THE WESTERN MEETING CLUB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Company registration number SC234779 (Scotland)
THE WESTERN MEETING CLUB LIMITED
COMPANY INFORMATION
Directors
Mr David Brown
Mr James Morrison
Mr Alan MacDonald
Mr Richard Johnstone
Secretary
Mr David Brown
Company number
SC234779
Registered office
2 Whitletts Road
Ayr
Ayrshire
KA8 0JE
Auditor
William Duncan + Co (Audit) Ltd
44 Bank Street
Kilmarnock
Ayrshire
KA1 1HA
Business address
2 Whitletts Road
Ayr
Ayrshire
KA8 0JE
Bankers
Virgin Money
43 Alloway Street
Ayr
Ayrshire
KA7 1SP
Solicitors
Morton Fraser Solicitors
1 West Regent Street
Glasgow
G2 1RW
THE WESTERN MEETING CLUB LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
THE WESTERN MEETING CLUB LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
The Group operates Ayr Racecourse which provided thirty two days of racing spread throughout the year and encompassing both codes of racing. In addition, it is further enhanced by the operation of Western House Hotel, a four star hotel situated on the racecourse.
Turnover increased to £9.6m (2021 - £7.3m). During 2022 32 race meetings took place with 0 abandonments (2021 – 30 race meetings with 2 abandoned). Total attendances were 69,728 (2021 – 34,145).
The Directors are committed to ensuring that the current race programme is appropriately funded and that it retains its status as a Group 1 racecourse. The principal investors and bankers continue to be supportive of this investment strategy.
The Catering and hotel operation performed in line with expectations taking into account the COVID 19 restrictions that were in place in the previous year.
The group continues to benefit financially from the support provided by related parties and is comfortable with its debt levels.
Principal risks and uncertainties
Cashflow Risk
The main cash flow risk is the vulnerability of race meetings to abandonment due to adverse weather conditions. The company has invested significant sums in recent years on improved drainage to mitigate risk.
Also, levy funding is dependent upon bookmaker contributions and profitability which are outside the control of the directors.
The company benefits from media rights income and the number of runners per race can affect certain media rights payments.
Credit Risk
The company's credit risk is primarily attributed to its trade receivables; however, payment is required in advance for ticket, hospitality and sponsorship income thereby reducing the risk of bad debt.
Price Risk
The company operates within the leisure sector and regularly benchmarks its prices to ensure it remains competitive.
Cost Risk
The main risks are unforeseen maintenance liabilities, supplier price increases and additional regulatory costs. There is a programme of regular maintenance in place to manage the risk of infrastructure failure; regular tendering of supplier contracts and the company is a member of all trade bodies appropriate to a racecourse in order to mitigate this risk.
Going Concern
The Board has reviewed the company's forecasts and associated risks taking cognisance of economic factors. Regular review and up-to-date management information reduced the risk of unforeseen trends developing without appropriate action being taken to mitigate them.
The Board has reviewed the working capital and cashflow requirements of the group and consider that they are consistent and adequate and, as a consequence, the going concern basis continues to be adopted in preparing the financial statements.
THE WESTERN MEETING CLUB LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators
The Directors monitor the performance of the business through the production of detailed budgets and comparison of actual and anticipated results on a continual basis.
In addition key performance indicators are monitored to ensure that they are within tolerable levels.
These include but are not exhaustive;
Attendance and sales against budget and previous years;
RevPar statistics;
Wage Costs as a fixed cost and variable costs;
Food and liquor gross profit percentages.
Mr David Brown
Director
14 September 2023
THE WESTERN MEETING CLUB LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of promotion, operation and management of Ayr Racecourse.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr David Brown
Mr James Morrison
Mr Alan MacDonald
Mr Richard Johnstone
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Market value of land and buildings
As noted in the accounts, land and buildings are included at the valuation carried out in 1996 with subsequent additions being included at cost.
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
Mr David Brown
Director
14 September 2023
THE WESTERN MEETING CLUB LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
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.
THE WESTERN MEETING CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE WESTERN MEETING CLUB LIMITED
- 5 -
Opinion
We have audited the financial statements of The Western Meeting Club Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
THE WESTERN MEETING CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE WESTERN MEETING CLUB LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
THE WESTERN MEETING CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE WESTERN MEETING CLUB LIMITED
- 7 -
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.
Mr Graeme Bryson CTA, ACA
Senior Statutory Auditor
For and on behalf of William Duncan + Co (Audit) Ltd
14 September 2023
Chartered Accountants
Statutory Auditor
44 Bank Street
Kilmarnock
Ayrshire
KA1 1HA
THE WESTERN MEETING CLUB LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
9,616,797
7,262,852
Cost of sales
(5,968,184)
(4,296,600)
Gross profit
3,648,613
2,966,252
Administrative expenses
(3,204,005)
(2,620,293)
Other operating income
137,003
745,395
Operating profit
4
581,611
1,091,354
Interest receivable and similar income
7
75,402
82,467
Interest payable and similar expenses
8
(192,730)
(81,617)
Profit before taxation
464,283
1,092,204
Tax on profit
9
(328,372)
(262,498)
Profit for the financial year
135,911
829,706
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE WESTERN MEETING CLUB LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
12,212,492
12,439,494
Investments
11
117,381
161,260
12,329,873
12,600,754
Current assets
Debtors
12
4,923,555
2,810,217
Cash at bank and in hand
413,581
2,466,385
5,337,136
5,276,602
Creditors: amounts falling due within one year
13
(2,181,101)
(2,106,731)
Net current assets
3,156,035
3,169,871
Total assets less current liabilities
15,485,908
15,770,625
Creditors: amounts falling due after more than one year
14
(5,946,888)
(6,554,158)
Provisions for liabilities
(748,524)
(561,882)
Net assets
8,790,496
8,654,585
Capital and reserves
Called up share capital
18
1,120
1,120
Share premium account
2,805,192
2,805,192
Fair value reserve
1,440,998
1,479,191
Equity reserve
21
972,551
1,055,098
Profit and loss reserves
3,570,635
3,313,984
Total equity
8,790,496
8,654,585
The financial statements were approved by the board of directors and authorised for issue on 14 September 2023 and are signed on its behalf by:
Mr David Brown
Director
Company Registration No. SC234779
THE WESTERN MEETING CLUB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Share capital
Share premium account
Revaluation reserve
Equity reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2021
1,120
2,805,192
1,517,384
1,136,715
2,364,468
7,824,879
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
-
829,706
829,706
Transfer of amortised cost movements
18
-
(81,617)
81,617
-
Transfers
-
-
(38,193)
-
38,193
-
Balance at 31 December 2021
1,120
2,805,192
1,479,191
1,055,098
3,313,984
8,654,585
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
-
135,911
135,911
Transfer of amortised cost movements
18
-
(82,547)
82,547
-
Transfers
-
(38,193)
-
38,193
-
Balance at 31 December 2022
1,120
2,805,192
1,440,998
972,551
3,570,635
8,790,496
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
1
Accounting policies
Company information
The Western Meeting Club Limited is a private company limited by shares incorporated in Scotland. The registered office is 2 Whitletts Road, Ayr, Ayrshire, KA8 0JE.
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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost convention as modified to include the revaluation of freehold property. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of The Western Meeting Club 2003 Limited. These consolidated financial statements are available from its registered office.
1.2
Turnover
Turnover represents income derived directly and indirectly from race meetings plus other miscellaneous income from the use of the racecourse facilities, excluding VAT.
Revenue is recognised on the date of the event.
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
10 - 50 years on straight-line basis
Plant and machinery
3 - 10 years on straight-line basis
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.
1.4
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.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.6
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.
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.
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
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.
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, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.7
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.
1.8
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
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.13
Grants from the Horserace Betting Levy Board
Grants are receivable from the Levy Board to support racing activities. The grants can be waived and transferred to capital credits. Such capital credits may be claimed, at the Levy Board's discretion, against expenditure on approved capital projects or repayment of Levy Board loans. Grants are taken to income when the race to which they relate is held.
1.14
Other borrowings, which are basic financial instruments are initially recorded at the present value of future payments discounted at a market rate of interest for similar borrowings. Subsequently, they are measured at amortised cost using the effective interest method. Other borrowings that are payable within one year are not discounted.
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.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Raceday Events
9,616,797
7,262,852
2022
2021
£
£
Turnover analysed by geographical market
UK
9,616,797
7,262,852
2022
2021
£
£
Other revenue
Dividends received
75,402
82,467
Grants received
53,000
607,698
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Levy Board grants
(53,000)
(607,698)
Fees payable to the company's auditors for the audit of the company's financial statements
10,600
13,253
Depreciation of owned tangible fixed assets
459,469
466,815
Profit on disposal of tangible fixed assets
(8,860)
-
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administration
16
15
Management
2
2
Ground staff and maintenance
20
13
Casual raceday staff
34
35
Total
72
65
2022
2021
£
£
Wages and salaries
1,353,174
1,142,364
Social security costs
78,698
67,980
Pension costs
48,064
30,852
1,479,936
1,241,196
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
197,500
172,808
Company pension contributions to defined contribution schemes
24,525
9,109
222,025
181,917
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 2).
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
7
Interest receivable and similar income
2022
2021
£
£
Other income from investments
Dividends received
75,402
82,467
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
110,183
-
Adjustment to amortised cost
82,547
81,617
192,730
81,617
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
141,730
260,669
Deferred tax
Origination and reversal of timing differences
186,642
1,829
Total tax charge
328,372
262,498
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
464,283
1,092,204
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
88,214
207,519
Tax effect of expenses that are not deductible in determining taxable profit
1,236
994
Depreciation on assets not qualifying for tax allowances
62,630
61,290
Other non-reversing timing differences
(2,426)
Dividend income
(14,326)
(15,669)
Adjustments in respect of financial liabilities
15,684
15,507
Increase in rate of DT
179,646
Enhanced expenditure
(4,712)
(4,717)
Taxation charge for the year
328,372
262,498
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
10
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Total
£
£
£
Cost or valuation
At 1 January 2022
17,846,730
3,767,528
21,614,258
Additions
10,822
221,645
232,467
Disposals
(13,200)
(13,200)
At 31 December 2022
17,857,552
3,975,973
21,833,525
Depreciation and impairment
At 1 January 2022
5,760,158
3,414,606
9,174,764
Depreciation charged in the year
321,407
138,062
459,469
Eliminated in respect of disposals
(13,200)
(13,200)
At 31 December 2022
6,081,565
3,539,468
9,621,033
Carrying amount
At 31 December 2022
11,775,987
436,505
12,212,492
At 31 December 2021
12,086,572
352,922
12,439,494
Land and buildings were valued in 1996 at £5,690,000 by independent external valuers based on depreciated replacement cost. Additions since that date are included at cost.
The transitional rules set out in FRS 102 have been applied in implementing FRS102. Accordingly the 1996 valuation is being deemed as the cost therefore revaluations are not required in the future.
Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £10,666,240 (2021 - £10,942,226), being cost £15,973,066 (2021 - £15,963,320) and depreciation £5,294,538 (2021 - £5,021,094).
2022
2021
£
£
Cost
15,973,066
15,963,320
Accumulated depreciation
(5,306,826)
(5,021,094)
Carrying value
10,666,240
10,942,226
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
11
Fixed asset investments
2022
2021
£
£
Unlisted investments
117,381
161,260
The company has not designated any financial assets that are not classified as financial assets at fair value through profit or loss.
The unlisted investments above are carried at cost and the directors are satisfied that this represents fair value given that the investments are not held for capital growth but for income generation.
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2022
161,260
Disposals
(43,879)
At 31 December 2022
117,381
Carrying amount
At 31 December 2022
117,381
At 31 December 2021
161,260
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
384,085
159,979
Amounts owed by group undertakings
3,630,032
1,985,032
Prepayments and accrued income
909,438
665,206
4,923,555
2,810,217
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
13
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Other borrowings
15
686,832
686,832
Trade creditors
261,533
182,724
Amounts owed to group undertakings
387,698
67,871
Corporation tax
8,398
259,847
Other taxation and social security
142,126
143,088
Other creditors
24,244
18,133
Accruals and deferred income
670,270
748,236
2,181,101
2,106,731
14
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Other borrowings
15
5,946,888
6,554,158
Amounts included above which fall due after five years are as follows:
Payable by instalments
3,629,614
4,229,085
15
Loans and overdrafts
2022
2021
£
£
Loans from related parties
6,633,720
7,240,990
Payable within one year
686,832
686,832
Payable after one year
5,946,888
6,554,158
Loans from related parties due in greater than one year have not incurred a market rate of interest since the year ended 31 December 2017, and as such have been discounted to fair value to account for the below market rate of interest, with the difference between book value and fair value being recognised in equity. The subsequent unwinding of the discount is recognised as an interest charge through the Profit and Loss Account.
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
748,524
561,882
2022
Movements in the year:
£
Liability at 1 January 2022
561,882
Charge to profit or loss
186,642
Liability at 31 December 2022
748,524
17
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
48,064
30,852
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.
18
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
1,114
1,114
1,114
1,114
Ordinary B of £1 each
6
6
6
6
1,120
1,120
1,120
1,120
Each 'A' ordinary shareholder is entitled to one vote for each share held. 'B' ordinary shareholders are not entitled to vote.
On the winding up of the company 'A' and 'B' ordinary shareholders rank pari passu in the event of a return of assets.
19
Equity reserve
The equity reserve reflects the discounting of the loans from related parties to fair value and the movement in the year is in relation to the unwinding of the discount. These reserves are not distributable.
THE WESTERN MEETING CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
20
Financial commitments, guarantees and contingent liabilities
The company has given a cross-guarantee to bankers to secure the borrowings of the parent company, The Western Meeting Club 2003 Limited, and fellow subsidiary company, Western House Catering Limited. At 31 December 2022, group bank borrowing amounted to £600,502 (2021 - £2,202,854).
21
Related party transactions
The company has taken advantage of the exemption in the Financial Reporting Standard 102 Number 33 from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company, The Western Meeting Club 2003 Ltd.
Included within note 15 is amounts due to companies which have common directorships of The Western Meeting Club Limited. These loans are repayable over 12 years with a rate of interest of 1.36%. Repayments of £686,432 (2021 - £nil) were made in the year. Interest of £82,547 (2021 - £nil) was charged in the year. The amounts outstanding at the balance sheet date was £6,636,705 (2021 - £7,240,990).
22
Ultimate controlling party
The ultimate controlling party is The Western Meeting Club 2003 Limited by virtue of its 100% shareholding. Copies of the group accounts can be found at Companies House.
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