Company registration number 13628728 (England and Wales)
CD WELCOMBE TOPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
LB GROUP
1 Vicarage Lane
Straford
London
England
E15 4HF
CD WELCOMBE TOPCO LIMITED
COMPANY INFORMATION
Directors
V Nazarov
H A Forusz
Company number
13628728
Registered office
2nd Floor
32-33 Gosfield Street
London
W1W 6HL
Auditor
LB Group Limited (Stratford)
1 Vicarage Lane
Stratford
London
England
E15 4HF
CD WELCOMBE TOPCO LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Group profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 34
CD WELCOMBE TOPCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
Objective
From the point of creation in the period the group’s long term objective is to become an established provider of hotel and hospitality and to deliver growth to the shareholders.
The group continue to pursue all financial means under management to reach this objective.
Key business strategy
In pursuit of the of this objective the Directors will seek to:
Grow relevant relationships with lenders, customers and other stakeholders,
Continue to invest in its infrastructure in Welcombe to create an increased occupancy and better level of provision of hospitality
Operate hotels with the best brands in the right locations
Invest in key personnel and management as required
The group operates in a tough market during a cost of living crisis and post COVID recovery. The strategy of the group is continually evolving to suit the change aspects of the business in order to meet its objectives.
Principal risks and uncertainties
The key risk areas are:
The directors consider there to be an appropriate structure in place to plan for and mitigate risks.
The group operates in a competitive market. The risks associated with this are mitigated by ensuring the group offers a high quality service across all areas of the business in line with the expectations of the widely recognized brand name and by targeting business customers as well as the tourism sector.
The group 's financial instruments comprise cash at bank, borrowings, financial derivatives, trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group 's operations to maintain cash liquidity buffer to mitigate this risk.
Customer pricing is under constant review. Excellent customer service and investment of capital expenditures, as well as strong client relationships are used to mitigate this risk.
Future outlook
The group continues to seek further hotel and investment opportunities and is focused on growing the core management team within the organisation. As a result of this the directors believe that the rebounding strength of the UK economy, underlined by the strong locations of the hotel sites within the group will allow for a positive future prospect.
CD WELCOMBE TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators
The group uses a number of financial measures to monitor progress against strategies and corporate objectives. These are summarised as follows
2022 2021
£'000 £'000
Turnover 4,321 439
Gross Profit 3,492 389
Loss before tax (2,972) (610)
Property asset value 13,204 13,204
Gearing (422%) (2,356%)
EBITDA (1,458) (381)
Please note that the period to 2021 was a short period of 27 days, hence the figures not being directly comparable.
In addition to financial measures the Directors continue to monitor all other operation business KPI’s including occupancy, health and safety, environmental and other operational KPI’s relevant to the sector.
The performance in the period of the group is not an indicator of future performance.
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters in their decision making. The directors continue to have regard to the interests of the Company’s employees and other stakeholders, the impact of its activities on the community, the environment and the Company’s reputation for good business conduct, when making decisions. In this context, acting in good faith and fairly, the Directors consider what is most likely to promote the success of the Company for its shareholder in the long term. We believe in a strong set of ethical values, which we believe is reflected in how we interact with our stakeholders. We summarise below how the Directors and management engages with the various stakeholders:
Employees
The Company seeks to ensure that all employees, job applications and prospective job applicants, are afforded equality of job opportunity in all areas of employment.
The Company fully recognises the Groups responsibility for the health and safety of employees and members of the community in which they work.
The Company places considerable value on the involvement of its employees and has continued its practice of keeping them informed of matters affecting them as employees, and on various matters affecting the performance of the Company.
Environmental policy
Climate change and resource scarcity are amongst society’s greatest challenges. The Company is committed to
adopting a responsible approach to minimising our operational impact.
Customer engagement
We value our customers, both corporate and individual, and closely monitor our guest feedback and quality matrix.
Key decisions in the year
The Directors key decision was to establish the group in the period and grow accordingly in the period including the
relevant establishment of management and controls. This includes the refinance of relevant loans within the group.
CD WELCOMBE TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
V Nazarov
H A Forusz
Director
Director
26 March 2024
CD WELCOMBE TOPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company is a holding company and the group is of the management, owning and operating of a hotel.
Results and dividends
The results for the year are set out on page 10.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
V Nazarov
H A Forusz
Auditor
LB Group Limited (Stratford) were re-appointed as auditor to the group and parent company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
On behalf of the board
V Nazarov
H A Forusz
Director
Director
26 March 2024
CD WELCOMBE TOPCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
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 group and company, and of the profit or loss of the group 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CD WELCOMBE TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CD WELCOMBE TOPCO LIMITED
- 6 -
We were engaged to audit the financial statements of CD Welcombe Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group profit and loss account, the statement of financial position, the statement of changes in equity and notes to the financial statements, including 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, except for the possible effects of the matter described in the basis for qualified opinion section of our audit report, the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss 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 qualified opinion
The financial statements for the period to 31 December 2021 included a disclaimer of opinion. On this basis, we have been unable to rely on the opening balance position for the period to 31 December 2022. In addition to the above matter, we have also identified exceptional items in the period to 31 December 2022 referred in Note 4 of these statutory accounts where management are unable to provide sufficient evidence to support this item.
We conducted our audit in accordance with International Standards on Auditing (UKI) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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 qualified opinion.
Except for the matter described in the Material uncertainty related to going concern section, we have determined that there are no other key audit matters to be communicated in our report.
Material uncertainty related to going concern
We draw attention to Note 1.5 in the financial statements, which indicates that subsequent to the year end, the group is seeking to restructure its finance further, releasing funds for the group. The funding for the group is not legally contracted for the next 12 months and is subject to either refinance, new finance, or extension of existing funding relationship. As stated in Note 1.5, these events or conditions, along with other matters as set forth in Note 1.5, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our audit report is not modified, and our audit opinion is not qualified, in respect of this matter.
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the reparation of the financial statements in appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
CD WELCOMBE TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CD WELCOMBE TOPCO LIMITED
- 7 -
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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
Notwithstanding our disclaimer of an opinion on the financial statements, in our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
Except for the matter described in the basis of qualified opinion diction of our report, in the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the director's report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
CD WELCOMBE TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CD WELCOMBE TOPCO LIMITED
- 8 -
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including, but not limited to, fraud and non-compliance with laws and regulations was as follows:
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006,axation legislation;
To address the risk of fraud through management bias and override of controls, we:
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
CD WELCOMBE TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CD WELCOMBE TOPCO LIMITED
- 9 -
Richard Lane (Senior Statutory Auditor)
For and on behalf of LB Group Limited (Stratford)
27 March 2024
Chartered Accountants
Statutory Auditor
CD WELCOMBE TOPCO LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Year
Period
ended
ended
31 December
31 December
2022
2021
Notes
£'000
£'000
Turnover
3
4,321
439
Cost of sales
(829)
(50)
Gross profit
3,492
389
Administrative expenses
(4,861)
(782)
Exceptional item
(183)
-
Operating loss
5
(1,552)
(393)
Interest payable and similar expenses
8
(1,420)
(217)
Loss before taxation
(2,972)
(610)
Tax on loss
9
Loss for the financial year
22
(2,972)
(610)
Loss for the financial year is all attributable to the owners of the parent company.
CD WELCOMBE TOPCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Year
Period
ended
ended
31 December
31 December
2022
2021
£'000
£'000
Loss for the year
(2,972)
(610)
Other comprehensive income
-
-
Total comprehensive income for the year
(2,972)
(610)
Total comprehensive income for the year is all attributable to the owners of the parent company.
CD WELCOMBE TOPCO LIMITED
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 12 -
2022
2021
Notes
£'000
£'000
£'000
£'000
Fixed assets
Goodwill
10
123
716
Other intangible assets
10
7
-
Total intangible assets
130
716
Tangible assets
11
201
18
Investment property
12
13,204
13,204
13,535
13,938
Current assets
Stocks
15
43
61
Debtors
16
319
968
Cash at bank and in hand
206
49
568
1,078
Creditors: amounts falling due within one year
17
(2,890)
(1,425)
Net current liabilities
(2,322)
(347)
Total assets less current liabilities
11,213
13,591
Creditors: amounts falling due after more than one year
18
(14,795)
(14,201)
Net liabilities
(3,582)
(610)
Capital and reserves
Called up share capital
21
Profit and loss reserves
22
(3,582)
(610)
Total equity
(3,582)
(610)
The financial statements were approved by the board of directors and authorised for issue on 26 March 2024 and are signed on its behalf by:
26 March 2024
V Nazarov
H A Forusz
Director
Director
Company registration number 13628728 (England and Wales)
CD WELCOMBE TOPCO LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 13 -
2022
2021
Notes
£'000
£'000
£'000
£'000
Fixed assets
Investments
13
4,017
3,550
Current assets
Debtors
16
462
48
Creditors: amounts falling due within one year
17
(462)
(48)
Net current assets
-
-
Total assets less current liabilities
4,017
3,550
Creditors: amounts falling due after more than one year
18
(4,017)
(3,550)
Net assets
Called up share capital
21
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £Nil.
The financial statements were approved by the board of directors and authorised for issue on 26 March 2024 and are signed on its behalf by:
26 March 2024
V Nazarov
H A Forusz
Director
Director
Company registration number 13628728 (England and Wales)
CD WELCOMBE TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
Share capital
Profit and loss reserves
Total
£'000
£'000
£'000
For the period ended 31 December 2021:
Balance at 17 September 2021
-
Period ended 31 December 2021:
Loss and total comprehensive income
-
(610)
(610)
Balance at 31 December 2021
(610)
(610)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(2,972)
(2,972)
Balance at 31 December 2022
(3,582)
(3,582)
CD WELCOMBE TOPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
Share capital
£'000
Balance at 17 September 2021
Period ended 31 December 2021:
Profit and total comprehensive income for the period
-
Balance at 31 December 2021
Year ended 31 December 2022:
Profit and total comprehensive income
-
Balance at 31 December 2022
CD WELCOMBE TOPCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
2022
2021
Notes
£'000
£'000
£'000
£'000
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
1,071
(153)
Interest paid
(1,420)
-
Net cash outflow from operating activities
(349)
(153)
Investing activities
Purchase of intangible assets
(7)
-
Purchase of tangible fixed assets
(235)
(18)
Purchase of subsidiaries, net of cash acquired
-
(13,980)
Net cash used in investing activities
(242)
(13,998)
Financing activities
Proceeds from borrowings
467
3,550
Proceeds from new bank loans
281
10,650
Net cash generated from financing activities
748
14,200
Net increase in cash and cash equivalents
157
49
Cash and cash equivalents at beginning of year
49
Cash and cash equivalents at end of year
206
49
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
1
Accounting policies
Company information
CD Welcombe Topco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 2nd Floor, 32-33 Gosfield Street, Fitzrova, London, United Kingdom, W1W 6HL.
The group consists of CD Welcombe Topco Limited and all of its subsidiaries.
1.1
Reporting period
The financial statements for the prior period were prepared for an accounting period not equal to 12 months, due to it being the first set of financial statements prepared by the group. For this reason, the comparative amounts presented in the financial statements (including the related notes) will not be entirely comparable.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investment properties. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:true
• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
1.3
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.4
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company CD Welcombe Topco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.5
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the parent company and Group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors foresee the going concern of the business for 12 months from the approval of the financial statements based on the ongoing strong performance of the underlying trade of the group, alongside the value of the properties that support the trading structure of the group. With the ongoing support of external lenders in order to support the financial base of the business and fund any required capital work the directors are confident that the strength of the tangible and trading assets are to only improve in the foreseeable future. This will ensure that the group of entities and this company will be able to meet and manage relevant financial and non-financial commitments for the foreseeable future.
The directors are aware that the period in which has been reported includes COVID-19. This resulted in a fall in the profitability and income generated was as a result of the global conditions paramount at that time. Subsequent to this period the directors have overseen a period of growth and stability in the trading capacity of the hotel that has allowed it to continue funding the financial requirements and day to day working capital of the business. To this extent, the directors have comfort and support that they can obtain funds as required in order to precipitate any future and ongoing cashflow issues that may arise in the business.
This further support and growth in the business post year end includes a refinancing of debt of £2.2 million in CD Welcombe Holdco Limited, a subsidiary of the ultimate parent company, and continued financial support from the ultimate parent company in the period by way of long-term debts. This input of working capital has allowed the group of companies to continue to service debt where due and grow the business. This is further supported by the seeking to obtain 3rd party finding in order to develop and grow the business and the hotel infrastructure in he coming years as part of its investment programme.
The directors are aware of external factors and change in economic environments that will have an impact on the business and its related entities. To this extent they are actively working alongside relevant industry specialists, and external partners, such as HM Revenue & Customs in order to overcome and resolve these issues as they arise.
As such, due to the ongoing support of the main lenders of the group entities, the financial and continued support of the shareholders and directors of the business, and underlying performance of the business and asset value, the directors are confident that the company is a going concern for 12 months from the date of the signing of the balance sheet.
1.6
Turnover
Group
Turnover represents amounts receivable in respect of the provision of hotel accommodation, conference facilities, food, beverages and golf income during the year, excluding VAT. Income for accommodation is recognised on a daily basis of the customers use of the hotel. Income related to Conference Facilities is recognised on the date the facility is used. Food and Beverage income is recognised at the point of sale to the customer. Income related to golf sales is recognised on a daily basis of the customers use of the golf course. Income related to the health club is recognised on the date the customer uses the facility.
Company
The company has no Turnover. Income relates to interest charged to subsidiary undertakings, and is accrued daily.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
1.7
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.8
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
5 years straight line
1.9
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
4 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.10
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.11
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.12
Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 22 -
1.13
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost 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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.14
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.15
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 23 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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 group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 24 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.16
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.17
Employee benefits
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 cost of stock or 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.
1.18
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.19
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’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 of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Group
Property valuation
Tangible fixed assets includes properties which are held at fair value. These fair values were determined by independent valuation on 31 August 2021. Details of this valuation have been included in note 11. It is the director's judgement that there are no material alterations to the carrying value since this date to the date of the financial statements.
Goodwill
The entity has capitalised goodwill on the acquisition of the subsidiary companies and assigned a useful economic life of 10 years. This is considered an appropriate estimate based on the expected life of the asset. There are also no signs of impairment of this goodwill at the year end.
Company
Impairment of loans and investments in subsidiaries
There is a continual and ongoing assessment and review of recoverability of debts due to and or from related entities. Assessment of this is taken by the underlying operating entities ability to help service the relevant debts as part of the financing arrangement of the group.
3
Turnover
2022
2021
£'000
£'000
Turnover analysed by class of business
Hotel and related activity
4,321
439
2022
2021
£'000
£'000
Turnover analysed by geographical market
United Kingdom
4,321
439
4
Exceptional item
2022
2021
£'000
£'000
Expenditure
Exceptional item
(183)
-
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
4
Exceptional item
(Continued)
- 26 -
Exceptional items in the current year relates to an unknown net expense to the profit and loss in the period to 31 December 2022.
5
Operating loss
2022
2021
£'000
£'000
Operating loss for the year is stated after charging:
Depreciation of owned tangible fixed assets
52
-
Amortisation of intangible assets
42
12
6
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the group and company
5
2
Audit of the financial statements of the company's subsidiaries
34
23
39
25
For other services
All other non-audit services
10
10
7
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
71
59
2
2
Their aggregate remuneration comprised:
Group
Company
2022
2021
2022
2021
£'000
£'000
£'000
£'000
Wages and salaries
2,423
153
Social security costs
113
9
-
-
Pension costs
17
2
2,553
164
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
8
Interest payable and similar expenses
2022
2021
£'000
£'000
Interest on bank overdrafts and loans
1,006
170
Interest payable to group undertakings
414
47
Total finance costs
1,420
217
9
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£'000
£'000
Loss before taxation
(2,972)
(610)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(565)
(116)
Unutilised tax losses carried forward
565
116
Taxation charge
-
-
10
Intangible fixed assets
Group
Goodwill
Software
Total
£'000
£'000
£'000
Cost
At 1 January 2022
728
728
Additions
7
7
Adjustments
(551)
(551)
At 31 December 2022
177
7
184
Amortisation and impairment
At 1 January 2022
12
12
Amortisation charged for the year
42
42
At 31 December 2022
54
54
Carrying amount
At 31 December 2022
123
7
130
At 31 December 2021
716
716
The company had no intangible fixed assets at 31 December 2022 or 31 December 2021.
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Intangible fixed assets
(Continued)
- 28 -
Goodwill arose within CD Welcombe Limited upon the formation of the group and the acquisition of CD Welcombe Propco Limited on the 3 November 2021.
The adjustment to goodwill relates to a reduction in the purchase price utilised at the date on acquisition.
11
Tangible fixed assets
Group
Leasehold improvements
£'000
Cost
At 1 January 2022
18
Additions
235
At 31 December 2022
253
Depreciation and impairment
At 1 January 2022
Depreciation charged in the year
52
At 31 December 2022
52
Carrying amount
At 31 December 2022
201
At 31 December 2021
18
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.
12
Investment property
Group
Company
£'000
£'000
Fair value
At 31 December 2021 & 31 December 2022
13,204
-
Investment property comprises a hotel that is owned and rented within the group. The fair value of the investment property has been arrived at on the basis of a valuation carried out at 31 August 2021 by Cushman & Wakefield, Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£'000
£'000
£'000
£'000
Loans to subsidiaries
14
4,017
3,550
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Fixed asset investments
(Continued)
- 29 -
Movements in fixed asset investments
Company
Loans to subsidiaries
£'000
Cost or valuation
At 1 January 2022
3,550
Additions
467
At 31 December 2022
4,017
Carrying amount
At 31 December 2022
4,017
At 31 December 2021
3,550
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
CD Welcombe Holdco Limited
UK
Ordinary
100.00
-
CD Welcombe Limited
UK
Ordinary
-
100.00
CD Welcombe Propco Limited (Formerly: Hallmark Hotels (Stratford) Limited)
UK
Ordinary
-
100.00
CD Welcombe Opco Limited
UK
Ordinary
-
100.00
S. The Welcombe Stratford Upon Avon Opco Limited
Jersey
Ordinary
-
100.00
S. The Welcombe Stratford Upon Avon Opco Limited was dissolved on 23 July 2023.
15
Stocks
Group
Company
2022
2021
2022
2021
£'000
£'000
£'000
£'000
Goods held for resale
43
61
-
-
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
16
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£'000
£'000
£'000
£'000
Trade debtors
82
398
Amounts owed by group undertakings
-
-
462
48
Other debtors
-
507
Prepayments and accrued income
237
63
319
968
462
48
Amounts owed by group undertakings are interest free and repayable on demand.
17
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£'000
£'000
£'000
£'000
Bank loans
19
324
170
Trade creditors
1,262
496
Amounts owed to parent undertaking
462
48
462
48
Other taxation and social security
393
58
-
-
Deferred income
27
Other creditors
183
129
Accruals and deferred income
239
524
2,890
1,425
462
48
Amounts owed to parent undertaking are interest free and repayable on demand.
18
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£'000
£'000
£'000
£'000
Bank loans and overdrafts
19
10,778
10,651
Other borrowings
19
4,017
3,550
4,017
3,550
14,795
14,201
4,017
3,550
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
18
Creditors: amounts falling due after more than one year
(Continued)
- 31 -
Company
The long term debt relates to £4.02 million (2021: £3.55 million) loan from parent company Conquer Dawn Limited repayable in full on 3 November 2026. Interest payable is agreed at 10% per annum accruing daily. This rate is considered appropriate in accordance with the arms length principle of the OECD guidelines.
Group
The bank loans and overdrafts contains a £2.2 million (2021: £2.2 million) term loan facility with Mar Hall Estates Limited, which was repaid in full on 12 May 2023. Interest payable was agreed at the percentage rate per annum which is the fixed rate at 6% per annum.
The bank loans and overdrafts figure also contains an £8.9 million (2021: £8.45 million) loan from Octopus Real Estate Advisers UK Limited was originally repayable in full on 3 May 2022. All parties have agreed to extend the repayment dates until the financing as shown in note 23 is complete. Interest payable is agreed at 10.8% per annum accruing daily.
19
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£'000
£'000
£'000
£'000
Bank loans
11,102
10,821
Loans from group undertakings
4,017
3,550
4,017
3,550
15,119
14,371
4,017
3,550
Payable within one year
324
170
Payable after one year
14,795
14,201
4,017
3,550
20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
17
2
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
21
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£'000
£'000
Ordinary shares of £1 each
1
1
-
-
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 32 -
22
Reserves
Profit and loss reserves
The profit and loss reserve includes all current and prior retained profits and losses.
23
Financial commitments, guarantees and contingent liabilities
Company
The long term debt of £4.02 million (2021: £3.55 million) relates to a loan from parent company Conquer Dawn Limited, repayable in full on 03 November 2026. Interest payable is agreed at 10% per annum accruing daily. This rate is considered appropriate in accordance with the arms length principle of the OECD guidelines.
Group
The group has fixed charges dated on 2 November 2021 with Octopus Real Estate Advisors UK Limited (as a Security Agent). This is in relation to a facility agreements entered by the group. The charge contains negative pledges, fixed charge and floating charges covering this company and all group company property and undertakings.
The group also has fixed charges dated 2 November 2021 with Mar Hall Estates Limited (as a Security Agent). This is in relation to a facility agreement entered by CD Welcombe Limited. The charge contains negative pledges, fixed charge and floating charges covering this company and all group company property and undertakings. On 12 May 2023, this debt was settled, and therefore the charges were satisfied.
24
Events after the reporting date
Within CD Welcombe Limited and CD Welcombe Holdco Limited respectively, it is the management's intention to refinance the debts held with Octopus Real Estate Advisors UK Limited and Mar Hall Estates Limited. Negotiations are ongoing at the point of these accounts being approved by the board.
As part of this, the loan with Mar Hall Estates Limited was settled on 12 May 2023
25
Related party transactions
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2022
2021
£'000
£'000
Group
Amounts owed to parent undertakings
4,479
3,598
Company
Amounts owed to parent undertakings
4,479
3,598
All group loan agreements are repayable on 3 November 2026 in full with an interest rate of 10% per annum accruing daily.
The following amounts were outstanding at the reporting end date:
Amounts due from related parties
2022
2021
£'000
£'000
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
25
Related party transactions
(Continued)
- 33 -
Company
Amounts owed by subsidiary undertakings
4,479
3,598
26
Controlling party
The parent company of CD Welcombe Topco Limited is Conquer Dawn Limited. The registered office is 2nd Floor, Palmerston House, Denzille Lane, Dublin, Ireland. The financial statements of the group are available from the registered office.
There are no ultimate controlling parties.
27
Cash generated from/(absorbed by) group operations
2022
2021
£'000
£'000
Loss for the year after tax
(2,972)
(610)
Adjustments for:
Finance costs
1,420
217
Amortisation and impairment of intangible assets
42
12
Loan adjustment
551
Depreciation and impairment of tangible fixed assets
52
-
Movements in working capital:
Decrease/(increase) in stocks
18
(61)
Decrease/(increase) in debtors
649
(968)
Increase in creditors
1,284
1,255
Increase in deferred income
27
-
Cash generated from/(absorbed by) operations
1,071
(155)
28
Analysis of changes in net debt - group
1 January 2022
Cash flows
31 December 2022
£'000
£'000
£'000
Cash at bank and in hand
49
157
206
Borrowings excluding overdrafts
(14,371)
(748)
(15,119)
(14,322)
(591)
(14,913)
CD WELCOMBE TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 34 -
29
Prior period adjustment
In the prior year accounts, a capital commitment was disclosed in respects to the future refurbishment, renovation and extension of the hotel. This was based on the director's current anticipation for the business. At 31 December 2021, and 31 December 2022 there is no signed commitment to undertake these capital works and as such, the note to capital commitments ahs been removed.
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