The directors present the strategic report for the year ended 31 March 2025.

Inverlochy Castle Hotel and Rocpool Reserve Hotel continued to uphold their reputation as two of Scotland's foremost luxury hotels.

On 20 January 2025, the company acquired the business of Knockendarroch Hotel and Restaurant, a trading hotel based in Pitlochry, Scotland. Further details of this are provided in note 22.

The company’s revenue has increased by 8% compared to last year, resulting in total revenue for the year of £6,562,161 compared to £6,056,559 in the prior year. The company reported a gross profit of £3,773,223, compared to £3,134,604 in the prior year. The company has reported a loss before tax of £50,274 compared to a profit of £312,720 in the prior year. The increase in revenue is primarily as a result of the company benefitting from the first full year of trade at the Walled Garden development at Inverlochy Castle and the addition of Knockendarroch Hotel and Restaurant in January 2025, although this has been offset with some higher administrative expenses.

The main risk to the company is how market conditions impact on the hotel and restaurant industry and the likelihood of difficult economic conditions continuing into the coming years. However the directors continue to minimise this risk by maintaining and marketing the company's reputation for quality.

Continuing to provide customers with a quality service in the hotels and restaurants it operates is the most important aspect of the company's objectives. The quality of service provided to guests is monitored constantly and there is an ongoing staff training programme designed to ensure that standards are maintained and improved wherever possible.

The company has an ongoing marketing programme to ensure that occupation levels and revenues are maximised throughout the year.

It is the opinion of the directors that the going concern basis of accounting is appropriate. The company is reliant on its shareholders and the bank for their continued support, and the shareholders have provided a letter of support to confirm their willingness to continue to financially support the company for the foreseeable future.

On behalf of the board

The principal activity of the company continued to be that of hoteliers in the operation of Inverlochy Castle Hotel, Rocpool Reserve Hotel and Knockendarroch Hotel & Restaurant which was acquired in January 2025.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The results for the year are set out on page 7.

The company intends to continue to improve its service and offering to customers by investing further in its facilities.

Saffery LLP have expressed their willingness to continue in office.

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.

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.

We have audited the financial statements of Inverlochy Castle Limited (the 'company') for the year ended 31 March 2025 which comprise the income statement, the statement of comprehensive income, the statement of financial position, 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 31 March 2025 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 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.

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. 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.

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.

As explained more fully in the directors' responsibilities statement on page 3, 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.

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with management, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and 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. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

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 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.

The income statement has been prepared on the basis that all operations are continuing operations.

Inverlochy Castle Limited is a private company limited by shares incorporated in Scotland. The registered office is Inverlochy Castle Hotel, Torlundy, Fort William, Inverness-shire, PH33 6SN.

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 as deemed cost on transition to FRS 102. The principal accounting policies adopted are set out below.

The cost of a business combination is the fair value at the acquisition date of the assets given and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The financial statements have been prepared under the going concern basis. At 31 March 20true25 the company had net assets of £3,247,302 (2024 - £3,304,336) and net current liabilities of £2,385,664 (2024 - £1,880,801). The company relies on continued support from its shareholders and bank facilities to be able to meet its liabilities as they fall due and the appropriateness of the going concern basis is dependent on this support being continued. The shareholders have provided a letter of support indicating their willingness to continue to support the company.

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of four years.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 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:

Property, plant and equipment 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:

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.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

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

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises of direct materials. At each reporting date, an assessment is made for impairment.

Cash and cash equivalents are basic financial assets and include cash at bank and in hand. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’.

Financial instruments are recognised in the company's statement of financial position 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, which include trade and other receivables, are initially measured at transaction price 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, including trade and other payables, bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

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.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 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 costs of short-term employee benefits are recognised as a liability and an expense. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

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.

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.

Depreciation is calculated based on an estimation of the expected useful lives of tangible fixed assets. This requires assumptions to be made, which includes the condition of the assets and potential recoverable amounts. The carrying amount of tangible fixed assets at 31 March 2025 was £10,182,830 after depreciation of £256,899 was charged during the year.

Amortisation of goodwill is calculated based on an estimation of the useful life of the goodwill. This requires an on-going judgement to be made on the carrying value of goodwill and the appropriateness of the rate of amortisation. The carrying amount of goodwill at 31 March 2025 was £186,064. Amortisation of £62,022 was charged in the year ended 31 March 2025.

An analysis of the company's revenue is as follows:

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 1).

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

The freehold land and buildings at Inverlochy Castle were valued on an open market value for existing use basis on 31 March 1998 by D M Hall Chartered Surveyors. This valuation has been used as deemed cost on transition to FRS 102.

Included in land and buildings is land of £1,500,000 (2024: £500,000) which is not depreciated.

If revalued assets were stated on an historical cost basis the total amounts included would have been as follows:

The revalued assets are held within 'Land and buildings freehold' and have a net book value of £3,745,018 (2024: £3,787,642).

Included in other payables is £1,477,289 (2024: £1,477,289 ) owed to fellow group companies.

Inverlochy Castle Limited has a fixed term £2,000,000 loan with an interest rate of 2.5% above the Bank of England base rate, payable by instalments ending in May 2027.

In January 2025, the company drew down additional loans totalling £3,450,000 at an interest of 2.15% above the Bank of England base rate, payable by instalments ending in January 2035.

The bank loans and overdraft facility are secured by fixed charges over the Inverlochy Castle Hotel, Rocpool Reserve Hotel and Knockendarroch Hotel in addition to a bond and floating charge over all assets of the company.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Revaluation Reserve

The reserve was used to record the increase in the valuation of freehold land and buildings prior to transition to FRS 102, less related deferred tax. Each year an amount representing the excess depreciation on the revalued element of these assets is transferred to retained earnings.

On 20 January 2025 the company acquired the trade and assets of Knockendarroch Hotel. This comprised the hotel property, fixtures and fittings, operational systems, and the transfer of staff.

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:

The company's immediate parent undertaking is Inverlochy Castle (International) Limited, a company registered in Guernsey.

The company's ultimate parent undertaking is Imperium Trust Company Limited as Trustee of The Chai Family Trust, a company registered in Guernsey.

The company's ultimate controlling party is Jen Chai.

The remuneration of key management personnel is as follows.

Other related party transactions

At 31 March 2025 the company owed the Chai 2011 Family Trust £228,975(2024 - £228,975) and this loan is interest free, unsecured and repayable on demand.

During the year the company was charged £782,693 (2024 - £756,183) by Inverlochy Castle Management International Limited for management and consultancy services. At 31 March 2025 Inverlochy Castle Management International Limited was owed £16,009 by the company (2024 - £127,702 owed to the company). This loan is interest free, unsecured and repayable on demand. The directors of Inverlochy Castle Management International Limited significantly influence the financial and operating policies of Inverlochy Castle Limited.

At 31 March 2025 Inverlochy Castle (International) Limited was owed £1,248,314 by the Company (2024 - £1,248,314), this loan is interest free, unsecured and repayable on demand. Inverlochy Castle (International) Limited is the parent undertaking of the company.

At 31 March 2025, the company was owed £27,716 by key management personnel (2024 - £27,716). This loan is unsecured, repayable on demand and subject to interest at 2.5%.