Waterfront Leisure (Crosby) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03198262 (England and Wales)

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

FOR

WATERFRONT LEISURE (CROSBY) LIMITED

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Statement of Financial Position

7

Statement of Changes in Equity

8

Notes to the Financial Statements

9

DIRECTORS:

D J Harding

R D Knight

P A Would

REGISTERED OFFICE:

The Stables

Duxbury Park

Duxbury Hall Road

Chorley

PR7 4AT

REGISTERED NUMBER:

03198262 (England and Wales)

AUDITORS:

Fairhurst

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

BANKERS:

Barclays Bank PLC

1 Churchill Place

London

E14 5HP

SOLICITORS:

DLA Piper UK LLP

1 St. Peter's Square

Manchester

M2 3DE

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

REVIEW OF BUSINESS

The profit for the year, after taxation, amounted to £194,564 (2018 - £202,438).

A dividend of £152,959 (2018: £Nil) was paid during the year.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this

report.

D J Harding

R D Knight

P A Would

GOING CONCERN

The financial statements have been prepared on a going concern basis because the company is continuing to operate in

accordance with the financial model of the PFI contract. This indicates that the company will continue as a going

concern until the cessation of the contract on 31st August 2028.

On this basis and having considered the company's budget and cash flow forecasts, the directors consider that the

company has adequate resources to continue in operational existence for the foreseeable future, being a period of not

less than 12 months from the date of approval of these financial statements, and therefore adopt the going concern basis

in preparing the accounts.

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

The company has provided qualifying third party indemnity provisions in respect of the board of directors which were in

force during the year and at the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have

taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the

company's auditors are aware of that information.

AUDITORS

The auditors, Fairhurst, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small

companies.

ON BEHALF OF THE BOARD:

D J Harding - Director

30 June 2020

Opinion

We have audited the financial statements of Waterfront Leisure (Crosby) Limited (the 'company') for the year ended

31 December 2019 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement

of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The

financial reporting framework that has been applied in their preparation is applicable law and United Kingdom

Accounting Standards, including 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 2019 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of

the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. 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 the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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 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.

Auditors' 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 a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs

(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors 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.

Jane Dennis BA (Hons) FCA (Senior Statutory Auditor)

for and on behalf of Fairhurst

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

30 June 2020

TURNOVER

1,321,152

1,297,382

Administrative expenses

708,131

708,068

OPERATING PROFIT

4

613,021

589,314

Interest receivable and similar income

6

6,561

4,473

619,582

593,787

Interest payable and similar expenses

7

288,388

322,861

PROFIT BEFORE TAXATION

331,194

270,926

Tax on profit

8

136,630

68,488

PROFIT FOR THE FINANCIAL YEAR

194,564

202,438

OTHER COMPREHENSIVE INCOME

Cash flow hedge

103,353

216,037

Income tax relating to other comprehensive income

(17,570

)

(36,726

)

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

85,783

179,311

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

280,347

381,749

FIXED ASSETS

Tangible assets

9

3,477,143

3,838,236

CURRENT ASSETS

Debtors

10

246,596

110,986

Cash at bank

1,120,200

1,273,078

1,366,796

1,384,064

CREDITORS

Amounts falling due within one year

11

900,030

857,437

NET CURRENT ASSETS

466,766

526,627

TOTAL ASSETS LESS CURRENT LIABILITIES

3,943,909

4,364,863

CREDITORS

Amounts falling due after more than one year

12

(3,559,483

)

(4,150,268

)

PROVISIONS FOR LIABILITIES

15

(97,807

)

(55,364

)

NET ASSETS

286,619

159,231

CAPITAL AND RESERVES

Called up share capital

16

50,000

50,000

Other reserves

17

(435,112

)

(520,895

)

Retained earnings

17

671,731

630,126

SHAREHOLDERS' FUNDS

286,619

159,231

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 30 June 2020 and were signed on its behalf by:

D J Harding - Director

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 January 2018

50,000

427,688

(700,206

)

(222,518

)

Changes in equity

Profit for the year

-

202,438

-

202,438

Other comprehensive income

-

-

179,311

179,311

Total comprehensive income

-

202,438

179,311

381,749

Balance at 31 December 2018

50,000

630,126

(520,895

)

159,231

Changes in equity

Profit for the year

-

194,564

-

194,564

Other comprehensive income

-

-

85,783

85,783

Total comprehensive income

-

194,564

85,783

280,347

Dividends

-

(152,959

)

-

(152,959

)

Balance at 31 December 2019

50,000

671,731

(435,112

)

286,619

1.	STATUTORY INFORMATION

Waterfront Leisure (Crosby) Limited is a private company, limited by shares , registered in England and Wales.

The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention except for the modification to a

fair value basis for certain financial instruments as specified in the accounting policies below, and in accordance

with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and

Republic of Ireland for smaller entities and the Companies Act 2006.

The financial statements are prepared in sterling (£) which is the functional currency of the company.

Going concern

The financial statements have been prepared on a going concern basis because the company is continuing to

operate in accordance with the financial model of the PFI contract. This indicates that the company will continue

to operate until the cessation of the contract on 31st August 2028

On this basis and having considered the company's budget and cash flow forecasts, the directors consider that the

company has adequate resources to continue in operational existence for the foreseeable futures, being a period

of not less than 12 months from the date of approval of these financial statements, and therefore adopt the going

concern basis in preparing the accounts.

Revenue

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and

the revenue can be reliably measured, Revenue is measured as the fair value of the consideration received or

receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also

be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in

accordance with the stage of completion of the contract when all the following conditions are satisfied:

i. the amount of revenue can be measured reliably;

ii. it is probable that the Company will receive the consideration due under the contract;

iii. the stage of completion of the contract at the end of the contract can be measured reliably; and

iv. the costs incurred and the costs to complete the contract can be reliably measured

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any

accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the

asset to the location and condition necessary for it to be capable of operating in the manner intended by

management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful

lives, using the straight line method.

Depreciation is provided on the following basis:

Buildings

- Straight line over the remaining project life, being 31st August 2028

Fixtures & fittings

- 6 years straight line

The assets residual values, useful lives and depreciation method are reviewed, and adjusted prospectively if

appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are

recognised in the Statement of Comprehensive Income.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of the financial instruments.

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangement entered into.

A financial liability exists where there is a contractual obligation to deliver cash or another financial asset to

another entity, or to exchange financial assets or financial liabilities under potentially unfavourable conditions. In

addition, contracts which result in the entity delivering a variable number of its own equity instruments are

financial liabilities. Shares containing such obligations are classified as financial liabilities.

An equity instrument is any contract that evidences a residual interest in the assets of the company after

deducting all of its liabilities. Dividends and distributions relating to equity instruments are debited directly to

reserves.

Financial instruments that are payable or receivable within one year, typically trade payables or receivables, are

measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to

be paid or received.

Financial instruments that constitute a financing transaction are measured, initially and subsequently, at the

present value of the future payment discounted at a market rate of interest for a similar debt instrument.

Finance costs are charged to the profit and loss over the term of the debt using the effective interest rate method

so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a

reduction in the proceeds of the associated capital instrument.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for

the objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is

recognised in the profit and loss account.

Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when

there is 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.

The company holds derivative financial instruments in the form of interest rate swaps. Derivatives are initially

recognised at fair value on the date 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 as appropriate, unless they are

included in a hedging arrangement.

The company applies hedge accounting for transactions entered into to manage the risk variability in cash flows

due to change in interest rates. Interest rate swaps are held to manage the exposure to variability in forecast

interest payments on bank borrowings due to changes in LIBOR and are designated as cash flow hedges.

Changes in the fair values of derivatives designated cash flow hedges, and which are effective, are recognised

directly in equity. Any ineffectiveness in the hedging relationship (being the excess of the cumulative change in

fair value of the hedging instrument since inception of the hedge over the cumulative change in the fair value of

the hedged item since inception of the hedge) is recognised in profit or loss.

The gain or loss recognised in other comprehensive income is reclassified to the profit and loss account when the

hedge relationship ends. Hedge accounting is discontinued when the hedging instrument expires, no longer meets

the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is

derecognised or the hedging instrument is terminated.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Finance costs

Finance costs are charged to the Statement of comprehensive income over the term of the debt using the effective

interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially

recognised in the proceeds of the associated capital instrument.

Interest income

Interest income is recognised in the Statement of comprehensive income over the term of the debt using the

effective interest method.

Borrowing costs

All borrowing costs are recognised in the Statement of comprehensive income in the year in which they are

incurred.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2018 - NIL).

2019

2018

£

£

Directors' remuneration

67,204

70,345

4.	OPERATING PROFIT

The operating profit is stated after charging:

2019

2018

£

£

Depreciation - owned assets

388,094

360,175

5.	AUDITORS' REMUNERATION

2019

2018

£

£

Fees payable to the company's auditors for the audit of the company's financial statements

4,892

4,430

Auditors' remuneration for non audit work

2,198

1,465

6.

INTEREST RECEIVABLE AND SIMILAR INCOME

2019

2018

£

£

Deposit account interest

6,561

4,473

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Bank loan interest

223,831

252,533

Sub-ordinated debt interest

64,557

70,328

288,388

322,861

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

124,909

-

Group relief

-

119,025

Adjustment re prior period

(13,152

)

17

Total current tax

111,757

119,042

Deferred tax

24,873

(50,554

)

Tax on profit

136,630

68,488

UK corporation tax was charged at 19%) in 2018.

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

2019

2018

£

£

Profit before tax

331,194

270,926

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

62,927

51,476

Effects of:

Adjustments to tax charge in respect of previous periods

(13,153

)

17

Fixed asset differences

48,978

52,644

Adjustment to deferred tax average rate

1,368

1,569

Deferred tax charged directly to equity

-

(36,726

)

Adjustments to tax charge in respect of previous periods - deferred tax

36,510

(492

)

Total tax charge

136,630

68,488

Tax effects relating to effects of other comprehensive income

2019

Gross

Tax

Net

£

£

£

Cash flow hedge

103,353

(17,570

)

85,783

2018

Gross

Tax

Net

£

£

£

Cash flow hedge

216,037

(36,726

)

179,311

9.	TANGIBLE FIXED ASSETS

Fixtures

Land &

and

buildings

fittings

Totals

£

£

£

COST

At 1 January 2019

7,578,190

789,385

8,367,575

Additions

27,001

-

27,001

At 31 December 2019

7,605,191

789,385

8,394,576

DEPRECIATION

At 1 January 2019

4,183,801

345,538

4,529,339

Charge for year

362,785

25,309

388,094

At 31 December 2019

4,546,586

370,847

4,917,433

NET BOOK VALUE

At 31 December 2019

3,058,605

418,538

3,477,143

At 31 December 2018

3,394,389

443,847

3,838,236

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Trade debtors

237,654

101,963

Other debtors

164

164

Prepayments and accrued income

8,778

8,859

246,596

110,986

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Bank loans (see note 13)

434,298

431,233

Subordinated loans (see note 13)

53,135

46,712

Trade creditors

42,656

27,329

Amounts owed to participating interests

42,781

30,757

Corporation tax

124,909

119,025

Social security and other taxes

52,512

55,369

Accruals and deferred income

149,739

147,012

900,030

857,437

12.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2019

2018

£

£

Bank loans (see note 13)

2,637,704

3,072,001

Subordinated loans (see note 13)

397,546

450,681

Interest rate swap

524,233

627,586

3,559,483

4,150,268

Amounts falling due in more than five years:

Repayable by instalments

Bank loans

602,620

1,163,663

Subordinated loans

101,190

190,148

703,810

1,353,811

Hedge accounting

An interest rate swap is held to manage the exposure to fluctuations in interest rates. Hedge accounting is applied

and the hedge is designated as a cash flow hedge.

The interest rate swap had a market valuation as at 31 December 2019 amounting to a liability of £524,233

(2018: £627,586). During 2019, a gain of £103,353 (2018: gain of £216,037) was recognised in other

comprehensive income for change in the fair value of the interest rate swap.

The fair value of the interest rate swap is based on a model which compared the discounted contractual fixed rate

payments with variable rate inflows where the variable rates are determined by market yield curves.