Bluenotch Limited
Annual Report and Unaudited Financial Statements
For the year ended 31 July 2018
Company Registration No. 01124571 (England and Wales)
Bluenotch Limited
Company Information
Director
D. W. Dove
Company number
01124571
Registered office
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Accountants
Kingston Smith LLP
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Bluenotch Limited
Director's Report
For the year ended 31 July 2018
Page 1
The director presents his annual report and financial statements for the year ended 31 July 2018.
Principal activities
The principal activity of the company throughout the year was that of investment property ownership and rental.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
D. W. Dove
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
D. W. Dove
Director
29 November 2018
Bluenotch Limited
Chartered Accountants' Report to the Director on the preparation of the Unaudited Statutory Financial Statements of Bluenotch Limited for the year ended 31 July 2018
Page 2
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Bluenotch Limited for the year ended 31 July 2018 which comprise the Profit And Loss Account, the Balance Sheet, the Statement of Changes in Equity and the related notes from the company’s accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at http://www.icaew.com/en/members/regulations-standards-and-guidance
.
This report is made solely to the Board of Directors of Bluenotch Limited, as a body, in accordance with the terms of our engagement letter dated 19 April 2016. Our work has been undertaken solely to prepare for your approval the financial statements of Bluenotch Limited
and state those matters that we have agreed to state to the Board of Directors of Bluenotch Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Bluenotch Limited and its Board of Directors as a body, for
our work or for this report.
It is your duty to ensure that Bluenotch Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets,
liabilities, financial position and profit of Bluenotch Limited. You consider that Bluenotch Limited is exempt from the statutory audit
requirement for the year.
We have not been instructed to carry out an audit or a review of the financial statements of Bluenotch Limited. For this reason, we have not verified the accuracy or completeness of the
accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
Kingston Smith LLP
3 December 2018
Chartered Accountants
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Bluenotch Limited
Profit and Loss Account
For the year ended 31 July 2018
Page 3
2018
2017
£
£
Turnover
333,742
316,659
Administrative expenses
(64,606)
(92,282)
Other operating income
30,784
35,529
Profit on disposal of investment property
8,325
99,058
Operating profit
308,245
358,964
Interest receivable and similar income
2,030
1,683
Interest payable and similar expenses
(473)
-
Increase in fair value of investment property
-
2,160,054
Profit before taxation
309,802
2,520,701
Taxation
4
(54,734)
(408,306)
Profit for the financial year
255,068
2,112,395
Bluenotch Limited
Balance Sheet
As at 31 July 2018
Page 4
2018
2017
Notes
£
£
£
£
Fixed assets
Tangible assets
5
39,578
4,708
Investment properties
6
6,367,000
6,619,000
6,406,578
6,623,708
Current assets
Debtors
7
51,337
46,128
Cash at bank and in hand
1,308,326
1,320,945
1,359,663
1,367,073
Creditors: amounts falling due within one year
8
(123,709)
(98,188)
Net current assets
1,235,954
1,268,885
Total assets less current liabilities
7,642,532
7,892,593
Creditors: amounts falling due after more than one year
9
(29,967)
-
Provisions for liabilities
10
(476,130)
(511,226)
Net assets
7,136,435
7,381,367
Capital and reserves
Called up share capital
11
100
100
Revaluation reserve
2,808,847
3,002,811
Profit and loss reserves
4,327,488
4,378,456
Total equity
7,136,435
7,381,367
For the financial year ended 31 July 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006.
T
he director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime.
Bluenotch Limited
Balance Sheet (Continued)
As at 31 July 2018
Page 5
The financial statements were approved and signed by the director and authorised for issue on 29 November 2018
D. W. Dove
Director
Company Registration No. 01124571
Bluenotch Limited
Statement of Changes in Equity
For the year ended 31 July 2018
Page 6
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 August 2016
100
1,245,581
4,023,291
5,268,972
Year ended 31 July 2017:
Profit and total comprehensive income for the year
-
-
2,112,395
2,112,395
Transfer of unrealised fair value gains on investment property
-
2,168,430
(2,168,430)
-
Transfer of fair value gains on investment property disposals
-
(67,381)
67,381
-
Transfer of movement on deferred tax provision
-
(343,819)
343,819
-
Balance at 31 July 2017
100
3,002,811
4,378,456
7,381,367
Year ended 31 July 2018:
Profit and total comprehensive income for the year
-
-
255,068
255,068
Dividends
-
-
(500,000)
(500,000)
Transfer of fair value gains on investment property disposals
-
(229,060)
229,060
-
Transfer of movement on deferred tax provision
-
35,096
(35,096)
-
Balance at 31 July 2018
100
2,808,847
4,327,488
7,136,435
Bluenotch Limited
Notes to the Financial Statements
For the year ended 31 July 2018
Page 7
1
Accounting policies
Company information
Bluenotch Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Betchworth House, 57-65 Station Road, Redhill, Surrey, RH1 1DL.
1.1
Accounting convention
These financial statements have been prepared in accordance with Section 1A of FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest pound.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investment properties at fair value. The principal accounting policies adopted are set out below.
1.2
Turnover
Turnover represents rent receivable
net of VAT
.
1.3
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:
Other fixed assets
25% per annum on 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
.
1.4
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value a
t
the reporting end date.
The surplus or deficit on revaluation is recognised in the profit and loss account.
Although this accounting policy is in accordance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102"), it is a departure from the general requirements of the Companies Act 2006 for all tangible fixed assets to be depreciated. In the opinion of the directors compliance with the standard is necessary for the financial statements to give a true and fair view. Depreciation or amortisation is only one of the many factors reflected in the annual valuation and the amount of this which might otherwise have been charged cannot be separately identified or quantified.
1.5
Cash and cash equivalents
Cash at bank and in hand
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.
Bluenotch Limited
Notes to the Financial Statements (Continued)
For the year ended 31 July 2018
1
Accounting policies
(Continued)
Page 8
1.6
Financial instruments
The company only has financial instruments classified as basic and measured at amortised cost. The company has no financial instruments that are classified as ‘other’ or financial instruments measured at fair value.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Bluenotch Limited
Notes to the Financial Statements (Continued)
For the year ended 31 July 2018
Page 9
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.
Valuation of investment properties
The investment properties owned by the company have been revalued as at 31 July 201
8
by the director on a fair value basis.
3
Employees
The average monthly number of persons (including director) employed by the company during the year was 1 (2017: 1).
4
Taxation
2018
2017
£
£
Current tax
UK corporation tax on profits for the current period
89,830
64,487
Deferred tax
Deferred tax on unrealised fair value gains on investment property
(35,096)
343,819
Total tax charge
54,734
408,306
Bluenotch Limited
Notes to the Financial Statements (Continued)
For the year ended 31 July 2018
Page 10
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 August 2017
26,449
Additions
42,884
Disposals
(26,449)
At 31 July 2018
42,884
Depreciation and impairment
At 1 August 2017
21,741
Depreciation charged in the year
3,954
Eliminated in respect of disposals
(22,389)
At 31 July 2018
3,306
Carrying amount
At 31 July 2018
39,578
At 31 July 2017
4,708
6
Investment property
2018
£
Fair value
At 1 August 2017
6,619,000
Additions
450,368
Disposals
(702,368)
At 31 July 2018
6,367,000
The investment properties have been valued on an open market basis at 31 July 2018 by the director, and are stated at their valuation amount. The director is considered qualified to value investment properties held by the company due to his vast experience in the field, having worked in the property industry since the 1960's.
The historical cost of the properties included at valuation at the balance sheet date is £3,310,916 (2017: £3,333,856).
Bluenotch Limited
Notes to the Financial Statements (Continued)
For the year ended 31 July 2018
Page 11
7
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
15,058
11,957
Other debtors
36,279
34,171
51,337
46,128
8
Creditors: amounts falling due within one year
2018
2017
£
£
Trade creditors
14,117
14,117
Corporation tax
89,830
64,487
Other creditors
19,762
19,584
123,709
98,188
9
Creditors: amounts falling due after more than one year
2018
2017
£
£
Other creditors
29,967
-
10
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2018
2017
Balances:
£
£
Investment property unrealised fair value gains
476,130
511,226
2018
Movements in the year:
£
Liability at 1 August 2017
511,226
Credit to profit and loss
(35,096)
Liability at 31 July 2018
476,130
Bluenotch Limited
Notes to the Financial Statements (Continued)
For the year ended 31 July 2018
Page 12
11
Called up share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
100
100
12
Related party transactions
The company paid secretarial fees of £15,333 (2017: £14,417) to D.W.D. Property & Investment Co. Limited, a company under the control of D.W. Dove Esq., a shareholder and director.
At the year end the company was owed £
30
,
306
(2017: £
30
,
30
6) from Perimeter Properties Limited, a company under the control of D.W. Dove Esq.
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