REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
FOR |
K & G RESTAURANTS LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
FOR |
K & G RESTAURANTS LIMITED |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Income Statement | 8 |
Balance Sheet | 9 |
Statement of Changes in Equity | 10 |
Cash Flow Statement | 11 |
Notes to the Financial Statements | 12 |
K & G RESTAURANTS LIMITED |
COMPANY INFORMATION |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
Chartered Accountants |
and Statutory Auditors |
34-40 High Street |
Wanstead |
London |
E11 2RJ |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
STRATEGIC REPORT |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
The directors present their strategic report for the period 1 January 2022 to 31 March 2023. |
REVIEW OF BUSINESS |
The Directors report that despite an improvement in turnover, significant costs pressures have lead to a fall in margins and a fall in the operating result. |
The company sold all of its restaurants in the period for a total of £13.7m. |
In February 2023 the company purchased two investment properties and changed its trade to that of property investment. |
The Company's key performance indicators are as follows: |
15 months ended | 12 months ended |
31 March 2023 | 31 December 2021 |
£ | £ |
Turnover | 28,149,181 | 32,329,076 |
Gross profit | 18,891,675 | 23,078,927 |
Gross profit % | 67.15% | 71.39% |
Operating profit | 310,362 | 3,269,325 |
The net assets of the Company were £6.3m (2021: £0.6m) at the balance sheet date, reflecting the solid position of the Company from a solvency and liquidity point of view. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The management of the business and the nature of the company's strategy were subject to a number of risks. |
With the change in the nature of operations and the closure of its restaurants, the company is now facing a new set of risks in the periods ahead as the trade |
Economic downturn |
In periods of economic downturns there may be challenges in terms of occupancy rates and the financial health of property tenants. |
The company mitigates this risk by performing stringent due diligence on prospective tenants and maintained clear of communication. |
Property market |
The business is exposed to the wider risks of a downturn in the UK property market leading to falling values. |
As the business is free from debt and does not have lending covenants in place, it is sheltered from the short term volatility of the market. The properties have been purchased as part of a long term strategy and so this further mitigates the risk of short term value changes. |
ON BEHALF OF THE BOARD: |
21 December 2023 |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
REPORT OF THE DIRECTORS |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
The directors present their report with the financial statements of the company for the period 1 January 2022 to 31 March 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the period under review was that of operating quick service restaurants until February 2023. |
Subsequent to that the principal activity changed to that of property investment. |
The current period was extended to 31 March 2023 to coincide with the closure of the restaurant business. The prior year profit and loss figures represent the 12 months ended 31 December 2021 and so are not comparable. |
DIVIDENDS |
Interim dividends of £999,513 (2021: £821,392) were paid during the year. The Directors do not recommend payment of a final dividend. |
FUTURE DEVELOPMENTS |
The Directors intend to expand and develop the property investment portfolio and also seek alternative ways to generate revenue from the cash balances held. |
EVENTS SINCE THE END OF THE PERIOD |
Information relating to events since the end of the period is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report. |
ENGAGEMENT WITH EMPLOYEES |
The company does not discriminate between employees or potential employees on grounds of colour, race, ethnic or national origin, sex, disability, age, marital status or religious beliefs. Full consideration is given to applications for employment from disabled persons who are able to demonstrate that they have the necessary abilities. |
The importance of staff training, equal opportunity, health and safety, environmental matters and the avoidance of sexual harassment is recognised at all levels and is monitored on a regular basis by committees chaired by a director or senior manager reporting directly to the Board. |
The company gives full and fair consideration to applications for employment by disabled persons. In the event of employees becoming disabled whilst in service of the company, every effort is made to continue their employment by transfer to alternative duties, if required and by provision of such retraining as is appropriate. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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; |
- | 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. |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
REPORT OF THE DIRECTORS |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
K & G RESTAURANTS LIMITED |
Opinion |
We have audited the financial statements of K & G Restaurants Limited (the 'company') for the period ended 31 March 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement 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 Financial Reporting Standard 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 March 2023 and of its profit for the period 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 opinion |
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 Auditors' 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. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. 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. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors 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 identified material misstatements in the Strategic Report or the Report of the Directors. |
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 |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
K & G RESTAURANTS LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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. |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence,capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the Company through discussions with Directors and other management, and from our commercial knowledge and experience of the sector in which the Company operates; |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental, food hygiene, franchise conditions and health and safety legislation; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC and any other relevant regulators as required. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
K & G RESTAURANTS LIMITED |
Use of our report |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants |
and Statutory Auditors |
34-40 High Street |
Wanstead |
London |
E11 2RJ |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
INCOME STATEMENT |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
271,612 | 3,079,225 |
Other operating income |
OPERATING PROFIT | 5 |
Profit on disposal of franchise | 6 |
8,579,476 | 3,269,325 |
Interest receivable and similar income |
8,629,236 | 3,269,325 |
Interest payable and similar expenses | 7 |
PROFIT BEFORE TAXATION |
Tax on profit | 8 |
PROFIT FOR THE FINANCIAL PERIOD |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
BALANCE SHEET |
31 MARCH 2023 |
2023 | 2021 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
Investment property | 13 |
CURRENT ASSETS |
Stocks | 14 |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT ASSETS/(LIABILITIES) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 19 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2021 | ( |
) | ( |
) |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2021 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 March 2023 |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
CASH FLOW STATEMENT |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 26 | ( |
) |
Interest paid | ( |
) | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Purchase of investment property | ( |
) |
Sale of fixed asset investments |
Sale of restaurants | 13,746,000 | - |
Interest received |
Net cash from investing activities | ( |
) |
Cash flows from financing activities |
Loan repayments in year | ( |
) | ( |
) |
Amount withdrawn by directors | (250,000 | ) | - |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
Increase/(decrease) in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of period |
27 |
2,008,500 |
Cash and cash equivalents at end of period |
27 |
3,229,624 |
585,256 |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
1. | STATUTORY INFORMATION |
K & G Restaurants Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | STATEMENT OF COMPLIANCE |
3. | ACCOUNTING POLICIES |
Basis of preparing the financial statements and going concern |
Significant judgements and estimates |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
a) Critical judgements in applying the entity's accounting policies |
There are no specific judgements, apart from those involving estimates as detailed below, that management has made in the process of applying the entity's accounting policies that have a significant effect on the amounts recognised in the financial statements. |
b) Critical accounting estimates and assumptions |
(i) Useful economic lives of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates based on technological advancement, future investments, economic utilisation and the physical condition of the assets. |
(ii) Useful economic live of intangible assets |
Goodwill and intangible assets are amortised over their useful economic lives and are assessed annually for indications of impairment. |
iii) Treatment of significant capital projects |
The allocation of store refurbishment expenditure between capital and revenue is an area that requires judgement on the part of management. Costs are allocated in line with the asset recognition contained within FRS102 and on the basis of all available evidence as to their nature. The management uses professional advisors to assist them with this process. |
Revenue recognition |
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied, net of returns, discounts and value added taxes. |
Sales of goods are recognised on sale to the customer, which is considered to be the point of sale and when |
the significant risks and rewards of the goods have been passed to the customer. |
Franchise rights and franchise fees |
Goodwill relates to franchise rights purchased and is amortised over the period of the franchise agreement. Franchise fees are also amortised over the period of the franchise agreement. |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful |
life. |
Property Improvements - Straight line over 7-10 years |
Plant and machinery - Straight line over 7-10 years |
Fixtures and fittings - Straight line over 10 years |
Motor Vehicles - Straight line over 5 years |
Computer Equipment - Straight line over 5 years |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
3. | ACCOUNTING POLICIES - continued |
Investment property |
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss. |
Stocks |
Stocks are valued at the lower of cost and selling price, after making due allowance for impairment of obsolete or slow moving items. Stocks are recognised as an expense in the period in which the related revenue is recognised. |
Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price, including taxes and duties, transport and handling directly attributable to bringing the stock to its present location and condition. |
Financial instruments |
The Company has chosen to adopt Sections 11 and 12 of FRS102 in respect of financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently carried at this value less any provision for impairment. |
Cash and cash equivalents |
Cash and cash equivalents in the balance sheet represent cash at bank and in hand. |
Short-term debtors and creditors |
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in profit or loss under operating expenses. |
The carrying value of all short-term financial assets and liabilities are measured at amortised cost. |
Taxation |
Taxation for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Pension costs and other employment costs |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
3. | ACCOUNTING POLICIES - continued |
(i) Holiday pay |
Holiday pay entitlements (where material) are recognised as an expense in the period in which the service is received. |
(ii) Pension Scheme |
The company operates a defined contribution pension scheme for its employees. The contributions are recognised as an expense when they are due. Amounts not paid are shown as a creditor on the balance sheet. The assets of the scheme are held separately from the company in independently administered funds. |
Operating lease commitments |
The company's restaurant premises are leased from the franchisor under non-cancellable leases with expiry terms of more than five years. The rental payments are calculated on a monthly basis and are substantially based on annual sales income generated. The aggregate benefit of the lease incentives is recognised over the term of the lease. |
4. | EMPLOYEES AND DIRECTORS |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the period was as follows: |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
Restaurant team | 479 | 630 |
Management | 27 | 36 |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The Directors are considered to be the key management for the purposes of disclosure under FRS102. |
5. | OPERATING PROFIT |
The operating profit is stated after charging: |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Depreciation - owned assets |
Franchise rights amortisation |
Franchise fees amortisation |
Auditors' remuneration |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
6. | EXCEPTIONAL ITEMS |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Profit on disposal of franchise |
The exceptional item represents the profit on disposal of the intangible and tangibles assets owned as part of the restaurant portfolio that was disposed in the period. |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Bank interest |
Inland Revenue interest |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the period was as follows: |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax | ( |
) | ( |
) |
Tax on profit |
UK corporation tax has been charged at 19% (2021 - 19%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2021 - |
Effects of: |
Depreciation in excess of capital allowances |
Deferred tax | (178,164 | ) | (27,228 | ) |
Loss on disposal | 225,472 | - |
Total tax charge | 1,908,197 | 614,062 |
The company has capital losses of £400,000 (2020: £400,000) to carry forward against capital gains. |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
9. | DIVIDENDS |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Ordinary A shares of £1 each |
Interim |
Ordinary B shares of £1 each |
Interim |
10. | INTANGIBLE FIXED ASSETS |
Franchise | Franchise |
rights | fees | Totals |
£ | £ | £ |
COST |
At 1 January 2022 |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 March 2023 |
AMORTISATION |
At 1 January 2022 |
Amortisation for period |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 December 2021 |
11. | TANGIBLE FIXED ASSETS |
Plant, |
Improvements | machinery |
to | and | Motor | Computer |
property | fixtures | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2022 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 March 2023 |
DEPRECIATION |
At 1 January 2022 |
Charge for period |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 December 2021 |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
12. | FIXED ASSET INVESTMENTS |
Unlisted |
investments |
£ |
COST |
At 1 January 2022 |
Disposals | ( |
) |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 December 2021 |
13. | INVESTMENT PROPERTY |
Total |
£ |
FAIR VALUE |
Additions |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
14. | STOCKS |
2023 | 2021 |
£ | £ |
Stocks |
15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2021 |
£ | £ |
Trade debtors |
Other debtors |
Directors' current accounts | 250,000 | - |
VAT |
Prepayments and accrued income |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2021 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Trade creditors |
Corporation tax |
Social security and other taxes |
Accrued expenses |
17. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2021 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans - less than 1 year |
The bank loans are unsecured and are repayable in instalments as detailed above. Interest is charged at 1.4% above the Bank of England base rate. |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
18. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2023 | 2021 |
£ | £ |
Within one year |
The prior year disclosure above related to the base rent owed on restaurant premises over the remainder of the relevant leases. |
19. | PROVISIONS FOR LIABILITIES |
2023 | 2021 |
£ | £ |
Deferred tax |
Accelerated capital allowances | - | 178,164 |
Deferred |
tax |
£ |
Balance at 1 January 2022 |
Credit to Income Statement during period | ( |
) |
Balance at 31 March 2023 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2021 |
value: | £ | £ |
Ordinary A | £1 | 75 | 75 |
Ordinary B | £1 | 25 | 25 |
100 | 100 |
The shares rank equally in all respects other than dividends on B shares shall be three times those on A shares. |
21. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2022 |
Profit for the period |
Dividends | ( |
) |
At 31 March 2023 |
22. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to a director subsisted during the period ended 31 March 2023 and the year ended 31 December 2021: |
2023 | 2021 |
£ | £ |
Balance outstanding at start of period |
Amounts advanced |
Amounts repaid |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of period |
The above balance was interest free and repaid within 9 months of the period end. |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
23. | RELATED PARTY DISCLOSURES |
During the period, total dividends of £999,513 (2021 - £821,392) were paid to the directors . |
During the year the Company paid £13,244 (2021: £9,625) to a member of the Directors' close family for employment services. |
At the year end the Company was owed £100,000 (2021: nil) by a related Company. |
24. | POST BALANCE SHEET EVENTS |
Subsequent to the year end the company purchased two further investment properties for a total consideration of £985,000. |
25. | ULTIMATE CONTROLLING PARTY |
The controlling party is K J Jansen. |
26. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
period |
1.1.22 |
to | year ended |
31.3.23 | 31.12.21 |
£ | £ |
Profit before taxation |
Depreciation charges |
Exceptional item | (7,950,114 | ) | - |
Finance costs | 66,133 | 94,816 |
Finance income | (49,760 | ) | - |
1,639,538 | 4,806,052 |
Decrease/(increase) in stocks | ( |
) |
Increase in trade and other debtors | ( |
) | ( |
) |
Decrease in trade and other creditors | ( |
) | ( |
) |
Cash generated from operations | ( |
) |
27. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Period ended 31 March 2023 |
31.3.23 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 3,229,624 | 585,256 |
Year ended 31 December 2021 |
31.12.21 | 1.1.21 |
£ | £ |
Cash and cash equivalents | 585,256 | 2,008,500 |
K & G RESTAURANTS LIMITED (REGISTERED NUMBER: 03900766) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE PERIOD 1 JANUARY 2022 TO 31 MARCH 2023 |
28. | ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS |
At 1.1.22 | Cash flow | At 31.3.23 |
£ | £ | £ |
Net cash |
Cash at bank | 585,256 | 2,644,368 | 3,229,624 |
585,256 | 3,229,624 |
Debt |
Debts falling due within 1 year | (4,422,750 | ) | 4,422,750 | - |
(4,422,750 | ) | 4,422,750 | - |
Total | (3,837,494 | ) | 7,067,118 | 3,229,624 |