HIGHGROVE HOUSE HOTEL LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Company Registration No. SC282087 (Scotland)
PAGES FOR FILING WITH REGISTRAR
HIGHGROVE HOUSE HOTEL LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
HIGHGROVE HOUSE HOTEL LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2019
30 September 2019
- 1 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
3
1,055,197
1,067,810
Current assets
-
-
Creditors: amounts falling due within one year
4
(1,566,297)
(1,577,631)
Net current liabilities
(1,566,297)
(1,577,631)
Total assets less current liabilities
(511,100)
(509,821)
Provisions for liabilities
(42,909)
(44,188)
Net liabilities
(554,009)
(554,009)
Capital and reserves
Called up share capital
5
100
100
Profit and loss reserves
(554,109)
(554,109)
Total equity
(554,009)
(554,009)
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 23 September 2020
Mr William Costley
Director
Company Registration No. SC282087
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 2 -
1
Accounting policies
Company information
Highgrove House Hotel Limited is a
private
company
limited by shares
incorporated in Scotland.
The registered office is
30 Miller Road, Ayr, Ayrshire, KA7 2AY.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 under the historical cost convention, modified to include the revaluation of freehold property at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares
;
-
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash
f
low and related notes and disclosures
;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Costley and Costley Hoteliers Limited
. These consolidated financial statements are available from its registered office,
30 Miller Road, Ayr, KA7 2AY
.
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
1
Accounting policies
(Continued)
- 3 -
1.2
Going concern
The company balance sheet currently shows no current assets and a deficit of shareholders’ funds.
true
Due to the current COVID 19 pandemic it has created significant
uncertainty in the economy, and more specifically the hospitality sector that the company operates in. At
the date of these financial statements being approved the Group is slowly emerging from lockdown, with
social distancing rules having to be adhered to.
The directors have prepared forecasts, which show that the business is expected to continue
to have
available funding to continue the operation of the business for this period, although it is difficult to know
with any certainty what the trade and profitability of the business will be in the post lockdown period where
some form of social distancing rules are still in place. The bank has indicated that they remain committed
to the business and are willing to provide
current and future funding to support the business.
As detailed in the audit report, there
is a limitation of scope regarding going concern, as the auditors are unable to conclude on the
reasonableness of the assumptions include
d
in the forecasts.
In order to mitigate against the risks associated with the operational uncertainties presented by the current
climate, the Directors have:
-
• Secured access to funding and Government support sufficient to meet the cash requirements of
the business.
-
• Developed and are in the process of implementing mitigation strategies designed to secure a
return to profitable trading at the earliest possible opportunity.
The group is dependent upon the continuing support of its bankers Clydesdale Bank Plc and
its
shareholders. The group is currently trading within the levels of its group overdraft and
loan facilities and is
also operating within the banking covenants placed on those facilities.
Although the current economic conditions create uncertainty, the group's forecasts and
projections, taking
account of reasonably possible changes in trading performance, show that
the group is expected to
operate within the level and covenants of its agreed facilities.
Therefore, the directors have a reasonable
expectation that the company and the group have
adequate resources to continue in operational existence
for the foreseeable future and
accordingly the going concern basis has been adopted in preparing the
financial statements.
1.3
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings freehold
2% Straight Line
Fixtures, fittings & equipment
15% Reducing 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 credited or charged to profit or loss
.
During the year residual values have been reassessed, which has resulted in depreciation being recommenced for land and buildings that had previously been written down to their residual value.
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
1
Accounting policies
(Continued)
- 4 -
1.4
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
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.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 5 -
2
Intangible fixed assets
Goodwill
£
Cost
At 1 October 2018 and 30 September 2019
275,000
Amortisation and impairment
At 1 October 2018 and 30 September 2019
275,000
Carrying amount
At 30 September 2019
-
At 30 September 2018
-
In year ended 30th September 2013 an annual impairment review was undertaken on the carrying value of goodwill in conjunction with an impairment review of the company's tangible fixed assets.
Goodwill has been written down accordingly in line with its considered net realisable value.
3
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 October 2018 and 30 September 2019
1,262,939
507,002
1,769,941
Depreciation and impairment
At 1 October 2018
212,617
489,514
702,131
Depreciation charged in the year
8,900
3,713
12,613
At 30 September 2019
221,517
493,227
714,744
Carrying amount
At 30 September 2019
1,041,422
13,775
1,055,197
At 30 September 2018
1,050,322
17,488
1,067,810
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 6 -
4
Creditors: amounts falling due within one year
2019
2018
£
£
Amounts owed to group undertakings
1,565,018
1,576,484
Taxation and social security
1,279
1,147
1,566,297
1,577,631
5
Called up share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
6
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was qualified and the auditor reported as follows:
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
6
Audit report information
(Continued)
- 7 -
We have audited the financial statements of Highgrove House Hotel Limited (the 'company') for the year ended 30 September 2019 which comprise , the balance sheet and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 September 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified 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 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 qualified opinion.
Material uncertainty relating to going concern
As detailed in the accounting policies and the basis for qualified opinion section of
t
he audit report
there is a limitation on the information available to allow us to conclude on the
appropriateness of the going
concern basis of preparation.
The audit evidence available to us was limited in respect of the cash flow forecasts and other information
provided by the directors in relation to their assessment of the appropriateness of the going concern basis of
preparation of the financial statements, as detailed in the accounting policies. This is because we consider that it
is not possible to obtain adequate audit evidence to conclude on the reasonableness of the assumptions
included in the forecasts regarding the level of trade they will be able to obtain. There is significant
uncertainty in
the economy and more specifically the hospitality sector, as a result of the ongoing impact of COVID 19 and the
effect this will have on future trade.
Although we consider that the directors have taken adequate steps to satisfy themselves that
it is appropriate for
them to adopt the going concern basis with cash flow forecasts for a
period of at least 12 months from the date
of approval of the financial statements, due the
limitation of information provided to us, we consider it not
possible to obtain adequate audit evidence to conclude on the reasonableness of the going concern basis of
preparation. This has been
heightened by the significant uncertainty in the economy and more specifically the
hospitality
sector, as a result of the ongoing impact of the COVID-19.
We would draw your attention to the post balance-sheet event note
8
of the financial
statements.
The senior statutory auditor was Robert Fergusson CA.
The auditor was William Duncan + Co Ltd.
HIGHGROVE HOUSE HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 8 -
7
Financial commitments, guarantees and contingent liabilities
The company's bankers hold an inter company guarantee in respect of group borrowings. At 30th September 2019 the total bank borrowings of the group amounted to £6,478,992 (2018 - £7,830,933).
8
Parent company
The ultimate parent company is Costley & Costley Hoteliers Limited, a company registered in Scotland.
Costley & Costley Hoteliers Limited prepares group financial statements and copies can be obtained from Companies House.
9
Post balance sheet events
At 23 March 2020 formal restrictions were put in place by the Government to slow the spread of COVID 19,
which resulted in the group closing the doors of all its premises to the public. This has had a significant
impact on the business post year end in relation to revenue generation and profitability. At the date of the
accounts being approved the group was slowly emerging from lockdown. It is difficult to predict with any
certainty what the trade and profitability of the
business will be during this post lockdown period where
some form of social distancing rules are still in place.
The bank have shown support for the business and provided funding to allow the business to meet its
obligations based on best forecast of COVID 19 effects. The business has also been successful in securing
grant funding. Whilst the support and grant funding are based on best estimate forecasts there remains
uncertainty due to the nature of the COVID 19 effects. Therefore as detailed in the audit report there is a
limitation of scope in relation to going concern.