Registered number:
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
COMPANY INFORMATION
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ARLAFORM LIMITED
CONTENTS
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ARLAFORM LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
The principal activity of the Company during the year was the provision of property rental and management services to its subsidiary company, Stapleford Park Limited, a hotel operator. There have been no other activities during the year.
Excluding the one off exceptional write back of intercompany debt (please see note 11), it is expected and accepted that the Company will make a similar level of profit or loss year on year, as there are few transactions within the Company. The principal activity of the Group is that of a running a luxury country house hotel.
Turnover for the year to 31 March 2022 was £3.2m (31 March 2021: £134k due to COVID-19 closure), Gross Profit was £2.7m (2021: £70k) and Gross Profit Margin was 83.4% for the year (2021: 51.5%).
A major part of the year the hospitality industry was closed by government order due to COVID-19 and the Hotel was opened again with limited capacity in June 2021. Since the lock-down the entire hospitality industry is faced with serious issues on staff shortages at all levels. Costs on all other areas are also on the rise due to supply shortages. Contracts for the purchase of the entire share capital of Arlaform Limited by Dreamr Hotels UK Limited were exchanged in the year and completed post year end. Trading results for the year have improved on historical achievements of the Group which has continued to improve post year end. The ultimate owner and director remains positive on the business outlook for the foreseeable future.
The principal risk and uncertainty of the business is the continued financial support of the Group's shareholder.
The director is the majority shareholder of the ultimate parent company and has confirmed he will provide financial and operational support to Arlaform Ltd and Stapleford Park Ltd to ensure they are able to fulfil their trading objectives and meet their obligations as they fall due for a period of at least twelve months from the date of the approval of the financial statements. This support extends to not seeking repayment of any director's loan account until the Group can afford to make repayment. On this basis the directors have the expectation that the Group will continue to realise its assets and meet its liabilities, as they fall due, in the normal course of business. The directors are therefore of the opinion that it remains appropriate to prepare these financial statements on a going concern basis. Please see note 2.2 for further information.
• Turnover
• Gross profit margin The results of these financial key performance indicators is noted in the business review above.
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ARLAFORM LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
This report was approved by the board and signed on its behalf.
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ARLAFORM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
The directors present their report and the financial statements for the year ended 31 March 2022.
The loss for the year, after taxation, amounted to £188,156 (2021 - loss £3,468,953).
The directors have not recommended a dividend.
The directors who served during the year were:
Mr D Fam (appointed 18 August 2022)
In a difficult and competitive market the directors are looking at indicators to increase revenue and reduce costs to return the business to profitability.
The Group's principal financial instrument was intercompany debt. The main purpose of which was to provide finance for the Group's normal trading operations and for future investment. As part of the acquisition of the Group by Dreamr Hotels UK Limited, all debt owed to the previous shareholders and investors was formally and legally waived. The Group has various other financial instruments such as trade debtors and creditors that arise directly from its trading operations. The main risks arising from the Group's financial instruments are liquidity and credit risks. The Group has clear policies for managing each of these risks, as summarised below.
Liquidity risk The Group aims to mitigate liquidity risk through continued financial support from the owners and seeking external finance where required. Credit risk The risk of financial loss due to counterparty's failure to honour its obligations arises principally in relation to transactions where the Group provides goods or services on deferred credit terms. The Group mitigates this risk by closely monitoring customer balances and payment history. Given the nature of the Group's activities and the payment policies in place, exposure to bad debts is not considered to be significant.
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ARLAFORM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
On the 18 August 2022, Arlaform Limited was acquired by Dreamr Hotels UK Limited, a Company registered and domiciled in England and Wales.
The auditor, MHA MacIntyre Hudson, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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ARLAFORM LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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ARLAFORM LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARLAFORM LIMITED
We have audited the financial statements of Arlaform Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2022, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated Statement of Cash Flows, the Consolidated and Company Statement of Changes in Equity and the related notes, 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).
Included in the debtors shown on the parent Company's Balance Sheet is an amount of £15,512,853 due from Stapleford Park Limited, a wholly owned subsidiary. The Balance Sheet of Stapleford Park Limited as at 31 March 2022 reports a deficit of shareholders’ funds amounting to £16,843,722. In our opinion the parent Company is unlikely to receive any payment of this debt and a full provision of £15,512,853 should have been made. Accordingly, debtors should be reduced by £15,512,853, the profit for the year should be decreased by £15,512,853 and retained earnings should be reduced by £15,512,853.
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
We draw attention to note 2.2 in the financial statements, which indicates that conditions identified may cast significant doubt on the Group's ability to continue as a going concern. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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ARLAFORM LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARLAFORM LIMITED (CONTINUED)
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.
As described in the basis for qualified opinion section of our report, in our opinion, the parent Company is unlikely to receive any payment of the debt due from Stapleford Park Limited, the wholly owned subsidiary, and a full provision of £15,512,853 should have been made. Accordingly, debtors should be reduced by £15,512,853, the profit for the year should be decreased by £15,512,853 and retained earnings should be reduced by £15,512,853. We have concluded that where the other information refers to amounts within the financial statements, it may be misstated for the same reason.
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit, the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements and, the Group Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.
Except for the material misstatement described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report and the Directors' Report.
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ARLAFORM LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARLAFORM LIMITED (CONTINUED)
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 Group 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:
• Enquiry of management and those charged with governance around actual, potential or suspected litigation, claims, non-compliance with applicable laws and regulations and fraud. • Enquiry of staff in compliance functions and external advisors to identify any instances of non-compliance with laws and regulations. • Performing audit work over the risk of management override, 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 bias. • Reviewing of financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. • Discussions were held amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud. 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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ARLAFORM LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARLAFORM LIMITED (CONTINUED)
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.
for and on behalf of
Statutory Auditor
Leicester
United Kingdom Date:
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ARLAFORM LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
REGISTERED NUMBER: 04204327
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2022
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ARLAFORM LIMITED
REGISTERED NUMBER: 04204327
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 39 form part of these financial statements.
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ARLAFORM LIMITED
REGISTERED NUMBER: 04204327
COMPANY BALANCE SHEET
AS AT 31 MARCH 2022
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ARLAFORM LIMITED
REGISTERED NUMBER: 04204327
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 39 form part of these financial statements.
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ARLAFORM LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The entity is a private company limited by shares which is incorporated in England and Wales, registration number 04204327. The registered office is C/O Dwf Law Llp 1 Scott Place, 2 Hardman Street, Manchester, England, M3 3AA.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The directors have adopted the going concern basis in the preparation of these financial statements and have taken measures to mitigate the impact of COVID-19, including the utilisation of the Job Retention Scheme. The Group reported a loss of £188,156 (2021 - £3,468,953) in the year ended 31 March 2022 and, at that date, the Group's total liabilities exceeded its total assets by £31,481,344 (2021 - (£31,293,188).
After reviewing the Group's forecasts and projections, the directors have a reasonable expectation that the Group has adequate resources and support to continue in operational existence for the foreseeable future. The Group's ability to continue as a going concern is dependent on the ongoing support of the parent company's shareholders. The director is the majority shareholder of the ultimate parent company and has confirmed he will provide financial and operational support to Arlaform Ltd and Stapleford Park Ltd to ensure they are able to fulfil their trading objectives and meet their obligations as they fall due for a period of at least twelve months from the date of the approval of the financial statements. This support extends to not seeking repayment of any director's loan account until the Group can afford to make repayment. On this basis the directors have the expectation that the Group will continue to realise its assets and meet its liabilities, as they fall due, in the normal course of business. The directors are therefore of the opinion that it remains appropriate to prepare these financial statements on a going concern basis however, it is acknowledged that due to the points noted above, a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. The previous parent of this group, which existed at the balance sheet date and previously prepared consolidated financial statements, entered liquidation post year end. In prior years Arlaform Limited prepared individual financial statements only. These financial statements have been prepared on a consolidated basis and the comparatives included within these financial statements are also consolidated.
Functional and presentation currency
Transactions and balances
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Government grants in relation to operating expenditure are credited to the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at transaction price, net of transaction costs and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (i) Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. (ii) Impairment of assets The Company makes an estimate of the recoverable value of intercompany debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of the debtors and historical experience.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The Company has tax losses of £2,639,481 (2021 - £2,766,325) to utilise against future trading profits.
Stapleford Park Limited has tax losses of £25,980,259 (2021 - £25,194,826) to utilise against future trading profits. From 1 April 2023, the Corporation Tax main rate will increase to 25% for profits over £250,000. A small profits rate will also be introduced for profits of £50,000 or less, charging Corporation Tax at 19%. Profits between £50,000 and £250,000 will be taxed at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
12.Tangible fixed assets (continued)
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
12.Tangible fixed assets (continued)
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
12.Tangible fixed assets (continued)
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Profit and loss account
22.Guarantees
A cross guarantee and debenture exists between Stapleford Park Limited and Arlaform Limited over net bank borrowings. At 31 March 2022 net bank borrowings of the two companies amounted to £Nil (2021 - £1,686,455).
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
During the year key management personnel were paid remuneration totalling £165,221 (2021 - £143,070).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements. The profit after tax of the parent Company for the year was £
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ARLAFORM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The immediate parent and ultimate company is
The ultimate parent company is The ultimate controlling party is considered to be David Fam by virtue of his controlling shareholding in the ultimate parent company.
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