Company registration number 04627713 (England and Wales)
APARTMENT 1 LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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
Sumer Auditco Limited
Unit 2
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 - 24
APARTMENT 1 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -
The director presents the strategic report for the year ended 31 July 2023.
Principal activity
The principal activity of the company is that of a wine bar and night club operator.
Fair review of the business
The rebranded venues of ChachaBuchi, Howlers, Social Bar and Social club showed improving sales year on year due to the premium level of social experience offered to customers.
The La fee was rebranded as Social bar and Social club, which has broadened the demographic of customers into the venues.
Key performance indicators
The director considers turnover, gross profit and EBITDA (earnings before interest, tax, depreciation and amortisation) to be the key measures of the company's performance:
Turnover in the year was £1,984,473 (2022 - £1,875,496).
Earnings before Interest,Tax, Depreciation & Amortisation (EBITDA) for the year was £157,144 (2022 - LBITDA £539,144).
The balance sheet shows that the company net assets have decreased from £4,909,030 to £4,420,619
The director considers 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.
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 monitors the financial information to ensure that any risks in this area are considered on a timely basis.
Credit risk
The director regularly monitors debtors to ensure that any risks of bad and doubtful debts are provided for on a timely basis.
APARTMENT 1 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -
Future developments
2023/24 is already showing significant growth on 2022/23 as the venues increase the number of the events offered to customers.
D Fisher
Director
Approved by the board on 30 April 2024
APARTMENT 1 LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -
The director presents his annual report and financial statements for the year ended 31 July 2023.
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 Sumer Auditco Limited 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 2023
- 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.
D Fisher
Director
Approved by the board on 30 April 2024
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 2023 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 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 July 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:
the information given in the strategic report and the director's report 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.
APARTMENT 1 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF APARTMENT 1 LIMITED
- 6 -
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 director's report.
We have nothing to report in respect of the following matters in relation to which 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 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 responsibilities statement, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
APARTMENT 1 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF APARTMENT 1 LIMITED
- 7 -
Capability of the audit in detecting irregularities, including fraud
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of legal costs incurred; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 the member 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 Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
30 April 2024
APARTMENT 1 LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
1,984,473
1,875,496
Cost of sales
(475,357)
(417,057)
Gross profit
1,509,116
1,458,439
Administrative expenses
(3,854,067)
(3,492,974)
Other operating income
2,076,760
1,224,701
Operating loss
4
(268,191)
(809,834)
Interest receivable and similar income
7
12
Interest payable and similar expenses
8
(325,236)
(150,877)
Loss before taxation
(593,427)
(960,699)
Tax on loss
9
105,016
377,911
Loss for the financial year
(488,411)
(582,788)
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 2023
- 9 -
2023
2022
£
£
Loss for the year
(488,411)
(582,788)
Other comprehensive income
-
-
Total comprehensive income for the year
(488,411)
(582,788)
APARTMENT 1 LIMITED
BALANCE SHEET
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,856,412
6,201,855
Current assets
Stocks
12
106,210
66,866
Debtors falling due after more than one year
13
1,846,009
2,864,098
Debtors falling due within one year
13
2,868,686
2,488,225
Cash at bank and in hand
247,654
88,466
5,068,559
5,507,655
Creditors: amounts falling due within one year
14
(1,698,508)
(1,619,527)
Net current assets
3,370,051
3,888,128
Total assets less current liabilities
9,226,463
10,089,983
Creditors: amounts falling due after more than one year
15
(4,805,844)
(5,073,213)
Provisions for liabilities
Deferred tax liability
17
107,740
-
(107,740)
Net assets
4,420,619
4,909,030
Capital and reserves
Called up share capital
19
100
100
Profit and loss reserves
4,420,519
4,908,930
Total equity
4,420,619
4,909,030
The financial statements were approved and signed by the director and authorised for issue on 30 April 2024
D Fisher
Director
Company registration number 04627713 (England and Wales)
APARTMENT 1 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2021
100
5,588,749
5,588,849
Year ended 31 July 2022:
Loss and total comprehensive income for the year
-
(582,788)
(582,788)
Dividends
10
-
(97,031)
(97,031)
Balance at 31 July 2022
100
4,908,930
4,909,030
Year ended 31 July 2023:
Loss and total comprehensive income for the year
-
(488,411)
(488,411)
Balance at 31 July 2023
100
4,420,519
4,420,619
APARTMENT 1 LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
24
863,044
(367,274)
Interest paid
(325,236)
(150,877)
Income taxes refunded/(paid)
228,596
(110,000)
Net cash inflow/(outflow) from operating activities
766,404
(628,151)
Investing activities
Purchase of tangible fixed assets
(89,142)
(690,238)
Proceeds from disposal of tangible fixed assets
9,250
5,450
Repayment of loans
30,706
Interest received
12
Net cash used in investing activities
(49,186)
(684,776)
Financing activities
Proceeds from new bank loans
5,098,058
550,000
Repayment of bank loans
(5,656,088)
(399,155)
Net cash (used in)/generated from financing activities
(558,030)
150,845
Net increase/(decrease) in cash and cash equivalents
159,188
(1,162,082)
Cash and cash equivalents at beginning of year
88,466
1,250,548
Cash and cash equivalents at end of year
247,654
88,466
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 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 amounts 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
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
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.
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.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 15 -
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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
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.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 16 -
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 director has 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 £5,856,412 (2022 - £6,201,855).
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Bar and door takings
1,984,473
1,875,496
2023
2022
£
£
Other significant revenue
Room, equipment and venue hire
19,500
52,807
Head office recharges
1,548,127
1,164,843
Grants received
500
7,006
Turnover and other significant revenue have arisen wholly within the UK.
Grant income includes amounts of £nil (2022 - £6,506) received in relation to the Coronavirus Job Retention Scheme.
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
6,300
6,450
Depreciation of owned tangible fixed assets
430,052
271,291
Profit on disposal of tangible fixed assets
(4,717)
(601)
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Director
1
1
Operational
56
55
Administration and finance
25
23
82
79
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
631,246
806,805
Social security costs
36,287
40,297
Pension costs
74,123
34,402
741,656
881,504
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
14,677
15,714
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
12
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
325,236
150,877
9
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
2,724
Deferred tax
Origination and reversal of timing differences
(107,740)
(377,911)
Total tax credit
(105,016)
(377,911)
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
9
Taxation
(Continued)
- 19 -
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(593,427)
(960,699)
Expected tax credit based on the standard rate of corporation tax in the UK of 21.01% (2022: 19.00%)
(124,679)
(182,533)
Tax effect of expenses that are not deductible in determining taxable profit
1,780
209
Tax effect of income not taxable in determining taxable profit
(991)
(28,581)
Gains not taxable
158
Adjustments in respect of prior years
231,320
(104,087)
Effect of change in corporation tax rate
(98,538)
Permanent capital allowances in excess of depreciation
(6,326)
(65,787)
Depreciation on assets not qualifying for tax allowances
2,868
Deferred tax adjustment
(107,740)
Taxation credit for the year
(105,016)
(377,911)
10
Dividends
2023
2022
£
£
Ordinary interim paid
97,031
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 20 -
11
Tangible fixed assets
Tenants improvements
Leasehold property
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 August 2022
592,638
3,235,417
1,247,669
2,951,323
57,506
8,084,553
Additions
500
81,657
6,985
89,142
Disposals
(8,500)
(8,500)
At 31 July 2023
592,638
3,235,417
1,248,169
3,032,980
55,991
8,165,195
Depreciation
At 1 August 2022
182,033
47,814
925,453
692,903
34,495
1,882,698
Charge for the year
11,853
3,242
32,247
381,190
1,520
430,052
Eliminated in respect of disposals
(3,967)
(3,967)
At 31 July 2023
193,886
51,056
957,700
1,074,093
32,048
2,308,783
Carrying amount
At 31 July 2023
398,752
3,184,361
290,469
1,958,887
23,943
5,856,412
At 31 July 2022
410,605
3,187,603
322,216
2,258,420
23,011
6,201,855
12
Stocks
2023
2022
£
£
Goods for resale
106,210
66,866
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,362
1,362
Corporation tax recoverable
231,320
Amounts due from connected companies
2,329,230
1,907,471
Other debtors
358,364
139,912
Prepayments and accrued income
179,730
208,160
2,868,686
2,488,225
Amounts falling due after more than one year:
Amounts due from connected companies
1,846,009
2,864,098
Total debtors
4,714,695
5,352,323
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 21 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
195,239
232,819
Trade creditors
636,076
724,334
Amounts due to connected companies
395,359
132,866
Other taxation and social security
337,218
244,117
Other creditors
76,933
123,242
Accruals and deferred income
57,683
162,149
1,698,508
1,619,527
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
4,791,345
5,058,214
Government grants
14,499
14,999
4,805,844
5,073,213
Amounts included above which fall due after five years are as follows:
Payable by instalments
3,850,846
-
16
Loans and overdrafts
2023
2022
£
£
Bank loans
4,986,584
5,291,033
Payable within one year
195,239
232,819
Payable after one year
4,791,345
5,058,214
Bank loans are secured by way of an unlimited guarantee granted by Apartment 1 Limited and associated companies Newton Hall (Northumberland) Limited, Manners (Newcastle) Limited, Whitworth Hall Developments Limited, Modnarway Limited and Vibrant Ventures Limited. The loans are also secured by way of a debenture over all the companies and a fixed and floating legal charge over the assets of these companies.
The bank borrowings relate to a fixed term loan facility of 180 months, which is denominated in Pounds Sterling with a nominal interest rate of 2.5% over the Bank Of England Base rate at the time. The loan is repayable in equal instalments up to March 2038.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 22 -
17
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
2023
2022
Balances:
£
£
Accelerated capital allowances
-
107,740
2023
Movements in the year:
£
Liability at 1 August 2022
107,740
Credit to profit or loss
(107,740)
Liability at 31 July 2023
-
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
74,123
34,402
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.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
The company has one class of ordinary shares which do not carry a right to fixed income.
20
Financial commitments, guarantees and contingent liabilities
The company has given an unlimited cross guarantee in favour of Natwest Bank Plc in respect of the bank borrowings of Apartment 1 Limited, Newton Hall (Northumberland) Limited, Manners (Newcastle) Limited, Modnarway Limited, Whitworth Hall Developments Limited and Vibrant Ventures Limited. No liability is expected to arise as a result of this guarantee.
APARTMENT 1 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 23 -
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
14,677
15,714
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Head office recharges:
2023
2022
£
£
Entities with control, joint control or significant influence over the company
2,056,760
1,164,843
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
395,359
132,886
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
4,175,239
4,771,569
22
Directors' transactions
Dividends totalling £0 (2022 - £97,031) were paid in the year in respect of shares held by the company's director.
Included within debtors is an amount owed by D Fisher, director and shareholder of the company amounting to £222,875 (2022 - £17,206 -creditor)
23
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 2023
- 24 -
24
Cash generated from/(absorbed by) operations
2023
2022
£
£
Loss for the year after tax
(488,411)
(582,788)
Adjustments for:
Taxation credited
(105,016)
(377,911)
Finance costs
325,236
150,877
Investment income
(12)
Gain on disposal of tangible fixed assets
(4,717)
(601)
Depreciation and impairment of tangible fixed assets
430,052
271,291
Movements in working capital:
(Increase)/decrease in stocks
(39,344)
28,739
Decrease/(increase) in debtors
629,183
(558,459)
Increase in creditors
116,561
702,090
Decrease in deferred income
(500)
(500)
Cash generated from/(absorbed by) operations
863,044
(367,274)
25
Analysis of changes in net debt
1 August 2022
Cash flows
31 July 2023
£
£
£
Cash at bank and in hand
88,466
159,188
247,654
Borrowings excluding overdrafts
(5,291,033)
304,449
(4,986,584)
(5,202,567)
463,637
(4,738,930)
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