| Densems (Holdings) Limited |
| Notes to the Accounts |
| for the year ended 31 March 2017 |
|
| 1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention subject to the revaluation of Investment Properties and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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The comparative figures have been restated in accordance with FRS102 in respect of Deferred Tax on the unrealised surplus on the revaluation of Investment Properties. |
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The accounts have been prepared treating the company as a going concern under the historical cost convention modified by the revaluation of investment properties and are in respect of the year ended 31 March 2017 with comparatives for the year ended 31 March 2016. This basis has been adopted by the board as a result of its forward review of the companies activities for the next year. The board believes this basis is acceptable for at lest the next 12 months. |
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Turnover - Property Rental Income |
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Turnover is measured at the fair value of the consideration received or receivable. Turnover is recognised when the significant risks and rewards of rental period of the tenancy have arisen. |
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Repairs and Maintenance |
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Cost of work on property is charged as incurred. Where properties become empty during the year costs of refurbishment ready for letting are charged to the Revenue Account. |
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Investment Income |
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Dividends and interest receiveable are included in the income of the year. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than Investment Property, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Investment Property |
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This is initially recognised at cost and then subsequently is stated at the valuation considered by directors annually from the knowledge of the properties and local market with reference to externally valued at intervals. These properties are held for investment return in the form of rents etc. |
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In accordance with the requirements of Financial Reporting Standards depreciation is no longer chargeable on properties held as investments and annual valuation carried out. |
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Debtors |
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Short term debtors are measured at transaction price, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that 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, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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No provision for taxation was previously made on the surplus which would arise if freehold investment properties were sold at their revalued amounts. Under FRS102 Section 1a deferred tax on unrealised revaluation surplus as to be recognised in the accounts with restatement of 2016 year-end. |
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Cash Flow Statement |
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The company has taken advantage of the exemption in Financial Reporting Standard No. 1 not to produce this statement on the grounds it is a small company. |
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| 2 |
Fixed assets - Investments |
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Land and buildings |
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|
2017 |
|
2016 |
| £ |
£ |
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Fair Value |
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At 1 April 2016 |
2,232,268 |
|
2,232,268 |
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Surplus on revaluation |
217,732 |
- |
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At 31 March 2017 |
2,450,000 |
|
2,232,268 |
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Depreciation |
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At 31 March 2017 |
- |
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- |
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Net book value |
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At 31 March 2017 |
2,450,000 |
|
2,232,268 |
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At 31 March 2016 |
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|
2,232,268 |
|
2,232,268 |
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Freehold land and buildings: |
2017 |
|
2016 |
| £ |
£ |
|
Historical cost |
255,519 |
|
255,519 |
|
Cumulative depreciation based on historical cost |
- |
|
- |
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|
255,519 |
|
255,519 |
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Investment properties were valued at £2,450,000 as of 31 March 2017 by J J Lake, a director, on the basis of market value subject to being tenanted. The fair value includes an assessment of the short and long term liabilities for maintenance of properties dating from the 16th Century and some of them being Grade II listed buildings and restrictive covenants contained within certain of the leases, which impact on the company's ability to market the other properties. |
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The properties were previously professionally valued by Buckinghams Chartered Surveyors of 8 Chantry Court, Crewe, as of 11 October 2012 based on open market value of current existing use as tenanted properties of £1,815,750. A further property was purchased in 2016 for £395,830. The company has no capital committment's contracted for or otherwise (2016 (£Nil). Work is continuing on refurbishment and repair of properties in 2017. |
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| 3 |
Debtors |
2017 |
|
2016 |
| £ |
£ |
|
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Other debtors |
15,473 |
|
15,675 |
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| 4 |
Creditors: amounts falling due within one year |
2017 |
|
2016 |
| £ |
£ |
|
Bank loans (see note 4a below) |
11,850 |
|
- |
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Loan from shareholder (note 10) |
120,000 |
|
- |
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Corporation tax |
700 |
|
23,100 |
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Other creditors |
49,079 |
|
58,159 |
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|
181,629 |
|
81,259 |
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| 4a |
Total bank loan of £18,100 at the year end is the balance of £25,000 borrowed on 5 October 2016 repaid over 24 months. This has been guaranteed by the Directors. |
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| 5 |
Creditors: amounts falling due after one year |
2017 |
|
2016 |
| £ |
£ |
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Bank loans (see note 4a above) |
6,250 |
|
- |
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| 6 |
Taxation |
2017 |
|
2016 |
|
Analysis of charge in period |
£ |
£ |
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Current tax: |
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UK Corporation tax on profits of the period |
700 |
|
23,100 |
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Adjustments in respect of previous periods |
(24) |
|
(190) |
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|
676 |
|
22,910 |
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Deferred tax: |
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On unrealised surplus on revaluation |
43,500 |
|
- |
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Tax on profit on ordinary activities |
44,176 |
|
22,910 |
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Factors affecting tax charge for period |
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The differences between tax assessed for the period and the standard rate of corporation tax are explained as follows: |
| Restated |
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|
2017 |
|
2016 |
| £ |
£ |
|
Profit on ordinary activities before tax |
228,396 |
|
112,391 |
|
Standard rate of corporation tax in the UK |
|
| £ |
£ |
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Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
45,679 |
|
22,478 |
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Effects of: |
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Expenses now claimed for tax purposes |
(1,479) |
|
622 |
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Deferred tax on surplus on revaluation |
(43,500) |
|
- |
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Effective rate change on surplus on revaluation |
- |
|
- |
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Adjustments to tax charge in respect of previous periods |
(24) |
|
(190) |
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Current tax charge for period |
676 |
|
22,910 |
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| 7 |
Share capital |
Nominal |
|
2017 |
|
2017 |
|
2016 |
| Value |
Number |
£ |
£ |
|
Alloted, called up and fully paid |
|
Ordinary shares |
£1 each |
|
14,000 |
|
14,000 |
|
14,000 |
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| Restated |
| 8 |
Revaluation reserve |
2017 |
|
2016 |
| £ |
£ |
|
Restated At 1 April 2016 |
1,561,214 |
|
1,561,214 |
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Restatement due to change in accounting policy deferred tax |
|
(224,000) |
|
(224,000) |
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Restated At 1 April 2016 |
1,337,214 |
|
1,337,214 |
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Gain on revaluation of land and buildings |
217,732 |
|
- |
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Deferred Tax charge on surplus on revaluation |
(43,500) |
|
At 31 March 2017 |
1,511,446 |
|
1,337,214 |
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| 9 |
Dividends |
2017 |
|
2016 |
| £ |
£ |
|
Dividends for which the company became liable during the year: |
|
Dividends paid |
109,433 |
|
109,433 |
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| 10 |
Related party transactions |
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The loan received in the year of £120,000 is from a shareholder Mrs M Lake, repayable on demand, with interest at 1.5% payable annually. |
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There were no other related party transactions. |
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| 11 |
Ultimate controlling party |
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There is no ultimate controlling party. |
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| 12 |
Other information |
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Densems (Holdings) Limited is a private company limited by shares and incorporated in England. Its registered office is: 71 New Barn Lane, Cheltenham, Gloucester GL52 3LB . Its Registered number is 00504273. |
