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Strategic Report, Report of the Director and |
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Financial Statements for the Year Ended 31 December 2019 |
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AG Restaurants Ltd |
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REGISTERED NUMBER:
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Strategic Report, Report of the Director and |
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Financial Statements for the Year Ended 31 December 2019 |
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for |
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AG Restaurants Ltd |
AG Restaurants Ltd (Registered number: SC287991) |
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Contents of the Financial Statements |
for the Year Ended 31 December 2019 |
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Page |
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Company Information | 1 |
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Strategic Report | 2 |
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Report of the Director | 5 |
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Report of the Independent Auditors | 7 |
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Income Statement | 10 |
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Other Comprehensive Income | 11 |
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Balance Sheet | 12 |
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Statement of Changes in Equity | 13 |
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Cash Flow Statement | 14 |
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Notes to the Cash Flow Statement | 15 |
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Notes to the Financial Statements | 17 |
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AG Restaurants Ltd |
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Company Information |
for the Year Ended 31 December 2019 |
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DIRECTOR: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Aldreth |
Pearcroft Road |
Stonehouse |
Gloucestershire |
GL10 2JY |
AG Restaurants Ltd (Registered number: SC287991) |
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Strategic Report |
for the Year Ended 31 December 2019 |
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The director presents his strategic report for the year ended 31 December 2019. |
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REVIEW OF BUSINESS |
The company runs fifteen restaurants in central and greater Glasgow, employing over 2,000 people. |
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The company has had a very successful year with total sales of £70.04 million up from £60.5 million in |
2018, helped by having the five stores bought in 2018 open for a full year. Operating Profits before tax in the |
period amounted to £2.33 million, compared with £1.56 million in 2018. |
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Overall the financial position of the company remains healthy with the balance sheet currently showing net |
assets of just over £6.62 million, increased from £5.23 million in 2018. |
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KEY PERFORMANCE INDICATORS |
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We consider that our key financial performance indicators are those that communicate the financial |
performance and strength of the company as a whole, these include turnover, gross profit and operating |
profit. |
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Sales for the year increased overall by 15.77% as a result all twenty stores operating for the full years. On a |
head to head basis for the fifteen stores open for both the whole of 2018 and 2019, sales also increased, this |
time by 7.84%. |
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Overheads have increased in proportion to the increased sales. Increased costs, including the costs of |
opening the new store, have impacted in areas such as wages. As a result, the gross profit as a percentage of |
sales has by increased by just 0.03%. |
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The business cash-flow is very healthy and the company is able to meet loan repayments. |
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FUTURE DEVELOPMENTS |
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The company is planning on acquiring more stores should the opportunities arise. |
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AG Restaurants Ltd (Registered number: SC287991) |
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Strategic Report |
for the Year Ended 31 December 2019 |
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PRINCIPAL RISKS AND UNCERTAINTIES |
The company operates in a highly competitive market. High street consumer behaviour impacts the |
company's turnover and the variability of commodity prices impacts profitability. |
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The company is continually assessing all risks with an aim to mitigate any future threats these may have on |
the business. |
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Economic risk: |
Following some very challenging times, we are optimistic about the economic future. Customer confidence |
continues to rise and unemployment rates are falling. A cautious approach is still required as real disposable |
income is declining over the longer term as the cost of living continues to rise, despite interest rates |
remaining at an historical low. Principle risks are increasing commodity prices, adding pressure to margins, |
uncertainty surrounding Brexit and significant upward movements in interest rates might also increase costs. |
The first two mentioned risks are controlled by McDonald's collective purchasing initiatives. The level of |
borrowing is such that interest rate increases are manageable. |
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Whilst the directors recognise the risks associated with Brexit, they believe that these risks will be mitigated |
by the strength of the McDonald's brand and the company's strong balance sheet. |
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Corona virus |
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Corona virus is clearly going to impact the business and will undoubtedly result in both reduced turnover and |
profits, though it is too early to assess the extent this will be the case. While the company has both reserves |
and banking facilities sufficient to weather a lengthy downturn, it is never the less reviewing what steps can |
be taken to minimise impact to the company |
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Regulatory risks: |
The companies operations demand a high level of compliance within a wide range of regulatory |
requirements. In particular - |
* health and safety |
* hygiene procedures |
* employment laws |
* licensing |
The above, along with a number of other areas, are monitored in detail by McDonalds, as being in the fast |
food industry brings a high level of regulatory concerns. |
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Consumer taste: |
Any material change in the way the consumer views the fast food industry could have an adverse affect on |
the company. However, this can also work in the opposite direction and could assist the company to achieve |
growth. As a result the company focuses, in detail, on recognising demographic trends, ensuring innovation |
and ensuring that the company only use the freshest and highest quality products through it stores. The |
company have strict policies to ensure that all stores are maintaining the McDonalds ethos. |
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Competitors: |
The fast food market is a very competitive market, with a high number of large competitors trading in the |
sector. In order to remain as one of the main players, McDonalds have dedicated teams who focus on |
ensuring they remain to be the leading company in the market. This will allow them to compete with other |
large fast food chains. |
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With these risks and uncertainties in mind, we are aware that any plans for the future development of the |
business may be subject to unforeseen future events outside our control, hence we are constantly assessing |
our plans in line with the current environment. |
AG Restaurants Ltd (Registered number: SC287991) |
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Strategic Report |
for the Year Ended 31 December 2019 |
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S172(1) COMPANIES ACT 2006 STATEMENT |
Statement by the directors in performance of their statutory duties in accordance with s172(1) Companies |
Act 2006: |
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The board of directors take into account the likely consequences of long-term decisions; build relationships |
with stakeholders; understand the importance of engaging with our employees; understand the impact of our |
operations on the communities within which we operate; and attribute importance to behaving as a |
responsible business. |
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The board of directors consider, both individually and together, that they have acted in the way they |
consider, in good faith, would be most likely to promote the success of the company for the benefit of its |
members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the |
decisions taken during the year ended 31 December 2019. In particular by reference to the approval of our |
business plan, which is updated on an annual basis. Our business plan was designed to have a long-term |
beneficial impact on the company and to contribute to its success in delivering high quality quick-service |
food. |
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Our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our |
approach the to pay and benefits our employees receive. The health, safety and well-being of our employees |
is one of our primary considerations in the way we do business. |
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As the Board of directors, our intention is to behave responsibly and ensure that management operate the |
business in a responsible manner, operating within the high standards of business conduct and good |
governance expected for a business such as ours, and in doing so, will contribute to the delivery of our plan. |
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ON BEHALF OF THE BOARD: |
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AG Restaurants Ltd (Registered number: SC287991) |
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Report of the Director |
for the Year Ended 31 December 2019 |
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The director presents his report with the financial statements of the company for the year ended 31 December 2019. |
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DIVIDENDS |
The following interim dividends were paid in the year: |
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A Ordinary shares |
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01 April 2019 - £90,000 per share |
29 June 2019 - £500,00 per share |
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RESEARCH AND DEVELOPMENT |
The company does not carry out any independent research and development. However the franchisor, |
McDonald's Restaurants Limited, carries out its own research and development on behalf of all franchisees. |
The company makes a contribution towards this through its existing payments to the franchisor. |
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DIRECTOR |
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GOING CONCERN |
The company is in a net current liabilities position at the balance sheet date, however the company is |
profitable and is expected to continue to grow. The directors have a reasonable expectation that the company |
has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to |
adopt the going concern basis of accounting in preparing the annual financial statements. |
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CORPORATE GOVERNANCE |
The company is owned and controlled by a single director. By reference to the Corporate Governance |
Guidance and Principles for Unlisted Companies in the UK, published by the Institute of Directors, the |
director has established a framework of company processes and attitudes that add value to the business, help |
build its reputation and ensure its long-term continuity and success. This framework aligns with the business |
system and processes established by the franchisor and contributes to the continued success of the company. |
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EMPLOYMENT OF DISABLED PERSONS |
The company operates a policy of giving full & fair consideration to employment applications from disabled |
persons. |
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PROVISION OF INFORMATION TO EMPLOYEES |
The company has a system for providing employees with information of concern to them . It also consults |
employees on a regular basis so that their views can be taken into account in making decisions affecting |
them. It regularly to explains to employees the financial and economic factors affecting the performance of |
the company and makes them aware of the provision of training, career development and employment of |
disabled employees. |
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AG Restaurants Ltd (Registered number: SC287991) |
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Report of the Director |
for the Year Ended 31 December 2019 |
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STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial |
statements in accordance with applicable law and regulations. |
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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: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements; |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business. |
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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 him 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. |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is 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 he has taken all the steps that he |
ought to have taken as a director in order to make himself aware of any relevant audit information and to |
establish that the company's auditors are aware of that information. |
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AUDITORS |
The auditors, Parcell & Associates, will be proposed for re-appointment at the forthcoming Annual General |
Meeting. |
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ON BEHALF OF THE BOARD: |
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Report of the Independent Auditors to the Members of |
AG Restaurants Ltd |
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Opinion |
We have audited the financial statements of AG Restaurants Ltd (the 'company') for the year ended |
31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, |
Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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). |
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In our opinion the financial statements: |
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give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for
the year then ended; |
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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. |
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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. |
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Conclusions relating to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us |
to report to you where: |
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the director's use of the going concern basis of accounting in the preparation of the financial statements is
not appropriate; or |
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the director has not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
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Other information |
The director is responsible for the other information. The other information comprises the information in the |
Strategic Report and the Report of the Director, but does not include the financial statements and our Report |
of the Auditors thereon. |
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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. |
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In connection with our audit of the financial statements, our responsibility is to read the other information |
and, in doing so, consider whether the other information is materially inconsistent with the financial |
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we |
identify such material inconsistencies or apparent material misstatements, we are required to determine |
whether there is a material misstatement in the financial statements or a material misstatement of the other |
information. If, based on the work we have performed, we conclude that there is a material misstatement of |
this other information, we are required to report that fact. We have nothing to report in this regard. |
Report of the Independent Auditors to the Members of |
AG Restaurants Ltd |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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the information given in the Strategic Report and the Report of the Director for the financial year for
which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and the Report of the Director have been prepared in accordance with applicable
legal requirements. |
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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 |
Director. |
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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: |
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adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
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Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page six, 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 necessary to enable the preparation of |
financial statements that are free from material misstatement, whether due to fraud or error. |
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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. |
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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. |
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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 |
AG Restaurants Ltd |
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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. |
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for and on behalf of
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Aldreth |
Pearcroft Road |
Stonehouse |
Gloucestershire |
GL10 2JY |
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AG Restaurants Ltd (Registered number: SC287991) |
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Income Statement |
for the Year Ended 31 December 2019 |
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31.12.19 | 31.12.18 |
Notes | £ | £ |
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TURNOVER |
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Cost of sales |
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GROSS PROFIT |
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Administrative expenses |
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2,549,132 | 1,810,699 |
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Other operating income |
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OPERATING PROFIT | 4 |
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Interest payable and similar expenses | 5 |
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PROFIT BEFORE TAXATION |
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Tax on profit | 6 |
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PROFIT FOR THE FINANCIAL
YEAR |
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AG Restaurants Ltd (Registered number: SC287991) |
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Other Comprehensive Income |
for the Year Ended 31 December 2019 |
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31.12.19 | 31.12.18 |
Notes | £ | £ |
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PROFIT FOR THE YEAR |
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OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR |
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AG Restaurants Ltd (Registered number: SC287991) |
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Balance Sheet |
31 December 2019 |
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31.12.19 | 31.12.18 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 |
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Tangible assets | 9 |
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Investments | 10 |
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CURRENT ASSETS |
Stocks | 11 |
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Debtors | 12 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 13 |
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NET CURRENT LIABILITIES | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
year |
14 |
( |
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( |
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PROVISIONS FOR LIABILITIES | 18 | ( |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 19 |
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Retained earnings | 20 |
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SHAREHOLDERS' FUNDS |
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The financial statements were approved by the director on
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AG Restaurants Ltd (Registered number: SC287991) |
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Statement of Changes in Equity |
for the Year Ended 31 December 2019 |
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Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
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Balance at 1 January 2018 |
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Changes in equity |
Dividends | - | ( |
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Total comprehensive income | - |
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Balance at 31 December 2018 |
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Changes in equity |
Issue of share capital |
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- |
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Dividends | - | ( |
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Total comprehensive income | - |
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Balance at 31 December 2019 |
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AG Restaurants Ltd (Registered number: SC287991) |
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Cash Flow Statement |
for the Year Ended 31 December 2019 |
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31.12.19 | 31.12.18 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
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Interest paid | ( |
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Tax paid | ( |
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Net cash from operating activities |
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Cash flows from investing activities |
Purchase of intangible fixed assets |
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( |
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Purchase of tangible fixed assets | ( |
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Purchase of fixed asset investments | - | (6,250 | ) |
Net cash from investing activities | ( |
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Cash flows from financing activities |
New loans in year |
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Loan repayments in year | ( |
) | ( |
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Amount introduced by directors | 590,000 | - |
Amount withdrawn by directors | (717,293 | ) | (2,420,425 | ) |
Share issue |
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Equity dividends paid | ( |
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Net cash from financing activities | ( |
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Increase/(decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents at
beginning of year |
2 |
1,250,660 |
2,680,632 |
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Cash and cash equivalents at end of
year |
2 |
4,160,543 |
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AG Restaurants Ltd (Registered number: SC287991) |
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Notes to the Cash Flow Statement |
for the Year Ended 31 December 2019 |
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1. |
RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS |
31.12.19 | 31.12.18 |
£ | £ |
Profit before taxation |
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Depreciation charges |
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Finance costs | 212,214 | 248,331 |
6,306,409 | 4,717,297 |
Decrease/(increase) in stocks |
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( |
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Decrease/(increase) in trade and other debtors |
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( |
) |
(Decrease)/increase in trade and other creditors | ( |
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Cash generated from operations |
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2. | CASH AND CASH EQUIVALENTS |
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The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in |
respect of these Balance Sheet amounts: |
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Year ended 31 December 2019 |
31.12.19 | 1.1.19 |
£ | £ |
Cash and cash equivalents | 4,160,543 | 1,486,884 |
Bank overdrafts |
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( |
) |
4,160,543 | 1,250,660 |
Year ended 31 December 2018 |
31.12.18 | 1.1.18 |
£ | £ |
Cash and cash equivalents | 1,486,884 | 2,680,632 |
Bank overdrafts | ( |
) |
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1,250,660 | 2,680,632 |
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AG Restaurants Ltd (Registered number: SC287991) |
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Notes to the Cash Flow Statement |
for the Year Ended 31 December 2019 |
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3. | ANALYSIS OF CHANGES IN NET DEBT |
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At 1.1.19 | Cash flow | At 31.12.19 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 1,486,884 | 2,673,659 | 4,160,543 |
Bank overdrafts | (236,224 | ) | 236,224 | - |
1,250,660 |
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4,160,543 |
Debt |
Debts falling due within 1 year | (1,311,246 | ) | (293,726 | ) | (1,604,972 | ) |
Debts falling due after 1 year | (7,443,199 | ) | 1,289,096 | (6,154,103 | ) |
(8,754,445 | ) | 995,370 | (7,759,075 | ) |
Total | (7,503,785 | ) | 3,905,253 | (3,598,532 | ) |
AG Restaurants Ltd (Registered number: SC287991) |
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Notes to the Financial Statements |
for the Year Ended 31 December 2019 |
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1. | STATUTORY INFORMATION |
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AG Restaurants Ltd is a
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registered number and registered office address can be found on the Company Information page. |
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The presentation currency of the financial statements is the Pound Sterling (£). |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding |
discounts, rebates, value added tax and other sales taxes. |
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Franchise rights & fees |
Franchise rights & fees, being the amounts paid on acquisition of restaurants are being written off |
evenly over the terms of the franchise agreements |
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Tangible fixed assets |
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Plant and machinery | - |
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Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for |
obsolete and slow moving items. |
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Taxation |
Taxation for the year 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. |
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Current or deferred taxation assets and liabilities are not discounted. |
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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. |
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AG Restaurants Ltd (Registered number: SC287991) |
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Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
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2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at |
the balance sheet date. |
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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 year 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. |
|
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period |
of the lease. |
|
Pension costs and other post-retirement benefits |
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. |
|
Impairment of fixed assets |
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible |
assets to determine whether there is any indication that those assets have suffered an impairment loss. |
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the |
extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of |
an individual asset, the company estimates the recoverable amount of the cash-generating unit to |
which the asset belongs. |
|
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in |
use, the estimated 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 each asset for |
which the estimates of future cash flows have not been adjusted. |
|
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying |
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable |
amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is |
carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease |
|
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have |
ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or |
cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the |
increased carrying amount does not exceed the carrying amount that would have been determined had |
no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of |
an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a |
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. |
|
Holiday pay accrual |
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the |
Balance Sheet date and carried forward to future periods. This is measured at the undiscounted cost |
of the future holiday entitlement so accrued at the Balance Sheet date. |
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
2. | ACCOUNTING POLICIES - continued |
|
Financial instruments |
The Company only enters into basic financial instruments that result in the recognition of financial |
assets and liabilities like trade and other debtors and creditors, loans from banks and other third |
parties, loans to related parties and investments in non-puttable ordinary shares |
|
For financial assets measured at amortised cost, the impairment cost is measured at the difference |
between an asset's carrying amount and the present value of estimated cash flows discounted at the |
assets effective interest rate. If the financial asset has a variable interest rate, the discount rate for |
measuring any impairment loss is the current effective interest rate determined under the contract |
|
For assets measured at cost less impairment, the impairment loss is measured as the difference |
between an asset's carrying amount and best estimate, which is an approximation of the amount that |
the Company would receive for the asset if it were to be sold at the balance sheet date |
|
Creditors |
|
Short term creditors are measured at the transaction price. Other financial liabilities, including bank |
loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at |
amortised cost using the effective interest method. |
|
Finance costs |
|
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective |
interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are |
initially recognised as a reduction in the proceeds of the associated capital instrument |
|
Dividends |
|
Equity dividends are recognised when they legally become payable. Interim equity dividends are |
recognised when paid. Final equity dividends are recognised when approved by the shareholdersat an |
annual general meeting. |
|
Judgements in applying accounting policies and key sources of estimation uncertainty |
|
In the process of applying the company's accounting policies, management are required to make |
certain estimates and judgements. The key estimates and judgements are as follows: |
|
Depreciation and residual values |
|
The director has reviewed the asset lives and associated residual values of all fixed asset classes, and |
has concluded that asset lives and residual values are appropriate |
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
3. | EMPLOYEES AND DIRECTORS |
31.12.19 | 31.12.18 |
£ | £ |
Wages and salaries |
|
|
Social security costs |
|
|
Other pension costs |
|
|
|
|
|
The average number of employees during the year was as follows: |
31.12.19 | 31.12.18 |
|
Production Staff | 1,973 | 1,735 |
Management Staff | 63 | 56 |
|
|
|
31.12.19 | 31.12.18 |
£ | £ |
Director's remuneration |
|
|
|
4. | OPERATING PROFIT |
|
The operating profit is stated after charging: |
|
31.12.19 | 31.12.18 |
£ | £ |
Other operating leases |
|
|
Depreciation - owned assets |
|
|
Franchise Rights amortisation |
|
|
Franchise Fees amortisation |
|
|
Auditors' remuneration |
|
|
Taxation compliance services |
|
|
Other non- audit services |
|
|
|
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.19 | 31.12.18 |
£ | £ |
Bank interest |
|
|
Loan interest |
|
|
|
|
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
6. | TAXATION |
|
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.12.19 | 31.12.18 |
£ | £ |
Current tax: |
UK corporation tax |
|
|
|
Deferred tax | ( |
) | ( |
) |
Tax on profit |
|
|
|
UK corporation tax has been charged at 19% (2018 - 19%). |
|
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The |
difference is explained below: |
|
31.12.19 | 31.12.18 |
£ | £ |
Profit before tax |
|
|
Profit multiplied by the standard rate of corporation tax in the UK
of |
|
|
|
Effects of: |
Income not taxable for tax purposes | ( |
) | ( |
) |
Depreciation in excess of capital allowances |
|
|
Adjustments to tax charge in respect of previous periods | ( |
) |
|
Deferred tax charge | (173,572 | ) | (26,540 | ) |
Total tax charge | 358,287 | 405,487 |
|
7. | DIVIDENDS |
31.12.19 | 31.12.18 |
£ | £ |
A Ordinary shares of 1 each |
Interim - ordinary shares |
|
|
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
8. | INTANGIBLE FIXED ASSETS |
Franchise | Franchise |
Rights | Fees | Totals |
£ | £ | £ |
COST |
At 1 January 2019 |
and 31 December 2019 |
|
|
|
AMORTISATION |
At 1 January 2019 |
|
|
|
Amortisation for year |
|
|
|
At 31 December 2019 |
|
|
|
NET BOOK VALUE |
At 31 December 2019 |
|
|
|
At 31 December 2018 |
|
|
|
|
9. | TANGIBLE FIXED ASSETS |
Short | Plant and |
leasehold | machinery | Totals |
£ | £ | £ |
COST |
At 1 January 2019 |
|
|
|
Additions |
|
|
|
At 31 December 2019 |
|
|
|
DEPRECIATION |
At 1 January 2019 |
|
|
|
Charge for year |
|
|
|
At 31 December 2019 |
|
|
|
NET BOOK VALUE |
At 31 December 2019 |
|
|
|
At 31 December 2018 |
|
|
|
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
10. | FIXED ASSET INVESTMENTS |
Unlisted |
investments |
£ |
COST |
At 1 January 2019 |
and 31 December 2019 |
|
NET BOOK VALUE |
At 31 December 2019 |
|
At 31 December 2018 |
|
|
Fixed asset investments consists of 25,000 (2018-25,000) ordinary shares of £1 each in Fries Holding |
Company Limited, a company registered in Guernsey. The investments are included in the accounts at |
cost. |
|
11. | STOCKS |
31.12.19 | 31.12.18 |
£ | £ |
Stocks |
|
|
|
Analysis of stock | 31.12.19 | 31.12.18 |
£ | £ |
Food | 156,930 | 193,721 |
Paper | 44,150 | 40,364 |
Non-product | 13,750 | 24,684 |
214,830 | 258,769 |
|
Stock recognised in cost of sales during the year as an expense was £22,906,337 (2018: £19,806,177) |
|
An impairment loss of £nil 2018: £nil) was recognised in cost of sales against stock during the year |
due to slow moving and obsolete stock. |
|
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.19 | 31.12.18 |
£ | £ |
Trade debtors |
|
|
Other debtors |
|
|
Prepayments |
|
|
|
|
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.19 | 31.12.18 |
£ | £ |
Bank loans and overdrafts (see note 15) |
|
|
Trade creditors |
|
|
Tax |
|
|
Social security and other taxes |
|
|
VAT | 1,712,981 | 1,818,000 |
Other creditors |
|
|
Directors' current accounts | 122,749 | 250,042 |
Accruals and deferred income |
|
|
Accrued expenses |
|
|
|
|
|
14. |
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN
ONE YEAR |
31.12.19 | 31.12.18 |
£ | £ |
Bank loans (see note 15) |
|
|
|
15. | LOANS |
|
An analysis of the maturity of loans is given below: |
|
31.12.19 | 31.12.18 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank overdrafts |
|
|
Bank loans |
|
|
|
|
|
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
|
|
|
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
|
|
|
Amounts falling due in more than five years: |
|
Repayable by instalments |
Bank loans more 5 yr by instal | 1,065,689 | 2,156,643 |
|
Bank loans are repayable over periods ranging from one to seven years. The interest rates applied to |
the loans are based on Base rate plus a margin varying from 1.4% to 1.7%. |
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
16. | LEASING AGREEMENTS |
|
Minimum lease payments under non-cancellable operating leases fall due as follows: |
31.12.19 | 31.12.18 |
£ | £ |
Within one year |
|
|
Between one and five years |
|
|
In more than five years |
|
|
|
|
|
Lease payments recognised as an expense in the year totalled £8,782,446 (2018: £7,963,029). |
|
The Company's restaurant premises are leased from McDonalds Restaurants Limited under |
non-cancellable operating leases with expiry terms of more than five years. Rent is calculated as a |
percentage of sales above base, the above operating lease commitment only relates to base rent. Each |
restaurant pays its own unique base rent based on its circumstances, with the remainder of the rent |
being based on the performance of the restaurant. |
|
17. | FINANCIAL INSTRUMENTS |
|
Financial Assets | 31.12.19 | 31.12.18 |
£ | £ |
Financial assets as an equity instrument | 25,000 | 25,000 |
Financial assets that are debt instruments measured at amortised cost | 4,177,001 | 1,260,430 |
4,202,001 | 1,285,430 |
|
|
Financial Liabilities | 15,586,278 | 18,019,548 |
15,586,278 | 18,019,548 |
|
18. | PROVISIONS FOR LIABILITIES |
31.12.19 | 31.12.18 |
£ | £ |
Deferred tax | 346,085 | 519,657 |
|
Deferred |
tax |
£ |
Balance at 1 January 2019 |
|
Credit to Income Statement during year | ( |
) |
Balance at 31 December 2019 |
|
AG Restaurants Ltd (Registered number: SC287991) |
|
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2019 |
|
19. | CALLED UP SHARE CAPITAL |
|
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.19 | 31.12.18 |
value: | £ | £ |
|
A Ordinary | 1 | 75 | 1 |
|
B Ordinary | 1 | 25 | - |
100 | 1 |
|
20. | RESERVES |
Retained |
earnings |
£ |
|
At 1 January 2019 |
|
Profit for the year |
|
Dividends | ( |
) |
At 31 December 2019 |
|
|
21. | DIRECTOR'S ADVANCES, CREDITS AND GUARANTEES |
|
Interest has been paid to the Director on his loan to the company at a rate of 3% per annum |