Company Registration No. 13574220 (England and Wales)
CD WELCOMBE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
PAGES FOR FILING WITH REGISTRAR
LB GROUP
1 Vicarage Lane
Stratford
London
E15 4HF
CD WELCOMBE LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 9
CD WELCOMBE LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 1 -
30 September 2023
31 December 2022
as restated
Notes
£'000
£'000
£'000
£'000
Fixed assets
Investments
4
13,016
13,016
Current assets
Debtors falling due after more than one year
6
4,062
2,562
Creditors: amounts falling due within one year
7
(666)
(324)
Net current assets
3,396
2,238
Total assets less current liabilities
16,412
15,254
Creditors: amounts falling due after more than one year
8
(16,910)
(15,487)
Net liabilities
(498)
(233)
Capital and reserves
Called up share capital
10
Profit and loss reserves
(498)
(233)
Total equity
(498)
(233)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 August 2024 and are signed on its behalf by:
V Nazarov
H A Forusz
Director
Director
Company Registration No. 13574220
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 2 -
1
Accounting policies
Company information
CD Welcombe Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2nd Floor, 32-33 Gosfield Street, London, W1W 6HL.
1.1
Reporting period
The financial statements for the current period have been prepared for a period of 9 months. 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. The principal accounting policies adopted are set out below.
This 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:
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.
The financial statements of the company are consolidated in the financial statements of CD Welcombe Topco Limited.
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company 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.true
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 trading entities 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 for the group is one of a loss making position, albeit a significant improvement from the previous year and management are actively seeking to continue to improve results subsequent to the year end and beyond.
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.
Despite this period of growth and stability in the trading capacity of the hotel, the group is at this current time anticipated to be in a cash flow deficit position in the period to 31 December 2025, however is actively seeking to restructure its finance further releasing funds for the group.
Management are in the process of securing finance releasing funds for the group, however at this current time, the financing facility has not been signed.
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, improved underlying performance of the business year on year and asset value, and anticipated restructure of its finance arrangements to further release funds for the group the directors are confident that the company is a going concern for 12 months from the date of the signing of the balance sheet.
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. 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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.5
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.
1.6
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
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 company 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.
1.7
Equity instruments
Equity instruments issued by the company 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 company.
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 5 -
1.8
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.
1.9
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and 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 of the revision and future periods where the revision affects both current and future periods.
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
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
2022
Number
Number
2
2
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 6 -
4
Fixed asset investments
2023
2022
Notes
£'000
£'000
Investments in subsidiaries
5
674
674
Loans to subsidiaries
5
12,342
12,342
13,016
13,016
5
Subsidiaries
Details of the company's subsidiaries at 30 September 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
CD Welcombe Propco Limited
UK
Ordinary
100.00
-
CD Welcombe Opco Limited
UK
Ordinary
-
100.00
In the period, S. The Welcombe Stratford Upon Avon Opco Limited was dissolved. The entity was dormant prior to dissolution.
6
Debtors
2023
2022
as restated
Amounts falling due after more than one year:
£'000
£'000
Amounts owed by group undertakings
4,062
2,562
Debtors includes interest receivable from CD Welcombe Propco Limited of £4,062,000 (2022: £2,562,000) and amount receivable towards share capital from the parent company, CD Welcombe Holdco Limited, of £1.
7
Creditors: amounts falling due within one year
2023
2022
as restated
Notes
£'000
£'000
Bank loans
9
666
324
Creditors includes interest on loan payable to Octopus Real Estate Advisors UK Limited of £666,000 (2022: £324,000).
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 7 -
8
Creditors: amounts falling due after more than one year
2023
2022
as restated
Notes
£'000
£'000
Bank loans and overdrafts
9
8,578
8,578
Loans from group undertakings
9
8,332
6,909
16,910
15,487
The long term debt relates to £8,332,000 (2022: £6,909,000) loan from parent company CD Welcombe Holdco Limited repayable in full on 3 November 2026 and £8,579,000 (2022: £8,578,000) loan from Octopus Real Estate Advisors UK Limited was originally repayable in full on 3 May 2022, all parties have agreed to extend this date. Group undertakings Interest payable is agreed at 14.5% per annum from 1 January 2023 to 30 September 2023 (2022: 12.5%) accruing daily. These rates are considered appropriate in accordance with the arms length principle of the OECD guidelines.
9
Loans and overdrafts
2023
2022
£'000
£'000
Bank loans
9,244
8,902
Loans from group undertakings
8,332
6,909
17,576
15,811
Payable within one year
666
324
Payable after one year
16,910
15,487
10
Share capital
2023
2022
2023
2022
Ordinary shares of £'0001 each
1
1
-
-
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
11
Audit report information
(Continued)
- 8 -
Material uncertainty related to going concern
We draw attention to Note 1.3 in the financial statements, which indicates subsequent to the year end the company 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 1.3, these events or conditions, along with other matters as set forth in Note 1.3, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our audit opinion 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Senior Statutory Auditor:
Richard Lane
Statutory Auditor:
LB Group Limited (Stratford)
12
Financial commitments, guarantees and contingent liabilities
The long term debt of £8,332,000 (2022: £6,909,000) relates to a loan from parent company CD Welcombe Holdco Limited, repayable in full on 3 November 2026. Interest payable is agreed at 14.5% per annum from 1 January 2023 to 30 September 2023 (2022: 14.5%) accruing daily. This rate is considered appropriate in accordance with the arms length principle of the OECD guidelines.
The company has a 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 company. The charge contains negative pledges, fixed charge and floating charges covering this company and all group company property and undertakings.
13
Related party transactions
Balances with related parties
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£'000
£'000
£'000
£'000
CD Welcombe Holdco Limited
8,332
6,909
CD Welcombe Opco Limited
981
819
CD Welcombe Propco Limited
15,423
14,084
CD WELCOMBE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- 9 -
14
Ultimate controlling party
The parent company of CD Welcombe Limited is CD Welcombe Holdco Limited.
The ultimate parent company in the UK is CD Welcombe Topco Limited, which is consolidated itself.
The ultimate parent company is Conquer Dawn Limited with a registered office address at, 2nd Floor, Palmerston House, Denzille Lane, Dublin, Ireland.
There are no ultimate controlling parties.
15
Prior period adjustment
The financial statements for the previous period have been restated to reflect the borrower and lender arrangements with respects to intercompany interest. As such, the agreements reflect that all intercompany interest due payable and repayable are to be added to principal loan amounts both due and receivable over one year. The restatement does not impact the profit and loss or reserves of the Company.