The directors of Longleat Enterprises Limited (“Longleat” or “LEL”) present their strategic report for the year ended 3 1 December 20 20 .
Review of the business
The year has been a remarkable one in which the COVID-19 Pandemic led to enforced lockdown closures of our entire operations for four of the key trading months of 2020, and a temporary full closure of Cheddar Caves. This had a significant impact on our revenues , which decreased from £29.8m in 2019 to £14.3m in the current year, but we have been fortunate to have weathered the crisis through good management, high quality people, a flexible workforce and strong cash reserves.
The Pandemic has demonstrated once again the popularity of our attractions, and it was encouraging to see that in the months that we were able to open, we saw demand levels at least as strong as 2019, itself a record-breaking year. Longleat is synonymous with value and quality and these have been important factors in attracting guests to the Park during this time.
We take our responsibilities to our guests and staff seriously and when we were able to open, we imposed our own daily visitor caps to help ensure social distancing in line with Government guidance. We spent £200,000 on COVID-19 measures such as additional toilet facilities, additional cleaning staff, air purifiers and other measures where appropriate. We were also amongst the first employers to offer Covid tests to our employees.
In March 2020 we decided to immediately reduce our offer to drive-through only, shortly before lockdown was instituted. When we were able to reopen in June we introduced safe queueing systems, paused the use of safari buses and the visitor-feeding of animals and for our 22,000 Annual Pass holders, we proactively extended out their membership passes for a further five months in total. These initiat iv es impacted revenues and costs but were the right thing to do.
In June 2020 we had to take the difficult decision not to reopen Cheddar Caves until further notice. The complexity of the cave attraction is such that it is challenging to operate in an environment of enforced lockdown closure at short notice, and therefore the caves will remain closed until a more predictable environment returns.
The Executive Chairman of Longleat Enterprises Limited, Ceawlin Weymouth, commented;
"2020 was the business’ most challenging year ever, which was in stark contrast to 2019, our most successful year. It has been very encouraging to see that Longleat is as popular with guests as it has ever been, and despite enforced closures, Longleat traded very strongly in the periods we were allowed to open. The outlook for 2021 remains challenging, but I am confident that with our compelling customer offer, tremendous staff and strong cash reserves, we are in a good place to mitigate any further challenges posed by the pandemic.”
Principal risks and uncertainties
There are a number of risks and uncertainties that face the business, and to this end there is a risk management strategy in place which is reviewed regularly and reports to the board at least annually. The strategy assesses and categorises the risks and uncertainties to which the business is exposed and details risk reduction actions and remedies.
The group has risk policies and committees/working parties to cover health and safety along with animal and staff welfare.
Credit risk
LEL takes care in approving credit worthiness of major new credit customers, and existing relationships are periodically reviewed.
Liquidity
LEL seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs.
Interest rate risk
LEL ensured that any external financing has a fixed interest rate to protect against future fluctuations.
The key performance indicators of the visitor attraction side of the business include visitor numbers, turnover per visitor, turnover per employee and a selection of guest satisfaction scores. The key performance indicators for the accommodation element of the business includes occupancy rates, average room rate, revenue per available room and spend per head. These are all monitored and measured against market comparatives .
The Directors have carefully considered their duties under section 172 reporting. Longleat has the foundations of a thriving business with visitors to Longleat Park exceeding 900,000 for four consecutive years. In turn the business has invested in its human resources as well as the infrastructure and visitor components of the site itself in order to ensure that stability is maintained whilst creating opportunities for future growth. Certain constraints due to the historic nature of the site are always carefully considered so that Longleat maintains a strong reputation within the heritage management and local business community. The Directors are satisfied that all section 172 matters are given appropriate and effective consideration with the necessary structures, policies and processes in place to promote a successful company.
The directors present their annual report and financial statements for the year ended 31 December 2020.
The results for the year are set out on page 10.
The directors recommend that no dividend be paid for the year (2019: £nil)
The net loss for the year of £3,031,458 is to be transferred to the reserves (2019: net profit of £2,686,714).
The directors' report does not include a fair review of the business, details of the risks and uncertainties and future developments, as this information is documented within the Strategic Report as required under s414C(11).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's policy is to consult and discuss with employees, through staff councils and at meetings, matters likely to affect employees' interests.
Information on matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance .
Saffery Champness have expressed their willingness to remain in office as auditors of Longleat Enterprises Limited.
Longleat Enterprises Limited (LEL) is committed to creating a culture of natural sustainability, and reducing the impact of its operations on the environment.
The Company’s operations are mostly undertaken on the Longleat Estate which retains within its historic landscape approximately 4,000 acres of forest and SSSI woodland, and around one million trees, weighing approximately 350,000 tonnes. These trees play a significant role in absorbing and locking-in carbon generated from the Company’s activities, whilst the forest soil is a valuable carbon pool.
Investment in various initiatives and external consultancy over the past financial year means that the Company is in a position to accurately measure its carbon footprint and identify key carbon emitters across its operations. LEL collects energy and (some) scope 3 carbon data, recording these using Sustainability Reporting Software. Over the past financial year the process for this has been improved and the scope of data has been increased, enabling the Company to measure reductions from future projects.
Energy consumption reductions have already been seen, for example, through a strategic change to all-LED lighting and the removal of generator units at Longleat’s major Land of Light Christmas festival. There has also been a drive to recycle more waste and reduce paper and plastics use with disposal initiatives in F&B and Retail operations.
The Company is committed to improving on these gains and plans to place sustainability high on the business agenda. LEL is currently reviewing proposals on how best to achieve its corporate sustainability aims. The following are being reviewed in FY 2021:
Develop an enhanced, aspirational environmental policy
Encourage staff across all areas to promote green initiatives
Review all design options for carbon efficiency savings in its property development plans
Move to 100% renewable energy when reviewing electric procurement
Roll out smart meters across all operations
Update the motor fleet with electrical vehicles where practicably possible
These plans cover all aspects of sustainability, and will help to reduce carbon emissions directly from company operations as well as through supporting carbon reductions elsewhere. The Company aims to ensure that, beyond simply averting further damage to the environment, it is a business whose collective actions will contribute towards its repair.
Under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, the Company is required to disclose its UK energy use and associated greenhouse gas emissions. Specifically, the Company is required to report, as a minimum, its energy use and associated GHG emissions relating to natural gas, electricity and transport fuel, as well as an intensity ratio and a narrative on energy efficiency action taken over the year. There is no prescribed reporting methodology under the legislation, although for effective emissions management and transparency, only robust and accepted methods are used.
Regarding energy usage, the data sources referenced are primarily supplier invoices for electricity, and accounting records for other energy sources. Regarding greenhouse gas emissions, LEL has used the ‘GHG Reporting Protocol – A Corporate Accounting and Reporting Standard’ and has assessed in accordance with the Defra’s ‘Environmental Reporting guidelines: including Streamlined Energy and Carbon Reporting requirements’.
LEL owns and controls all of its operations, and has therefore taken a financial control approach to measuring its emissions. The reporting period used to calculate emissions is from 1 st January 2020 – 31 st December 2020, in line with the Company’s financial year. The Company has identified the following scopes for its emissions reporting:
Scope 1 (Direct Emissions): Gas oil used for heating, LPG used for catering and other services, transport fuel which includes purchased fuel for site vehicles.
Scope 2 (Energy Indirect): Electricity used for powering equipment and heating
Scope 3 (Other Indirect): Transport fuel which includes business mileage in employee vehicles.
Outside of scopes 1, 2 and 3: Biomass fuel (woodchip) is used for heating
For some data sources, assumptions have been used where energy and carbon use cannot be calculated exactly from primary data; for example where fuel orders are recorded by cost rather than primary measurement units. These are recorded and any changes in source data and methodology in future years will be notified. All carbon emissions factors are taken from ‘UK Government GHG Conversion Factors for Company Reporting’ issued by Defra and BEIS, for the appropriate years.
The directors regularly work to foster strong relationships with their suppliers, customers and other stakeholders. The impact of this can be seen through the review of the business summarised in the Strategic Report.
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent 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 group or the parent 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.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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.
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 the audit :
the information given in the strategic report and the directors' r eport 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.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report and the directors' r eport .
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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
As explained more fully in the directors' r esponsibilities s tatement, 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 group and the parent 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 group or parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the group and parent company 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed
As permitted by section 408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The parent company's net loss for the year was £3,047,069 (2019: net profit of £2,662,259).
Longleat Enterprises Limited (“the company”) is a private limited company incorporated in England and Wales . The registered office is Longleat Estate Office, Longleat, Warminster, Wiltshire, BA12 7NW.
The group consists of Longleat Enterprises Limited and all of its subsidiaries.
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 a mounts in these financial statements are rounded to the nearest £ 1 .
The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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’ : 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 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
The group financial statements consolidate the financial statements of the c ompany and its subsidiary undertakings drawn up to ended 31 December each year . The results of subsidiaries acquired or sold are included in the profit and loss account up to, or from the date control passes. Where a subsidiary has difference accounting policies to the group, adjustments are made to those subsidiary financial statements to apply the group's accounting policies when preparing consolidated financial statements. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
The directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis of accounting in preparing the financial statements.
Revenue from retail sales is recognised at the date of sale, net of VAT. Revenue from annual passes is recognised over the period that the customer receives the benefit.
Rental income received under operating leases is recognised in the profit and loss account over the term of the underlying lease.
Turnover derived from the hotel trading represents revenue from room sales, food and beverage, and other sundry sales net of VAT and trade discounts. The income is recognised in the profit and loss account when it is receivable.
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 recognised in the income statement .
The directors have reviewed the assets held by Longleat Enterprises Limited and are of the opinion that the works of art and similar assets are not maintained principally for their contribution to knowledge and culture, but do further the commercial and enterprise of the company. For this reason they are accounted for as Tangible Fixed Assets under section 17 of FRS 102.
Natural mazes are depreciated over 20 years from the date they are brought into use.
When land and buildings meet the definition of investment property they are reclassified at their fair value. Any gain or loss on revaluation, with the related tax movement, is treated in accordance with section 17 of FRS 102 and recognised in the statement of other comprehensive income.
I n the parent company financial statements, investments in subsidiaries and unlisted investments are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
At each reporting end date, the group 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.
The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its 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 paymen ts 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred taxation is provided in full respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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 lease d asset are consumed.
The group applies the accruals model for grants receivable. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.
The Group and Company have amended the revenue recognition policy for annual passes. Full information is detailed in note 32.
In the application of the group'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.
In preparing these financial statements the directors have made the following significant judgements and estimates:
FRS 102 requires investment property to be valued at its fair value at each reporting date. Management acknowledge the uncertainty of the valuation as in the direct local area sales are less frequent than in normal areas making a determination of market value more difficult. The management usually uses the prior year value and compares this to movements in house prices in the local area as a basis for the fair value where no external valuation has been made in the period.
An analysis of the group's turnover is as follows:
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
During the year the group received government grants of £1,480,795 (2019: £nil) relating to he Coronavirus Job Retention Scheme. Other grants received were related to the groups stewardship of the natural environment and to reimburse costs incurred by the company in relation to maintaining the house and grounds. There are no significant contingencies attached.
In the prior period, payments into the Longleat Employment Benefits Trust were in relation to former directors.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
The directors are considered to be the key management personnel.
During the prior period the group recognised costs related to several projects that were no longer considered viable.
Shortly after the end of the previous reporting period a group subsidiary Longleat Bath Arms Limited ceased trading. As a result the assets and liabilities of the company have been revalued to their recoverable amounts which resulted in an impairment loss of £299,601.
On 3 February 2020 the company's subsidiary, Longleat Bath Arms Limited, ceased trading. This was considered a separate line of business and so has been presented as discontinued in the financial statements.
During 2018 the group sold the trade and assets held by Longleat Bishopstrow Limited and Longleat Homewood Park Limited, discontinuing its high end hotel operations. On 27 November 2019 both of these subsidiaries entered liquidation ceasing the parent's control over their financial activities. Subsequently, a loss on disposal totalling £297,638 was recognised to remove their net assets from the group's financial statements.
The applicable tax rate has been updated in line with changes in UK tax legislation. 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:
In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:
As at the period end date the the group had unrelieved tax losses totalling £2,131,333 (2019: £537,739) which are available for use against future trading profits.
Investment property comprises of various properties owned by Longleat Enterprises Limited which are now primarily held to earn rentals and for capital appreciation.
The most recent external valuation was undertaken in March 2020 and the earliest was undertaken in March 2016. The directors have assessed the current year valuation by reference to local market prices using the work of employees with MRICS qualifications and are of the opinion that this value is reflective of the fair value at 31 December 2020.
If held at historical cost, the assets would be recognised at a cost value of £936,054 (2019: £936,054) and have a net book value totalling £516,838 (2019: £535,558).
Details of the company's subsidiaries at 31 December 2020 are as follows:
The Longleat Bath Arms Limited (registered number 08804418) is entitled to exemption from audit under sections 479A and 479C of the Companies Act 2006 relating to subsidiary companies through parental guarantee.
Barclays Bank plc have a standard letter of set off in place for a bank overdraft facility that was not in use at the period end date.
The loan is supported by the Coronavirus Business Interruption Loan Scheme Guarantee. The capital is secured over the assets of the company and the loan attracts an interest rate of 3.49% above base rate, which is paid by the UK government for the first 12 months. The loan has a term of three years with repayments commencing 12 months after the drawdown date.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
T he deferred tax liability set out above is expected to reverse in future accounting periods.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The ordinary shares rank pari passu and confer the right to vote, participate in dividends and other distributions upon a winding up.
The preference shares are redeemable at the discretion of the company. There are no set premiums on redemption and they can be redeemed on any date notified by the company. The shares are also non-voting and non-cumulative.
The share premium account includes any premiums received on issue of share capital. Any transaction costs associated with the issue of shares are deducted from share premium.
The revaluation reserve includes fair value gains recognised on investment properties of £1,412,763 and fair value gains on property, plant and equipment of £984,193. All amounts are net of deferred tax.
Following a redemption of preference shares in the year a capital redemption reserve has been recognised to ensure compliance with section 733 of the Companies Act 2006.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The operating leases represent property rentals. The leases tend to be short term in nature and range from a term of two months to two years. At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Group and company
A Director, and close family members, are beneficiaries of various trusts which share the same controlling parties with the Group. During the year the group received income and recharges totalling £974,726 (2019: £912,364) and incurred costs totalling £1,212,603 (2019: £1,117,069). At the reporting date, amounts owed to these related trusts totalled £50,621 (2019: £74,665) and amounts due from these related trusts totalled £nil (2019: £269,106).
During the year the group received grant income of £nil (2019: £1,623,471) from Longleat Maintenance Fund, an entity for whom a director of the company acts as a trustee. This has been included within other operating income.
During the year the group received income totalling £900 from the Longleat Charitable Trust. The group also incurred expenses totalling £1,000 (2019: £883). At the year end the company was owed £23,011 by the Longleat Charitable Trust (2019: the Company owed £280).
During the year, close family members of key management personnel received salaries of £32,312 (2019: £126,662).
The controlling parties are the trustees of Lord Bath's Longleat Settlement - Viscount Weymouth's Fund.
Following the introduction of direct debits as a payment method for the annual passes, the directors reviewed the revenue recognition policy around annual passes. The decision was taken that revenue from these sales should be spread over the period that they are valid, changing the current policy which recognised revenue in full on payment. The directors believe that this will increase the comparability of revenue as revenue from both up front payments and through direct debit will be recognised over the same period.
The impact on the prior year has been summarised below. A similar impact would be expected on preceding periods should this revenue policy have been in place.