Registered number: 13159367
EASTLANDS ARENA LIMITED
ANNUAL REPORT
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 30 JUNE 2023
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EASTLANDS ARENA LIMITED
REGISTERED NUMBER:13159367
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BALANCE SHEET
AS AT 30 JUNE 2023
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Debtors: amounts falling due within one year
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Creditors: Amounts Falling Due Within One Year
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Net current assets/(liabilities)
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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EASTLANDS ARENA LIMITED
REGISTERED NUMBER:13159367
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BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2023
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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F Leiweke-Bodie
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The notes on pages 3 to 12 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Eastlands Arena Limited is a private company, limited by shares and is registered in England and Wales. The company's registered number is 13159367 and the registered office address is 55 New Bond Street, London, W1S 1DG.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
As the company is in the construction phase of building an arena, the directors’ have considered any assessment of going concern will be dependent on having the ability to complete this construction.
To ensure the company has sufficient funding, the directors have prepared detailed budgets and cashflow projections to cover the remaining construction and fit out, and a forecast business plan for once it is operational.
In addition to the pre-existing liquidity drawdown facility, the directors have obtained a commitment from its joint venture partners post year end to provide additional liquidity should further cash be required to cover the funding requirements of the company during its construction phase.
Even in a reasonable downside scenario, the cashflow projections show the company having sufficient available funds to complete the arena's development and to meet its obligations as they fall due for a period of at least 12 months from the approval of the financial statements. Consequently, the directors have prepared the financial statements on a going concern basis.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Turnover is recognised when the significant risk and rewards are considered to have been transferred to the customer. Event related turnover is recognised on the day on which an event takes place. Royalties and sponsorship are recognised on the right to consideration basis.
Where payments are received from customers in advance of the service provided, the amounts are recorded as deferred income and recognised as income over the respective terms of the agreements. Turnover on contracts exceeding one year is recognised on a straight line basis over the term of the contract.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Interest income is recognised in profit or loss using the effective interest method.
Borrowing costs are capitalised as part of the qualifying asset at the date the borrowing occurs.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Assets under construction
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Assets under construction are recorded within fixed assets and are not depreciated as these assets are not available for use in the business. Upon completion the assets recorded within the appropriate fixed asset category are depreciated over the estimated useful economic lives.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Restricted cash is cash that belongs to a company with restricted use. Restricted cash is not available for use by the company due to legal restrictions.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
The company recognises proceeds received, net of direct costs, as an equity instrument where repayment is at the sole discretion of the company.
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The average monthly number of employees during the year was 22 (2022 - 14).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Assets under construction
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Charge for the year on owned assets
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Included under Assets under construction are capitalised interest costs totaling £15.2m (2022: £3.7m).
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Amounts owed by group undertakings
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Prepayments and accrued income
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Cash and cash equivalents
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Non current restricted cash
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At the balance sheet date funds of £20m (2022: £20m) were held in a dedicated account as security for the payment of sums becoming due in respect to the asset under construction.
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Amounts owed to group undertakings are repayable on demand.
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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The company has agreed a loan facility of £275m, of which it has drawn £250m at the balance sheet date (2022: £129m). The loans include £204.5m (2022: £105.4m) at an interest rate of 4% (2022: 4%), repayable by 20 October 2048 and £45.5m (2022: £23.6m) at an interest rate of 3.25% (2022: 3.25%) plus adjusted daily simple SONIA repayable by 20 October 2026. These loans of £250m are secured against the assets of the company.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Analysis of the maturity of loans is given below:
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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Amounts owed to group undertakings
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Allotted, called up and fully paid
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200 (2022 - 100) Ordinary shares of £0.01 each
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During the year 100 ordinary shares each of a nominal value of £0.01 were issued for a total cash consideration of £7,851,546.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Share premium account
The share premium account is used to record the aggregate amount or value of premiums paid when the company’s shares are issued at an amount in excess of nominal value. The reserve represents the accumulation of all such premiums, less any amount directly charged to the reserve and less any permitted transfers from the reserve.
Other reserves
The movement in other reserves represents capital contributions from the company's parent undertaking.
Retained earnings
Retained earnings relate to the loss in the current period
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At 30 June 2023 the Company had capital commitments as follows:
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Construction costs contracted for but not provided in these financial statements
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The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £44,685 (2022: Nil). Contributions totalling £17,783 (2022 - £Nil) were payable to the fund at the reporting date are included within accruals and deferred income.
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Related party transactions
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OVG Manchester Limited and City Football Group Limited are related parties by virtue of their shareholdings of Eastlands Arena Holdings Limited (“EAHL”), this company’s parent. These companies are considered to be the joint venture partners.
During the year OVG Manchester Limited and City Football Group Limited charged the company £1.5m (2022: £2.6m) for management services of which at the balance sheet date, there were no outstanding liabilities in respect to these transactions (2022: £nil).
The company is claiming an exemption confirmed in paragraph 33.1A of FRS 102, Related Party Disclosures, not to disclose transactions with wholly owned member companies of the group.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
The immediate and ultimate parent company is Eastlands Arena Holdings Limited, a company registered in the United Kingdom.
The auditor's report on the financial statements for the year ended 30 June 2023 was unqualified.
The audit report was signed on 20 October 2023 by Peter Key (Senior Statutory Auditor) on behalf of CLA Evelyn Partners Limited.
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