Company registration number 07505340 (England and Wales)
OLD TRAFFORD SUPPORTERS CLUB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
OLD TRAFFORD SUPPORTERS CLUB LIMITED
COMPANY INFORMATION
Directors
Gary Neville
Ryan Giggs
Chan Lay Hoon
Company number
07505340
Registered office
St Andrews Chambers
21 Albert Square
Manchester
M2 5PE
Auditor
Cowgill Holloway LLP
Regency House
45-53 Chorley New Road
Bolton
BL1 4QR
Bankers
HSBC Bank Plc
69 Pall Mall
London
SW1Y 5EY
Solicitors
Kuit Steinart Levy LLP
3 St Mary's Parsonage
Manchester
M3 2RD
OLD TRAFFORD SUPPORTERS CLUB LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
OLD TRAFFORD SUPPORTERS 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
2022 represented a turnaround year for the hospitality industry following the devastating impact of COVID-19. Despite variants emerging in the early part of the year such as the Omicron variant, the Hotel has managed to re-establish its financial performance at levels close to 2019.
The director's commitment to maintaining the quality of the Hotel, its team and the brand through difficult times has proved to be successful as the Hotel continues to grow and experience new levels of performance. The fact that the team is largely the same that went into COVID demonstrates the cohesion within the Hotel and has ensured that unlike in other parts of the industry, the Hotel has not suffered with significant recruitment costs associated with a transient workforce or had to rely on agencies to fill any vacancies.
2023 is expected to be a record year for the Hotel, as all key performance indicators suggest that revenue will exceed pre-COVID levels due to increasing demand, especially with non-match day revenue streams increasing through accommodation, conference & events, and food & beverage sales within the outlets of the Hotel.
Due to the previous significant investment in the brand and customer service standards, the Hotel is well placed to increase its conversion of this increased revenue into profit as well as contributing further to the local economy and the environment. Concurrently, the property continues to achieve excellent feedback from guests and is consistently at the forefront on the competitive set in this area.
The Hotel also places great importance on the welfare of its employees and we regard this as a top priority. Our team engagement scores have never been higher, and we continue to focus on developing our team members to meet the ever growing number and expectations of our customers.
Gary Neville
Director
4 July 2023
OLD TRAFFORD SUPPORTERS CLUB LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
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 the operation of a hotel in Manchester branded as 'Hotel Football'. Operations at the restaurant and event space at the National Football Museum, also in Manchester, were discontinued as part of a strategic redevelopment to cut off loss making areas of the business.
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.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Gary Neville
Ryan Giggs
Chan Lay Hoon
Hasan Malik
(Resigned 1 May 2022)
Auditor
The auditor, Cowgill Holloway LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
Each of the directors in office at the date of approval of this annual report confirms that:
so far as the director's are aware, there is no relevant audit information of which the company's auditors are unaware, and
the director's have taken all the steps that they ought to have taken as a director's in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
Going concern
The financial statements of the company have been prepared using the going concern basis which the directors consider to be appropriate for the following reasons:
The company has reported a net current assets position as at the end of 2022 of £858,375 (excluding the bank loan) which is a slight fall on the same position at the end of 2021 of £1,342,330.
The company has registered an operating profit of £175,433 during the year compared to an operating loss of £328,724 in the prior year where there was limited operation of the hotel for the first six months of the year due to the pandemic.
The company registered a loss before tax of £630,158, down from the £1,148,879 registered in the previous year.
As restrictions were completely lifted during the second half of last year and the hotel re-opened completely, revenues have picked up significantly.
The directors have approved profit and loss budgets and well as cash flow forecasts until December 2023.
As such the cash flow forecasts until December 2023 indicate that, taking account of reasonably possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period. In addition, these forecasts show that the company will remain within the covenants set under its external banking facilities for the foreseeable future.
The external banking facilities were meant to expire on 31 March 2022. Negotiations with the banks started in the first quarter of 2021 and led to the facilities being renewed and agreement reached for the facility to expire on the 30 September 2023, albeit with some adjustments.
These cash flow forecasts are dependent on the company's immediate parent company, Orchid Leisure Limited not seeking repayment of the amounts currently due to the group, which on 31 December 2022 amounted to £10,288,487. Orchid Leisure Limited has indicated that it does not intend to seek repayment of these amounts for the period covered by the forecasts.
In addition to the above, the Company has received a letter of support from its ultimate parent company RSP Holdings PTE Limited stating that it will continue to provide such funds as are needed by the company until at least May 2024 and thereafter for the foreseeable future.
As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue, although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Based on the above, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least the next 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
On behalf of the board
Gary Neville
Director
4 July 2023
OLD TRAFFORD SUPPORTERS CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF OLD TRAFFORD SUPPORTERS CLUB LIMITED
- 5 -
Opinion
We have audited the financial statements of Old Trafford Supporters Club Limited (the 'company') for the year ended 31 December 2022 which comprise the profit and loss account, 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 loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OLD TRAFFORD SUPPORTERS 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.
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.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; laws related to Health and Safety, Employment, UK Companies Act, Pension Legislation and Tax Legislation.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OLD TRAFFORD SUPPORTERS CLUB LIMITED
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outline below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud.
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.
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.
Stuart Stead
Senior Statutory Auditor
For and on behalf of Cowgill Holloway LLP
4 July 2023
Chartered Accountants
Statutory Auditor
Regency House
45-53 Chorley New Road
Bolton
BL1 4QR
OLD TRAFFORD SUPPORTERS CLUB LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
6,476,653
3,558,228
Cost of sales
(1,253,045)
(741,350)
Gross profit
5,223,608
2,816,878
Administrative expenses
(5,421,709)
(4,036,680)
Other operating income
373,534
891,078
Operating profit/(loss)
4
175,433
(328,724)
Interest payable and similar expenses
6
(805,591)
(820,155)
Loss before taxation
(630,158)
(1,148,879)
Tax on loss
7
Loss for the financial year
(630,158)
(1,148,879)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
£
£
Loss for the year
(630,158)
(1,148,879)
Other comprehensive income
-
-
Total comprehensive income for the year
(630,158)
(1,148,879)
OLD TRAFFORD SUPPORTERS CLUB LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
8
26,681
33,258
Tangible assets
9
14,953,885
15,212,653
14,980,566
15,245,911
Current assets
Stocks
10
91,432
69,892
Debtors
11
2,587,771
2,429,001
Cash at bank and in hand
16,368
191,993
2,695,571
2,690,886
Creditors: amounts falling due within one year
12
(15,571,323)
(15,279,919)
Net current liabilities
(12,875,752)
(12,589,033)
Total assets less current liabilities
2,104,814
2,656,878
Creditors: amounts falling due after more than one year
13
(10,365,987)
(10,287,893)
Net liabilities
(8,261,173)
(7,631,015)
Capital and reserves
Called up share capital
16
160,550
160,550
Share premium account
492,477
492,477
Other reserves
87,591
Profit and loss reserves
(8,914,200)
(8,371,633)
Total equity
(8,261,173)
(7,631,015)
The financial statements were approved by the board of directors and authorised for issue on 4 July 2023 and are signed on its behalf by:
Gary Neville
Director
Company Registration No. 07505340
OLD TRAFFORD SUPPORTERS CLUB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Share premium account
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2021
160,550
492,477
429,691
(7,564,854)
(6,482,136)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(1,148,879)
(1,148,879)
Transfers
-
-
(342,100)
342,100
-
Balance at 31 December 2021
160,550
492,477
87,591
(8,371,633)
(7,631,015)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(630,158)
(630,158)
Transfers
14
-
-
(87,591)
87,591
-
Balance at 31 December 2022
160,550
492,477
(8,914,200)
(8,261,173)
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
1
Accounting policies
Company information
Old Trafford Supporters Club Limited is a private company limited by shares incorporated in England and Wales. The registered office is St Andrews Chambers, 21 Albert Square, Manchester, M2 5PE.
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 under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. 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 RSP Topco PTE Limited. These consolidated financial statements are available from its registered office, 105 Cecil Street, #12-02 The Octagon, Singapore 069534.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern
The financial statements of the company have been prepared using the going concern basis which the directors consider to be appropriate for the following reasons:
The company has reported a net current assets position as at the end of 2022 of £858,375 (excluding the bank loan) which is a fall on the same position at the end of 2021 of £1,342,330.
The company has registered an operating profit of £175,433 during the year compared to an operating loss of £328,724 in the prior year where there was limited operation of the hotel for the first six months of the year due to the pandemic.
The company registered a loss before tax of £630,158, down from the £1,148,879 registered in the previous year.
As restrictions were completely lifted during the second half of last year and the hotel re-opened completely, revenues have picked up significantly.
The directors have approved profit and loss budgets and well as cash flow forecasts until December 2023.
As such the cash flow forecasts until December 2023 indicate that, taking account of reasonably possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period. In addition, these forecasts show that the company will remain within the covenants set under its external banking facilities for the foreseeable future.
The external banking facilities were meant to expire on 31 March 2022. Negotiations with the banks started in the first quarter of 2021 and led to the facilities being renewed and agreement reached for the facility to expire on the 30 September 2023, albeit with some adjustments.
These cash flow forecasts are dependent on the company's immediate parent company, Orchid Leisure Limited not seeking repayment of the amounts currently due to the group, which on 31 December 2022 amounted to £10,288,487. Orchid Leisure Limited has indicated that it does not intend to seek repayment of these amounts for the period covered by the forecasts.
In addition to the above, the Company has received a letter of support from its ultimate parent company RSP Holdings PTE Limited stating that it will continue to provide such funds as are needed by the company until at least May 2024 and thereafter for the foreseeable future.
As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue, although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Based on the above, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least the next 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Hotel revenue is recognised on the date of stay. Restaurant and bar revenue is recognised at the point of sale.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Development Costs
Over 5 years straight line
1.6
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:
Buildings
Over 50 years straight line
Plant and machinery
4 to 15 years straight line
Fixtures, fittings & equipment
Over 7 years 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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.8
Stocks
Stocks comprising mainly food and beverages are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase and those overheads that have been incurred in bringing the stocks to their present location and condition. Cost is calculated using the first-in-first-out method.
Net realisable value represents the estimated selling price less all estimated costs of completion and estimated costs to make the sale.
1.9
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.
1.10
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.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
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, 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.
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.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
1.12
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.16
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.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
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.
Valuation of fixed assets
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.
Valuation of fixed assets
Where there is an indication that an asset may be impaired, the company is required to test whether assets have suffered any impairment. An impairment arises when net book value exceeds the recoverable amount. The recoverable amount is the higher of value in use or fair value less costs of disposal. The use of these methods requires the estimation of future cash flows and discount rates to calculate the present value of the cash flows. Actual outcomes may vary and hence there is an inherent uncertainty involved with this estimate. The directors have performed an assessment of carrying value as at 31 December 2022 and have concluded the carrying value is recoverable.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Accommodation
3,492,811
1,914,013
Food & Beverage
2,788,515
1,517,457
Miscellaneous
195,327
126,758
6,476,653
3,558,228
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
6,476,653
3,558,228
2022
2021
£
£
Other significant revenue
Grants received
452,884
Other operating income is composed of £373,534 (2021: £388,137) for a suite rented out to a related party, along with £Nil (2021: £452,884) of furlough grant income.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
4
Operating profit/(loss)
2022
2021
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
30,090
(50)
Government grants
(452,884)
Fees payable to the company's auditor for the audit of the company's financial statements
15,372
15,375
Depreciation of owned tangible fixed assets
412,202
443,253
Amortisation of intangible assets
17,872
15,049
Operating lease charges
42,500
42,500
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Management
1
1
Finance and administration
4
4
Operations
180
131
Total
185
136
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,475,318
1,910,268
Social security costs
167,155
106,497
Pension costs
33,536
21,425
2,676,009
2,038,190
Directors are not paid any remuneration by the company as their role in this company is incidental to their wider role in other group companies. As such they provide no material qualifying services to the company and thus no allocation of remuneration has been disclosed in these financial statements.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
6
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
717,016
471,705
Interest payable to group undertakings
87,591
342,100
Other interest
984
6,350
805,591
820,155
7
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Loss before taxation
(630,158)
(1,148,879)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(119,730)
(218,287)
Tax effect of expenses that are not deductible in determining taxable profit
83,786
70,898
Change in unrecognised deferred tax assets
44,091
147,389
Permanent capital allowances in excess of depreciation
(8,147)
Taxation charge for the year
-
-
8
Intangible fixed assets
Development Costs
£
Cost
At 1 January 2022
60,194
Additions
11,295
At 31 December 2022
71,489
Amortisation and impairment
At 1 January 2022
26,936
Amortisation charged for the year
17,872
At 31 December 2022
44,808
Carrying amount
At 31 December 2022
26,681
At 31 December 2021
33,258
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
9
Tangible fixed assets
Buildings
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 January 2022
17,426,861
1,545,352
1,245,117
20,217,330
Additions
145,755
7,679
153,434
At 31 December 2022
17,426,861
1,691,107
1,252,796
20,370,764
Depreciation and impairment
At 1 January 2022
2,348,131
1,467,499
1,189,047
5,004,677
Depreciation charged in the year
348,537
49,332
14,333
412,202
At 31 December 2022
2,696,668
1,516,831
1,203,380
5,416,879
Carrying amount
At 31 December 2022
14,730,193
174,276
49,416
14,953,885
At 31 December 2021
15,078,730
77,853
56,070
15,212,653
10
Stocks
2022
2021
£
£
Raw materials and consumables
91,432
69,892
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
243,613
139,002
Other debtors
408,506
424,663
Prepayments and accrued income
152,292
152,890
804,411
716,555
2022
2021
Amounts falling due after more than one year:
£
£
Other debtors
1,783,360
1,712,446
Total debtors
2,587,771
2,429,001
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
11
Debtors
(Continued)
- 22 -
Included within amounts due after more than one year is a loan of £1,783,360 (2021: £1,712,446) to GG Hospitality Management Limited, a related party.
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
12
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
14
14,001,701
13,931,363
Trade creditors
372,180
606,313
Amounts owed to group undertakings
5,081
5,081
Taxation and social security
486,757
200,383
Other creditors
67,318
30,563
Accruals and deferred income
638,286
506,216
15,571,323
15,279,919
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
13
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Other borrowings
14
10,365,987
10,287,893
14
Loans and overdrafts
2022
2021
£
£
Bank loans
13,734,127
13,931,363
Bank overdrafts
267,574
Other loans
10,365,987
10,287,893
24,367,688
24,219,256
Payable within one year
14,001,701
13,931,363
Payable after one year
10,365,987
10,287,893
Included within bank loans and overdrafts is a bank loan of £13,734,127 (excluding deduction of fees) which was secured by way of a fixed and floating charge over all assets of the company. The facility is due for repayment in full on 30 September 2023. Capital repayments of £50,000 per quarter are repayable from 31 March 2022. The loan carried interest of 3.25% + SONIA.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
14
Loans and overdrafts
(Continued)
- 23 -
Included within other loans is a loan due to Orchid Leisure Limited (a fellow group subsidiary) totalling £10,288,487 (2021: £10,297,984) which is due for repayment on 30 March 2022. This loan carries no interest. Accordingly the loan has been recognised at present value by discounting the loan at a market rate of interest with a corresponding entry within capital contribution reserve. Changes in present value are recorded as an interest charge in the profit and loss account.
15
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
33,536
21,425
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.
16
Share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
160,550 Ordinary shares of £1 each
160,550
160,550
17
Reserves
The company’s capital and reserves are as follows:
Called up share capital
Called up share capital represents the nominal value of the shares issued.
Share premium account
The difference between the amount received for a share and its fair value.
Other reserves
This represents a capital contribution reserve.
Profit and loss account
The profit and loss account represents cumulative profits and losses net of dividends paid and other
adjustments.
OLD TRAFFORD SUPPORTERS CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
18
Operating lease commitments
Lessee
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:
2022
2021
£
£
Within one year
44,295
44,295
Between two and five years
174,936
176,731
In over five years
308,125
350,625
527,356
571,651
19
Related party transactions
A loan balance is due to Orchid Leisure Limited, the immediate parent company totalling £10,288,487 (2021: £10,297,984) as detailed in note 14.
Included within debtors are the following balances owed by related parties;
GG Hospitality Limited £1,783,360 (2021: £1,712,446)
Finestday Limited £396,286 (2021: £384,717)
Income was also received from a related party in respect of the rental of a suite at the hotel. This rental income totalled £373,534 (2021: £388,137) as disclosed in note 3.
20
Ultimate controlling party
The immediate parent company is Orchard Leisure Limited, a company registered in the British Virgin Islands.
The ultimate controlling party is RSP Topco PTE Limited, a company registered in Singapore. The largest group in which the results of the company is consolidated is that headed by RSP Topco PTE Limited. The consolidated financial statements of this group are available to the public and may be obtained from its registered office, 105 Cecil Street, #12-02 The Octagon, Singapore 069534.
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