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Registered Number:01642568













MILSOM HOTELS LIMITED






ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024











 
MILSOM HOTELS LIMITED
 

 
COMPANY INFORMATION


Directors
P Milsom 
G Milsom 
D Milsom 
M Gooding 




Company secretary
M Gooding



Registered number
01642568



Registered office
5th Floor
167-169 Great Portland Street

London

W1W 5PF




Independent auditor
Sumer Auditco Limited

Fitzroy House

Crown Street

Ipswich

Suffolk

IP1 3LG






 
MILSOM HOTELS LIMITED
 


CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11 - 12
Statement of changes in equity
13
Statement of cash flows
14 - 15
Analysis of net debt
16
Notes to the financial statements
17 - 36



 
MILSOM HOTELS LIMITED
 

 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024

Business review
 
The directors present the Strategic Report for the year ended 31 March 2024 and are pleased to acknowledge another successful year in trading despite challenges following inflationary pressures in the economy.
The Company continues to invest in its properties to strengthen its position as evidenced by the significant level of refurbishment expenditure in the year which resulted in an EBIT loss in the year despite EBITDA being positive.  The Company is proud to be championing local food and drink, continuing to support local suppliers and employing a local labour force.
During the year, the Company acquired the café at Ha’penny Pier in Harwich, subsequently renaming this to Deck 1853. Deck 1853 opened in April 2024 after a period of refurbishment with the related investment being reflected in these financial statements. Deck 1853 has outperformed expectations throughout its first Summer of trading, the results of which will be reflected in the financial statements for the year ending 31 March 2025.
The Company's investment in the joint venture at Kesgrave Hall Limited made a loss for the year in trading, however the view is that the entity remains well positioned for the future. Details of the share in the (loss)/profit and net assets held by Milsom Hotels Limited is set out in note 15.
The Company considers its key financial performance indicators to be growth in turnover, gross profit margin and net margin.
Turnover has decreased by 4.1% to £11,627,537 (2023 - £12,130,707).
The gross margin has increased to 75.0% (2023 - 74.4%).
Overall, the Company has made a loss before tax of £242,076 (2023 - profit before tax of £618,846) and has net assets of £10,256,944 (2023 - £10,585,209). The financial position at year end was considered satisfactory by the directors of the Company to enter its operations for the following year.


Principal risks and uncertainties

The principal risks to the Company are shown below:
UK economy and interest rate risks:
A sudden deterioration in the UK economy or a steep and sudden rise in the interest rates represent the key risks to the business. The directors have many decades of experience in this sector of the hospitality industry and recognise the importance of continued investment alongside a cautious approach to cost control and debt reduction.


- 1 -



 
MILSOM HOTELS LIMITED
 


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Financial risk management
 
The Company's principal financial instruments comprise a bank loan, a bank overdraft, other creditor loans and amounts due from participating interests. The primary purpose of the above is to raise finance for the Company's operations. In addition, the Company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from operations. 
The Company's approach to managing the principal risks and uncertainties is shown below.
Interest rate risk:
Whilst the Company is exposed to interest rate risk by virtue of movements in the Bank of England base rate in respect of its borrowings, its exposure is limited by reference to the Company's low gearing.
Liquidity and cash flow risk:
The Company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the Company has sufficient liquid resources to meet the operating needs of the business.
Credit risk:
The Company has minimal exposure to credit risk due to the nature of the trading activities. For customers who wish to trade on credit terms, they are subject to credit verification procedures.
Price risk:
The Company reviews its sales prices on an annual basis to ensure it remains competitive. Any fluctuations in the price of importing food and drink are a risk but these are closely monitored by the Company.

Financial key performance indicators
 
The directors monitor the financial health of the business through the review of monthly management accounts
and review of key performance indicators, such as turnover growth and gross margin.
The Company considers its key performance indicator to be its focus on its gross profit margins, and in doing so
the directors continue to monitor the costs of the Company closely.

Future developments
 
The Company is investing in consolidating its position in the market by continuing to deliver exceptional customer service and its locations being great places to eat, drink and stay. 


- 2 -



 
MILSOM HOTELS LIMITED
 


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024


This report was approved by the board on 16 September 2024 and signed on its behalf.






P Milsom
Director


- 3 -



 
MILSOM HOTELS LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024

The directors present their report and the financial statements for the year ended 31 March 2024.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the Company continued to be that of the operation of hotels and restaurants.

Results and dividends

The loss for the year, after taxation, amounted to £198,265 (2023 - profit £496,182).

Particulars of dividends can be found in note 12.

Directors

The directors who served during the year were:

P Milsom 
G Milsom 
D Milsom 
M Gooding 

Qualifying third party indemnity provisions

The Company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.


- 4 -



 
MILSOM HOTELS LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Matters covered in the Strategic report

Details of the Company's principal risks and uncertainties, including its use of financial instruments and the key risks to which it is exposed, are included in the Strategic Report.

Disclosure of information to auditor

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

On 28 March 2024 our auditor, SB Audit LLP, merged with Sumer Auditco Limited.
Accordingly SB Audit LLP formally resigned as the Company's auditor with the Directors duly appointing Sumer Auditco Limited to fill the vacancy arising.

The auditor, Sumer Auditco Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 16 September 2024 and signed on its behalf.
 





P Milsom
Director


- 5 -



 
MILSOM HOTELS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MILSOM HOTELS LIMITED

Opinion


We have audited the financial statements of Milsom Hotels Limited (the 'Company') for the year ended 31 March 2024, which comprise the statement of comprehensive income, the balance sheet, the statement of cash flows, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for 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 United Kingdom, including the Financial Reporting Council'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.



- 6 -



 
MILSOM HOTELS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MILSOM HOTELS LIMITED (CONTINUED)

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 ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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 directors' 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 set out on page 4, 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.



- 7 -



 
MILSOM HOTELS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MILSOM HOTELS LIMITED (CONTINUED)

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.


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:

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience and through discussions and enquiries of directors and management. During the engagement team briefing, the outcomes of these discussions were shared with the team, as well as consideration as to where and how fraud may occur in the Company.
The following laws and regulations were identified as being of significance to the Company:
• Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, UK Company Law and UK tax legislation; and
• Those laws and regulations considered to have an indirect effect on the financial statements including licencing requirements, food hygiene, employment law and the Health & Safety Act 1974.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the company complies with such regulations; enquiries of management and those charged with governance concerning any actual or potential litigation or claims, inspection of relevant legal documentation, review of board minutes, testing of journal entries, performance of analytical review to identify any unexpected movements in account balances which may be indicative of fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.



- 8 -



 
MILSOM HOTELS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MILSOM HOTELS LIMITED (CONTINUED)

Use of our 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 2006Our 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.





Steven Burgess (Senior Statutory Auditor)
  
for and on behalf of
Sumer Auditco Limited
 
Statutory Auditors
  
Fitzroy House
Crown Street
Ipswich
Suffolk
IP1 3LG

18 September 2024

- 9 -



 
MILSOM HOTELS LIMITED
 

 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
Notes
£
£

  

Turnover
 4 
11,627,537
12,130,707

Cost of sales
  
(2,909,317)
(3,105,369)

Gross profit
  
8,718,220
9,025,338

Administrative expenses
  
(8,892,936)
(8,413,509)

Operating (loss)/profit
 5 
(174,716)
611,829

Interest receivable and similar income
 9 
42,499
76,118

Interest payable and similar expenses
 10 
(109,859)
(69,101)

(Loss)/profit before tax
  
(242,076)
618,846

Tax on (loss)/profit
 11 
43,811
(122,664)

(Loss)/profit for the financial year
  
(198,265)
496,182

There was no other comprehensive income for 2024 (2023:£NIL).

Earnings before interest, tax, depreciation and amortisation (EBITDA)                           204,152          900,381


- 10 -



 
MILSOM HOTELS LIMITED
REGISTERED NUMBER:01642568


BALANCE SHEET
AS AT 31 MARCH 2024

2024
2023
Notes
£
£

Fixed assets
  

Intangible assets
 13 
27,500
5,000

Tangible assets
 14 
16,294,666
16,321,896

Investments
 15 
100
100

  
16,322,266
16,326,996

Current assets
  

Stocks
 16 
230,730
269,483

Debtors: amounts falling due after more than one year
 17 
745,908
753,541

Debtors: amounts falling due within one year
 17 
582,143
421,047

Cash at bank and in hand
 18 
22,667
113,875

  
1,581,448
1,557,946

Creditors: amounts falling due within one year
 19 
(3,972,298)
(3,058,520)

Net current liabilities
  
 
 
(2,390,850)
 
 
(1,500,574)

Total assets less current liabilities
  
13,931,416
14,826,422

Creditors: amounts falling due after more than one year
 20 
(1,228,015)
(1,750,926)

Provisions for liabilities
  

Deferred tax
 22 
(2,446,457)
(2,490,287)

Net assets
  
10,256,944
10,585,209


Capital and reserves
  

Called up share capital 
 23 
7,000
7,000

Revaluation reserve
 24 
5,533,856
5,533,856

Profit and loss account
 24 
4,716,088
5,044,353

  
10,256,944
10,585,209



- 11 -



 
MILSOM HOTELS LIMITED
REGISTERED NUMBER:01642568

    
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2024

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 September 2024.



P Milsom
Director

The notes on pages 17 to 36 form part of these financial statements.


- 12 -



 
MILSOM HOTELS LIMITED
 


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£


At 1 April 2022
7,000
5,533,856
4,728,171
10,269,027



Profit for the year
-
-
496,182
496,182

Dividends: Equity capital
-
-
(180,000)
(180,000)



At 1 April 2023
7,000
5,533,856
5,044,353
10,585,209



Loss for the year
-
-
(198,265)
(198,265)

Dividends: Equity capital
-
-
(130,000)
(130,000)


At 31 March 2024
7,000
5,533,856
4,716,088
10,256,944



- 13 -



 
MILSOM HOTELS LIMITED
 


STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(198,265)
496,182

Adjustments for:

Amortisation of intangible assets
2,500
2,500

Depreciation of tangible assets
368,768
286,052

Loss/(profit) on disposal of tangible assets
7,600
(633)

Interest paid
109,859
69,101

Interest received
(42,499)
(76,118)

Taxation charge
(43,811)
122,664

Decrease in stocks
38,753
23,920

(Increase)/decrease in debtors
(186,096)
73,190

Decrease in amounts owed by participating interests
7,633
821

(Decrease) in creditors
(50,862)
(334,686)

Corporation tax (paid)
(19)
(206,635)

Net cash generated from operating activities

13,561
456,358


Cash flows from investing activities

Purchase of intangible fixed assets
(25,000)
-

Purchase of tangible fixed assets
(324,138)
(916,759)

Sale of tangible fixed assets
-
15,200

Interest received
42,499
76,118

HP interest paid
(507)
(966)

Net cash from investing activities

(307,146)
(826,407)

Cash flows from financing activities

Repayment of bank loans
(39,629)
(937,633)

Other new loans
100,000
-

Repayment of other loans
-
(375,402)

Repayment of finance leases
(17,885)
(19,534)

Shares treated as debt - issued
-
1,000,000

Shares treated as debt - redeemed
-
(80,000)

Dividends paid
(130,000)
(180,000)

Interest paid
(109,352)
(68,135)

Net cash used in financing activities
(196,866)
(660,704)

- 14 -



 
MILSOM HOTELS LIMITED
 


STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024


2024
2023

£
£



Net (decrease) in cash and cash equivalents
(490,451)
(1,030,753)

Cash and cash equivalents at beginning of year
113,875
1,144,628

Cash and cash equivalents at the end of year
(376,576)
113,875


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
22,667
113,875

Bank overdrafts
(399,243)
-


The notes on pages 17 to 36 form part of these financial statements.


- 15 -



 
MILSOM HOTELS LIMITED
 


ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2024






At 1 April 2023
Cash flows
New other loans
Other non-cash changes
At 31 March 2024
£

£

£

£

£

Cash at bank and in hand

113,875

(91,208)

-

-

22,667

Bank overdrafts

-

(399,243)

-

-

(399,243)

Debt due after 1 year

(1,580,371)

-

-

460,371

(1,120,000)

Debt due within 1 year

(125,416)

27,803

(100,000)

(460,371)

(657,984)

Finance leases

(30,041)

17,885

-

-

(12,156)


(1,621,953)
(444,763)
(100,000)
-
(2,166,716)

The notes on pages 17 to 36 form part of these financial statements.


- 16 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.


General information

Milsom Hotels Limited (the "Company") is a private company limited by shares, domiciled and incorporated in England and Wales. The address of the registered office is 5th Floor, 167-169 Great Portland Street, London, England, W1W 5PF. The principal places of business are the locations of the Milsom hotels and restaurants.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The functional currency is Sterling (£).
The Company has not prepared consolidated financial statements on the basis that its subsidiaries are not material and have been dormant for the current and preceding periods.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

In making their assessment the directors have noted that as the 31 March 2024, the balance sheet shows a net current liability position. This is not uncommon for a hospitality business and represents the usual balance sheet position for the Company. Consequently, the directors do not believe that the net current liability position impacts their overall assessment of going concern as outlined hereafter. The Company meets its working capital requirements through a number of separate funding arrangements, as set out in note 19. The directors have made enquiries and prepared forecasts for a period of 12 months from the date of approval of these financial statements which indicate, based upon the facilities the Company has available to it, the Company has adequate resources to continue to trade and settle its liabilities as they fall due for 12 months from the date of signing of these financial statements.
On this basis, the directors therefore continue to adopt the going concern basis in preparing the financial statements. 


- 17 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

  
2.3

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The Company has the following revenue recognition policies:
Food and drink sales are recognised on the date that goods are supplied to customers.
Hotel sales are recognised on the date that customers stay in the accommodation.
Function sales are recognised on the date that the event takes place.
Turnover excludes income received in advance of events that take place after the balance sheet date. These amounts are recognised in deferred income and released to the profit and loss account when the event takes place.

  
2.4

Intangible assets

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis over 10 years to the statement of comprehensive income over its useful economic life.

 
2.5

Tangible fixed assets

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.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Freehold property
-
no depreciation charged (see note 3)
Motor vehicles
-
25% reducing balance
Fixtures and fittings
-
12.5% - 25% reducing balance

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.


- 18 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.6

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.7

Associates and joint ventures

Associates and Joint Ventures are held at cost less impairment.

  
2.8

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. 
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.9

Debtors

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.

 
2.10

Cash and cash equivalents

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.

In the statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.11

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the

- 19 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.11
Financial instruments (continued)

present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

- 20 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.11
Financial instruments (continued)


 
2.12

Creditors

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.

 
2.13

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the profit and loss account in the same period as the related expenditure.

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.

 
2.15

Pensions

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.

 
2.16

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.17

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.


- 21 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.18

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 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 except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include: 
Depreciation on freehold property
Depreciation is not charged on freehold property because the directors are of the opinion that the depreciation charge and accumulated depreciation are immaterial as the expected residual value of the properties are not significantly different to the carrying value and the company maintains all its properties in a good state of repair.

Recoverability of amounts owed by a joint venture
The directors have performed an assessment with regards to the amount outstanding from a joint venture. From this assessment, no concerns have been identified with regards to it being recoverable. Furthermore, it is not anticipated to be recovered within 12 months of the balance sheet date and hence the classification of the debt is shown as falling due after more than one year.


- 22 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Food and drink
9,275,664
9,833,728

Accommodation
1,377,163
1,381,379

Other ancillary turnover
974,710
915,600

11,627,537
12,130,707


All turnover arose within the United Kingdom.


5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2024
2023
£
£

Depreciation of tangible fixed assets
368,768
286,052

Amortisation of intangible fixed assets
2,500
2,500

Other operating lease rentals
74,336
71,013


6.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2024
2023
£
£

Fee payable for the audit of the Company's financial statements
16,000
15,250

- 23 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£
£



Wages and salaries
4,272,026
4,004,923

Social security costs
337,857
369,392

Cost of defined contribution scheme
142,617
147,994

4,752,500
4,522,309

The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Office and management
38
38



Restaurant, kitchen and hotel
156
138

194
176


8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
353,516
421,682

Company contributions to defined contribution pension schemes
39,308
40,201

392,824
461,883


During the year retirement benefits were accruing to 3 directors (2023 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £146,827 (2023 - £203,191).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £9,167 (2023 - £10,000).

All key management personnel are directors. 

Key management personnel compensation equates to directors' remuneration. There are no members of key management other than the directors.


- 24 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

9.


Interest receivable

2024
2023
£
£


Other interest receivable
42,499
76,118


10.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
43,177
48,641

Other loan interest payable
6,008
14,353

Preference share dividends
60,167
5,141

Finance leases and hire purchase contracts
507
966

109,859
69,101


11.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
-
(38,630)

Adjustments in respect of previous periods
19
-


Deferred tax


Origination and reversal of timing differences
(43,830)
161,294

Total deferred tax
(43,830)
161,294


Taxation on (loss)/profit on ordinary activities
(43,811)
122,664

- 25 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 19%). The differences are explained below:

2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(242,076)
618,846


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
(60,519)
117,581

Effects of:


Non-tax deductible amortisation of goodwill and impairment
14,350
475

Expenses not deductible for tax purposes
19
2,265

Changes in tax rate
-
38,710

Other differences leading to a decrease in the tax charge
2,339
(36,367)

Total tax charge for the year
(43,811)
122,664


Factors that may affect future tax charges

The Finance Act 2021 announced an increase of the main rate of UK corporation tax rate from 19% to 25% from 1 April 2023. This was enacted in June 2021. Accordingly, deferred tax assets and liabilities are stated at 25%.


12.


Dividends

2024
2023
£
£


Dividends - Ordinary
130,000
180,000


Dividends - Preference
60,167
5,141

190,167
185,141


- 26 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

13.


Intangible assets




Goodwill

£



Cost


At 1 April 2023
25,000


Additions
25,000



At 31 March 2024

50,000



Amortisation


At 1 April 2023
20,000


Charge for the year
2,500



At 31 March 2024

22,500



Net book value



At 31 March 2024
27,500



At 31 March 2023
5,000




- 27 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

14.


Tangible fixed assets





Freehold property
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost or valuation


At 1 April 2023
13,850,434
172,152
6,475,328
20,497,914


Additions
-
158,910
207,628
366,538


Disposals
-
(25,000)
-
(25,000)



At 31 March 2024

13,850,434
306,062
6,682,956
20,839,452



Depreciation


At 1 April 2023
125,000
96,267
3,954,751
4,176,018


Charge for the year
-
34,196
334,572
368,768



At 31 March 2024

125,000
130,463
4,289,323
4,544,786



Net book value



At 31 March 2024
13,725,434
175,599
2,393,633
16,294,666



At 31 March 2023
13,725,434
75,885
2,520,577
16,321,896

The land and buildings were revalued at 31 March 2015 by Frank Knight LLP (Chartered Surveyors), independent valuers not connected with the Company, on a fair value basis. The valuation was based on recent market transactions on an arm's length basis for similar properties. The valuation has been used as the deemed cost upon transition to FRS 102.

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2024
2023
£
£



Motor vehicles
30,164
40,219


- 28 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

15.


Fixed asset investments





Investments in associates

£



Cost or valuation


At 1 April 2023
100



At 31 March 2024
100





Subsidiary undertakings


The following were associates of the Company:


Name

Registered office

Principal activity

Class of shares

Holding

The Pier at Harwich Limited
Le Talbooth Gun Hill, Dedham, Colchester, England, CO7 6HP
Dormant
Ordinary
100%
Le Talbooth Dedham Limited
Le Talbooth Gun Hill, Dedham, Colchester, England, CO7 6HP
Dormant
Ordinary
100%

The aggregate of the share capital and reserves as at 31 March 2024 and of the profit or loss for the year ended on that date for the subsidiary undertakings were £nil for both subsidiaries.


Participating interests


The following was a joint venture of the Company:


Name

Registered office

Principal activity

Holding

Kesgrave Hall Limited
Fifth Floor, 167-169 Great Portland Street, London, England, W1W 5PF
Hotel and restaurant
50%

The below disclosures in respect of the joint venture were taken directly from the most recent audited financial statements of Kesgrave Hall Limited for the year ended 31 March 2023. 


- 29 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

Joint ventures

31 March 2023
31 March 2022
        £
        £
Fixed assets

10,566,593

9,764,890
 
Current assets

435,339

1,248,325
 
Creditors: Amounts falling due within one year

(1,134,008)

(1,232,635)
 
Creditors: Amounts falling due after one year

(5,474,272)

(5,481,428)
 
Provisions

(1,005,025)

(721,303)
 
Net assets


3,388,627

3,577,849
 
Net assets attributable to the company


1,694,314

1,788,925
 


 
Turnover

4,133,266

4,526,691
 
Net expenses

4,038,766

3,588,341
 
Profit before taxation

94,500

938,350
 
Taxation

(192,937)

(168,856)
 
(Loss)/Profit for the year

(98,437)

769,494
 
Other comprehensive income

(90,785)

254,890
 
Total comprehensive income


(189,222)

1,024,384
 
Total comprehensive income for the year attributable to the company


(94,611)

512,192
 


 


16.


Stocks

2024
2023
£
£

Raw materials and consumables
230,730
269,483



- 30 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

17.


Debtors

2024
2023
£
£

Due after more than one year

Due from participating interests
745,908
753,541


2024
2023
£
£

Due within one year

Trade debtors
162,234
75,025

Other debtors
200,913
151,493

Corporation tax recoverable
-
38,630

Prepayments and accrued income
218,996
155,899

582,143
421,047



18.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
22,667
113,875

Less: bank overdrafts
(399,243)
-



- 31 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

19.


Creditors: Amounts falling due within one year

2024
2023
£
£

Bank overdrafts
399,243
-

Bank loans
460,371
39,629

Trade creditors
926,605
960,205

Other taxation and social security
94,346
129,419

Obligations under finance lease and hire purchase contracts
12,156
17,886

Other creditors
254,756
113,398

Accruals and deferred income
1,824,821
1,797,983

3,972,298
3,058,520


Disclosure of the terms and conditions attached to the non-equity shares is made in note 23.

The bank overdrafts and loans are secured by legal charges over the Company's freehold property and by fixed and floating charges over the company's assets.
Amounts due under finance leases and hire purchase contracts are secured over the assets to which they relate.


20.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Bank loans
-
460,371

Net obligations under finance leases and hire purchase contracts
-
12,155

Accruals and deferred income
108,015
158,400

Share capital treated as debt
1,120,000
1,120,000

1,228,015
1,750,926


The bank overdrafts and loans are secured by legal charges over the Company's freehold property and by fixed and floating charges over the Company's assets.
Amounts due under finance leases and hire purchase contracts are secured over the assets to which they relate.


- 32 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

21.


Loans


Analysis of the maturity of loans is given below:


2024
2023
£
£

Amounts falling due within one year

Bank loans
460,371
39,629

Amounts falling due 1-2 years

Bank loans
-
460,371



460,371
500,000


The bank loans attract interest at a rate of 2.40% above the Bank of England base rate. The bank loans are repayable in instalments over the length of 3 years based on a 15 year repayment profile.


22.


Deferred taxation




2024
2023


£

£






At beginning of year
(2,490,287)
(2,328,993)


Charged to profit or loss
43,830
(161,294)



At end of year
(2,446,457)
(2,490,287)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(574,813)
(618,643)

Revaluations
(1,871,644)
(1,871,644)

(2,446,457)
(2,490,287)


The deferred tax liability relating to the revaluation of freehold land and buildings set out above is expected to reverse only when the assets are sold as they have an indefinite useful economic life.


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MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

23.


Share capital

2024
2023
£
£
Shares classified as equity

Allotted, called up and fully paid



6,900 Ordinary shares of £1.00 each
6,900
6,900
50 Ordinary A shares of £1.00 each
50
50
50 Ordinary B shares of £1.00 each
50
50

7,000

7,000

Each class of share carries their own right to participate in approved income distributions however otherwise rank pari-passu.

2024
2023
£
£
Shares classified as debt

Allotted, called up and fully paid



1,120,000 (2023 - 1,120,000) Preference shares of £1.00 each
1,120,000
1,120,000


The preference shares are redeemable via an option at the shareholders discretion on any date following 2 years from the date of issue. There is no premium payable upon redemption.
The preference shares are entitled to a cumulative preferential dividend payable at a rate of 5% payable quarterly in arrears. On winding up, the preference shares rank ahead of any ordinary shares and will be repaid at par.


24.


Reserves

Revaluation reserve

The revaluation reserve represents the cumulative revaluation gains and losses in respect of land and buildings. The reserve is stated net of associated deferred tax movements.

Profit and loss account

The profit and loss account represents the Company's accumulated profits which are available for distribution to shareholders.


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MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

25.


Contingent liabilities

During the year, the Company entered into a cross company guarantee which covered any borrowings provided by Barclays Bank Plc to Milsom People Limited, a company under common control. At the year end, Milsom People Limited had borrowings amounting to £NIL.


26.


Pension commitments

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 £142,617 (2023 - £147,994). Contributions totalling £16,208 (2023 - £16,295) were payable to the fund at the balance sheet date.


27.


Commitments under operating leases

At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
78,957
74,336

Later than 1 year and not later than 5 years
63,887
94,283

Later than 5 years
5,625
-

148,469
168,619


- 35 -



 
MILSOM HOTELS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

28.


Related party transactions

At the year end, the Company was due an amount of £745,908 (2023 - £753,541) from its joint venture. The loan element of the balance attracts interest at a rate of 5% per annum. During the year, the Company received interest on the loan of £37,500 (2023 - £37,500). At the year end, £37,500 remains outstanding (2023 - £Nil).
At the year end, the Company was due an amount of £132,946 (2023 - £46,318) from its joint venture Company in respect of a trade debtor balance. During the year the Company made sales to its joint venture company of £120,288 (2023 - £121,114).
During the year, the Company made purchases totalling £639,490 (2023 - £825,994) from a company under common control. The Company received management charge income of £40,000 (2023 - £40,000). At the year end, the Company owed an amount of £45,606 (2023 - £40,387). 
Transactions with directors 
At the year end, the Company was owed amounts totalling £10,918 by one of the directors (2023 - Company owed £4,934 to one of the directors). The maximum overdrawn loan account balance during the year was £23,053 (2023 - £30,383).
During the year, the Company paid interest on the loans from directors of £Nil (2023 - £9,148).
During the year, the Company purchased fixed assets totalling £25,000 (2023 - £Nil) from a director. 
During the year, dividends were payable on ordinary shares to the directors of £84,348 (2023 - £126,552).
During the year, dividends were payable on ordinary shares to close family members of the directors of £30,000 (2023 - £30,000).
During the year, salaries of £Nil (2023 - £16,095) were paid to close family members of the directors.
At the year end, the Company owed an amount of £94,970 (2023 - £85,787) to close family members of the directors. The amount attracts interest at 4% per annum. During the year, the Company paid interest on the amount of £2,704 (2023 - £2,889).


29.


Controlling party

P Milsom is considered to be the ultimate controlling party by virtue of his majority ownership of voting rights.

 

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