2006/07 Chatham Hotel Syndicate. Accounts for the year ended 5 April 2014

Transcription

1 Accounts for the year ended 5 April 2014

2 Professional advisers Solicitors: Surveyors: Accountants Bank: Maclay Murray & Spens One London Wall London EC2Y 5AB CB Richard Ellis Hotels St Martin's Close 10 Paternoster Row London EC4M 7HP B+M Tax Accountants Aberdeen House South Road Haywards Heath West Sussex RH16 4NG The Royal Bank of Scotland Kirkstane House 139 St Vincent Street Glasgow G2 5JF

3 Property information Description Address Tenant Leasehold interest in land and 90 bedroom hotel over six storeys with meeting room, built to Ramada Encore specification, to 31 March 2147 at peppercorn rent. The property has a 137 year lease less 7 days commenced 6 April 2007 at a current rent of 1,946, subject to annual review, on which is constructed 58 car park spaces. Western Avenue, Chatham Historic Dockyard, Chatham, Kent, ME4 4NT Ramcore Chatham limited. Leases Hotel 30 years full repairing and insuring from 6 October Rent review on fifth anniversary of lease commencement increasing at 2½% per annum compound and five yearly thereafter. Car Park Annual rent Hotel 29½ years commenced 6 April Rent increases annually in line with the Retail Price Index. 458,220 from 6 October The tenant's rent is discounted for the first eight years of the lease. The Developer, Chatham Maritime F5 Developments Limited, pays a top up fee to bring Syndicate receipts to the full rent. The payments amount payable by the Developer were as follows- Year Top up Year from 7 100,000 6 October ,000 6 October 2013 Car park 1,946 (from 6 April 2013) Date acquired 6 October 2006 Initial funding The syndicate members introduced 3,962,500 funding the balance with a loan of 5,300,000 advanced by The Royal Bank of Scotland.

4 Income statement Note Rent receivable 3 467, ,701 Interest received net of tax deduction 4 1,586 1,612 Income tax deducted (317) (322) 468, ,991 Less: Rents, rate, insurance and ground rent 5 7,286 7,110 Bank charges 6 8,571 5,330 Loan interest paid 7 282, ,721 Legal and professional costs 8 13,100 13,100 Costs of services provided 9 1,781 1, , ,115 Net income for the year 155, ,876

5 Statement of financial position at5 April 2014 Fixed assets: Note Long leasehold 1 9,235,000 9,235,000 Current assets: Cash at bank , ,029 Debtors and prepayments 11 65, , , ,127 Current liabilities: Prepaid rents 12 (131,970) (231,982) Creditors and accruals due within one year 13 (4,569,397) (276,848) (4,701,367) (508,830) Net current assets (4,103,514) 197,297 Assets less current liabilities 5,131,486 9,432,297 Creditors falling due after more than one year - (4,456,395) Financed by: 5,131,486 4,975,902 Cash introduced 4,370,048 4,370,048 Retained income 605, ,978 Net income for the year 155, ,876 5,131,486 4,975,902

6 Notes to the accounts Note 1 Accounting policies Basis of accounting The financial statements have been prepared under the historical cost convention, modified by the revaluation of certain assets. Long leasehold property Depreciation is not provided on long leasehold property. Due to the medium to long term nature of the investment, the Trustees have no revaluation policy. Where a valuation is obtained, any increase or decrease in value is reflected in the financial statements. Savills provided an informal valuation to The Royal Bank of Scotland (RBS) in May Savills opined of 5,500,000 on an investment basis and 4,300,000 vacant possession. A market report from CB Richard Ellis Hotels to the Trustees at that time indicated 4,000,000 on an investment basis and 3,500,000 vacant possession. Neither opinions are formal valuations and no adjustment has been made in the financial statements. Financial instruments Financial instruments comprise trade and other receivables, cash, cash equivalents, loans, borrowings, trade and other payables and other financial liabilities. Financial instruments are recognised at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as for long leasehold property as described above. The loan from RBS is at a fixed rate of 6.215%. The cost of breaking the fixed rate is not recognised; the loan is expected to run full term to 5 October Rent receivable Rent includes insurance, car park rent (note 4) and estate management charges (note 9) recoverable from the tenant. 4 Interest received net of tax deduction The interest is earned on bank deposits, principally the security support deposit (note 10) and paid after deduction of tax.

7 Notes to the accounts Note 5 Rents, rate, insurance and ground rent Made up as follows- Insurance 5,339 Car park rent 1,947 7,286 6 Bank charges RBS charged arrangement fees of 27,500 the loan was drawn and 6,000 for a variation to the facility in April The first cost is spread over the life of the loan; the second is spread over the remaining life of the loan when the cost was incurred. The charge for the year is 5,146; the balance of 2,585 is a prepaid expense (note 10). RBS commissioned a valuation report from Savills (note 1), the cost was 3,300 and recovered from the Trustees. 7 Loan interest paid The loan was originally set at %, which included RBS's mandatory costs. Following review the bank decided it would no longer charge these costs when fixing rates after 8 July This resulted in the all in rate reducing to 6.215%. 8 Legal and professional costs The expense was for administration and accountancy. 9 Costs of services provided The cost is estate management fees which are recovered from the tenant as additional rent (note 2). 10 Cash at bank The Trustees hold 377,346 in a separate account with RBS lodged as security to support the loan (note 14) following alleged breach of the loan to value covenant. Rectification was by an amendment to the loan facility agreement (note 6) and a cash call on members to fund the deposit.

8 Notes to the accounts Note 11 Debtors and prepayments Made up as follows - Debtors Developer (rent top up 25 March to 5 October 2014)* 28,082 Tenant 2,830 Unpaid cash calls S A Aiken 6,619 M Hussain 8,825 B P Brandon 2,206 Exchangelaw (No 229) Limited 4,413 Estate of R Terley deceased 4,413 B Hindocha 1,103 27,579 Prepayments Bank arrangement fees 2,585 Insurance (6 April to 29 October 2014) 3,055 Service charges (6 April to 30 September 2014) ,055 * The Developer "tops up" the rent paid by the tenant to the full rent (note 2) until 5 October The amount is the remainder of the top up, which was invoiced in October Prepaid rents Made up as follows - Top up payments (6 April to 5 October 2014 notes 2 & 11) 49,785 Rent (6 April to 23 June 2014) 77,745 Car park rent (6 April to 30 June 2014) 461 Insurance (6 April to 29 October 2014) 3,055 Service charges (6 April to 20 September 2014) ,970

9 Notes to the accounts Note 13 Creditors and accruals due within one year Made up as follows - Creditors Historic Dockyard Property (2005) Ltd Car park rent (6 April 2007 to 5 April 2014) 14,033 Service charge (1 April to 30 September 2014) 1,140 HM Revenue & Customs (VAT ¼ ended 28 February 2014) 17,353 HM Revenue & Customs (VAT ¼ ended 31 May 2014) 17,353 Loan repayments 4,456,395 Accruals Accountancy and administration 2,417 Loan interest (16 January to 5 April 2014) 60,706 4,569,397