Company registration number 05280297 (England and Wales)
ENTRECOTE (OPERATIONS) LTD
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
ENTRECOTE (OPERATIONS) LTD
CONTENTS
Page
Directors' report
1
Profit and loss account
2
Statement of comprehensive income
Balance sheet
3 - 4
Statement of changes in equity
5
Notes to the financial statements
6 - 14
ENTRECOTE (OPERATIONS) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company is to be that of a restaurant.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M Elghanayan
Mr S Mokhtarzadeh
Mr J Shashou
M Dine
Ging concern
The Directors have considered whether it is appropriate to prepare the Company financial statements on a going concern basis.
In doing so, the Directors have considered the operation of the Company and prepared cash flow forecasts to ascertain whether the Company can meet its obligations as they fall due for at least twelve months from the date of approval of the financial statements.
The Directors therefore have a reasonable expectation the Company has adequate resources to meet its liabilities as they fall due for at least twelve months from the date of approval of the financial statements and consequently have adopted the going concern basis of accounting in preparing the non-statutory accounts.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
Mr M Elghanayan
Director
17 July 2023
ENTRECOTE (OPERATIONS) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
2022
2021
Notes
£
£
Turnover
3
8,667,393
5,261,835
Cost of sales
(2,748,154)
(1,505,645)
Gross profit
5,919,239
3,756,190
Administrative expenses
(4,435,701)
(3,063,820)
Other operating income
6,000
109,335
Operating profit
4
1,489,538
801,705
Interest payable and similar expenses
7
(27,056)
(3,678)
Profit before taxation
1,462,482
798,027
Tax on profit
8
(259,759)
(138,438)
Profit for the financial year
1,202,723
659,589
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ENTRECOTE (OPERATIONS) LTD
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 3 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
429,385
311,193
Current assets
Stocks
10
164,773
126,907
Debtors
11
3,905,181
2,852,257
Cash at bank and in hand
1,392,242
1,668,194
5,462,196
4,647,358
Creditors: amounts falling due within one year
12
(3,008,031)
(1,967,403)
Net current assets
2,454,165
2,679,955
Total assets less current liabilities
2,883,550
2,991,148
Creditors: amounts falling due after more than one year
13
(273,094)
(797,359)
Provisions for liabilities
Deferred tax liability
15
33,635
19,191
(33,635)
(19,191)
Net assets
2,576,821
2,174,598
Capital and reserves
Called up share capital
16
1
1
Profit and loss reserves
2,576,820
2,174,597
Total equity
2,576,821
2,174,598
For the financial year ended 31 December 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The 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.
ENTRECOTE (OPERATIONS) LTD
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2022
31 December 2022
- 4 -
The financial statements were approved by the board of directors and authorised for issue on 17 July 2023 and are signed on its behalf by:
Mr M Elghanayan
Mr S Mokhtarzadeh
Director
Director
Company Registration No. 05280297
ENTRECOTE (OPERATIONS) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2021
1
1,515,008
1,515,009
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
659,589
659,589
Balance at 31 December 2021
1
2,174,597
2,174,598
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,202,723
1,202,723
Dividends
-
(800,500)
(800,500)
Balance at 31 December 2022
1
2,576,820
2,576,821
ENTRECOTE (OPERATIONS) LTD
STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
1
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
2
Accounting policies
Company information
Entrecote (Operations) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Gable House, 239 Regents Park Road, London, N3 3LF.
2.1
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, [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.
2.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
2.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
2.4
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.
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Accounting policies
(Continued)
- 7 -
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 Leasehold
over the term of the lease
Plant and machinery
25% Straight line method
Fixtures, fittings & equipment
25% Straight line method
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.
2.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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.
2.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
2.7
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.
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Accounting policies
(Continued)
- 8 -
2.8
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.
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.
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 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.
2.9
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.
2.10
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.
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Accounting policies
(Continued)
- 9 -
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.
2.11
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.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sales of goods
8,667,393
5,261,835
2022
2021
£
£
Turnover analysed by geographical market
United Kindgdom
8,667,393
5,261,835
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover and other revenue
(Continued)
- 10 -
2022
2021
£
£
Other revenue
Grants received
6,000
109,335
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
5,792
1,517
Government grants
(6,000)
(109,335)
Depreciation of owned tangible fixed assets
133,658
97,376
(Profit)/loss on disposal of tangible fixed assets
-
2,587
Operating lease charges
438,363
221,274
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Office & Management
15
15
Production & Sales
110
84
Total
125
99
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,791,541
1,134,561
Social security costs
155,410
131,140
1,946,951
1,265,701
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
100,117
91,967
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
7
Interest payable and similar expenses
2022
2021
£
£
Other interest on financial liabilities
27,056
3,678
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
245,315
145,061
Deferred tax
Origination and reversal of timing differences
14,444
(6,623)
Total tax charge
259,759
138,438
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
1,462,482
798,027
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
277,872
151,625
Group relief
(21,505)
(17,066)
Permanent capital allowances in excess of depreciation
(36,447)
(8,491)
Depreciation on assets not qualifying for tax allowances
25,396
18,501
Deferred tax adjustments in respect of prior years
14,443
(6,131)
Taxation charge for the year
259,759
138,438
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
9
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 January 2022
349,742
1,141,214
466,994
1,957,950
Additions
68,550
88,237
95,065
251,852
At 31 December 2022
418,292
1,229,451
562,059
2,209,802
Depreciation and impairment
At 1 January 2022
186,538
1,065,145
395,076
1,646,759
Depreciation charged in the year
17,921
59,978
55,759
133,658
At 31 December 2022
204,459
1,125,123
450,835
1,780,417
Carrying amount
At 31 December 2022
213,833
104,328
111,224
429,385
At 31 December 2021
163,204
76,070
71,919
311,193
10
Stocks
2022
2021
£
£
Finished goods and goods for resale
164,773
126,907
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
8,978
4,103
Amounts owed by group undertakings
2,566,432
1,703,035
Amounts owed by undertakings in which the company has a participating interest
1,096,375
826,005
Other debtors
111,003
106,453
Prepayments and accrued income
122,393
212,661
3,905,181
2,852,257
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
12
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,597,704
1,056,937
Amounts owed to group undertakings
10,537
19,704
Corporation tax
103,305
106,566
Other taxation and social security
577,519
75,208
Other creditors
135,355
112,507
Accruals and deferred income
583,611
596,481
3,008,031
1,967,403
13
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Other borrowings
14
273,094
797,359
14
Loans and overdrafts
2022
2021
£
£
Other loans
273,094
797,359
Payable after one year
273,094
797,359
15
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
2022
2021
Balances:
£
£
Accelerated capital allowances
33,635
19,191
2022
Movements in the year:
£
Liability at 1 January 2022
19,191
Charge to profit or loss
14,444
Liability at 31 December 2022
33,635
ENTRECOTE (OPERATIONS) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
15
Deferred taxation
(Continued)
- 14 -
The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.
16
Share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
1 Ordinary share of £1 each
1
1
17
Related party transactions
During the year rent was paid of £155,000 (2021: £150,000 ) to Entrecote (Marylebone) Limited, Entrecote (City) Limited of £153,000 (2021: £153,000 ) and Entrecote (Dean street) Limited of £226,538 (2020: £254,836 ) all are fellow subsidiary undertakings.
An ordinary interim dividend of £800,500 (2021: £Nil ) was paid during the year.
Included within debtors is amounts owed from fellow subsidiary undertakings: Entrecote (Marylebone) Limited £458,953 (2021 - £189,445), Entrecote (City) Limited £1,096,375 (2021- £826,005), Entrecote (Dean Street) Limited £2,097,383 (2021: £1,503,493 ) and amount owed to parent undertaking Entrecote (Holdings) Limited £10,937 (2021: £19,704).
18
Ultimate controlling party
The ultimate parent company and controlling party is Entrecote (Holdings) Limited, a company registered in England and Wales.
19
Going concern
The Directors have considered whether it is appropriate to prepare the Company financial statements on a going concern basis.
In doing so, the Directors have considered the operation of the Company and prepared cash flow forecasts to ascertain whether the Company can meet its obligations as they fall due for at least twelve months from the date of approval of the financial statements.
The Directors therefore have a reasonable expectation the Company has adequate resources to meet its liabilities as they fall due for at least twelve months from the date of approval of the financial statements and consequently have adopted the going concern basis of accounting in preparing the non-statutory accounts.
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