Rayglow Securities Limited - Period Ending 2017-12-31

For the financial year ending 31 December 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

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 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.

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.

The presentation currency of the financial statements is the Pound Sterling (£). All monetary amounts are rounded to the nearest Pound (£).

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

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 differences.

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

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.

Trade debtors are amounts due from tenants for services provided 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 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.

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Amounts received under operating leases are credited to the profit and loss account on a straight-line basis over the period of the lease, except where the lease was entered into before the FRS102 transition date or where doing so would not result in a true and fair view.

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.

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.

The company's investment property portfolio was valued on an open market basis on 31 December 2017 by Messrs Boddy and Edwards, Chartered Surveyors.

If investment properties had not been revalued they would have been included at their historical cost of £4,795,595 (2016 - £4,452,566).

No provision has been made for deferred tax on losses recognised on revaluing investment properties to their fair values and unutilised capital losses on disposal. The current estimate is that there is an unprovided deferred tax asset of £109,073 (2016 - £85,577). The directors have not recognised this asset as it is their long-term intention to retain the investment properties.

In 2015, the company entered into an agreement with a tenant, supplementary to its lease, to suffer costs attributable to an asbestos survey and the removal of any asbestos identified within the let property. The survey and removal of asbestos, if present, was to be undertaken during approved alteration works which were completed in 2016. The tenant commenced trading from the premises in August 2016.

The tenant had not made the company aware of the identification of asbestos as a result of the survey or any costs attributable to the survey and removal of the asbestos until August 2018 when a claim for reimbursement of £288,619 was made by the tenant.

The limited information provided initially in support of the claim was passed to our agents for review and they have identified an initial £36,587 of the claim as relating to a property that is not owned by the company.

A request has been made to the tenant for a detailed breakdown of the balance of the claim together with all appropriate supporting documentation. Until this has been received and scrutinised by our agents it is not possible to ascertain the exact amount of any specific liability.

In the circumstances, it has been deemed prudent to make a provision for expenditure of £252,032 in respect of the potential asbestos costs. An appropriate adjustment will be made in subsequent accounts once a detailed analysis and negotiation have taken place. The costs have been categorised as 'repairs to property' due to the revenue nature of the works involved.