Company Registration No. 08463207 (England and Wales)
ZEME CAPITAL LIMITED
Unaudited financial statements
For the year ended 30 September 2019
Pages for filing with registrar
ZEME CAPITAL LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 7
ZEME CAPITAL LIMITED
STATEMENT OF FINANCIAL POSITION
As at 30 September 2019
- 1 -
2019
2018
as restated
Notes
£
£
£
£
Non-current assets
Investment properties
3
4,100,000
4,100,000
Investments
4
30,395,907
27,540,331
34,495,907
31,640,331
Current assets
Trade and other receivables
5
217,729
-
Cash and cash equivalents
222,336
1,001,845
440,065
1,001,845
Current liabilities
6
(33,079,990)
(30,356,332)
Net current liabilities
(32,639,925)
(29,354,487)
Total assets less current liabilities
1,855,982
2,285,844
Equity
Called up share capital
1
1
Retained earnings
1,855,981
2,285,843
Total equity
1,855,982
2,285,844
The director of the company has elected not to include a copy of the income statement within the financial statements.
true
For the financial year ended 30 September 2019 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he member has 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 26 June 2020
Mr Nicholas Lowcock
Director
Company Registration No. 08463207
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 September 2019
- 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.
1.2
Going concern
At the time of approving the financial statements, the
true
director has
undertaken an assessment of the adequacy of the resources available to the company
as well as the expected support to businesses available from the government measures in place through the period of disruption caused by coronavirus. The
director has
a reasonable expectation the company
has adequate resources to continue in operational existence for the foreseeable future
and
accordingly continue
s
to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Reporting period
These financial statements present information for the
year to 30 September 2019
while the
comparatives present financial information for
the eighteen
month period ended 3
0 September
2018. The comparative amounts presented in the
financial statements (including the related notes) are therefore not entirely comparable. The change was made to
minimise the amount of work required to compile the financial statements.
1.4
Revenue
Revenue represents rental income receivable from the company's investment properties, recognised in the period in which the rental income is earned.
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
Changes in fair value are recognised in profit or loss.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as property, plant and equipment.
1.6
Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 September 2019
1
Accounting policies
(Continued)
- 3 -
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's 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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including 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
paymen
ts 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.
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 September 2019
1
Accounting policies
(Continued)
- 4 -
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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Total
1
1
3
Investment property
2019
£
Fair value
At 1 October 2018 and 30 September 2019
4,100,000
The fair value of the investment property has been arrived at on the basis of a valuation carried out by the director of the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 September 2019
- 5 -
4
Fixed asset investments
2019
2018
£
£
Listed investments
-
2,239,237
Unlisted investments
3,125,892
2,809,429
Loans
27,270,015
22,491,665
30,395,907
27,540,331
Movements in non-current investments
Listed investments
Loans
Unlisted investments
Total
£
£
£
£
Cost or valuation
At 1 October 2018
2,239,237
22,786,665
3,090,798
28,116,700
Additions
-
6,224,187
391,430
6,615,617
Valuation changes
-
(13,922)
-
(13,922)
Amortisation (effective interest method)
-
1,335,103
-
1,335,103
Disposals
(2,239,237)
(1,880,153)
-
(4,119,390)
At 30 September 2019
-
28,451,880
3,482,228
31,934,108
Impairment
At 1 October 2018
-
295,000
281,369
576,369
Impairment losses
-
1,181,865
74,967
1,256,832
Disposals
-
(295,000)
-
(295,000)
At 30 September 2019
-
1,181,865
356,336
1,538,201
Carrying amount
At 30 September 2019
-
27,270,015
3,125,892
30,395,907
At 30 September 2018
2,239,237
22,491,665
2,809,429
27,540,331
5
Trade and other receivables
2019
2018
Amounts falling due within one year:
£
£
Corporation tax recoverable
217,729
-
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 September 2019
- 6 -
6
Current liabilities
2019
2018
£
£
Corporation tax
103,674
234,948
Other payables
32,976,316
30,121,384
33,079,990
30,356,332
7
Related party transactions
During the year
the company's shareholder and director
provided a loan to the company. The balance of the loan due to the director at 30 September 2019 was £32,935,502 (2018: £30,095,941
). The loan is interest-free and repayable on demand.
During the year the company provided a loan to, and acquired cumulative redeemable preference shares from, a company which shares common owners. The loan bears interest at a rate of 10% per annum and the preference shares pay dividends at a rate of 10% per annum, however it was not probable that the interest or dividend income would be received and as such they have not been recognised in the income statement in either the current or prior period. Impairment losses of £781,865 (2018: £nil) have been recognised in the profit and loss account in respect of interest on the loan. The total outstanding and recognised within fixed asset investments as at 30 September 2019 was £10,920,455 (2018: £9,417,787
).
8
Prior period adjustment
The company has restated its comparative financial statements to correct a material prior period error. Previously these recognised interest receivable on a loan to a company which shares a common shareholder and director. However under FRS 102 recognition criteria for revenue, interest should only be recognised when it is probable that the economic benefits associated with the transaction will flow to the company. It was apparent to the director throughout the previous period that it was improbable that the interest income would be received and as such the interest has not been recognised.
The following sets out the adjustments made to the comparative amounts for the period to 30 September 2018:
Changes to the statement of financial position
As previously reported
Adjustment
As restated at 30 Sep 2018
£
£
£
Fixed assets
Investments
28,686,273
(1,145,942)
27,540,331
Creditors due within one year
Taxation
(452,677)
217,729
(234,948)
Net assets
3,214,057
(928,213)
2,285,844
Capital and reserves
Profit and loss
3,214,056
(928,213)
2,285,843
ZEME CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 September 2019
8
Prior period adjustment
(Continued)
- 7 -
Changes to the income statement
As previously reported
Adjustment
As restated
Period ended 30 September 2018
£
£
£
Interest receivable and similar income
2,498,576
(1,145,942)
1,352,634
Taxation
(452,677)
217,729
(234,948)
Profit for the financial period
2,097,642
(928,213)
1,169,429