BOXPARK_LIMITED - Accounts

The directors of the group have elected not to include a copy of the profit and loss account within the financial statements.

These financial statements have been prepared in accordance with the provisions applicable to groups and companies subject to the small companies regime.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's loss for the year was £194,159 (2018 - £122,076 profit).

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

Boxpark Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Diplocks Yard, 73 North Road, Brighton, East Sussex, BN1 1YD.

The group consists of Boxpark Limited and all of its subsidiaries.

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 amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. Investments in subsidiaries and joint ventures are accounted for at cost less impairment.

The consolidated financial statements incorporate those of Boxpark Limited and all of its non-dormant subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes and all financial statements are made up to 30 April 2019.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. In the group financial statements, joint ventures are accounted for using the equity method. The joint venture has a different year end to the rest of the group, being 31 December 2018, and detailed management accounts have been used to determine the result for this entity, up to the year end date, to be include in the consolidated accounts.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT. Turnover is recognised when the company has transferred risks and rewards of ownership to the buyer.

Rental income from outlets leased out under operating leases is recognised in the statement of income and retained earnings on a straight-line basis over the life of the lease. Contingent rents, which comprise turnover rents, are recognised as income in the periods in which they are earned.

Lease incentives are recognised as an integral part of the net consideration for use of the property and amortised on a straight-line basis over the life of the lease.

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:

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 recognised in the profit and loss account.

The directors have adopted a new depreciation basis on fixtures and fittings in one of the subsidiary companies. In the current period a proportion of the assets are now depreciated over the life of the lease at each location in this company rather than on a 5-year straight line basis. This change in estimate reflects a more accurate representation of the useful economic life of the assets.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Entities in which the group has a long term interest and share control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, on a first in first out basis.

Cash at bank and in hand are basic financial assets and include deposits held at call with banks.

The group 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.

Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.

Basic financial liabilities, including trade and other creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Equity instruments issued by the group 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 group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year.

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.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

The costs of short-term employee benefits are recognised as a liability and an expense as they fall due.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted is material to the financial statements. Where material, the fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

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 profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating lease is recognised on a straight line basis over the term of the relevant lease.

Grants are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

The average monthly number of persons employed by the group and company during the year was:

Included within the group in other creditors in notes 6 and 7, is an amount of £168,446 (2018 - £133,333) falling due within one year and £128,859 (2018 - £166,667) falling due after more than one year, relating to finance lease contracts, which are secured against their respective tangible fixed assets.

The loan included within the group in bank and other loans and overdrafts in notes 6 and 7, is an amount of £437,190 (2018 - £393,622) falling due within one year and £2,194,841 (2018 - £2,632,031) falling due after more than one year, relating to a loan, which is secured by a charge over the share capital of a subsidiary company.

On the 23 April 2019, there was a subdivision of ordinary share capital from 100 ordinary shares of £1 per share to 100,000 ordinary shares of £0.001 per share. This has no effect on the total equity value, voting rights or rights on winding up of the company.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

The group has the following fixed charges:

Over all the assets of the parent company, including a negative pledge.

In the parent company, over the shares of a subsidiary company, including negative pledge.

Rights to, title and interest in any of the container boxes and all related property rights held within the parent company.

Over the assignment of material contracts and insurance policies of the company, including negative pledge, in a subsidiary company.

Over the bank accounts of the company, including negative pledge, in a subsidiary company.

There is also a fixed and floating debenture over all the property or undertaking of the subsidiary company, including negative pledge.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

A company under common control of the group has a 50% joint venture interest in BPQW LLP.

During the year, the company charged management fees of £83,333 (2018 - £0) and recharged costs of £48,830 (2018 - £0) to BPQW LLP. At the balance sheet date, £100,000 (2018 - £0) is owed from BPQW LLP and shown within debtors due within one year.

During the year the group charged management fees of £83,333 (2018 - £0) and recharged costs of £76,297 (2018 - £0) to BPQW LLP. At the balance sheet date, £102,928 (2018 - £136) is owed from BPQW LLP and shown within debtors falling due within one year. Also an amount of £10,356 (2018 - £0) is owed to BPQW LLP; this amount is located within creditors falling due after more than one year.

Within the operating lease agreement for the land from which the company operates, there is an obligation to dismantle all property, plant and equipment and to restore the site at the end of the lease to its former condition. Following the opening of the site this provision existed and should have been recognised. Therefore, an adjustment has been made to the prior year financial statements to include £226,000 within provisions for liabilities as an estimate of the costs, with these costs being capitalised and depreciated over the life of the lease from the same date. This has also resulted in an increase in the net book value of £83,954 in tangible fixed assets as at the end of the comparative period.

Amounts owed by group undertakings included within creditors falling due within one year, totalling £89,231, have been restated to offset against their corresponding balance included within debtors falling due within one year in the comparative period.

A restatement has been made to correctly included a deferred tax asset, totalling £23,305, within debtors falling due within one year as previously it was incorrectly shown as as a debit balance within provisions for liabilities.

In prior years, lease incentives were accounted for in the period in which the incentive was utilised which was not in accordance with FRS 102. This balance of £106,671, now included within other debtors, has been restated to be split over the term of the lease on a straight-line basis.

Within the operating lease agreements for the land from which the group operates, there are obligations to dismantle all property, plant and equipment and to restore two sites at the end of their leases. Following the opening of these sites these provisions should have been recognised. Therefore, an adjustment has been made to the financial statements to include £608,000 within provisions for liabilities as an estimate of the costs, with these costs being capitalised and depreciated over the life of the lease from the same date. This has also resulted in an increase in the net book value of £351,354 in tangible fixed assets as at the end of the comparative period.

Deposits held on behalf of tenants where the lease end date falls due more than 12 months after the balance sheet date, totalling £192,000, have been restated as long term creditors.

Part of a loan totalling £312,262 included in creditors has been reclassified from amounts falling due within one year to amounts falling due after more than one year, in conjunction with the agreement.

The directors have re-classified bank transaction charges and event costs, totalling £97,597, from administrative expenses to cost of sales in the prior period in order to treat these costs consistently year on year and show a comparable gross profit margin.

A prior year adjustment has also been made to reclassify a finance lease, totalling £300,000, from bank and other loans and overdrafts to other creditors for the amounts falling due within one year and amounts falling due after more than one year, to reflect the correct treatment of this lease in the financial statements.

A restatement has been made to correctly included a deferred tax asset, totalling £23,305, within debtors falling due within one year as previously it was incorrectly shown as as a debit balance within provisions for liabilities.

None of these adjustments have resulted in a change to previously reported equity or profit for the prior financial year.