United Real Estate Ltd - Period Ending 2020-12-31

United Real Estate Ltd

Contents

Company Information	1
Balance Sheet	2 to 3
Notes to the Financial Statements	4 to 11

United Real Estate Ltd

Company Information

Directors

M Ramzan N Ramzan

Company secretary

K Javed

Registered office

246 Flemington Street Glasgow G21 4BY

Accountants

Khokhar McAdam Chartered Accountants 1 Eagle Street Glasgow G4 9XA

United Real Estate Ltd

(Registration number: SC122629)
Balance Sheet as at 31 December 2020

	Note	2020 £	2019 £
Fixed assets
Tangible assets	3	5,265,855	5,349,271
Investment property	4	2,604,133	2,604,133
		7,869,988	7,953,404
Current assets
Debtors	5	88,086	103,735
Cash at bank and in hand		462,763	174,399
		550,849	278,134
Creditors: Amounts falling due within one year	6	(450,445)	(363,395)
Net current assets/(liabilities)		100,404	(85,261)
Total assets less current liabilities		7,970,392	7,868,143
Creditors: Amounts falling due after more than one year	6	(5,416,844)	(5,604,328)
Provisions for liabilities		(8,246)	(8,652)
Net assets		2,545,302	2,255,163
Capital and reserves
Called up share capital	7	104	104
Revaluation reserve		603,100	603,100
Profit and loss account		1,942,098	1,651,959
Total equity		2,545,302	2,255,163

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

Directors' responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

United Real Estate Ltd

(Registration number: SC122629)
Balance Sheet as at 31 December 2020

Approved and authorised by the Board on 21 December 2021 and signed on its behalf by:
 

.........................................

N Ramzan
Director

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

1	General information

The company is a private company limited by share capital, incorporated in Scotland.

The address of its registered office is:
246 Flemington Street
Glasgow
G21 4BY

These financial statements were authorised for issue by the Board on 21 December 2021.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

The company's operation is funded by short term loans from the Group and bank. The company met all its covenants during the year. The company's forecasts and projections, taking account of possible changes in trading performance and considering the risks identified, show that the company should be able to operate within the level of its bank facility and that the group will continue to fund its operating activities.

After making enquiries, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for at least twelve months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the Company financial statements.

Changes in accounting policy

New standards, interpretations and amendments effective

The following have been applied for the first time from 1 January 2020 and have had an effect on the financial statements:

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents the rent income from own properties and income from management of other properties.

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

The fair value of intra-group land and building on 1 January 2018 as deemed cost, less sudsquent accumulated depreciation and subsequent accumulated impairment losses.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Buildings	2.5% on cost
Plant & Machinery etc.	10% on cost
Leasehold buildings	over the period of lease

Investment property

Investment property is carried at fair value determined annually by the directors and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in the Profit and Loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

Financial instruments

Recognition and measurement
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if the arrangement of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at a market rate, the financial asset or liability is measured, initially at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at a amortised cost.

Financial asset that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate.

If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
 
 

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

3	Tangible assets

	Land and buildings £	Furniture, fittings and equipment  £	Total £
Cost or valuation
At 1 January 2020	5,431,645	79,770	5,511,415
Additions	-	3,355	3,355
At 31 December 2020	5,431,645	83,125	5,514,770
Depreciation
At 1 January 2020	122,150	39,994	162,144
Charge for the year	78,459	8,312	86,771
At 31 December 2020	200,609	48,306	248,915
Carrying amount
At 31 December 2020	5,231,036	34,819	5,265,855
At 31 December 2019	5,309,495	39,776	5,349,271

Included within the net book value of land and buildings above is £2,200,372 (2019 - £2,245,889) in respect of freehold land and buildings and £3,030,664 (2019 - £3,063,606) in respect of long leasehold land and buildings.
 

Revaluation

The fair value of the company's Land and buildings was revalued on 1 January 2018. An independent valuer was not involved.
The investment property rented out to the group member was transferred to property, plant and equipment on 1 January 2018 at the carrying value of £2,158,953 being the fair value as deemed cost, the cost of the property was £1,555,853. The subsquent additions are stated at cost. .
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £1,701,197 (2019 - £1,701,197).

4	Investment properties

	2020 £
At 1 January	2,604,133

The 2020 valuation was made by the director, at a fair value in accordance with accounting policy at Note 2.

If investment properties were not revalued they would have been included at the historical cost of £3,219,326 (2019 - £3,219,326).

There has been no valuation of investment property by an independent valuer.

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

5

Debtors

	2020 £	2019 £
Trade debtors	14,128	20,822
Prepayments	12,131	21,586
Other debtors	61,827	61,327
	88,086	103,735

6

Creditors

Creditors: amounts falling due within one year

	Note	2020 £	2019 £
Due within one year
Bank loans and overdrafts	8	110,192	110,192
Trade creditors		5,395	16,741
Taxation and social security		39,177	25,588
Accruals and deferred income		136,317	139,576
Other creditors		159,364	71,298
		450,445	363,395

Creditors: amounts falling due after more than one year

	Note	2020 £	2019 £
Due after one year
Loans and borrowings	8	3,129,472	3,236,969
Other non-current financial liabilities		2,287,372	2,367,359
		5,416,844	5,604,328

7	Share capital

Allotted, called up and fully paid shares

	2020		2019
	No.	£	No.	£
Ordinary of £1 each	104	104	104	104

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

8	Loans and borrowings

	2020 £	2019 £
Non-current loans and borrowings
Bank borrowings	3,129,472	3,236,969

	2020 £	2019 £
Current loans and borrowings
Bank borrowings	110,192	110,192

9	Related party transactions

Directors' remuneration

The directors' remuneration for the year was as follows:

	2020 £	2019 £
Remuneration	33,649	33,650
Directors amount under long term incentive schemes in respect of qualifying services	1,644	1,644
	35,293	35,294

Summary of transactions with other related parties

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Included in debtors is the amount of £13 (2019 - £13) due to United Properties Scotland Ltd, a company in which close family members of a director have significant interest as shareholders and director.

Included in debtors is an amount of £59,114 (2019 - £59,114) due from a director who is also the director and shareholder of the parent company. Interest at an annual rate of 2 per cent is payable on the amounts due.

During the year the company paid rent totalling £nil (2019 - £14,300) to certain shareholders of the parent company for the flats for short term let on Airbnb.

The company charged management fee of £9,000 (2019 - £30,000) for property managment to a company in which Mrs Summon Ramzan has material interest as shareholder and director. Mrs Ramzan is a shareholder in the parent company.
 

United Real Estate Ltd

Notes to the Financial Statements for the Year Ended 31 December 2020

10	Staff numbers

The average number of persons employed by the company (including directors) during the year, was 3 (2019 - 3).