Company Registration No. 05131897 (England and Wales)
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
COMPANY INFORMATION
Director
Mr P G Blacker
Company number
05131897
Registered office
Slinfold Golf & Country Club
Stane Street
Slinfold
Horsham
West Sussex
RH13 0RE
Auditor
MHA Carpenter Box
Amelia House
Crescent Road
Worthing
West Sussex
BN11 1QR
Business address
Slinfold Golf & Country Club
Stane Street
Slinfold
Horsham
West Sussex
RH13 0RE
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Director's responsibilities statement
4
Independent auditor's report
5 - 6
Group statement of total comprehensive income
7
Group statement of financial position
8
Company statement of financial position
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Consolidated statement of cash flows
12
Notes to the financial statements
13 - 25
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 1 -
The director presents the strategic report for the year ended 31 December 2016.
Principal activities
The principal activity of the
group and
company continued to be that of operating
health and fitness and leisure facilities in the South of England
.
Fair review of the business
The results for the year are set out on page 7, reflecting the activities of its subsidiaries Ensign Leisure Limited (Slinfold Golf & Country Club) and Finemoss Limited (Rookwood Golf Course).
The group result from continuing operations, before exceptional items, shows an improvement of 22% upon the previous year, with profits of £422,748 (2015: £346,277).
Both subsidiaries performed well during the year, and the results for the seven months to July 2017 show profitability improving against 2016.
At Slinfold, the health and fitness facilities are undergoing continual improvement, with the pool and spa areas benefiting from a recent refurbishment and upgrade. The company is committed to investing in its facilities and has recently contracted with Technogym for a completely new suite of gym equipment which will be operational by November 2017. Work on its restyled 9-hole golf course continued during 2016, with the course fully reopened on schedule in the spring of 2017.
Rookwood has seen a major redevelopment of its farmhouse building during 2016 and 2017, with work on the building being completed by September 2017 and ready for letting.
The principal risks and uncertainties facing the group include the impact of UK and global economic factors outside its control. However, the director believes that the company will achieve its business plan, and is very confident in the years ahead.
|
Mr P G Blacker
Director
19 September 2017
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 2 -
The director presents his annual report and financial statements for the year ended 31 December 2016.
Director
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr P G Blacker
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
Financial instruments
The group operates a treasury function which is responsible for managing the liquidity, interest and
credit
risks associated with the group’s activities.
The company operates the following management policies designed to minimise its exposure to financial risk:
Liquidity risk
The group manages its cash and borrowing requirements
in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the businesses.
Interest rate risk
The company operates a number of policies to ensure there is sufficient liquidity and cash. Regular cash flow forecasts are prepared to ensure the company is able to cover its interest payments
and continually monitors the market rate of interest.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification purposes. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Future developments
The directors believe that there are currently no major developments requiring disclosure.
Auditor
The auditor, MHA Carpenter Box, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor
of the
company is
unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor
of the
company
is
aware of that information.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 3 -
On behalf of the board
Mr P G Blacker
Director
19 September 2017
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 4 -
The director is responsible for preparing the Strategic Report, Director's Report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is 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 the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
- 5 -
We have audited the financial statements of British Ensign Golf Ltd t/a Country Club Group for the year ended 31 December 2016 which comprise the Group Statement of
Total
Comprehensive Income
, the Group Statement Of Financial Position, the Company Statement Of Financial Position, the Group Statement of Changes in Equity
, the Company Statement of Changes in Equity
, the Group Statem
ent of Cash Flows
and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
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.
Respective responsibilities of director and auditor
As explained more fully in the Director's Responsibilities Statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the
FRC
’s website at www.frc.org.uk/auditscopeukprivate
.
Opinion on financial statements
In our opinion the financial statements:
-
• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2016 and of its profit for the year then ended;
-
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
• have been prepared in accordance with the requirements of the Companies Act 2006.
We draw attention to note 1.3 to the financial statements which describes the company’s net current liability, and net liability, position as at the balance sheet date and sets out the director’s assessment of the company’s going concern position. Our opinion is not qualified in respect of this matter. The financial statements do not include adjustments that would result if the company was unable to continue as a going concern.
Opinion on other matter 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’ 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.
-
In the light of our 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 and the Directors’ Report.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the Strategic Report and the Director's Report
.
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 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.
Robin Evans BA FCA CTA (Senior Statutory Auditor)
for and on behalf of MHA Carpenter Box
19 September 2017
Chartered Accountants
Statutory Auditor
Worthing
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
GROUP STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
- 7 -
2016
2015
Notes
£
£
Revenue
3
3,259,997
3,101,534
Cost of sales
(1,684,678)
(1,522,888)
Gross profit
1,575,319
1,578,646
Administrative expenses
(1,188,162)
(1,232,369)
Other operating income
35,591
-
Exceptional items
4
(175,852)
3,900,055
Operating profit
5
246,896
4,246,332
Finance costs
8
(145,526)
(207,275)
Profit before taxation
101,370
4,039,057
Taxation
9
-
-
Profit for the financial year
22
101,370
4,039,057
Other comprehensive income
Revaluation of property, plant and equipment
-
(213,263)
Total comprehensive income for the year
101,370
3,825,794
Total comprehensive income for the year is all attributable to the owners of the parent company.
The Group Statement of Total Comprehensive Income has been prepared on the basis that all operations are continuing operations.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2016
31 December 2016
- 8 -
2016
2015
Notes
£
£
£
£
Fixed assets
Property, plant and equipment
10
7,750,201
7,515,995
Current assets
Inventories
14
53,375
51,926
Trade and other receivables
15
144,539
103,359
Cash and cash equivalents
12,272
21,918
210,186
177,203
Current liabilities
16
(4,598,729)
(4,237,256)
Net current liabilities
(4,388,543)
(4,060,053)
Total assets less current liabilities
3,361,658
3,455,942
Non-current liabilities
17
(3,315,804)
(3,511,458)
Net assets/(liabilities)
45,854
(55,516)
Equity
Called up share capital
21
167
167
Share premium account
22
1,121,886
1,121,886
Revaluation reserve
22
431,830
431,830
Retained earnings
22
(1,508,029)
(1,609,399)
Total equity
45,854
(55,516)
The financial statements were approved and signed by the director and authorised for issue on 19 September 2017
19 September 2017
Mr P G Blacker
Director
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
31 December 2016
- 9 -
2016
2015
Notes
£
£
£
£
Fixed assets
Investments
11
1,140,700
1,140,700
Current assets
Trade and other receivables
15
53,284
1,403
Cash and cash equivalents
201
-
53,485
1,403
Current liabilities
16
(3,487,726)
(3,434,672)
Net current liabilities
(3,434,241)
(3,433,269)
Total assets less current liabilities
(2,293,541)
(2,292,569)
Equity
Called up share capital
21
167
167
Share premium account
22
1,121,886
1,121,886
Retained earnings
22
(3,415,594)
(3,414,622)
Total equity
(2,293,541)
(2,292,569)
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own income statement and related notes. The
c
ompany’s loss for the year was £972 (2015 - £271,846 loss).
The financial statements were approved and signed by the director and authorised for issue on 19 September 2017
19 September 2017
Mr P G Blacker
Director
Company Registration No. 05131897
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
- 10 -
Share capital
Share premium account
Revaluation reserve
Retained earnings
Total
£
£
£
£
£
Balance at 1 January 2015
167
1,121,886
645,093
(5,648,456)
(3,881,310)
Year ended 31 December 2015:
Profit for the year
-
-
-
4,039,057
4,039,057
Other comprehensive income:
Revaluation of property, plant and equipment
-
-
(213,263)
-
(213,263)
Total comprehensive income for the year
-
-
(213,263)
4,039,057
3,825,794
Balance at 31 December 2015
167
1,121,886
431,830
(1,609,399)
(55,516)
Year ended 31 December 2016:
Profit and total comprehensive income for the year
-
-
-
101,370
101,370
Balance at 31 December 2016
167
1,121,886
431,830
(1,508,029)
45,854
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
- 11 -
Share capital
Share premium account
Retained earnings
Total
£
£
£
£
Balance at 1 January 2015
167
1,121,886
(3,142,776)
(2,020,723)
Year ended 31 December 2015:
Loss and total comprehensive income for the year
-
-
(271,846)
(271,846)
Balance at 31 December 2015
167
1,121,886
(3,414,622)
(2,292,569)
Year ended 31 December 2016:
Loss and total comprehensive income for the year
-
-
(972)
(972)
Balance at 31 December 2016
167
1,121,886
(3,415,594)
(2,293,541)
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
- 12 -
2016
2015
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
448,523
664,959
Interest paid
(145,526)
(207,275)
Net cash inflow from operating activities
302,997
457,684
Investing activities
Purchase of property, plant and equipment
(171,917)
(336,775)
Net cash used in investing activities
(171,917)
(336,775)
Financing activities
Proceeds from borrowings
85,450
3,600,000
Repayment of borrowings
-
(3,450,000)
Repayment of bank loans
(200,000)
-
Payment of finance leases obligations
(11,702)
(11,221)
Net cash (used in)/generated from financing activities
(126,252)
138,779
Net increase in cash and cash equivalents
4,828
259,688
Cash and cash equivalents at beginning of year
(26,508)
(286,196)
Cash and cash equivalents at end of year
(21,680)
(26,508)
Relating to:
Cash at bank and in hand
12,272
21,918
Bank overdrafts included in creditors payable within one year
(33,952)
(48,426)
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
- 13 -
1
Accounting policies
Company information
British Ensign Golf Ltd t/a Country Club Group
(“the company”)
is a
private
limited company domiciled and incorporated in England and Wales.
The registered office is
Slinfold Golf & Country Club, Stane Street, Slinfold, Horsham, West Sussex, RH13 0RE.
The group consists of British Ensign Golf Ltd t/a Country Club Group and all of its subsidiaries.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention, modified to include the revaluation of freehold properties. 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’ –
C
arrying 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 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own income statement and related notes. The
c
ompany’s loss for the year was £972 (2015 - £271,846 loss).
1.2
Basis of consolidation
The Group consolidated financial statements include the financial statements of the
c
ompany and all of its subsidiary
undertakings
and for the comparative year to 31 December 2015. All financial statements are made up to 31 December 2016.
A subsidiary is an entity controlled by the Group. Control is the power to govern the
financial and operating policies of
a
n entity so as to obtain benefits from its activities.
The trading results of all subsidiaries included in note 12, which are all wholly owned subsidiary throughout the year, have been included in the group financial statements.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation. Adjustments are made to eliminate the profit or loss arising on
transactions with associates to the extent of the Group’s interest in the entity.
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill
.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 14 -
1.3
Going concern
As at 31 December 2016 the group statement of financial position showed net assets of £45,854 and net current liabilities of £4,388,543 (company – deficit of £2,293,541 and net current liabilities of £3,434,241). However, just over £3 million of the net current liabilities (of the group and of the company) relates to balances due to a company under common control, British Ensign Investments Limited. This company has confirmed it will not seek repayment of this loan within 12 months of the signing of the statement of financial position date and will continue to support the group and company as required. During the year the group made an operating profit of £246,896 and is budgeted to make further profits in 2017. The group is able to operate with negative working capital because most of its income is either received upon delivery or in advance. The group and the company meet their working capital requirements by way of a long-term bank loan and overdraft facility.
At the time of approving the financial statements, the director has a reasonable expectation that the group and the company have adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Revenue
Revenue
represents
the total
amounts receivable
by the group derived from its ordinary activities
for
the provision of
goods and services net of VAT.
The following criteria must also be met before revenue is recognised:
Membership income is accounted for on a time basis. Such income relating to future accounting periods is treated as a creditor and recorded as turnover in the period to which it relates.
Green fees, bar and restaurant income, and other income is recognised at the time the goods are sold or the service is delivered.
1.5
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings freehold
2% diminishing balance on the buildings element only
Course construction
2% diminishing balance
Plant and machinery
20% diminishing balance
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.
Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in or or a revaluation loss exceeds the accumulated revaluation gains recognised in equity
;
such
gains and loss
es
are recognised in or .
Property and course improvements are maintained to such a standard that any depreciation charge on the freehold buildings or course improvements would not be material to the financial statements.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 15 -
Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.
A full valuation is obtained from a qualified valuer with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.
1.6
Impairment of non-current assets
At each reporting
period
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
.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
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.
1.7
Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial assets and liabilities
The
group
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
group
's statement of financial position when the
group
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.
The
group
enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and loans from related parties.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 16 -
Debt instruments like loans and other accounts receivable and payable are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method; Debt instruments that are payable or receivable within one year are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.10
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.11
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 non-current 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.
1.12
Retirement benefits
The group contributes to a number of money purchase pension schemes. Such contributions are held in trustee administered funds independently on the group's finances. Contributions payable are charged to the profit and loss account in the year they are payable.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to income 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 asset are consumed.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the director is 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.
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.
Fair value of property, plant and equipment
The judgement relating to the fair value of property, plant and equipment is based on the director's use of the professional valuation carried out on behalf of the company's lenders on 4 November 2015 at £7.5 million, taking into account any additions and depreciation since this date. The valuation was carried out in accordance with the 2014 edition of
The Royal
Institution of Chartered Surveyors
valuation manual by Matthews & Goodman, an independent firm of Chartered Surveyors
with a recognised
and relevant professional qualification and with recent experience in the location and category of
the
property, plant and equipment
being valued
. The valuation was made on the basis of existing use as a fully-equipped operational entity having regard to trading potential in line with Section 27 of FRS 102.
Freehold land and buildings and course improvements are maintained to such a standard that their estimated residual value is not less than their cost, therefore no depreciation is charged on freehold land and buildings as not material.
3
Revenue
An analysis of the group's revenue is as follows:
2016
2015
£
£
Revenue
Membership income
1,767,714
1,625,505
Green fees
501,783
520,145
Food and beverage income
706,908
670,118
Pro shop income
42,469
45,482
Health and fitness
224,552
221,794
Functions
4,982
10,352
Other income
11,589
8,138
3,259,997
3,101,534
The total revenue of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 18 -
4
Exceptional (costs)/income
2016
2015
£
£
Related party loan written back
-
3,900,055
Settlement of claim relating to prior period
(175,852)
-
(175,852)
3,900,055
5
Operating profit/(loss)
2016
2015
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Depreciation of owned property, plant and equipment
21,125
20,287
Depreciation of property, plant and equipment held under finance leases
6,714
780
Profit on disposal of property, plant and equipment
566
-
Cost of inventories recognised as an expense
616,947
574,743
Operating lease charges
89,898
97,915
6
Auditor's remuneration
2016
2015
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
6,500
6,500
Audit of the financial statements of the company's subsidiaries
12,500
12,000
19,000
18,500
7
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2016
2015
2016
2015
Number
Number
Number
Number
Administration
9
11
-
-
Food and beverage
47
41
-
-
Greenkeeping
14
10
-
-
Health and fitness
22
23
-
-
Pro shop
3
5
-
-
95
90
-
-
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
7
Employees
(Continued)
- 19 -
Group
Company
2016
2015
2016
2015
£
£
£
£
Wages and salaries
1,222,858
1,131,787
-
-
Social security costs
110,713
79,867
-
1,300
Pension costs
6,814
3,697
-
-
1,340,385
1,215,351
-
1,300
8
Finance costs
2016
2015
£
£
Interest on bank overdrafts and loans
139,806
203,510
Interest on finance leases and hire purchase contracts
5,720
3,765
Total finance costs
145,526
207,275
9
Taxation
The actual charge for the year can be reconciled to the expected charge based on the profit or loss and the standard rate of tax as follows:
2016
2015
£
£
Profit before taxation
101,370
4,039,057
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2015: 20.00%)
20,274
807,811
Tax effect of expenses that are not deductible in determining taxable profit
5,414
501,603
Tax effect of income not taxable in determining taxable profit
(7,118)
(1,277,198)
Tax effect of utilisation of tax losses not previously recognised
(39,494)
(55,179)
Unutilised tax losses carried forward
60,364
45,482
Permanent capital allowances in excess of depreciation
(45,008)
(26,733)
Depreciation on assets not qualifying for tax allowances
5,568
4,214
Tax expense for the year
-
-
The group has estimated trading losses totalling £3.43 million (2015 - £3.35 million) available for carry forward against future trading profit.
The group has estimated non-trading tax losses, capital losses and excess management expenses totalling £2.56 million (2015 - £2.53 million) available to carry forward against relevant future income.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 20 -
10
Property, plant and equipment
Group
Land and buildings freehold
Course construction
Plant and machinery
Total
£
£
£
£
Cost or valuation
At 1 January 2016
7,082,938
685,904
1,125,197
8,894,039
Additions
50,004
70,314
142,292
262,610
Disposals
-
-
(1,180)
(1,180)
At 31 December 2016
7,132,942
756,218
1,266,309
9,155,469
Depreciation and impairment
At 1 January 2016
103,073
236,395
1,038,575
1,378,043
Depreciation charged in the year
-
687
27,152
27,839
Eliminated in respect of disposals
-
-
(614)
(614)
At 31 December 2016
103,073
237,082
1,065,113
1,405,268
Carrying amount
At 31 December 2016
7,029,869
519,136
201,196
7,750,201
At 31 December 2015
6,979,867
449,508
86,620
7,515,995
The company had no property, plant and equipment at 31 December 2016 or 31 December 2015.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2016
2015
2016
2015
£
£
£
£
Plant and machinery
80,424
3,120
-
-
Depreciation charge for the year in respect of leased assets
6,714
780
-
-
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
Group
Company
2016
2015
2016
2015
£
£
£
£
Cost
6,771,428
6,651,110
-
-
Accumulated depreciation
(103,073)
(103,073)
-
-
Carrying value
6,668,355
6,548,037
-
-
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
10
Property, plant and equipment
(Continued)
- 21 -
The bank loan and overdraft is secured by a charge over the freehold property, a debenture, a corporate guarantee from the parent company and a personal guarantee from Mr P Blacker.
As disclosed in note 2, the fair value of tangible fixed assets have been determined by the director with reference to previous valuation undertaken by a firm of Chartered Surveyors.
11
Fixed asset investments
Group
Company
2016
2015
2016
2015
Notes
£
£
£
£
Investments in subsidiaries
12
-
-
1,140,700
1,140,700
Movements in non-current investments
Company
Shares
£
Cost or valuation
At 1 January 2016 & 31 December 2016
1,140,700
Carrying amount
At 31 December 2016
1,140,700
At 31 December 2015
1,140,700
12
Subsidiaries
Details of the company's subsidiaries at 31 December 2016 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Ensign Lesiure Limited
Note a)
Health and fitness and leisure facility
Ordinary
100.00
Finemoss Limited
Note a)
Golf club
Ordinary
100.00
Sidemanor Limited
Note a)
Non-trading
Ordinary
100.00
Note a)
The registered office for all the subsidiaries above is Slinfold Golf & Country Club, Stane Street, Slinfold, Horsham, West Sussex, RH13 0RE.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 22 -
13
Financial instruments
Group
Company
2016
2015
2016
2015
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
42,351
18,535
2,501
1,403
Carrying amount of financial liabilities
Measured at amortised cost
7,298,495
7,376,967
3,007,115
2,922,354
14
Inventories
Group
Company
2016
2015
2016
2015
£
£
£
£
Finished goods and goods for resale
53,375
51,926
-
-
15
Trade and other receivables
Group
Company
2016
2015
2016
2015
Amounts falling due within one year:
£
£
£
£
Trade receivables
32,438
7,585
-
-
Amounts due from group undertakings
-
-
50,783
-
Other receivables
9,913
11,236
2,501
1,403
Prepayments and accrued income
102,188
84,538
-
-
144,539
103,359
53,284
1,403
16
Current liabilities
Group
Company
2016
2015
2016
2015
Notes
£
£
£
£
Bank loans and overdrafts
18
233,952
248,426
876
1,065
Obligations under finance leases
19
29,311
3,250
-
-
Other borrowings
18
3,083,541
2,998,091
3,006,239
2,921,289
Trade payables
281,375
373,594
-
-
Amounts due to group undertakings
-
-
469,111
500,818
Other taxation and social security
294,089
216,628
-
-
Other payables
294,600
192,824
-
-
Accruals and deferred income
381,861
204,443
11,500
11,500
4,598,729
4,237,256
3,487,726
3,434,672
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 23 -
17
Non-current liabilities
Group
Company
2016
2015
2016
2015
Notes
£
£
£
£
Bank loans and overdrafts
18
3,200,000
3,400,000
-
-
Obligations under finance leases
19
52,930
-
-
-
Trade payables
62,874
111,458
-
-
3,315,804
3,511,458
-
-
18
Borrowings
Group
Company
2016
2015
2016
2015
£
£
£
£
Bank loans
3,400,000
3,600,000
-
-
Bank overdrafts
33,952
48,426
876
1,065
Other loans
3,083,541
2,998,091
3,006,239
2,921,289
6,517,493
6,646,517
3,007,115
2,922,354
Payable within one year
3,317,493
3,246,517
3,007,115
2,922,354
Payable after one year
3,200,000
3,400,000
-
-
The bank loan is repaid in equal instalments over the repayment term from the statement of financial position date to November 2020. The interest rate is 3.5% above the Bank of England base rate per annum..
19
Finance lease obligations
Group
Company
2016
2015
2016
2015
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
29,311
3,250
-
-
In two to five years
52,930
-
-
-
82,241
3,250
-
-
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. No restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finances are secured on the assets to which they relate.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 24 -
20
Retirement benefit schemes
2016
2015
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
6,814
3,697
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.
21
Share capital
Group and company
2016
2015
Ordinary share capital
£
£
Issued and fully paid
16,700 Ordinary shares of 1p each
167
167
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.
22
Reserves
Share premium
This reserve records the amount of fair value of consideration received above the nominal value for shares issued, less transaction costs.
Revaluation reserve
This reserve is used to record movements in the fair value of its tangible fixed assets.
23
Operating lease commitments
Lessee
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:
Group
Company
2016
2015
2016
2015
£
£
£
£
Within one year
122,876
100,841
-
-
Between two and five years
153,168
225,010
-
-
276,044
325,851
-
-
Op
e
rating
lease
payments
represent
rentals payable by the group for properties and plant and machinery. Leases are negotiated for an average term of 3 - 5 years and rentals are fixed for an average of 3 - 5 years.
BRITISH ENSIGN GOLF LTD T/A COUNTRY CLUB GROUP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 25 -
24
Related party transactions
Group
Included within other
borrowings
is
an amount owed of £
3,083,541
(201
5
- £
2,998,091
) which is a loan made by British Ensign Investments Limited, a company in which Mr P G Blacker is a director and majority shareholder.
No interest is payable on the loan and there is no fixed repayment date.
The
director of the company has provided a
personal guarantee of £3,600,000
(2015 - £3,600,000)
with respect to the bank loan and overdraft facility of the group.
Company
Included within other
borrowings
is
an amount owed of £
3,006,239
(201
5
- £
2,921,289
) which is a loan made by British Ensign Investments Limited.
No interest is payable on the loan and there is no fixed repayment date.
The company has provided a
corporate guarantee of £3,600,000 with respect to the bank loan and overdraft facility of the group.
25
Controlling party
The controlling party is Mr P G Blacker, a director and the majority shareholder.
26
Cash generated from group operations
2016
2015
£
£
Profit for the year after tax
101,370
4,039,057
Adjustments for:
Finance costs
145,526
207,275
Loss on disposal of property, plant and equipment
566
-
Depreciation and impairment of property, plant and equipment
27,839
21,067
Movements in working capital:
(Increase) in inventories
(1,449)
(6,072)
(Increase)/decrease in trade and other receivables
(41,180)
175,836
Increase/(decrease) in trade and other payables
215,851
(3,772,204)
Cash generated from operations
448,523
664,959
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