Company registration number 02018937 (England and Wales)
OATLANDS INVESTMENTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 24 SEPTEMBER 2023
OATLANDS INVESTMENTS LIMITED
COMPANY INFORMATION
Directors
K Dhala
N Jamal
K Jamal
R Jamal
A Somji
S Somji
Secretary
N Jamal
Company number
02018937
Registered office
146 Oatlands Drive
Weybridge
Surrey
KT13 9HB
Auditor
MGI Midgley Snelling LLP
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
OATLANDS INVESTMENTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
OATLANDS INVESTMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 24 September 2023.
Principal risks and uncertainties
The second financial year following COVID-19 related restrictions saw significant increases in enquiries, bookings and overall business for the Company in common with the industry generally.
However, the unsettled geo-political landscape continued to bring about increases in energy costs and inflation with a resulting increase in borrowing costs. The Company is mindful of the continuing risks posed by geo-political events and the potential for further impact on business levels and financial markets.
The Company continues to place an emphasis on credit vetting and timely collections where credit lines are extended to corporate customers. This helps avoid bad debts. The Company is mindful of the increasing threat of cyber-fraud and our systems and procedures are reviewed to safeguard its position. The management continues to ensure compliance with current regulations and standards.
Development and performance
The continued strong enquiries and bookings history following the easing of pandemic-period restrictions confirmed the benefit to the Hotel of the refurbishment. The management maintained focus on customer service improvements, the results from which are evidenced in an overall improvement in customer feedback. At the same time, there have been stringent controls in place to deliver savings in payroll and other expenses. The results for the year under review bear witness to the value of these initiatives.
Hotel average daily room rate showed an increase on the prior year of £4.48 (2022: £7.63 increase).
Occupancy has increased in the year to 30 September 2023 by 13.27% on the previous year (2022 Overall Occupancy: 48.39% which was an increase of 117%).
The Hotel has continued to compete successfully in the premium market with a focus, in the first instance, on achieving good rates. We expect higher occupancy to come in time as we consolidate our position on the back of a reputation for quality, and from expanding our facilities to include leisure.
Going concern
In preparing the financial statements the Directors are required to assess the Company's ability to continue to trade as a going concern for the foreseeable future. In undertaking this assessment, the Directors have given due consideration to the Company's available cash funds, historical and current trading, together with forward looking projections which have taken into account the impact of the unsettled geo-political landscape. At the Balance sheet date, the Company has net current liabilities of £804k (2022: £577k) of which £234k (2022: £161k) is deferred income.
The Company continues to strive for cost reduction and control initiatives to conserve cash and secure the longer-term viability of the business. There is continued emphasis on developing new marketing channels to boost revenues.
The Directors have reviewed the Company's forecasts and cash flow projections, as well as performing stress testing, covering 12 months from the date of approval of these financial statements. Based on their best assessment, they believe that the Company will have sufficient cash in order for the Company to settle its liabilities as they fall due. Given significant improvements in overall business performance during the period under review the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the annual financial statements
The Company has a good relationship with its bank and continues to keep them informed through management accounts and regular meetings of performance, updates on forecasts, and future plans. The Company's performance during the period under review was in line with budget forecasts. Having provided refurbishment funding and arranged loan re-financing during the pandemic, the bank continues to be supportive.
OATLANDS INVESTMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 2 -
Future Developments
Having been granted Listed Buildings Consent in 2020, Planning Permission was granted in January 2021 for a development to include a Spa. The Company has also been granted Planning and Listed Buildings Consent for a secondary spa / other facility which could be opened sooner if needed.
N Jamal
Director
6 September 2024
OATLANDS INVESTMENTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 24 September 2023.
Principal activities
The principal activity of the company continued to be that of hotel accommodation and hospitality.
Results and dividends
The results for the year are set out on page 8.
The Company's accounting reference date is 30 September. In any given year, the Directors' report is for the 52 week period that culminates prior to this date.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors recommend the payment of a preferential dividend of 10% per 'A' Ordinary share, being £50,000 (2022 - £50,000).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
K Dhala
N Jamal
K Jamal
R Jamal
A Somji
S Somji
Financial instruments
The Company's operations are financed by a mixture of retained profits and bank borrowings. Bank loans have been part of the medium-to-long term financing structure of the Company. Working capital requirements are met out of operational cash flow and retained profits. In addition, various financial instruments such as trade debtors and trade creditors arise directly from the Company's operations. Current bank loans carry interest rates between 3.05% to 4.06% above base rate.
Research and development
The company's future developments are shown in the Strategic report.
OATLANDS INVESTMENTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 4 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 company’s auditor 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 company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
N Jamal
Director
6 September 2024
OATLANDS INVESTMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF OATLANDS INVESTMENTS LIMITED
- 5 -
Opinion
We have audited the financial statements of Oatlands Investments Limited (the 'company') for the year ended 24 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 the financial statements:
give a true and fair view of the state of the company's affairs as at 24 September 2023 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.
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.
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.
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
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.
OATLANDS INVESTMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OATLANDS INVESTMENTS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor'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.
In planning and designing our audit tests, we identify and assess the risks of material misstatements within the financial statements, whether due to fraud or error. Our assessment of these risks includes consideration of the nature of the industry and sector, the control environment and the business performance along with the results of our enquiries of management, about their own identification and assessment of the risks of irregularities. We are also required to perform specific procedures to respond to the risk of management override.
As a result of this assessment, we considered the opportunities and incentives that may exist within the company for fraud and identified that the greatest area of risk was in relation to management override, completeness of income, achievement of loan covenants and the valuation of fixed assets.
We have obtained an understanding of the legal and regulatory frameworks that the company operates in from discussions with the directors and our knowledge of the company and its industry sector. We have focussed on the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, local tax legislation and licensing regulations.
OATLANDS INVESTMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OATLANDS INVESTMENTS LIMITED
- 7 -
We performed the following audit procedures after consideration of the above risks which included the following:
review of valuations performed regarding the fixed assets;
review the covenants of loans currently drawn down and ensure company is complying with these requirements;
tracing of transactions from external point of sale systems to the accounting records;
enquiry of management of actual and potential litigation and claims;
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
The engagement partner has assessed that all engagement team members were made aware of the relevant laws and regulations and potential fraud risks and were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
Tracey Wickens
Senior Statutory Auditor
For and on behalf of MGI Midgley Snelling LLP
6 September 2024
Chartered Accountants
Statutory Auditor
Ibex House
Baker Street
Weybridge
Surrey
KT13 8AH
OATLANDS INVESTMENTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
6,235,186
5,169,797
Cost of sales
(2,397,325)
(1,910,555)
Gross profit
3,837,861
3,259,242
Administrative expenses
(3,788,037)
(3,477,696)
Other operating income
15,140
8,980
Operating profit/(loss)
4
64,964
(209,474)
Interest receivable and similar income
8
85
Interest payable and similar expenses
9
(471,549)
(289,371)
Loss before taxation
(406,585)
(498,760)
Tax on loss
10
(22,644)
(29,321)
Loss for the financial year
(429,229)
(528,081)
Other comprehensive income
Tax relating to other comprehensive income
69,204
(371,129)
Total comprehensive income for the year
(360,025)
(899,210)
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
OATLANDS INVESTMENTS LIMITED
BALANCE SHEET
AS AT
24 SEPTEMBER 2023
24 September 2023
- 9 -
24 September 2023
25 September 2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
24,154,936
24,586,464
Current assets
Stocks
13
64,126
57,050
Debtors
14
330,137
238,296
Cash at bank and in hand
2,139,742
2,215,180
2,534,005
2,510,526
Creditors: amounts falling due within one year
15
(3,338,046)
(3,087,860)
Net current liabilities
(804,041)
(577,334)
Total assets less current liabilities
23,350,895
24,009,130
Creditors: amounts falling due after more than one year
16
(5,469,702)
(5,725,367)
Provisions for liabilities
Deferred tax liability
18
1,757,894
1,800,439
(1,757,894)
(1,800,439)
Net assets
16,123,299
16,483,324
Capital and reserves
Called up share capital
20
500
500
Share premium account
89,500
89,500
Revaluation reserve
17,598,751
17,529,547
Profit and loss reserves
(1,565,452)
(1,136,223)
Total equity
16,123,299
16,483,324
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 6 September 2024 and are signed on its behalf by:
K Dhala
N Jamal
Director
Director
Company registration number 02018937 (England and Wales)
OATLANDS INVESTMENTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 10 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 27 September 2021
500
89,500
17,900,676
(608,142)
17,382,534
Year ended 25 September 2022:
Loss
-
-
-
(528,081)
(528,081)
Other comprehensive income:
Tax relating to other comprehensive income
-
-
(371,129)
(371,129)
Total comprehensive income
-
-
(371,129)
(528,081)
(899,210)
Balance at 25 September 2022
500
89,500
17,529,547
(1,136,223)
16,483,324
Year ended 24 September 2023:
Loss
-
-
-
(429,229)
(429,229)
Other comprehensive income:
Tax relating to other comprehensive income
-
-
69,204
69,204
Total comprehensive income
-
-
69,204
(429,229)
(360,025)
Balance at 24 September 2023
500
89,500
17,598,751
(1,565,452)
16,123,299
OATLANDS INVESTMENTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
1,403,901
1,326,514
Income taxes refunded
16,233
Net cash inflow from operating activities
1,420,134
1,326,514
Investing activities
Purchase of tangible fixed assets
(849,544)
(281,762)
Interest received
85
Net cash used in investing activities
(849,544)
(281,677)
Financing activities
Repayment of borrowings
8,186
Bank loans
(255,665)
(142,011)
Interest paid
(390,363)
(239,371)
Net cash used in financing activities
(646,028)
(373,196)
Net (decrease)/increase in cash and cash equivalents
(75,438)
671,641
Cash and cash equivalents at beginning of year
2,215,180
1,543,539
Cash and cash equivalents at end of year
2,139,742
2,215,180
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 12 -
1
Accounting policies
Company information
Oatlands Investments Limited is a private company limited by shares incorporated in England and Wales. The registered office is 146 Oatlands Drive, Weybridge, Surrey, KT13 9HB.
1.1
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 £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.
1.2
Going concern
In preparing the financial statements the Directors are required to assess the Company's ability to continue to trade as a going concern for the foreseeable future. In undertaking this assessment, the Directors have given due consideration to the Company's available cash funds, historical and current trading, together with forward looking projections which have taken into account the impact of the unsettled geo-political landscape. At the Balance sheet date, the Company has net current liabilities of £true804k (2022: £577k) of which £234k (2022: £161k) is deferred income.
The Directors have reviewed the Company's forecasts and cash flow projections, as well as performing stress testing, covering 12 months from the date of approval of these financial statements. Based on their best assessment, they believe that the Company will have sufficient cash in order for the Company to settle its liabilities as they fall due. Given significant improvements in overall business performance during the period under review the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the annual financial statements
The Directors keep the position relating to loan covenants under regular review with relevant financial institutions to ensure on-going compliance and support and are satisfied that such loans are adequate financing arrangements to support the Company. The Company continues to enjoy the support of its shareholders who historical provided support to alleviate fiscal pressures related to previous disruptions.
Since the year end, the company has arranged refinancing of the existing loans to continue the development of the hotel.
Therefore the directors consider that with the continued support of the bank and its shareholders it appropriate to adopt the going concern basis of accounting in preparing the annual financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Sales of goods
The Company operates restaurants and bars at its hotel. Sales of goods are recognised when the hotel restaurant or bars sell a product to a customer.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Sales of services
The Company supplies conference and event facilities as well as hotel rooms to businesses and private customers. Sales of rooms and conference and event facilities are recognised on the dates those facilities are used. Deposits received in advance are not recognised as turnover until the day of the stay or event.
1.4
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:
Freehold property
2% per annum
Fixtures and fittings
15% per annum
Motor vehicles
20% per annum
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 credited or charged to profit or loss.
Individual freehold and leasehold properties are carried at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that would be determined using fair value at the balance sheet date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in the statement of comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
1.5
Borrowing costs
All borrowing costs are recognised in the Statement of comprehensive income in the period in which they are incurred.
1.6
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.
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.
1.7
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.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
Financial instruments
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.
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.
1.9
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
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.
1.15
Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 16 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Leases
Determine whether leases entered into by the Company either as a lessor or a lessee are operating or financial leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Tangible assets
Determine whether there are any indicators of impairment of the Company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Hotel property
The hotel property value is considered by the directors on an annual basis. The directors obtain independent valuations periodically in accordance with the RICS Red Book. There is, however, a degree of judgement involved in that each property is unique and the value can only be reliably tested in the market.
3
Turnover and other revenue
The whole of the turnover is attributable to the principal activity of the company.
All turnover arose within the United Kingdom.
2023
2022
£
£
Other revenue
Interest income
-
85
Net rents receivable
15,140
8,980
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 17 -
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
1,281,072
1,397,398
Operating lease charges
21,151
20,967
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,500
19,450
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
29
24
Other
68
55
Total
97
79
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,066,230
1,665,992
Social security costs
173,353
143,321
Pension costs
46,336
36,037
2,285,919
1,845,350
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
63,481
88,093
Company pension contributions to defined contribution schemes
1,904
1,904
65,385
89,997
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 18 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
85
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
413,993
239,371
Dividends on redeemable preference shares not classified as equity
50,000
50,000
463,993
289,371
Other finance costs:
Other interest
7,556
471,549
289,371
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(4,015)
Deferred tax
Origination and reversal of timing differences
26,659
29,321
Total tax charge
22,644
29,321
During the period, the UK corporation tax rate changed from 19.00% to 25.00% (effective 1 April 2023), therefore an effective tax rate has been used for the period.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
10
Taxation
(Continued)
- 19 -
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:
The effective interest rate for 6 months was 19.00% up to 31 March 2023. Beginning 1 April 2023, the corporation tax rate changed from 19.00% to 25.00%, which covered the remainder of the period, being 6 months.
Therefore the effective corporation tax charge based on 6 months at 19.00%, and 6 months at 25.00% will be 22.00% for the financial reporting period.
2023
2022
£
£
Loss before taxation
(406,585)
(498,760)
Expected tax credit based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
(89,449)
(94,764)
Tax effect of expenses that are not deductible in determining taxable profit
1,718
6,464
Tax effect of utilisation of tax losses not previously recognised
(65,329)
(116,814)
Adjustments in respect of prior years
(4,015)
Permanent capital allowances in excess of depreciation
152,017
205,114
Other non-reversing timing differences
1,043
Deferred tax adjustment
26,659
29,321
Taxation charge for the year
22,644
29,321
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2023
2022
£
£
Deferred tax arising on:
Valuation of property
(69,204)
371,129
11
Dividends
Dividends in arrears total £450,000 (2022 - £400,000).
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 20 -
12
Tangible fixed assets
Freehold property
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 26 September 2022
21,694,061
9,342,545
4,250
31,040,856
Additions
849,544
849,544
Disposals
(4,250)
(4,250)
At 24 September 2023
21,694,061
10,192,089
31,886,150
Depreciation and impairment
At 26 September 2022
172,000
6,279,233
3,159
6,454,392
Depreciation charged in the year
104,816
1,175,165
1,091
1,281,072
Eliminated in respect of disposals
(4,250)
(4,250)
At 24 September 2023
276,816
7,454,398
7,731,214
Carrying amount
At 24 September 2023
21,417,245
2,737,691
24,154,936
At 25 September 2022
21,522,061
3,063,312
1,091
24,586,464
In August 2021, a professional valuation was carried out on the instructions of our bank. The report stated that the market valuation of the hotel that comprises the freehold property including fixtures, fittings and equipment was £25,700,000 using a Discounted Cash Flow valuation methodology based on the professional valuer’s projections which was compared to recent market transactions on an arm's length terms for similar properties. The directors consider that the valuation of the freehold property, including fixtures, fittings and equipment at £24,154,936 reflects their fair value at 30 September 2023.
Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £2,541,248 (2022 - £2,369,248), being cost £5,424,650 (2022 - £5,424,650) and depreciation £2,883,402 (2022 - £3,055,402).
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
64,126
57,050
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
177,537
78,525
Corporation tax recoverable
12,218
Other debtors
4,500
4,434
Prepayments and accrued income
148,100
143,119
330,137
238,296
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 21 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
282,622
282,622
Other borrowings
17
1,000,000
1,000,000
Trade creditors
338,875
170,096
Taxation and social security
227,296
312,873
Dividends payable
450,000
400,000
Other creditors
515,241
462,997
Accruals and deferred income
524,012
459,272
3,338,046
3,087,860
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
4,969,702
5,225,367
Other borrowings
17
500,000
500,000
5,469,702
5,725,367
17
Loans and overdrafts
2023
2022
£
£
Bank loans
5,252,324
5,507,989
Preference shares
500,000
500,000
Loans from related parties
1,000,000
1,000,000
6,752,324
7,007,989
Payable within one year
1,282,622
1,282,622
Payable after one year
5,469,702
5,725,367
The bank loans rank in preference to the loans due to shareholders/directors and are secured by a debenture over the company's assets and a legal charge over the company's freehold property. Guarantees on bank loans have also been provided by the shareholders.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
17
Loans and overdrafts
(Continued)
- 22 -
A bank loan facility of £302k was agreed in October 2020. The loan term is a period of 72 months from the date the first part is drawn. Interest is payable at 4.06% p.a over base rate.
A second bank loan facility of £1.148m was also agreed in October 2020. The loan term is a period of 72 months from the date the first part is drawn. Interest is payable at 4.06% p.a over base rate.
A third bank loan facility of £3.2m was also agreed in October 2020. The loan term is a period of 72 months from the date the first part is drawn. Interest is payable at 3.05% p.a over base rate.
A fourth and final bank loan facility of £1m was also agreed in October 2020. The loan term is a period of 72 months from the date the first part is drawn. Interest is payable at 3.05% p.a over base rate.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
447,304
494,716
Tax losses
(189,507)
(263,578)
Revaluations
1,500,097
1,569,301
1,757,894
1,800,439
2023
Movements in the year:
£
Liability at 26 September 2022
1,800,439
Charge to profit or loss
26,659
Credit to equity
(69,204)
Liability at 24 September 2023
1,757,894
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
46,336
36,037
At the year end an amount of £7,660 (2022: £2,920) was outstanding and due to be paid to the pension provider.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 23 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'B' Ordinary shares of £1 each
500
500
500
500
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
'A' ordinary shares of £1 each
500,000
500,000
500,000
500,000
Preference shares classified as liabilities
500,000
500,000
Shares classified as debt
500,000 'A' Ordinary shares of £1 each were in issue from the company for the current financial period and previous financial periods. These shares are recognised as a creditor in the accounts.
Further information regarding shares
The 'A' Ordinary shares confer on their holder the right to a fixed cumulative preferential dividend at the rate of 10% per annum on the paid up capital; plus a dividend out of the distributable profits up to a maximum of £3,000,000 per annum.
The 'B' Ordinary shares are eligible for a dividend out of profits above £3,000,000 per annum.
The holders of 'A' Ordinary shares are entitled to capital, for example on a return of assets on a liquidation, up to a maximum of £8,000,000 plus their nominal value of £500,000. The holders of 'B' Ordinary shares are entitled to any capital in excess of this amount.
The 'B' Ordinary shares are non-voting, except in relation to any resolution to vary the rights attached to the 'B' Ordinary shares.
21
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
21,244
19,925
Between two and five years
21,338
39,850
42,582
59,775
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 24 -
22
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
96,879
97,851
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Services costs
2023
2022
£
£
Entities with control, joint control or significant influence over the company
30,000
30,000
Key management personnel
6,000
6,000
Other related parties
69,481
69,481
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
1,126,500
1,139,700
Key management personnel
3,000
6,000
Other related parties
219,606
172,754
Included in amounts due to controlling entities are loan balances totalling £1,000,000 (2022: £1,000,000). These amounts have interest payable of 3% per annum and are repayable in less than one year.
Remaining amounts due to related parties are interest free and repayable on demand.
OATLANDS INVESTMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 SEPTEMBER 2023
- 25 -
23
Cash generated from operations
2023
2022
£
£
Loss for the year after tax
(429,229)
(528,081)
Adjustments for:
Taxation charged
22,644
29,321
Finance costs
390,363
239,371
Investment income
(85)
Depreciation and impairment of tangible fixed assets
1,281,072
1,397,398
Movements in working capital:
Increase in stocks
(7,076)
(19,816)
Increase in debtors
(104,059)
(21,285)
Increase in creditors
250,186
229,691
Cash generated from operations
1,403,901
1,326,514
24
Analysis of changes in net debt
26 September 2022
Cash flows
24 September 2023
£
£
£
Cash at bank and in hand
2,215,180
(75,438)
2,139,742
Borrowings excluding overdrafts
(7,007,989)
255,665
(6,752,324)
(4,792,809)
180,227
(4,612,582)
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