Trade Bond Limited |
Strategic Report |
|
Introduction |
Trading during the first quarter of the year was adversely affected, by the kitchen refurbishment. This affected our ability to offer a full food and liquor service, which affected revenues, and occupancy as well. However, the second half of the year traded better, although we did enter a period of replacing all the windows in the building. Disruption was minimal however, as replacements were fitted during working hours. |
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Business review |
The Directors consider the performance of the business this year to be satisfactory, in so far as the year was severely disrupted by ongoing refurbishment works, together with the cost challenges arising from the previous year’s utility price increases. We ended the year behind budget revenues - £360k – 11%. We did, however, initiate various cost saving measures, which led to a decline in hotel operating profit of only £72k to budget. |
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Principle risks and uncertainties |
The future shape and direction of the market remains uncertain during this period of rising inflation, and interest rates. However, the directors have sought to mitigate this risk by working closely with its professional advisors to ensure the business is well positioned in the domestic leisure market to benefit from the market recovery. During this year, we have fully refurbished the kitchen, and entered into a window replacement schedule. Whilst these capital items are non revenue generating, they serve to improve the client offering, and our ability to drive both rooms and wedding volumes in 2024, in addition to improving the fabric of the hotel. |
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Financial key performance indicators |
The hotel achieved an overall occupancy of 82.5% and an ADR of £84.10, which was on budget. Sales were back year on year by £68k, due to the closure of the kitchen on the early part of the year. |
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This report was approved by the board on 22 August 2024 and signed on its behalf. |
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|
H L Jaffer |
|
Director |
|
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’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 opinion. |
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Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
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Other information |
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. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
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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. |
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Matters on which we are required to report by exception |
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Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
The extent to which the audit was considered capable of detecting irregularities including fraud |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
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the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
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we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry. |
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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, taxation legislation, data protection, anti-money-laundering, employment, environmental and health and safety legislation; |
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we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management. |
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identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
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making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; |
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considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations |
To address the risk of fraud through management bias and override of controls, we: |
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performed analytical procedures to identify any unusual or unexpected relationships; |
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tested journal entries to identify unusual transactions; |
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assessed whether judgements and assumptions made in determining the accounting estimates set out in note 1 were indicative of potential bias; and |
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investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
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agreeing financial statement disclosures to underlying supporting documentation; |
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reading the minutes of meetings of those charged with governance; |
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enquiring of management as to actual and potential litigation and claims; and |
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reviewing correspondence with HMRC. |
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There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
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Trade Bond Limited |
Statement of Cash Flows |
for the year ended 31 December 2023 |
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Notes |
|
2023 |
|
2022 |
£ |
£ |
Operating activities |
(Loss)/profit for the financial year |
(271,359) |
|
67,592 |
|
Adjustments for: |
Interest payable |
184,362 |
|
67,595 |
Tax on (loss)/profit on ordinary activities |
- |
|
26,789 |
Depreciation |
178,576 |
|
138,107 |
Decrease in stocks |
6,437 |
|
2,755 |
Decrease in debtors |
6,808 |
|
131,810 |
Increase/(decrease) in creditors |
3,593,524 |
|
(10,268) |
|
|
|
3,698,348 |
|
424,380 |
|
Interest paid |
|
|
(184,362) |
|
(67,595) |
Corporation tax paid |
- |
|
(26,789) |
|
Cash generated by operating activities |
3,513,986 |
|
329,996 |
|
|
|
|
|
|
Investing activities |
Payments to acquire tangible fixed assets |
(864,256) |
|
(106,398) |
|
Cash used in investing activities |
(864,256) |
|
(106,398) |
|
|
|
|
|
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Financing activities |
Repayment of loans |
(2,675,029) |
|
228,741 |
|
Cash (used in)/generated by financing activities |
(2,675,029) |
|
228,741 |
|
|
|
|
|
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Net cash (used)/generated |
Cash generated by operating activities |
3,513,986 |
|
329,996 |
Cash used in investing activities |
(864,256) |
|
(106,398) |
Cash (used in)/generated by financing activities |
(2,675,029) |
|
228,741 |
|
Net cash (used)/generated |
(25,299) |
|
452,339 |
|
Cash and cash equivalents at 1 January |
29,629 |
|
(422,709) |
Cash and cash equivalents at 31 December |
4,330 |
|
29,630 |
|
|
|
|
|
|
Cash and cash equivalents comprise: |
Cash at bank |
6,676 |
|
29,630 |
Bank overdrafts |
10 |
|
(2,346) |
|
- |
|
|
|
4,330 |
|
29,630 |
|
|
|
|
|
|
|
|
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Analysis of turnover |
2023 |
|
2022 |
£ |
£ |
|
|
Sale of goods |
2,985,875 |
|
3,037,075 |
|
|
|
|
|
|
|
|
|
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By geographical market: |
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|
UK |
2,985,875 |
|
3,037,075 |
|
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|
|
|
|
|
|
|
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3 |
Operating profit |
2023 |
|
2022 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
178,576 |
|
138,107 |
|
Carrying amount of stock sold |
426,630 |
|
436,618 |
|
|
|
|
|
|
|
|
|
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4 |
Staff costs |
2023 |
|
2022 |
£ |
£ |
|
|
Wages and salaries |
219,353 |
|
196,728 |
|
Social security costs |
75,526 |
|
58,992 |
|
Other pension costs |
20,383 |
|
16,917 |
|
|
|
|
|
|
315,262 |
|
272,637 |
|
|
|
|
|
|
|
|
|
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Average number of employees during the year |
Number |
Number |
|
|
|
|
|
|
|
65 |
|
62 |
|
|
|
|
|
|
|
|
|
|
5 |
Interest payable |
2023 |
|
2022 |
£ |
£ |
|
|
Bank loans and overdrafts |
185,318 |
|
62,576 |
|
Other loans |
(956) |
|
5,019 |
|
|
|
|
|
|
184,362 |
|
67,595 |
|
|
|
|
|
|
|
|
|
|
6 |
Taxation |
2023 |
|
2022 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
- |
|
26,789 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
- |
|
26,789 |
|
|
|
|
|
|
|
|
|
|
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
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|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
(Loss)/profit on ordinary activities before tax |
(271,359) |
|
94,381 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
(51,558) |
|
17,932 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
51,558 |
|
8,857 |
|
|
Current tax charge for period |
- |
|
26,789 |
|
|
|
|
|
|
|
|
|
|
7 |
Tangible fixed assets |
|
|
Land and buildings |
|
Plant and machinery |
|
Fixtures, fittings, tools and equipment |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
£ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 January 2023 |
6,897,028 |
|
131,971 |
|
277,388 |
|
7,306,387 |
|
Additions |
466,351 |
|
173,156 |
|
224,749 |
|
864,256 |
|
At 31 December 2023 |
7,363,379 |
|
305,127 |
|
502,137 |
|
8,170,643 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 January 2023 |
522,311 |
|
28,476 |
|
93,039 |
|
643,826 |
|
Charge for the year |
109,257 |
|
26,165 |
|
43,154 |
|
178,576 |
|
At 31 December 2023 |
631,568 |
|
54,641 |
|
136,193 |
|
822,402 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 December 2023 |
6,731,811 |
|
250,486 |
|
365,944 |
|
7,348,241 |
|
At 31 December 2022 |
6,374,717 |
|
103,495 |
|
184,349 |
|
6,662,561 |
|
|
|
|
|
|
|
|
|
|
8 |
Stocks |
2023 |
|
2022 |
£ |
£ |
|
|
Finished goods and goods for resale |
25,697 |
|
32,134 |
|
|
|
|
|
|
|
|
|
|
9 |
Debtors |
2023 |
|
2022 |
£ |
£ |
|
|
Trade debtors |
43,614 |
|
36,335 |
|
Amounts owed by group undertakings and undertakings in which the company has a participating interest |
|
5,578 |
|
- |
|
Other debtors |
44,462 |
|
18,267 |
|
Prepayments and accrued income |
22,984 |
|
68,844 |
|
|
|
|
|
|
116,638 |
|
123,446 |
|
|
|
|
|
|
|
|
|
|
10 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
£ |
£ |
|
|
Bank overdrafts |
2,346 |
|
- |
|
Bank loans |
- |
|
261,493 |
|
Trade creditors |
307,237 |
|
207,463 |
|
Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
767,016 |
|
37,326 |
|
Other taxes and social security costs |
143,595 |
|
68,223 |
|
Shareholder's loan |
2,799,900 |
|
2,929,900 |
|
Other creditors |
3,438,372 |
|
189,456 |
|
Other Loans |
- |
|
400,000 |
|
Accruals and deferred income |
87,240 |
|
117,468 |
|
|
|
|
|
|
7,545,706 |
|
4,211,329 |
|
|
|
|
|
|
|
|
|
|
11 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
£ |
£ |
|
|
Bank loans |
- |
|
2,413,536 |
|
|
|
|
|
|
|
|
|
|
|
12 |
Share capital |
Nominal |
|
2023 |
|
2023 |
|
2022 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
100 |
|
100 |
|
100 |
|
|
|
|
|
|
|
|
|
|
13 |
Profit and loss account |
2023 |
|
2022 |
£ |
£ |
|
|
At 1 January |
222,805 |
|
155,214 |
|
(Loss)/profit for the financial year |
(271,359) |
|
67,592 |
|
|
At 31 December |
(48,554) |
|
222,806 |
|
|
|
|
|
|
|
|
|
|
14 |
Related Party Transactions |
|
During the year the company made purchases of £102,216 (2022: £102,216) from Legacy Hotels and Resorts Limited, a company with common directors. At the year end £15,227 (2022: £15,227) was owed to that company. At the year end, Frank Truman Limited, the ultimate parent company of the group, owed £353,000 (2022: £279,000) to Trade Bond Limited. At the year end, Handycross Opco Limited, a company with common directors, owed £120,000 (2022: £Nil) to Trade Bond Limited. At the year end, the company owed £Nil (2022: £400,000) to Finbar Investments (International) Limited, a company with common directors. At the year end, the company owed £515,000 (2021: £130,000) to Legacy Hotels, a company with common directors. At the year end, the company owed a total of £2,533,935 (2022:£2,556,246) to the parent company, Trinity Crabwall Limited. At the year end, the company owed a total of £554,402 (2022:£559,980) to the parent company, Hospitality Ventures Limied. |
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15 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
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|
16 |
Legal form of entity and country of incorporation |
|
|
Trade Bond Limited is a private company limited by shares and incorporated in England and Wales. |
|
17 |
Principal place of business |
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The address of the company's principal place of business and registered office is: |
|
Parkgate Rd, Mollington, Chester CH1 6NE |