San Marco Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02108482 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2021

FOR

SAN MARCO LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

16

DIRECTORS:

I Bragagnini

Mrs L Bragagnini

C Bragagnini

S Bragagnini

P Bragagnini

G Bragagnini

SECRETARY:

Mrs L Bragagnini

REGISTERED OFFICE:

Chandler House

7 Ferry Road Office Park

Riversway

Preston

Lancashire

PR2 2YH

REGISTERED NUMBER:

02108482 (England and Wales)

AUDITORS:

Wallwork Nelson & Johnson

Chartered Accountants & Statutory Auditors

Chandler House

7 Ferry Road Office Park

Riversway

Preston

Lancashire

PR2 2YH

The directors present their strategic report for the year ended 31 October 2021.

REVIEW OF BUSINESS

The principal activities of the company is that of restauranteurs.

The Coronavirus pandemic has once again had a significant impact on the companies operations during the year. On the 4 November 2020 England were put into another lockdown causing the hospitality sector to close once again. Outdoor service was permitted from 12 April 2021 with indoor service following on 17 May 2021. As a result a significant amount of revenue was lost during the period of closure. During the periods where trade was permitted the company showed pleasing results.

During this period the company conserved its resources by continuing to us the government support schemes available. The Directors took advantage of the Coronavirus Job Retention Scheme and received discretionary grants from the local council.

On the 17 May 2021 the restaurants were able to open for indoor service. Sales in the six months ending 31 October 2021 were £4,242,294 compared to £3,521,656 for the same period in 2019. The increased post lockdown trade and the sale of one of its properties improved the company's cashflow position.

The Directors remain optimistic about future trading and recent trading has demonstrated that customer demand for their service remains high.

The results for the period are set out on page 7.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors consider the principal risks and uncertainties facing the company on a regular basis and take appropriate action.

Cash flow risk

The company considers cash in a professional manner both short and long term positions and requirement. The Directors consider they have managed the cashflow risk during the pandemic and have taken advantage of the government support schemes during this time.

COVID risk

Whilst there are uncertainties as to future restrictions being imposed on the hospitality sector, the government is hopeful that the vaccination programme will reduce the possibility for future severe restrictions.

Other

Other risks and uncertainties facing the company are those relating to the continuing credit squeeze on consumer spending, longer term effects of any upward pressure on bank interest rates and the living wage and continued increase in regulation of sites offering public access.

KEY PERFORMANCE INDICATORS

The company's Key Performance Indicators are revenue, Gross Profit and Operating profit. Management continue to monitor performance against these indicators on regular basis.

2021

2020

Revenue

£4,344,991

£5,407,943

Gross profit

£3,179,945

£3,947,590

Gross profit %

73%

73%

Operating profit/(loss)

£1,750,675

£957,660

FUTURE DEVELOPMENTS

The directors propose to continue to manage the assets of the company in such a way as to achieve a level of profitability in excess of the levels reported in that of periods prior the Coronavirus pandemic and to continue with the management policies which should improve the companys efficiency and performance.

ON BEHALF OF THE BOARD:

I Bragagnini - Director

28 October 2022

The directors present their report with the financial statements of the company for the year ended 31 October 2021.

DIVIDENDS

The total distribution of dividends for the year ended 31 October 2021 will be £ 243,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 November 2020 to the date of this report.

I Bragagnini

Mrs L Bragagnini

C Bragagnini

S Bragagnini

P Bragagnini

G Bragagnini

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Wallwork Nelson & Johnson, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

I Bragagnini - Director

28 October 2022

Opinion

We have audited the financial statements of San Marco Limited (the 'company') for the year ended 31 October 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 October 2021 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the directors and other management (as required by Auditing Standards) and from inspection of the company's legal correspondence and we discussed with the directors and other management the policies and procedures regarding compliance with the laws and regulations. We communicated identified laws and regulations within our audit team and remained alert to any indications of non-compliance throughout the audit.

Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we have assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the company is subject to many other laws and regulations where the consequences of non compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines and litigation. We identified the following areas as those most likely to have such effect; food and alcohol licence, food hygiene, health and safety, employment law, data protection, environmental law and certain aspects of company legislation. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry with directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we have not become aware of any actual or suspected non-compliance material to the financial statements.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This increases the more the compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities accruing due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

I M Johnson (Senior Statutory Auditor)

for and on behalf of Wallwork Nelson & Johnson

Chartered Accountants & Statutory Auditors

Chandler House

7 Ferry Road Office Park

Riversway

Preston

Lancashire

PR2 2YH

28 October 2022

TURNOVER

4,344,991

5,407,943

Cost of sales

1,165,046

1,460,353

GROSS PROFIT

3,179,945

3,947,590

Administrative expenses

3,109,878

3,695,502

70,067

252,088

Other operating income

1,680,608

705,572

OPERATING PROFIT

4

1,750,675

957,660

Interest payable and similar expenses

5

90,975

99,501

PROFIT BEFORE TAXATION

1,659,700

858,159

Tax on profit

6

303,067

112,339

PROFIT FOR THE FINANCIAL YEAR

1,356,633

745,820

PROFIT FOR THE YEAR

1,356,633

745,820

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,356,633

745,820

FIXED ASSETS

Intangible assets

8

64,173

77,683

Tangible assets

9

9,689,860

9,187,729

9,754,033

9,265,412

CURRENT ASSETS

Stocks

10

771,126

728,505

Debtors

11

23,495

217,672

Investments

12

220,100

220,100

Cash at bank

1,413,158

1,354,272

2,427,879

2,520,549

CREDITORS

Amounts falling due within one year

13

2,101,643

2,478,964

NET CURRENT ASSETS

326,236

41,585

TOTAL ASSETS LESS CURRENT LIABILITIES

10,080,269

9,306,997

CREDITORS

Amounts falling due after more than one year

14

(4,042,308

)

(4,416,973

)

PROVISIONS FOR LIABILITIES

17

(289,249

)

(254,945

)

NET ASSETS

5,748,712

4,635,079

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

Retained earnings

19

5,747,712

4,634,079

SHAREHOLDERS' FUNDS

5,748,712

4,635,079

The financial statements were approved by the Board of Directors and authorised for issue on 28 October 2022 and were signed on its behalf by:

I Bragagnini - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 November 2019

1,000

4,131,259

4,132,259

Changes in equity

Dividends

-

(243,000

)

(243,000

)

Total comprehensive income

-

745,820

745,820

Balance at 31 October 2020

1,000

4,634,079

4,635,079

Changes in equity

Dividends

-

(243,000

)

(243,000

)

Total comprehensive income

-

1,356,633

1,356,633

Balance at 31 October 2021

1,000

5,747,712

5,748,712

Cash flows from operating activities

Cash generated from operations

1

1,582,791

1,194,303

Interest paid

(90,975

)

(99,501

)

Tax paid

(100,965

)

(156,876

)

Net cash from operating activities

1,390,851

937,926

Cash flows from investing activities

Purchase of tangible fixed assets

(983,484

)

(301,834

)

Sale of tangible fixed assets

828,214

-

Purchase of current asset investments

-

(220,100

)

Net cash from investing activities

(155,270

)

(521,934

)

Cash flows from financing activities

New loans in year

-

560,000

Loan repayments in year

(303,711

)

(124,483

)

Amount introduced by directors

703,276

-

Amount withdrawn by directors

(1,333,260

)

139,934

Equity dividends paid

(243,000

)

(243,000

)

Net cash from financing activities

(1,176,695

)

332,451

Increase in cash and cash equivalents

58,886

748,443

Cash and cash equivalents at beginning of year

2

1,354,272

605,829

Cash and cash equivalents at end of year

2

1,413,158

1,354,272

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31/10/21

31/10/20

£

£

Profit before taxation

1,659,700

858,159

Depreciation charges

244,864

258,531

Profit on disposal of fixed assets

(578,214

)

-

Finance costs

90,975

99,501

1,417,325

1,216,191

Increase in stocks

(42,621

)

(180,300

)

Decrease in trade and other debtors

140,899

178,424

Increase/(decrease) in trade and other creditors

67,188

(20,012

)

Cash generated from operations

1,582,791

1,194,303

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 October 2021

31/10/21

1/11/20

£

£

Cash and cash equivalents

1,413,158

1,354,272

Year ended 31 October 2020

31/10/20

1/11/19

£

£

Cash and cash equivalents

1,354,272

849,993

Bank overdrafts

-

(244,164

)

1,354,272

605,829

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/11/20

Cash flow

At 31/10/21

£

£

£

Net cash

Cash at bank

1,354,272

58,886

1,413,158

1,354,272

58,886

1,413,158

Liquid resources

Current asset investments

220,100

-

220,100

220,100

-

220,100

Debt

Debts falling due within 1 year

(313,091

)

(70,955

)

(384,046

)

Debts falling due after 1 year

(4,416,973

)

374,665

(4,042,308

)

(4,730,064

)

303,710

(4,426,354

)

Total

(3,155,692

)

362,596

(2,793,096

)

1.	STATUTORY INFORMATION

San Marco Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts and value added tax. Turnover is recognised at the point of sale.

Goodwill

Goodwill is being amortised evenly over its estimated useful life of 10 years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and any provision for impairment in value.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

- 15% on reducing balance

Motor vehicles

- 25% on reducing balance

Freehold property is not depreciated. Freehold property is maintained to ensure that its value does not diminish over time. The maintenance costs are charged to the profit and loss account as they are incurred. In the opinion of the directors, depreciation would be immaterial and, therefore, freehold property is not depreciated. Any increase or decrease to the market value is taken to the revaluation reserve.

Government grants

Government grants received under the Coronavirus Job Retention Scheme are recognised in the profit and loss account as income in the same period as the related expenditure.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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.

Employee benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the fixed cost of fixed assets.

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.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Where the contractual obligations of the financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of the share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Going concern

As at 31 October 2021 the company has net current assets of £326,236 and shareholders funds of £5,748,712.

The results for the first six months of 2022 show improved trading performance which are over and above pre-covid levels for the same period. The improved trade along with the government support during the pandemic has lead to surplus cash reserves.

While there is some uncertainty about the effect of future variants of COVID, the government is hopeful the vaccination programme will reduce the possibility for future severe restrictions.

The Directors therefore consider that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Current assets investments

Current asset investments are initially recognised at cost and then subsequently valued at market value.

3.	EMPLOYEES AND DIRECTORS

31/10/21

31/10/20

£

£

Wages and salaries

2,063,463

2,253,914

Other pension costs

68,055

70,670

2,131,518

2,324,584

The average number of employees during the year was as follows:

31/10/21

31/10/20

Management and administration

10

11

Sales

173

232

183

243

31/10/21

31/10/20

£

£

Directors' remuneration

35,276

34,892

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31/10/21

31/10/20

£

£

Depreciation - owned assets

231,353

245,020

Profit on disposal of fixed assets

(578,214

)

-

Goodwill amortisation

13,510

13,509

Auditors' remuneration

6,000

5,000

Auditors' remuneration for non audit work

21,761

-

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31/10/21

31/10/20

£

£

Loan interest

89,136

98,069

Other interest paid

1,839

1,432

90,975

99,501

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31/10/21

31/10/20

£

£

Current tax:

UK corporation tax

268,763

160,390

Under provision in prior year

-

(53,278

)

Total current tax

268,763

107,112

Deferred tax

34,304

5,227

Tax on profit

303,067

112,339

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31/10/21

31/10/20

£

£

Profit before tax

1,659,700

858,159

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

315,343

163,050

Effects of:

Expenses not deductible for tax purposes

162

342

Capital allowances in excess of depreciation

(9,778

)

-

Depreciation in excess of capital allowances

-

2,225

Adjustments to tax charge in respect of previous periods

-

(53,278

)

Indexation allowance

(2,660

)

-

Total tax charge

303,067

112,339

7.

DIVIDENDS

31/10/21

31/10/20

£

£

Ordinary 'A' shares shares of £1 each

Interim

40,500

40,500

Ordinary 'B' Shares shares of £1 each

Interim

40,500

40,500

Ordinary 'C' Shares shares of £1 each

Interim

40,500

40,500

Ordinary 'D' Shares shares of £1 each

Interim

40,500

40,500

Ordinary ' E' shares shares of £1 each

Interim

40,500

40,500

Ordinary 'F' shares shares of £1 each

Interim

40,500

40,500

243,000

243,000