors is a loan of £105,000 from Campbell & Co Design Consultants Limited Employee Benefit Trust 2010. The loan is unsecured, bears interest at 4% per annum and is repayable on demand.
8
Creditors: amounts falling due after more than one year
2017
2016
£
£
Bank loans and overdrafts
107,161
122,767
Amounts included above which fall due after five years are as follows:
Payable by instalments
45,206
-
The bank loan is secured by a standard security and floating charge over the assets of the company.
9
Provisions for liabilities
2017
2016
£
£
Deferred tax liabilities
10
61,446
50,840
61,446
50,840
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 11 -
10
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
2017
2016
Balances:
£
£
Revaluations
65,016
50,840
Provisions
(3,570)
-
61,446
50,840
2017
Movements in the year:
£
Liability at 1 February 2016
50,840
Credit to profit or loss
(714)
Effect of change in tax rate - profit or loss
(2,856)
Effect of change in tax rate - equity
14,176
Liability at 31 January 2017
61,446
11
Called up share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
12
Related party transactions
The company has taken advantage of the exemption available in FRS 102 "Related Party Disclosures" whereby it has not disclosed transactions with any wholly owned subsidiary undertaking.
13
Directors' transactions
Dividends totalling £55,000 (2016 - £55,000) were paid in the year in respect of shares held by the company's directors.
CHALLEN PROPERTIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2017
- 12 -
14
Reconciliations on adoption of FRS 102
Reconciliation of equity
1 February
31 January
2015
2016
Notes
£
£
Equity as reported under previous UK GAAP
489,459
497,488
Adjustments arising from transition to FRS 102:
Deferred tax on revalued properties
(i)
(56,489)
(50,840)
Equity reported under FRS 102
432,970
446,648
Reconciliation of profit for the financial period
2016
£
Profit as reported under previous UK GAAP and under FRS 102
63,029
Profit reported under FRS 102
63,029
Notes to reconciliations on adoption of FRS 102
(i) Deferred taxation on revalued properties
Under previous UK GAAP the company stated its investment properties at estimated current market value. However as there was no intention or obligation to sell these properties no deferred taxation on the revaluation was recognised in the accounts. Under FRS 102 and on the basis that the properties will at some time in the future be sold, the directors have elected to provide for deferred taxation on the revaluation of the investment properties. The transition date for this adjustment was 1 February 2015, the effect of the change was to move the revaluation reserve of £282,445 to other reserves and to make a provision for deferred tax of £56,489. The provision was debited against the other reserves and so there was no effect on the profit and loss account. In the year to 31 January 2016 the effective rate of tax reduced from 20% to 18% which resulted in a £5,649 reduction in the deferred tax provision, this reduction was credited against other reserves. In the year to 31 January 2017 the effective rate of tax reduced from 18% to 17% which resulted in a £2,824 reduction in the deferred tax provision, this reduction was credited against other reserves.
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