Company Registration No. 08463207 (England and Wales)
ZEME CAPITAL LIMITED
Unaudited financial statements
For the year ended 31 March 2016
Pages for filing with registrar
ZEME CAPITAL LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 8
ZEME CAPITAL LIMITED
STATEMENT OF FINANCIAL POSITION
As at 31 March 2016
- 1 -
2016
2015
as restated
Notes
£
£
£
£
Fixed assets
Investment properties
3
5,020,222
5,020,222
Investments
4
12,248,626
11,254,609
17,268,848
16,274,831
Current assets
Trade and other receivables
5
261,059
-
Cash at bank and in hand
1,871,716
102,583
2,132,775
102,583
Current liabilities
6
(19,221,767)
(16,612,499)
Net current liabilities
(17,088,992)
(16,509,916)
Total assets less current liabilities
179,856
(235,085)
Equity
Called up share capital
7
1
1
Retained earnings
179,855
(235,086)
Total equity
179,856
(235,085)
The director of the company have elected not to include a copy of the income statement within the financial statements.
true
For the financial year ended 31 March 2016 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
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.
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 .
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 and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and signed by the director and authorised for issue on 13 March 2017
Mr Nicholas Lowcock
Director
Company Registration No. 08463207
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
- 2 -
1
Accounting policies
Company information
Zeme Capital Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Connect House, 133-137 Alexandra Road, Wimbledon, London, SW19 7JY.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £.
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.
These financial statements for the year ended 31 March 2016 are the first financial statements of Zeme Capital Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 April 2014. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 9.
are the
first
financial statements of Zeme Capital Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 April 2014. An explanation of how transition to FRS 102 has affected the reported financial position and financial performance is given in note 9.
1.2
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business , and is shown net of VAT and other sales related taxes .
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Revenue also includes rental income receivable from the company's investment properties, recognised in the period in which the rental income is earned.
, and
is shown net of VAT and other sales related taxes
.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
Revenue also includes rental income receivable from the company's investment properties, recognised in the period in which the rental income is earned.
1.3
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 as the reporting end date. The surplus or deficit on revaluation is recognised in the income statement. Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as property, plant and equipment.
The surplus or deficit on revaluation is recognised in the income statement.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as property, plant and equipment.
1.4
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.
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.
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 March 2016
1
Accounting policies
(Continued)
- 3 -
1.5
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 statement of financial position 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.
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.
Financial instruments are recognised in the company's statement of financial position 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 trade and other receivables 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment. Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. Basic financial liabilities, including trade and other payables, 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 receipts 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. Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy. Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss , are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 March 2016
1
Accounting policies
(Continued)
- 4 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables, 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 receipts 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 payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. A m ounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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 payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.6
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.
1.7
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 income statement 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.
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 income statement, 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.
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 income statement, 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.
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 March 2016
1
Accounting policies
(Continued)
- 5 -
1.8
The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertaking comprise a small-sized group. The company has therefore taken advantage of the exemptions provided by section 399 of the Companies Act 2006 not to prepare group accounts.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 1 (2015 - 1).
3
Investment property
2016
£
Fair value
At 1 April 2015 and 31 March 2016
5,020,222
The fair value of the investment property was based on an open market valuation by reference to market evidence of transaction prices for similar properties. The director has determined that there has been no material movement on the fair value of investment property since acquisition.
4
Fixed asset investments
2016
2015
£
£
Listed investments
3,124,822
9,214,458
Unlisted investments
1,963,264
1,308,008
Loans
7,160,540
732,143
12,248,626
11,254,609
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 March 2016
4
Fixed asset investments
(Continued)
- 6 -
Movements in non-current investments
Listed investments
Loans
Unlisted investments
Total
£
£
£
£
Cost or valuation
At 1 April 2015
9,214,458
732,143
1,308,008
11,254,609
Additions
1,048,414
6,319,963
655,256
8,023,633
Valuation changes
(562,655)
-
-
(562,655)
Foreign exchange movements
-
224,382
-
224,382
Disposals
(6,575,395)
(115,948)
-
(6,691,343)
At 31 March 2016
3,124,822
7,160,540
1,963,264
12,248,626
Carrying amount
At 31 March 2016
3,124,822
7,160,540
1,963,264
12,248,626
At 31 March 2015
9,214,458
732,143
1,308,008
11,254,609
5
Trade and other receivables
2016
2015
Amounts falling due within one year:
£
£
Other receivables
261,059
-
6
Current liabilities
2016
2015
£
£
Corporation tax
101,568
-
Other payables
19,120,199
16,612,499
19,221,767
16,612,499
7
Called up share capital
2016
2015
£
£
Ordinary share capital
Issued and fully paid
1 ordinary share of £1 each
1
1
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 March 2016
- 7 -
8
Related party transactions
During the year the company's director provided a loan to the company. The balance of the loan due to the director at 31 March 2016 was £19,110,199 (2015: £16,610,199). The loan is interest-free and repayable on demand. During the year the company provided a loan to its subsidiary undertaking. The balance of the loan due to the company at 31 March 2016 was EUR 4,700,000 (2015: EUR 600,000). The loan bears interest at a rate of 10% per annum and accrued interest of EUR 269,315 has been recognised in the profit and loss account and is included within other receivables (2015: nil). The loan is repayable on the fifth anniversary following the issue of the loan.
During the year the company provided a loan to its subsidiary undertaking. The balance of the loan due to the company at 31 March 2016 was EUR 4,700,000 (2015: EUR 600,000). The loan bears interest at a rate of 10% per annum and accrued interest of EUR 269,315 has been recognised in the profit and loss account and is included within other receivables (2015: nil). The loan is repayable on the fifth anniversary following the issue of the loan.
9
Reconciliations on adoption of FRS 102
Reconciliations and descriptions of the effect of the transition to FRS 102 on; (i) equity at the date of transition to FRS 102; (ii) equity at the end of the comparative period; and (iii) profit or loss for the comparative period reported under previous UK GAAP are given below.
Reconciliation of equity
1 April
31 March
2014
2015
Notes
£
£
Equity as reported under previous UK GAAP
(74,032)
291,366
Adjustments to prior year (note 10)
-
(12,034)
As restated
(74,032)
279,332
Adjustments arising from transition to FRS 102:
Revaluation of investments to fair value
(946,958)
(514,417)
Equity reported under FRS 102
(1,020,990)
(235,085)
10
Prior period adjustment
The comparatives have been amended to recognise investments made by the company in the previous reporting period but not recognised in the accounts for that period and to translate certain investments into sterling at the exchange rate prevailing at the period end.
Changes to the statement of financial position
At 31 March 2015
Balances as restated before FRS 102 transition adjustments:
As previously reported
Adjustment
As restated
£
£
£
Fixed assets
Investments
10,578,643
1,190,383
11,769,026
Creditors due within one year
Borrowings
(15,407,782)
(1,202,417)
(16,610,199)
Net assets
291,366
(12,034)
279,332
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 March 2016
10
Prior period adjustment
At 31 March 2015
Balances as restated before FRS 102 transition adjustments:
As previously reported
Adjustment
As restated
£
£
£
(Continued)
- 8 -
Capital and reserves
Profit and loss
291,365
(12,034)
279,331