The director presents the strategic report for the year ended 31 March 2025.

Malhotra Leisure Limited is a leading leisure operator of bars, restaurants, hotels, a back packing hostel and the rent of leisure venues all located in and around Newcastle upon Tyne.

Malhotra Leisure has a reputation for unique venues that are presented to a high quality and that offer the highest standards of customer satisfaction.

Following on from the two previous financial years, which saw more tempered demand with inflation and interest rates affecting customers' disposable income, financial year 2025 has seen trading similarly affected and demand has dropped following price increases introduced by the business to cover increasing wages, energy and raw materials. We have also seen a shift in customer spending behaviour towards a lower spend on alcohol in addition to a reduced spend per transaction.

The New Northumbria Hotel, which saw its Home Office contract to let cease in January 2024, currently remains closed for refurbishment.

Cost inflation continued to impact the business during the year which remains a continuing trend. Increases in wage costs continue to impact with the ramifications of the increase in the National Minimum Wage. The lack of trained kitchen staff/​chefs continues to be an industry wide issue and so as a result we have struggled in terms of staff retention and recruitment.

Our Leisure Division has seen a strategic shift in recent years to focus on operating high quality assets. In addition, in some instances, we have moved away from being the sole operator of all trading activities at a leisure venue, and instead have entered into ‘partner’ arrangement with third parties who lease and operate part of our facilities. We have found this to be a highly effective strategy meaning our income stream is now a hybrid of (mainly) trading income but also includes an element of rental income. Our longer term strategy is to continue to invest in high quality assets although we will look to let these sites as opposed to operating them.

At the end of the year we took the decision to close our Leila Lily’s bar and restaurant. This was directly influenced by the decision to increase both National Minimum Wage rates and employer's NIC in the October 2024 Budget.

Despite the uncertainties, the Board remains positive about the future, about our ability to cope with the challenges posed through our experienced management team and that we are able to continue to provide the best possible customer-centred experience in our venues.

The principal risks faced by the company are set out below:

Staffing and skill levels

Chef vacancies particularly are still difficult to fill which adds cost pressure on wages due to competition in the market for candidates. This risk is being partly mitigated by other trained staff in the organisation covering for any vacancies.

Regulatory risk

If the company fails to comply with current licensing regulations, regulatory action could include the revocation of the license to operate. The company ensures managers and supervisors are fully aware of all aspects of the licensing legislation in order to mitigate the risk. In addition, food hygiene regulations are taken very seriously with a 4 star rating in one venue and 5 star rating in the others.

Market risk/economic climate

The leisure and hospitality markets are strongly linked to the health of the economy and the impact that it has on consumer confidence and ultimately on the level of disposable incomes, which is especially key at present with the current cost of living and energy cost crisis. The Company is well placed to navigate these financial risks given the financial strength of the wider group together with its high quality, diverse and customer focused portfolio of venues. Patterns in consumer spending can also change rapidly and if the company does not keep abreast of changes in tastes and respond accordingly, this could impact revenue and footfall. The site and marketing teams work very closely to analyse trading and ensure that the company identifies and remedies weaknesses and keeps on trend, At present we are closely monitoring business costs and opening hours to reduce any excess spend. Additionally, competition within the broader leisure sector remains strong, especially within the Newcastle Upon Tyne city centre locations and we have recently conducted some market research to understand this better and ensure we are positioned correctly in terms of price and offering. However, this risk should be minimised due to our continuous investment in our assets. ensuring we comfortably exceed industry standards, and therefore make our venues attractive to customers.

Property risk

If a property were severely damaged by fire or flooding or a serious equipment malfunction, then this could endanger tenants, customers and staff in the first instance, but also mean significant disruption to the provision of services for some period of time. In order to mitigate this, Malhotra Group is committed to making all necessary arrangements to ensure that the buildings and equipment are maintained at all times and to protect staff, residents, visitors, contractors and members of the public who may be affected by our activities. This will be achieved by ensuring compliance with relevant legal and Approved Codes of Practice standards and include ensuring that a programme of routine and emergency maintenance of the premises is in place and that records are kept of all maintenance activities. All buildings, fabrics, fittings, plant, utilities and equipment are kept in good safe condition, in efficient working order and in good repairs and services such as water, lighting, heating and air conditioning are maintained appropriately to ensure that premises are comfortable, economical and safe to use and that energy is not wasted.

Inflation risk

Increases to the National Minimum Wage continue to impact labour costs and there is a risk that increased competition in the labour market in the sector due to a shortage of staff will push wage costs up further. Costs due to pressures in the job market are not only impacting the leisure sector, but other sectors and this has impacted the cost of purchases. The company has contracts in place with main food and beverage suppliers which should mitigate the risk of cost increases in the short to medium term. Additionally, cost prices on utilities should be mitigated in the short to medium term due to taking short term contracts whilst the market prices are high, and renewing contracts once the rates drop. However, from a revenue perspective, the continued increase in inflation and the cost of living crisis is a risk to customer spend with people facing inflationary pressure across all costs in the normal lives and having to prioritise spend. We are mindful to this with our product pricing and are monitoring footfall and revenue closely.

Principal Risks and Uncertainties cont.

Liquidity/Interest rate risk

The company continues to be funded by bank loans secured on the freehold properties with the loans being secured to March 2027. The properties continue to be well maintained or soon to be refurbished and to hold their valuations although this could be impacted by macroeconomic factors. Fluctuations in interest rates would impact cashflow although there is headroom in the cashflow forecasts to handle this. Working capital is monitored closely to ensure that the company maintains sufficient cash for its ongoing operations and future developments. The Malhotra Group continues to investigate hedging instruments and whether these are appropriate to manage liquidity risk.

Data protection risk

The risk continues to be controlled through data protection policies and privacy notices that are in place. Internal data protection activities are well managed and all responses to data requests are provided ensuring compliance with ICO guidance. Awareness continues to be raised with staff of data protection issues with updates and training. Additionally, our systems containing personal data are protected.

The Statement of Comprehensive Income shows the results for the year ending 31 March 2025.

The company's turnover and profit for the year was £8.9m (2024: £10.1m) and gross profit decreased to £6.6m (2024: £7.6m).

EBITDA for the year reduced to £0.6m (2024: £2.2m) due to increased wage and utility costs.

As at 31 March 2025 the company had net assets of £3.6m (2024: £5.4m).

On behalf of the board

The director presents his annual report and financial statements for the year ended 31 March 2025.

The principal activity of the company continued to be that of the operation of bars, restaurants, hotels and a hostel, together with the leasing of investment properties.

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

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

The company has bank loans which are interest bearing and which are secured on the company's freehold and investment property assets. The applicable loan interest rates are linked to movements in the bank base rates. At present the company does not have any interest rate hedges in place to mitigate any interest rate risk. A 1% interest rate increase would result in an increase to interest charged to the income statement of approximately £170,000 per annum.

Despite the ongoing uncertainty arising from the cost of living crisis, the company continues to invest in its portfolio to ensure that it remains modern and attracts the required footfall. There is significant investment planned for the redevelopment of The Market Lane, Newcastle and The Sandpiper, Whitley Bay, alongside proposals for both the New Northumbria Hotel and 1 Mosely Street. The company will continue to review the composition of its portfolio in terms of strategic contribution.

In accordance with the company's articles, a resolution proposing that Robson Laidler Accountants Limited be reappointed as auditor of the company will be put at a General Meeting.

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.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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. He is 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 Malhotra Leisure Limited (the 'company') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's 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 director's 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 director's 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 director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company, we identified that there were principal risks of non-compliance with laws and regulations central to the company's operations in respect of its bars, restaurants and hotels. However, it does not have to report to a regulatory body and there is no supervisory body which monitors its operations. We also considered those laws and regulations that have a direct impact on the financial statements of the company such as the Companies Act 2006 and UK tax legislation.

Audit procedures performed by the engagement team included:

Discussions with directors and key management including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;

Evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities;

Reviewing relevant meeting minutes;

Identifying and testing journal entries based on risk criteria;

Testing transactions entered into outside of the company's normal course of business.

There are inherent limitations in the audit procedures above and, the further removed non-compliance with laws and regulations is from 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 or 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.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Malhotra Leisure Limited is a private company limited by shares incorporated in England and Wales. The registered office is Malhotra House, 50 Grey Street, Newcastle upon Tyne, NE1 6AE.

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 UK sterling which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards, modified to include the revaluation of freehold properties and to include investment properties at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 'Statement of Cash flows'. Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues: Interest, income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 'Share based Payment': Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled shar-based payments, explanation of modifications to arrangements;

• Section 33 'Related Party Disclosures'. Compensation for key management personnel.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

Malhotra Leisure Limited is a wholly owned subsidiary of Malhotra Group plc and the results of Malhotra Leisure Limited are included in the consolidated financial statements of Malhotra Group plc which are available from the Companies House website.

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised as follows:

Bar and restaurant takings are recognised at point of sale excluding value added tax and supplier rebates receivable.

Hotel income is recognised at point of sale or booking excluding value added tax.

Backpacker hostel fees are recognised at point of sale or booking excluding value added tax.

Rents receivable are recognised in accordance with the underlying property leases and exclusive of value added tax where there are options to tax on properties. Lease incentives (such as rent free periods) are spread over the entire period of the lease.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is between five and ten years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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:

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:

Assets in the course of construction are not depreciated.

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.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

The methods and significant assumptions used to ascertain the fair value of £6,794,697 and fair value movement of £Nil included in the profit/loss for the year are as follows:

The investment property has been valued at fair value based on director's estimates

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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.

Cost is calculated using the first in, first out method.

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.

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.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised directly in equity.

Current and deferred taxation assets or liabilities are not discounted.

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 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.

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.

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.

In the application of the company’s accounting policies, the director is 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.

The length of the useful lives of fixed assets are determined by the director's judgement

Some investment properties have been valued at fair value based on the director's estimates

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

Their aggregate remuneration comprised:

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:

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:

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

The assets were being amortised over the following periods: Goodwill - 5 years; Business name - 1 year; Domain name and social media - 1 year.

The intangible assets arose on the transfer of trade and assets from Grey Street Venture Limited into Malhotra Leisure Limited in February 2022 for consideration of £500,000 which related £350,000 for goodwill, £100,000 for the business name and £50,000 for the business' domain name and social media. The business in respect of this transaction ceased trading in March 2025.

Freehold land and buildings with a carrying amount of £32,542,687 (2024: £33,236,038) have been pledged as security for the company's bank liabilities.

Freehold properties with a carrying amount of £37,112,345 were revalued to £34,660,000 on 7 January 2022 by CBRE Limited, independent valuers not connected with the company on the basis of market value. The valuation was made on an open market value basis in accordance with RICS Valuation - Professional Standards and on the basis that the property is a fully equipped operational entity having regard to its current use and trading potential.

The revaluation surplus is disclosed in note 24.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

The fair value of the investment property has been arrived at on the basis of a valuation carried out on 7 January 2022 by CBRE Limited, independent valuers not connected with the company on the basis of market value.

Investment property with a carrying value of £6,794,697 (2024: £6,794,697) has been pledged as security for the company's bank liabilities.

The carrying value of land and buildings comprises:

Details of the company's subsidiaries at 31 March 2025 are as follows:

The bank loan is secured on the company's freehold and investment properties.

The 5 year term loan was drawn down with HSBC in February 2022. The interest rate applicable to the bank loan is 2.3% above the bank base rate.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

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.

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 following amounts were outstanding at the reporting end date:

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with wholly owned subsidiaries within the group.

Malhotra Group plc (incorporated in England and Wales) is regarded by the director as being the company's ultimate parent company.

A copy of the consolidated financial statements can be obtained from the Companies House website.

The ultimate controlling party is J Malhotra.

The company was successful in its the litigation with Aviva Insurance Ltd, the judgement being handed down on 7 May 2025 (Malhotra Leisure Ltd v Aviva Insurance Ltd).

Whilst the case has been decided in our favour, dialogue is continuing with regard to the quantum of the settlement and its various constituent parts. We have maintained a provision for the recovery of our legal costs in relation to this litigation but have not provided anything in respect of the claim itself, interest, and the potential for additional consequential damages arising from Aviva’s decision to cancel our insurance policy. We expect this to be determined in the next financial year when the amounts, when known, will be recognised.