Company Registration No. 00118558 (England and Wales)
CASTLE LEISURE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 26 DECEMBER 2021
CASTLE LEISURE LIMITED
COMPANY INFORMATION
Directors
Mr P J T Yapp
Mr M H Andrews
Mrs K L Brown
Mr W J Davies
Mr J C Harris
Mrs L M Morgan
Mr S D Phillips
Secretary
Mrs L M Morgan
Company number
00118558
Registered office
1 City Road
Cardiff
United Kingdom
CF24 3TQ
Auditor
Azets Audit Services
Lime Tree Court
Cardiff Gate Business Park
Cardiff
CF23 8AB
United Kingdom
CASTLE LEISURE LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 9
Directors' responsibilities statement
10
Independent auditor's report
11 - 14
Statement of comprehensive income
15
Balance sheet
16
Statement of changes in equity
17
Statement of cash flows
18
Notes to the financial statements
19 - 31
CASTLE LEISURE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 26 DECEMBER 2021
- 1 -
The Directors present their strategic report for the 52 weeks ended 26 December 2021.
Business Review
All clubs were closed until 17th May as a result of the Government lockdown enacted late 2020. During these 20 weeks, the Company was unable to generate any trading revenue, whilst still incurring fixed overhead costs. The Company successfully attained all available Grants, including the Job Retention Scheme, which supported cash reserves.
Following significant flood damage in 2020, reinstatement works at our Nantgarw club were completed on schedule in February 2021. The club reopened, along with the rest of the estate, in May.
On reopening, all clubs operated with social distancing and continuing restrictions. Initial trading performance was severely impacted with customer confidence remaining low.
Relaxation of most restrictions from August led to increased customer attendances but with older and more vulnerable customers remaining cautious on returning to play. Customer numbers trended positively through the remainder of 2021 although remained below pre-pandemic levels.
Strong management of cash flow was key through the lockdown periods and continues to be monitored daily.
Principal Risks and Uncertainties
The Company’s risk management strategy focuses on the mitigation of risks to the Company.
The Principal risks and uncertainties that could impact on the Company and the action taken to mitigate and address are detailed as follows:
Legislative and Regulation
.
Failure to comply with all relevant legislation, including the Gambling Act 2005 and Licencing Act 2003, could adversely impact the Company’s Operator, Premises and Personal licences. Regulatory risk is increasing in areas of responsible gambling and in relation to anti money laundering requirements.
All key management and employees undergo ongoing training and certification to ensure the Company remains fully compliant. The Company maintains a transparent and open relationship with the Gambling Commission, BeGambleAware, Gamcare and Local Authorities.
The Company has been actively involved in the consultation on the review of the Gambling Act 2005 through Company and Industry body submissions. The Government is expected to publish its recommendations in H2 2022.
Duties and Taxation.
Increases in rates in Gaming Duties and VAT rates would adversely impact net revenues and company profitability. The Company actively monitors taxation legislation and contributes, through industry bodies, to consultation papers. Contingency plans are developed as appropriate.
Systems and Data Security.
Company operations depend on reliable systems which hold and process personal information on club members.
The company has developed a robust control system to protect customer and company data from cyber attack, which is recognised as an increasing risk. This would lead to loss of Company reputation and significant financial penalty under the General Data Protection Act 2016.
Company IT security, anti-virus software and firewalls are reviewed and updated regularly to mitigate this risk.
Recognising increased threats to company systems and data, a cyber health check is being processed to stress test all critical systems and security within the Company.
CASTLE LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 2 -
Data is securely backed up on a daily basis. A cloud based Disaster Recovery location has been implemented to enable continuity of business operations in the event of the primary systems being compromised. The Crisis Management Plan is embedded in our risk planning.
Supply Chain.
The Company is dependent on a number of third party suppliers for the effective operation of the business. Failure of a supplier to provide these products would impact on the effective operations of our clubs. We maintain close working relations with and monitor financial stability of all key suppliers to ensure continuity of supply is maintained.
The Company utilises local suppliers to ensure reliability of supply and reduced delivery lead times, when practical to do so.
Economic
.
Unfavourable and uncertain economic conditions will impact consumer confidence and disposable income. We monitor UK economic data, forecasts and industry trends to ensure best understanding of the likely impact on our customers.
Our pricing and product offering is continually reviewed to match current market conditions and to improve our customer proposition.
Industry.
The Company operates in a competitive market and its performance can be impacted if there is an improvement by competitors in respect of their product offer, prize boards or location. The Company is actively involved in supporting the Bingo Association and the development of sector wide best practice.
External Events
.
Events such as extreme weather conditions, natural disaster, pandemic, infectious diseases and terrorism threats could adversely affect admission levels and profitability.
A risk management committee considers all recognisable risks and prepares contingency plans to minimise the impact of these events.
Insurance policy cover is in place to mitigate the operational and financial impact of these events.
Continuity of Business
.
Potential loss of, or damage to, individual clubs and systems could impact continuity of trading. Insurance provisions and disaster recovery procedures are maintained to protect Company assets and information flows, to minimise any disruption to our business operations.
Changing Customer Needs.
Long term change in retail and leisure consumer spending patterns are resulting in lower Industry numbers of customer visits. The company actively pursues a focused policy approach to maintain the relevance of our customer proposition by evolving our product and service offer.
Liquidity
.
Management actively manages the Company’s financing requirements to ensure the Company will have sufficient funds to meet its liabilities.
Cash balances are monitored daily with detailed variance procedures.
Cash forecasts are reviewed weekly and undergo sensitivity testing. Quarterly meetings are held with our Bankers to ensure that they maintain a strong understanding of our business and trading conditions.
Key risks are reviewed by management and the Board on a regular basis and, where appropriate, actions are undertaken to mitigate the risks that are identified
CASTLE LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 3 -
Cash forecasts are reviewed weekly and undergo sensitivity testing. Quarterly meetings are held with our Bankers to ensure that they maintain a strong understanding of our business and trading conditions.
Key risks are reviewed by management and the Board on a regular basis and, where appropriate, actions are undertaken to mitigate the risks that are identified
Section 172(1) Statement
The Board of Directors of Castle Leisure consider that we have acted in good faith and made decisions in the way that would be most likely to promote the success of the Company for the benefit of shareholders and stakeholders.
The Directors take into account regular update reports from management regarding customers, employees, suppliers and environment and all are considered in discussions and the decision making process under section 172 of the Companies Act 2006.
Our plans are intended to have a positive, beneficial impact on the company over the mid to long term and to contribute to its continued success. We have identified each of our key stakeholder groups and considered how we have engaged with each during the year.
Employees
Our management and wider team members are critical to the delivery of our strategy.
The Company has held Investors in People Gold accreditation since 1996 and is reassessed on a 3 year rolling basis.
The Company holds annual Consultation meetings with all employees. Staff are encouraged to raise questions through their representative at regular meetings held with the Chief Executive and Senior Company executives.
We invest in training programs to ensure that all employees are equipped with the skills they need to perform their roles. All our clubs have been awarded the Sword of Honour by the British Safety Council. A rigorous Health, Safety and Environment policy is adopted to promote safe working practices.
Employees are able to progress within the Company, including into club and central management roles. All senior management have been promoted from within the Company, ensuring a continuity of delivery and an inherent understanding of the Company’s drive for excellence.
Customers
Our investment into club amenities and customer service standards provides a safe and enjoyable visit experience for customers. Customer Service standards training is key for all staff to provide a positive visit experience.
We engage with our customers through club management teams, marketing communications and social media. Customers are encouraged to provide feedback and comments which are all critically assessed and responded to by the Company.
Financial Institutions
We maintain a strong working relationship with our bankers and meet with them quarterly. We provide reliable, timely management information to ensure they are fully briefed with our financial position and strategy which may impact on our potential funding requirements.
Suppliers
Engagement with our suppliers is key to our success. We have developed long term, collaborative relationships with key suppliers who, where practical, are based local to our businesses. We meet regularly with principal suppliers to review ways to develop these relationships further.
CASTLE LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 4 -
Shareholders
The Board of Directors focus on the long term strategy of the Company to protect and grow Shareholder interest in an ethical and sustainable way. The Board, led by the Chairman and the Chief Executive engage with individual shareholders throughout the year.
Local community
Our plans and strategies are constructed following consideration of the impact of our operations on the community and environment, recognising that a large proportion of our customer base live within the immediate vicinity of our clubs.
Our wider social responsibilities are embedded in our core policy approach. We operate best in sector practice, ensuring full compliance with the codes and conditions of our operating and premises licences. We position our businesses to be responsible and considerate within our business areas and beyond.
The Company staffing compliment primarily live within the immediate local catchment areas of our clubs.
Financial key performance indicators
Key performance indicators, including admissions and average spends per head, are monitored and interpreted by the management on a daily basis. Both measures remain ahead of industry trends.
Financial review
Company turnover for the year was £16.7m (2020: £13.5m).
During 2021, the Company incurred capital expenditure of £6.2m, to give a year end fixed asset valuation of £48.8m.
The profit for the 52 weeks, before taxation, amounted to £3,000,322 (2020: £800,327 loss).
Current trading and outlook
2022 has started positively with spends and visit patterns improving. The high level of inflation expected through 2022 will adversely affect both the disposable income of our customers and will lead to increased pressures on our expense lines.
The Directors anticipate further consolidation within the bingo market. We expect market conditions to stabilise within the industry in the medium term.
Mrs L M Morgan
Director
18 February 2022
CASTLE LEISURE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 26 DECEMBER 2021
- 5 -
The directors present their report and the financial statements for the 52 weeks ended 26 December 2021.
Principal activities
The Company’s principal activity for the period was the operation of bingo clubs, the provision of electronic entertainment and bars and catering services within them. The Directors do not anticipate any likely changes in the company’s activities in the current year.
Business review
All clubs were closed until 17th May as a result of the Government lockdown enacted late 2020. During these 20 weeks, the Company was unable to generate any trading revenue, whilst still incurring fixed overhead costs. The Company successfully attained all available Grants, including the Job Retention Scheme, which supported cash reserves.
Following significant flood damage in 2020, reinstatement works at our Nantgarw club were completed on schedule in February 2021. The club reopened, along with the rest of the estate, in May.
On reopening, all clubs operated with social distancing and continuing restrictions. Initial trading performance was severely impacted with customer confidence remaining low.
Relaxation of most restrictions from August led to increased customer attendances but with older and more vulnerable customers remaining cautious on returning to play. Customer numbers trended positively through the remainder of 2021 although remained below pre-pandemic levels.
Strong management of cash flow was key through the lockdown periods and continues to be monitored daily.
The Company focus is to enhance customer visit experience by providing enjoyable bingo based leisure experiences to a diverse customer base. We continue to reinvest into our clubs and implement new innovations and technologies to generate cost efficiencies and drive long term revenue growth.
Results and dividends
The profit for the 52 weeks, after taxation, amounted to £3,000,322 (2020 - £598,640 loss).
The Directors propose a final dividend of £1.00 per share.
Directors
The directors serving at the end of the period and their interests in the company’s issued share capital were:
Ordinary shares
of £1 each
26/12/21
27/12/20
Mr P J T Yapp
6,356
6,356
Mr M H Andrews
2,117
2,117
Mrs K L Brown
250
250
Mr W J Davies
2,990
2,990
Mr J C Harris
34,038
33,664
Mrs L M Morgan
2,163
2,370
Mr S D Phillips
100
100
The Directors retiring by rotation are Philip J T Yapp, Lisa M Morgan and Kate L Brown who, being eligible, offer themselves for reappointment.
Ordinary dividends were paid in the year amounting to £113,990.
CASTLE LEISURE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 6 -
Charitable contributions
During the period the Company made charitable donations of £22,533. The Company has a policy of making no political donations.
Corporate social responsibility
The Company is fully committed to ensuring that the licensing objectives, as defined by the Licensing Act 2003 and Gambling Act 2005, are strictly adhered to and complied with. The Company’s Corporate Strategy embodies our policy approach and commitment to surpassing our legislative and regulatory obligations to provide safe and fair gambling.
The Company’s risk assessment process takes account of social, environmental and ethical matters relevant to the operation of the Company and protection of its customers and employees.
The Board seeks both to identify and assess any short or long-term risks and to identify opportunities to enhance value. Compliance and Social Responsibility matters are reviewed monthly by the Board and Executive Committee.
The Company maintains a strong emphasis on Social Responsibility in all aspects of its operation. The Company has been recognised for its support and contribution in this area by both GamCare and BeGambleAware.
Financial Instruments
The Company’s principal financial instruments comprise bank loans, overdraft and cash. The main purpose of these instruments is to finance the Company’s capital investment programme and working capital requirements.
No trading in financial instruments is undertaken. The Company’s borrowings are in pounds sterling and at the year end were subject to floating rates of interest.
Human Resources
The Company values the contribution that its employees make to the success of the business. Substantial investment is made in training, development, motivating staff and ensuring compliance with legislation and industry best practices. Particular focus is made on ensuring customer satisfaction through consistent attainment of high standards of care and service. We seek to enhance our standards on a rolling basis.
The involvement of employees in the success of the business is encouraged through company wide communication and consultation. Employees have opportunities to develop through a range of internal and external training programmes and nationally recognised qualifications.
The Company is an Investors in People Gold Company and will be reaccredited in 2022.
The Company believes it benefits substantially from having a diverse workforce and endorses the active application of equal opportunities policies and programmes to provide fair and equitable pay and conditions for all employees regardless of sex, family status, religion, creed, colour, ethnic origin, age or disability.
The following table provides a breakdown of the Company Directors and employees as at the financial year end
Female Male
Company Directors 2 5
Executives/Senior Management 4 2
General Managers 4 7
All Employees 353 172
Supplier payment policy
The Company policy is to strive for excellent working relationships with our suppliers, which encourages mutual business development over the long term. We make payment, usually directly into the supplier’s bank account, before the end of the month following invoicing, subject to satisfactory performance by the supplier.
CASTLE LEISURE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 7 -
Health and safety
The Company is committed to providing a safe place to work and visit, and has developed a culture of excellence in health and safety across the Company. Our vision is not only to ensure full compliance, but to lead our sector with a robust and consistent safety culture throughout the Company. This is assessed monthly to ensure progressive enhancement.
Our systematic internal approach to all health and safety matters is supported by rigorous and independent inspection by the British Safety Council, with all clubs achieving the maximum 5 stars award.
All 11 clubs have been awarded the Sword of Honour by the British Safety Council for Health and Safety, including a second sword awarded at our Neath club in 2021. We are the only company in the UK and internationally to hold such accolades for all business units.
The Board reviews monthly reports on health and safety matters.
Taxation
We adopt a clear and transparent approach to taxation and do not pursue aggressive techniques to reduce our tax liability.
The total Corporation tax charge for the year is £340,585, which represents an effective tax rate of 19% (2020: 19%).
CASTLE LEISURE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 8 -
Streamlined Energy and Carbon Report
The following figures make up our baseline reporting for 2021.
Scope 1 consumption and emissions relate to direct combustion of natural gas, and fuels utilised for transportation operations, such as company cars and external vehicles.
Scope 2 consumption and emissions relate to indirect emissions relating to the consumption of purchased electricity in day to day business operations.
The total consumption (kWh) figures for energy supplies reportable by Castle Leisure are as follows:
|
2021 UK Consumption
(kWh)
|
Grid-Supplied Electricity (Scope 2)
|
|
Gaseous and other fuels (Scope 1)
|
|
|
|
|
|
The total emission (tCO2e) figures for energy supplies reportable by Castle Leisure are as follows:
|
2021
UK Consumption
(tCO
2
e)
|
Grid-Supplied Electricity (Scope 2)
|
|
Gaseous and other fuels (Scope 1)
|
|
|
|
|
|
An intensity metric of tCO2e per FTE has been applied for the annual total emissions of Castle Leisure. An intensity metric tCO2e per m2 has been applied to the annual total emissions of the Company.
Castle Leisure are committed to year on year improvements in their operational energy efficiency. A register of energy efficiency measures has been compiled, with a view to implementing over the next 5 years.
Measures ongoing and undertaken through 2021 by the Company include:
Intensity metrics have been calculated utilising the 2021 reportable figures. These highlight:
Full time equivalents (FTE )
258
Gross internal area (m2)
23,615
CASTLE LEISURE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 9 -
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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
Mrs L M Morgan
Director
18 February 2022
CASTLE LEISURE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 26 DECEMBER 2021
- 10 -
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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
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.
CASTLE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CASTLE LEISURE LIMITED
- 11 -
Opinion
We have audited the financial statements of Castle Leisure Limited
(the 'Company')
for the year ended 26 December 2021 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and
notes to the financial statements, including a summary of significant accounting policies
. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 26 December 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the entity's ability to continue to adopt the going concern basis of accounting included review of the forecasts prepared, discussion of the key judgements made and the sensitivity of these.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
CASTLE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASTLE LEISURE LIMITED
- 12 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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.
CASTLE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASTLE LEISURE LIMITED
- 13 -
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
.
A further description of our responsibilities for the audit of the
financial statements
is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Reviewing minutes of meetings of those charged with governance;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
CASTLE LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASTLE LEISURE LIMITED
- 14 -
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.
Ian Thomas BSc FCA DChA (Senior Statutory Auditor)
For and on behlaf of Azets Audit Services
18 February 2022
Ty Derw
Chartered Accountants
Lime Tree Court
Statutory Auditors
Cardiff Gate Business Park
Cardiff
UK
CF23 8AB
United Kingdom
CASTLE LEISURE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 26 DECEMBER 2021
- 15 -
2021
2020
Notes
£
£
Turnover
3
16,664,365
13,515,620
Cost of sales
(2,215,458)
(1,703,633)
Gross profit
14,448,907
11,811,987
Administrative expenses
(18,868,545)
(18,187,543)
Other operating income
3,467,637
5,699,603
Exceptional item
4
4,034,909
Operating profit/(loss)
5
3,082,908
(675,953)
Interest payable and similar expenses
9
(82,600)
(124,374)
Profit/(loss) before taxation
3,000,308
(800,327)
Tax on profit/(loss)
10
(340,585)
201,687
Profit/(loss) for the financial year
2,659,723
(598,640)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CASTLE LEISURE LIMITED
BALANCE SHEET
AS AT
26 DECEMBER 2021
26 December 2021
- 16 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
48,830,823
46,593,681
Current assets
Stocks
13
341,688
235,738
Debtors
14
176,907
383,179
Cash at bank and in hand
3,483,145
7,125,123
4,001,740
7,744,040
Creditors: amounts falling due within one year
15
(6,898,317)
(4,766,326)
Net current (liabilities)/assets
(2,896,577)
2,977,714
Total assets less current liabilities
45,934,246
49,571,395
Creditors: amounts falling due after more than one year
16
(2,088,850)
(8,095,250)
Provisions for liabilities
(179,518)
Net assets
43,665,878
41,476,145
Capital and reserves
Called up share capital
20
225,980
227,980
Share premium account
283,744
283,744
Capital redemption reserve
46,670
44,670
Profit and loss reserves
43,109,484
40,919,751
Total equity
43,665,878
41,476,145
The financial statements were approved by the board of directors and authorised for issue on 18 February 2022 and are signed on its behalf by:
Mr P J T Yapp
Mr J C Harris
Director
Director
Company Registration No. 00118558
CASTLE LEISURE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 26 DECEMBER 2021
- 17 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 30 December 2019
228,948
283,744
43,702
41,918,675
42,475,069
Year ended 27 December 2020:
Loss and total comprehensive income for the year
-
-
-
(598,640)
(598,640)
Dividends
11
-
-
-
(227,980)
(227,980)
Redemption of shares
20
968
968
Reduction of shares
20
(968)
-
(172,304)
(173,272)
Balance at 27 December 2020
227,980
283,744
44,670
40,919,751
41,476,145
Year ended 26 December 2021:
Profit and total comprehensive income for the year
-
-
-
2,659,723
2,659,723
Dividends
11
-
-
-
(113,990)
(113,990)
Redemption of shares
20
2,000
2,000
Reduction of shares
20
(2,000)
-
(356,000)
(358,000)
Balance at 26 December 2021
225,980
283,744
46,670
43,109,484
43,665,878
CASTLE LEISURE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 26 DECEMBER 2021
- 18 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
7,113,051
1,980,437
Interest paid
(82,600)
(124,374)
Income taxes (paid)/refunded
(63,780)
3,574
Net cash inflow from operating activities
6,966,671
1,859,637
Investing activities
Purchase of tangible fixed assets
(6,191,342)
(1,207,725)
Proceeds on disposal of tangible fixed assets
1,059,083
6,349
Net cash used in investing activities
(5,132,259)
(1,201,376)
Financing activities
Redemption of shares
(356,000)
(172,304)
Proceeds of new bank loans
2,000,000
5,000,000
Repayment of bank loans
(7,006,400)
(475,950)
Dividends paid
(113,990)
(227,980)
Net cash (used in)/generated from financing activities
(5,476,390)
4,123,766
Net (decrease)/increase in cash and cash equivalents
(3,641,978)
4,782,027
Cash and cash equivalents at beginning of year
7,125,123
2,343,096
Cash and cash equivalents at end of year
3,483,145
7,125,123
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 26 DECEMBER 2021
- 19 -
1
Accounting policies
Company information
Castle Leisure Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
1 City Road, Cardiff, United Kingdom, CF24 3TQ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
As at 26 December 2021 the company has net current liabilities of £2,895,577 and net assets of £43,665,878.
true
During 2021, as a consequence of the measures taken by the UK Government to manage the impact of Covid-19, the day to day operations of the business were disrupted.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover
comprises revenue recognised from participation fees, gaming machine takings and the sale of food and drink received during the year net of gross profit tax, machine gaming duty and value added tax. Revenue is recognised as the services are rendered and food and drink revenue is recognised at the point of sale.
1.4
Tangible fixed assets
Freehold properties are stated at 1991 open market for existing use valuation with subsequent additions at cost. The cost of repairs and maintenance of the buildings is charged to profit and loss account as incurred. Impairment reviews are carried out to ensure freehold buildings are not carried above their recoverable amounts. Any impairment write downs are charged to the profit and loss account.
Other tangible fixed assets are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off their cost less their estimated residual value, over their expected useful lives on the following bases:
Freehold property
3% straight line
Plant, equipment and vehicles
4-33% straight line
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
.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
1
Accounting policies
(Continued)
- 20 -
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible 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.
1.6
Stocks
Stock is valued at the lower of cost and net realisable value.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand
and
deposits held at call with banks
.
1.8
Financial instruments
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
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.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
1
Accounting policies
(Continued)
- 21 -
Other financial assets
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.
Impairment of financial assets
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.
Derecognition of financial assets
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.
Classification of financial liabilities
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
Basic financial liabilities, including
creditors and
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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
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 th
r
ough 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.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
1
Accounting policies
(Continued)
- 22 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and the recognition in the tax computation.
A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be a suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time of the timing differences are expected to reverse.
Deferred tax assets and liabilities are not discounted.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The Company operates a defined contribution plan under which the Company pays a fixed contribution to a separate entity. The Company has no further payment obligation once the contributions have been paid. The pension charge represents the amounts payable by the Company in respect of the 52 weeks.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
1
Accounting policies
(Continued)
- 23 -
1.13
Government grants
Government grants are recognised at the fair value of the asset receive
d
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Depreciation of freehold property
The directors in determining an appropriate depreciation policy in respect of freehold property have made estimates in respect of the useful economic lives of the assets and their residual values. This is based on their knowledge and understanding of the market.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Bingo admissions and participations
8,721,030
7,340,482
Net receipts from sale of goods
2,526,275
2,144,703
Net receipts from gaming machines
5,417,060
4,030,435
16,664,365
13,515,620
2021
2020
£
£
Other significant revenue
Grants received
2,583,124
3,188,722
Net Repayment of trading income by HMRC
-
2,242,430
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
3
Turnover and other revenue
(Continued)
- 24 -
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
16,664,365
13,515,620
4
Exceptional item
2021
2020
£
£
Income
Exceptional item
4,034,909
-
The exceptional item relates to the re-development of the Nantgarw site, which was completed in 2021. This balance included insurance monies, the cost of re-development of the new site, write-down of the damaged assets and additional costs associated with the re-development.
5
Operating profit/(loss)
2021
2020
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Government grants
(2,583,124)
(3,188,722)
Depreciation of owned tangible fixed assets
2,915,092
3,034,516
(Profit)/loss on disposal of tangible fixed assets
(19,975)
8,435
6
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
26,000
24,000
For other services
Taxation compliance services
5,000
5,000
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 25 -
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Bingo clubs
493
482
Administration
27
28
520
510
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
9,242,495
9,073,478
Social security costs
780,607
688,442
Pension costs
830,410
939,469
10,853,512
10,701,389
8
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
1,383,900
1,118,301
Company pension contributions to defined contribution schemes
469,811
410,340
1,853,711
1,528,641
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2020 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
826,725
714,144
Company pension contributions to defined contribution schemes
479,000
352,967
The gross equivalent of own pension contributions made by the highest paid director was £59,128 (2020: £66,916).
A total of £53,413 (2020: £50,458) was paid as pension and benefits to former directors.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 26 -
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
82,600
124,374
10
Taxation
2021
2020
£
£
Current tax
Adjustments in respect of prior periods
(19,120)
Deferred tax
Origination and reversal of timing differences
615,594
(91,992)
Previously unrecognised tax loss, tax credit or timing difference
(275,009)
Adjustment in respect of prior periods
(90,575)
Total deferred tax
340,585
(182,567)
Total tax charge/(credit)
340,585
(201,687)
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit/(loss) before taxation
3,000,308
(800,327)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
570,059
(152,062)
Tax effect of expenses that are not deductible in determining taxable profit
27,876
68,207
Adjustments in respect of prior years
(274,947)
(109,695)
Effect of change in corporation tax rate
43,084
Other tax adjustments
(25,487)
(8,137)
Taxation for the year
340,585
(201,687)
11
Dividends
2021
2020
£
£
Paid in the year
113,990
227,980
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 27 -
12
Tangible fixed assets
Freehold property
Assets under construction
Plant, equipment and vehicles
Total
£
£
£
£
Cost
At 28 December 2020
39,105,454
345,162
37,322,854
76,773,470
Additions
6,191,342
6,191,342
Disposals
(6,230,583)
(6,230,583)
Transfers
(345,162)
345,162
At 26 December 2021
39,105,454
37,628,775
76,734,229
Depreciation and impairment
At 28 December 2020
854,277
29,325,512
30,179,789
Depreciation charged in the year
25,000
2,890,092
2,915,092
Eliminated in respect of disposals
(5,191,475)
(5,191,475)
At 26 December 2021
879,277
27,024,129
27,903,406
Carrying amount
At 26 December 2021
38,226,177
10,604,646
48,830,823
At 27 December 2020
38,251,177
345,162
7,997,342
46,593,681
13
Stocks
2021
2020
£
£
Goods for resale
341,688
235,738
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Other debtors
42,727
Prepayments and accrued income
176,907
179,385
176,907
222,112
Deferred tax asset (note 18)
161,067
176,907
383,179
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 28 -
15
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
17
3,003,800
2,003,800
Trade creditors
823,757
344,289
Corporation tax
63,780
Other taxation and social security
511,009
419,989
Accruals and deferred income
2,559,751
1,934,468
6,898,317
4,766,326
16
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
17
2,088,850
8,095,250
17
Loans and overdrafts
2021
2020
£
£
Bank loans
5,092,650
10,099,050
Payable within one year
3,003,800
2,003,800
Payable after one year
2,088,850
8,095,250
The first bank loan is secured by a first charge on certain freehold property of the company and bears interest at 1.75% above the bank's base rate.
The second bank loan bears interest at 1.9% above the bank's base rate.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 29 -
18
Deferred taxation
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:
Liabilities
Liabilities
Assets
Assets
2021
2020
2021
2020
Balances:
£
£
£
£
(Decelerated)/accelerated capital allowances
(528,249)
-
-
-
Other timing differences
10,706
-
-
161,067
Losses
697,061
-
-
-
179,518
-
-
161,067
2021
Movements in the year:
£
Asset at 28 December 2020
(161,067)
Charge to profit or loss
340,585
Liability at 26 December 2021
179,518
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,170,830
939,469
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.
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
- 30 -
20
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
225,980 Ordinary shares of £1 each
225,980
227,980
21
Financial commitments
The company has unfunded pension commitments to one of its executive directors and two former non executive directors.
22
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
561,043
594,719
Between two and five years
301,987
282,250
863,030
876,969
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2021
2020
£
£
Acquisition of tangible fixed assets
1,680,000
2,110,000
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2021
2020
£
£
Aggregate compensation
1,700,628
1,533,729
Transactions with related parties
During the year the company entered into the following transactions with related parties:
CASTLE LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 26 DECEMBER 2021
24
Related party transactions
(Continued)
- 31 -
Dividend payments
2021
2020
£
£
Key management personnel
9,483
18,965
25
Directors' transactions
Dividends totalling £13,839 (2020 - £27,678) were paid in the year in respect of shares held by the company's directors.
During the year an interest-free loan of £nil (2020: £150,000) was advanced to the company by one of the directors. The amount was repaid in full during the prior year.
26
Cash generated from operations
2021
2020
£
£
Profit/(loss) for the year after tax
2,659,723
(598,640)
Adjustments for:
Taxation charged/(credited)
340,585
(201,687)
Finance costs
82,600
124,374
(Gain)/loss on disposal of tangible fixed assets
(19,975)
8,435
Depreciation and impairment of tangible fixed assets
2,915,092
3,034,516
Movements in working capital:
(Increase)/decrease in stocks
(105,931)
67,616
Decrease in debtors
45,186
273,932
Increase/(decrease) in creditors
1,195,771
(728,109)
Cash generated from operations
7,113,051
1,980,437
27
Analysis of changes in net debt
28 December 2020
Cash flows
26 December 2021
£
£
£
Cash at bank and in hand
7,125,123
(3,641,978)
3,483,145
Borrowings excluding overdrafts
(10,099,050)
5,006,400
(5,092,650)
(2,973,927)
1,364,422
(1,609,505)
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