Latona Leisure Limited 02777532 false 2022-02-01 2023-01-31 2023-01-31 The principal activity of the company is the running of four hotels and property development. 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Registration number: 02777532

Latona Leisure Limited

Annual Report and Financial Statements

for the Year Ended 31 January 2023

 

Latona Leisure Limited

Contents

Company Information

1

Strategic Report

2

Directors' Report

3 to 4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 8

Profit and Loss Account

9

Balance Sheet

10

Statement of Changes in Equity

11

Statement of Cash Flows

12

Notes to the Financial Statements

13 to 29

 

Latona Leisure Limited

Company Information

Directors

R J Styles

T R Styles

N A Gray

Registered office

Limpley Stoke Hotel
Woods Hill
Lower Limpley Stoke
Bath
Avon
BA2 7FZ

Auditors

Milsted Langdon LLP
Chartered Accountants and Statutory Auditors
Freshford House
Redcliffe Way
Bristol
BS1 6NL

 

Latona Leisure Limited

Strategic Report for the Year Ended 31 January 2023

The directors present their strategic report for the year ended 31 January 2023.

Principal activity

The principal activity of the company is the running of four hotels and property development.

Fair review of the business

Following the easing of Covid-19 Government lockdowns in May 2021, a substantial increase in hotel revenues was experienced in the year, which is in line with expectations and the industry. The directors are satisfied with the trading performance of the company.

The results are summarised on page 10 and despite the impact of lockdowns the directors consider them satisfactory.

The company's key financial and other performance indicators during the year were as follows:

 

Unit

2023

2022

Hotel revenues growth/(decline)

%

38

127

Hotel gross profit margin

%

81

81

Hotel net profit (before tax) margin

%

12

16

Principal risks and uncertainties

Competition
The company is exposed to the inherent risks of new hotel openings close to its existing units and to any general downturn in the hotel and leisure industry. The directors are not aware of any planned openings in the near future and consider that their units are as well placed as any to withstand any potential economic downturn in the hotel and leisure industry.

Employees and skills
The recruitment and retention of employees with the requisite skills is a crucial factor in the achievement of the company's business plan. The company is committed to providing the necessary level of training and operational support for all its staff.

Financial management
By the very nature of its trade, the company is reliant on bank borrowings, and has secured the majority of its required finance by way of long term bank loans.

Business interruption
Like all hotel operations, the company is subject to risks of severe disruption from fire, flooding etc at its operating units and the catastrophic failure of its Information Technology systems and processes. The former risk is covered by comprehensive insurance cover and the latter by way of offsite back up systems.

Approved by the Board on 16 October 2023 and signed on its behalf by:


N A Gray
Director

 

Latona Leisure Limited

Directors' Report for the Year Ended 31 January 2023

The directors present their report and the financial statements for the year ended 31 January 2023.

Directors of the company

The directors who held office during the year were as follows:

R J Styles

T R Styles

N A Gray

Financial instruments

The company has procedures to identify risk and manage the risks that may hinder its financial performance objectives. The objective is to limit counterparty exposure, ensure sufficient weekly capital and to mitigate the risks identified. The company does not consider it necessary to employ derivatives to manage risk based on the current activities of the company.

Objectives and policies

The company's objective is to operate hotel and property development enterprises in a profitable manner.

The directors are responsible for monitoring financial risk. Appropriate policies have been developed and implemented to identify, evaluate and manage the key risks.

Price risk, credit risk, liquidity risk and cash flow risk

Price risk – The company is exposed to price risk as a result of its operations. However, given the size of the company’s operations, the costs of managing exposure to price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

Credit risk – The company’s credit risk is primarily attributable to its trade debtors. Credit risk is managed by requesting deposits upon booking and by monitoring receipts against payment terms.

Liquidity risk – The company monitors cash flow as part of its normal activities. The directors consider cash flow projections on a monthly basis and ensure that facilities are available to be drawn as necessary.

Interest rate cash flow risk – The company has interest bearing liabilities and is therefore exposed to increases in interest rates.

Future developments

After a period of uncertainty due to the Covid-19 pandemic and the enforced Govenrment lockdowns, the company intends to continue consolidating its position within the market place.

 

Latona Leisure Limited

Directors' Report for the Year Ended 31 January 2023

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

The auditors Milsted Langdon LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved by the Board on 16 October 2023 and signed on its behalf by:

N A Gray
Director

   
     
 

Latona Leisure Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Annual Report 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

 

Latona Leisure Limited

Independent Auditor's Report to the Members of Latona Leisure Limited

Opinion

We have audited the financial statements of Latona Leisure Limited (the 'company') for the year ended 31 January 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and 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 January 2023 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 auditor 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 were 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 included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Latona Leisure Limited

Independent Auditor's Report to the Members of Latona Leisure Limited

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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 5, 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 is 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.

Auditor 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 an auditor’s report 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.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company is complying with the legal and regulatory framework;

inquired of management, and those charged with governance, about their own identification and assessment of the risks or irregularities, including known and actual, suspected or alleged instances of fraud;

 

Latona Leisure Limited

Independent Auditor's Report to the Members of Latona Leisure Limited

discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity’s operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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 an auditor’s report 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.





Mrs S Jenkins (Senior Statutory Auditor)
For and on behalf of Milsted Langdon LLP, Statutory Auditor
Freshford House
Redcliffe Way
Bristol
BS1 6NL

17 October 2023

 

Latona Leisure Limited

Profit and Loss Account for the Year Ended 31 January 2023

Note

2023
£

2022
£

Turnover

3

7,875,301

6,258,605

Cost of sales

 

(1,520,340)

(1,646,735)

Gross profit

 

6,354,961

4,611,870

Administrative expenses

 

(5,276,326)

(4,075,527)

Other operating income

4

26,000

540,286

Operating profit

5

1,104,635

1,076,629

Other interest receivable and similar income

6

1,617

526

Interest payable and similar expenses

7

(136,181)

(125,084)

   

(134,564)

(124,558)

Profit before tax

 

970,071

952,071

Tax on profit

11

(166,038)

(170,460)

Profit for the financial year

 

804,033

781,611

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

Latona Leisure Limited

(Registration number: 02777532)
Balance Sheet as at 31 January 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

12

13,031,826

12,959,307

Current assets

 

Stocks

13

41,404

48,613

Debtors

14

332,798

304,004

Cash at bank and in hand

 

855,466

990,673

 

1,229,668

1,343,290

Creditors: Amounts falling due within one year

16

(1,426,969)

(1,525,244)

Net current liabilities

 

(197,301)

(181,954)

Total assets less current liabilities

 

12,834,525

12,777,353

Creditors: Amounts falling due after more than one year

16

(2,426,733)

(3,126,733)

Provisions for liabilities

17

(177,855)

(177,855)

Net assets

 

10,229,937

9,472,765

Capital and reserves

 

Called up share capital

19

2,812,629

2,812,629

Revaluation reserve

 

2,909,307

2,909,307

Profit and loss account

 

4,508,001

3,750,829

Total equity

 

10,229,937

9,472,765

Approved and authorised by the Board on 16 October 2023 and signed on its behalf by:
 

N A Gray
Director

   
     
 

Latona Leisure Limited

Statement of Changes in Equity for the Year Ended 31 January 2023

Share capital
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 February 2022

2,812,629

2,909,307

3,750,829

9,472,765

Profit for the year

-

-

804,033

804,033

Total comprehensive income

-

-

804,033

804,033

Dividends

-

-

(46,861)

(46,861)

At 31 January 2023

2,812,629

2,909,307

4,508,001

10,229,937

Share capital
£

Revaluation reserve
£

Profit and loss account
£

Total
£

At 1 February 2021

2,812,629

2,909,307

3,062,940

8,784,876

Profit for the year

-

-

781,611

781,611

Total comprehensive income

-

-

781,611

781,611

Dividends

-

-

(93,722)

(93,722)

At 31 January 2022

2,812,629

2,909,307

3,750,829

9,472,765

 

Latona Leisure Limited

Statement of Cash Flows for the Year Ended 31 January 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

804,033

781,611

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

45,682

56,208

Finance income

6

(1,617)

(526)

Finance costs

7

136,181

125,084

Income tax expense

11

166,038

170,460

 

1,150,317

1,132,837

Working capital adjustments

 

Decrease in stocks

13

7,209

344,022

(Increase)/decrease in trade debtors

14

(28,794)

265,198

(Decrease)/increase in trade creditors

16

(151,749)

456,223

Cash generated from operations

 

976,983

2,198,280

Income taxes (paid)/received

11

(169,693)

13,514

Net cash flow from operating activities

 

807,290

2,211,794

Cash flows from investing activities

 

Interest received

6

1,617

526

Acquisitions of tangible assets

(118,201)

(60,163)

Net cash flows from investing activities

 

(116,584)

(59,637)

Cash flows from financing activities

 

Interest paid

7

(136,181)

(125,084)

Repayment of bank borrowing

 

(700,000)

(1,240,000)

Proceeds from other borrowing draw downs

 

57,129

-

Dividends paid

23

(46,861)

(93,722)

Net cash flows from financing activities

 

(825,913)

(1,458,806)

Net (decrease)/increase in cash and cash equivalents

 

(135,207)

693,351

Cash and cash equivalents at 1 February

 

990,673

297,322

Cash and cash equivalents at 31 January

15

855,466

990,673

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

1

General information

The company is a private company limited by shares incorporated in England and Wales.

The address of the company's registered office is:
Limpley Stoke Hotel
Woods Hill
Lower Limpley Stoke
Bath
Avon
BA2 7FZ

These financial statements were authorised for issue by the Board on 16 October 2023.

2

Accounting policies

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention modified to include the revaluation of certain fixed assets and, as disclosed in the accounting policies, certain items are shown at fair value.

The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £.

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.

Going concern

The company once again had a highly profitable year and despite having net current liabilities on the balance sheet, the directors are confident that the business will continue as a going concern as a result of significant bank reserves and continued trading activity. Accordingly, the financial statements are prepared on a going concern basis.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Key sources of estimation uncertainty

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 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 estimates and assumptions which are considered to have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities arise in respect of the valuation of the freehold land and building, inclusive of furniture, fittings and equipment, for which management are of the opinion requires no impairment. The carrying amount is £13,031,826 (2022 - £12,959,307).

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and 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 all of the following conditions are satisfied:
- the amount of revenue can be reliably measured;
- all of the significant risks and rewards of ownership have been transferred to the customer;
- the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
- the costs incurred or to be incurred in respect of the transaction can be measured reliably;
- 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.

Government grants

Government grants are recognized using the accruals model. Where the costs have already been incurred then the grant is credited to the profit and loss account.

Finance income and costs policy

Interest income and expenses are recognised using the effective interest rate method.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

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 income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets is reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the statement of financial position at cost or valuation 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.

Tangible assets held at valuation are revalued with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date.

Any revaluation increase arising on the revaluation is credited to the revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is credited to the income statement to the extent of the decrease previously expensed. A decrease in carrying amount arising on the revaluation is charged as an expense to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

On the subsequent sale or scrappage of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained earnings.

Depreciation

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

Asset class

Depreciation method and rate

Freehold land and buildings

Nil

Furniture, fittings and equipment

25% straight line

Motor vehicles

25% straight line

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

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.

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.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

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.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets or financial liabilities.

 Recognition and measurement
Financial assets are measured at amortised cost, the impairment loss is measured as the difference between an 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 the 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 the 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 reporting date.

 Impairment
Financial instruments are assessed for impairment at the end of each reporting period with an impairment loss being recognised in the profit or loss.

3

Turnover

The analysis of the company's revenue for the year from continuing operations in the UK is as follows:

2023
 £

2022
 £

Hotel revenues

7,875,301

5,668,605

Property sales

-

590,000

7,875,301

6,258,605

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
 £

2022
 £

Government grants

26,000

540,286

Government grants received include rates grants received from local councils and furlough income received.

The grant is accrued on a systematic basis over the period that the related costs have been recognised. Where the costs have already been incurred then government grants are credited to the profit and loss account in full.

There are no unfulfilled conditions attached to the grant income.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

5

Operating profit

Arrived at after charging:

2023
£

2022
£

Depreciation expense

45,682

56,208

Operating lease expense - plant and machinery

121,783

94,818

6

Other interest receivable and similar income

2023
 £

2022
 £

Other finance income

1,617

526

7

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

132,461

121,355

Interest expense on other finance liabilities

3,720

3,729

136,181

125,084

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

2,843,532

2,354,925

Social security costs

216,601

164,825

Pension costs, defined contribution scheme

56,388

43,459

3,116,521

2,563,209

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Administration and support

24

21

Other departments

122

114

146

135

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

52,852

76,672

10

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

18,670

16,150

Other fees to auditors

Taxation compliance services

2,500

3,235

All other non-audit services

470

176

2,970

3,411


 

11

Taxation

Tax charged/(credited) in the income statement:

2023
£

2022
£

Current taxation

UK corporation tax

166,038

169,693

UK corporation tax adjustment to prior periods

-

767

166,038

170,460

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 19% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

970,071

952,071

Corporation tax at standard rate

184,313

180,893

Effect of expense not deductible in determining taxable profit (tax loss)

(1,592)

(1,970)

Deferred tax expense relating to changes in tax rates or laws

5,275

-

Increase in UK current tax from unrecognised tax credit

20

-

Increase in UK current tax from adjustment for prior periods

-

767

Tax decrease from effect of capital allowances and depreciation

(21,768)

(9,414)

Tax (decrease)/increase from other short-term timing differences

(210)

184

Total tax charge

166,038

170,460

Deferred tax

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Revaluation of freehold land and building

-

177,855

-

177,855

2022

Asset
£

Liability
£

Revaluation of freehold land and building

-

177,855

-

177,855

The deferred tax liability has arisen due to the revaluation of freehold land and building. The provision is not expected to reverse significantly in the next twelve months although this is subject to estimation uncertainty.

On 3 March 2021, the Chancellor of the Exchequer announced that the main rate of corporation tax in the United Kingdom will rise to 25% with effect from 1 April 2023 for companies earning annual taxable profits in excess of £250,000. Companies earning annual taxable profits of £50,000 or less will continue to pay corporation tax at 19% with a marginal rate adjustment for companies earning annual taxable profits between the two levels. As a result of this announcement deferred tax has been calculated at 25%.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

12

Tangible assets

Freehold land and buildings
 £

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost or valuation

At 1 February 2022

12,898,622

958,341

41,162

13,898,125

Additions

44,942

73,259

-

118,201

At 31 January 2023

12,943,564

1,031,600

41,162

14,016,326

Depreciation

At 1 February 2022

-

897,656

41,162

938,818

Charge for the year

-

45,682

-

45,682

At 31 January 2023

-

943,338

41,162

984,500

Carrying amount

At 31 January 2023

12,943,564

88,262

-

13,031,826

At 31 January 2022

12,898,622

60,685

-

12,959,307

Revaluation

All assets in the categories freehold land and buildings and furniture, fittings and equipment were revalued on 17 January 2019 by an independent valuer, Colliers International Specialist and Consulting UK LLP, who are external to the company. The basis of this valuation was market value and the assets in these categories have a current value of £13,031,826 (2021 - £12,959,307).
Had these properties been measured on a historical cost basis, their carrying amount would have been £8,549,651 (2022 - £8,477,132).
 

Restriction on title and pledged as security

Land and buildings with a carrying amount of £12,943,564 (2022 - £12,898,622) has been pledged as security for the company's bank loans.

Furniture, fittings and equipment with a carrying amount of £88,262 (2022 - £60,685) has been pledged as security for the company's bank loans.

Motor vehicles with a carrying amount of £Nil (2022 - £Nil) has been pledged as security for the company's bank loans.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

13

Stocks

2023
£

2022
£

Stocks

41,404

48,613

The carrying amount of stocks pledged as security for liabilities amounted to £41,404 (2022 - £48,613).

14

Debtors

Current

2023
£

2022
£

Trade debtors

83,041

89,083

Other debtors

174,812

153,165

Prepayments

74,945

61,756

 

332,798

304,004

15

Cash and cash equivalents

2023
£

2022
£

Cash on hand

91,555

10,984

Cash at bank

763,911

979,689

855,466

990,673

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

16

Creditors

Note

2023
£

2022
£

Due within one year

 

Loans and borrowings

21

257,129

200,000

Trade creditors

 

138,963

116,163

Social security and other taxes

 

235,963

158,614

Outstanding defined contribution pension costs

 

11,630

9,695

Other creditors

 

512,842

717,253

Accrued expenses

 

104,431

153,853

Corporation tax liability

 

166,011

169,666

 

1,426,969

1,525,244

Due after one year

 

Loans and borrowings

21

2,426,733

3,126,733

17

Provisions for liabilities

Deferred tax
£

Total
£

At 1 February 2022

177,855

177,855

At 31 January 2023

177,855

177,855

18

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £56,388 (2022 - £43,459).

Contributions totalling £11,630 (2022 - £9,695) were payable to the scheme at the end of the year and are included in creditors.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

19

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary A shares of £1 each

18,000

18,000

18,000

18,000

Ordinary B shares of £1 each

162,000

162,000

162,000

162,000

Preference shares of £1 each

2,632,629

2,632,629

2,632,629

2,632,629

 

2,812,629

2,812,629

2,812,629

2,812,629

Rights, preferences and restrictions

Ordinary A shares have the following rights, preferences and restrictions:
The ordinary A shares have full voting rights and rights to dividends at the discretion of the directors.

Ordinary B shares have the following rights, preferences and restrictions:
The ordinary B shares have full voting rights and rights to dividends at the discretion of the directors.

Preference shares have the following rights, preferences and restrictions:
The preference shares are non redeemable and non voting shares but have full rights to dividends at the discretion of the directors.

20

Reserves

Profit and loss account

This reserve represents accumulated profits net of any distributions made to shareholders.

Revaluation reserve

This has arisen from previous revaluations as permitted under previous accounting standards.

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

21

Loans and borrowings

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

2,326,733

3,026,733

Other borrowings

100,000

100,000

2,426,733

3,126,733

2023
£

2022
£

Current loans and borrowings

Bank borrowings

200,000

200,000

Other borrowings

57,129

-

257,129

200,000

Bank borrowings

Bank loans are denominated in GBP with a nominal interest rate of 2.83% over the base rate, and the final instalment is due on 31 January 2025. The carrying amount at the year end is £2,526,733 (2022 - £3,226,733).

The bank has a first priority legal charge over each of the existing properties that the company holds and a fixed and floating charge over the present and future assets of the company.

Other borrowings

Other borrowings are denominated in GBP with a nominal interest rate of 3% above bank base rate, and the final instalment is due on 1 August 2024. The carrying amount at the year end is £157,129 (2022 - £100,000).

22

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

3,030

8,009

Later than one year and not later than five years

2,995

7,986

6,025

15,995

The amount of non-cancellable operating lease payments recognised as an expense during the year was £7,370 (2022 - £8,156).

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

23

Dividends

Interim dividends paid

   

2023
£

 

2022
£

Interim dividend of £2.60 (2022 - £5.21) per each Ordinary A shares

 

46,861

 

93,722

Interim dividend of £Nil per each Ordinary B shares

 

-

 

-

   

46,861

 

93,722

24

Related party transactions

Transactions with directors

2023

At 1 February 2022
£

At 31 January 2023
£

R J Styles

Overdrawn loan account

39,259

39,259

     

T R Styles

Overdrawn loan account

51,637

51,637

     

N A Gray

Overdrawn loan account

13,418

13,418

     

2022

At 1 February 2021
£

Repayments by director
£

At 31 January 2022
£

R J Styles

Overdrawn loan account

39,259

-

39,259

       
     

T R Styles

Overdrawn loan account

150,345

(98,708)

51,637

       
     

N A Gray

Overdrawn loan account

91,396

(77,978)

13,418

       
     

 

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Summary of transactions with other related parties

A pension scheme of which the directors of the company are also trustees
 

Expenditure with and payables to related parties

2023

Key management
£

Dividends

46,861

2022

Key management
£

Dividends

93,722

Loans to related parties

2023

Key management
£

Total
£

At start of period

104,314

104,314

At end of period

104,314

104,314

2022

Key management
£

Total
£

At start of period

281,000

281,000

Repaid

(176,686)

(176,686)

At end of period

104,314

104,314

Terms of loans to related parties

The loans from key management personnel are interest free and repayable on demand.
 

Loans from related parties

2023

Other related parties
£

Total
£

At start of period

233,851

233,851

Advanced

57,129

57,129

At end of period

290,980

290,980

2022

Other related parties
£

Total
£

At start of period

233,851

233,851

At end of period

233,851

233,851

 

Latona Leisure Limited

Notes to the Financial Statements for the Year Ended 31 January 2023

Terms of loans from related parties

During the year, the company pension scheme provided the company with two loans. Interest at a rate of 3% above base was charged upon these loans.

25

Financial instruments

Categorisation of financial instruments

2023
 £

2022
 £

Financial assets that are debt instuments measured at amortised cost

187,355

193,397

Financial liabilities measured at amortised cost

2,822,825

3,442,896

26

Analysis of changes in net debt

At 1 February 2022
£

Financing cash flows
£

At 31 January 2023
£

Cash and cash equivalents

Cash

990,673

(135,207)

855,466

Borrowings

Long term borrowings

(3,126,733)

700,000

(2,426,733)

Short term borrowings

(200,000)

(57,129)

(257,129)

(3,326,733)

642,871

(2,683,862)

 

(2,336,060)

507,664

(1,828,396)