London_and_Newcastle_Capi - Accounts

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

For the financial year ended 31 December 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

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.

The 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.

London and Newcastle Capital Limited is a private company limited by shares incorporated in England and Wales. The registered office is 55 Loudoun Road, St John's Wood, London, NW8 0DL.

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.

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. The directors have and are prepared to continue to support the business financially either directly or via  their connected businesses. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true

The continuous support of the business is evidenced by the financial support provided by directors David Barnett and Robert Soning. At the year end these two directors were owed £263,234.05 and £277,918.65 respectively by the company. They have also provided support to the company through connected  businesses as shown below in the amounts due to the following companies (intercompany balance detailed in Note 11), amounts owed to group undertakings are detailed in note 7.

Redspur (UKEI) Limited - £999,963

KMIT (Abbey Road) LLP - £199,000

Turnover represents amounts receivable for services and sales of property net of VAT. Income is recognised at the point at which the company has fulfilled all its contractual obligations.

When the outcome of a transaction involving the rendering of services can be estimated reliably, an entity shall recognise revenue associated with the transaction by reference to the stage of completion of the transaction at the end of the reporting period.

When services are performed by an indeterminate number of acts over a specified period of time, an entity recognises revenue on a straight line basis over the specified period unless there is evidence that some other method better represents the stage of completion. When a specified act is much more significant than any other act, the entity postpones recognition of revenue until the significant act is executed.

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 credited or charged to profit or loss.

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.

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.

Basic financial assets, which include debtors 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.

Basic financial liabilities, including creditors, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

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. 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 taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted. A deferred tax asset is recognised to the extent that it is more likely than not that it will be recovered against the reversal of deferred tax liabilities or future taxable profits.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss 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 leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Group accounts

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

In the application of the company’s accounting policies, the directors are 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.

The average monthly number of persons (including directors) employed by the company during the year was:

Details of the company's subsidiaries at 31 December 2020 are as follows:

Included within debtors is an amount of £10,121,000 due from London & Newcastle 2010 Holdings Limited for which there are no fixed repayment terms. The directors expect full recoverability of this balance on the basis London & Newcastle 2010 Holdings will receive sufficient dividends from its subsidiary undertakings to enable it to repay the debt it owes to London & Newcastle Capital Limited. The debt will not be repaid in cash.

Included within other creditors are loans including interest of £10,185,081 (2019: £9,075,355) which have been classified as current under FRS102 as they have no fixed repayment terms. However, the repayment of loan and interest amount totalling £9,952,467 is linked and will fall due at the completion of Balfron Towers Development. The Baflron Towers Development is expected to complete in Q3 2022 and sell out by Q4 2023. The Directors are currently in the closing stage of negotiating new terms with the primary lender 1, the new terms will allow LN to write off the interest it has accrued on the loan (c£4m to Dec 2020) and a further £1m off the original loan amount (£6m). This will significantly improve the businesses balance sheet position and affirms its adoption of the going concern basis of accounting.

Amounts owed to group undertakings totalling £3,000,000 bear interest at 8% per annum. This loan has been raised by the Directors (David Barnett & Robert Soning) on behalf of the company by giving security (2nd charge) over assets they own personally.

Amounts owed to group undertakings totalling £999,900 bear interest at 18.75% per annum. This loan has been raised by the Directors (David Barnett & Robert Soning) on behalf of the company by giving security (2nd charge) over assets they own personally.

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

The above entities are related by virtue of common directors and shareholders.

At the year end, balances totalling £Nil (2019: £Nil) were owed by directors. During the year, interest of £14,439 (2019: £8,628) was charged on these balances. Also at the year end, an amount of £607,502 (2019: £221,372) was owed to other directors by the company.

The company has taken advantage of the exemption available in accordance with FRS 102 Section 33 'Related party disclosures' not to disclose transactions entered into between two or more members of a group, as the company and its subsidiaries are wholly owned subsidiary undertakings of the group to which they are party to the transactions.