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Registered number: 09212743
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 OCTOBER 2019
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
REGISTERED NUMBER:09212743
STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2019
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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TOTAL ASSETS LESS CURRENT LIABILITIES
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PROVISIONS FOR LIABILITIES
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 2 to 9 form part of these financial statements.
Page 1
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
The company, registered number 09212743, is a private company, limited by shares and registered in England and Wales. The registered address is Chesterfield House, 207 Old Marylebone Road, London, NW1 5QP.
The company's principal activity during the year was that of operating a luxury hotel and spa.
2.ACCOUNTING POLICIES
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BASIS OF PREPARATION OF FINANCIAL STATEMENTS
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies.
The following principal accounting policies have been applied:
Page 2
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.ACCOUNTING POLICIES (continued)
The company made a loss before tax of £94,050 during the year ended 31 October 2019. At that date it had net current liabilities of £207,931 and net assets of £251,861.
The Directors continually review the performance of the company, and continually adapt the operations to deal with the Covid-19 pandemic. Following Government guidelines, the company closed the hotel between 23 March 2020 and 4 July 2020. Following the reopening of the hotel, the company has benefited from the reduced travel restrictions and quarantine imposed on UK travellers, which has resulted in the growth of UK ‘staycations’. This has resulted in significant growth in hotel revenues and average daily rates (ADR) for both the hotel rooms and lodges. The high levels of occupancy and higher ADR has resulted in the highest revenue the hotel and lodges has achieved in any August, September, and October, since the hotel commenced commercial operations in March 2010.
Business on the books for November 2020 and December 2020 is also higher than the Directors would anticipate and more than previous years. The Directors are confident the trend of UK staycations will continue, and Cornwall in particular will benefit from increased demand from UK tourism. The company is well placed to attract its fair share of this additional business.
The company has taken full advantage of the various governmental incentives, including the furlough scheme, Eat Out to Help Out, and has significantly benefited with the VAT rate changes. The spa was subjected to strict guidelines from 4 July 2020 until 31 August 2020 but is now up and running with all usual services, subject to strict Covid safe procedures.
The cashflow projections for the next 12 months demonstrate there is sufficient cash within the business to enable the company to settle all of its debts as they fall due over the next financial year. The Directors anticipate this will be without the need for further borrowings.
The Directors recognise that there is a high level of unpredictability and uncertainty regarding the future impact of the Covid-19 pandemic which indicates the existence of a material uncertainty which would cast doubt over the company’s ability to continue as a going concern. However, the Directors have considered the adverse impact of Covid-19 on the cash flow projections which include management’s assumptions on scenarios of possible Covid-19 pandemic related travel restrictions and controls which would affect generation of revenue. Based on the cash flow projections and strong cash position as at the current date, the Directors are of the opinion that it is appropriate that the financial statements have been prepared on a going concern basis.
Page 3
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.ACCOUNTING POLICIES (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the company has transferred the significant risks and rewards of ownership to the buyer;
∙the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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OPERATING LEASES: THE COMPANY AS LESSEE
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
DEFINED CONTRIBUTION PENSION PLAN
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the company in independently administered funds.
Page 4
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.ACCOUNTING POLICIES (continued)
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CURRENT AND DEFERRED TAXATION
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Long-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Page 5
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.ACCOUNTING POLICIES (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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CASH AND CASH EQUIVALENTS
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties.
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The average monthly number of employees, including directors, during the year was 96 (2018: 98).
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Page 6
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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Charge for the year on owned assets
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Prepayments and accrued income
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Page 7
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Short term timing differences
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ALLOTTED, CALLED UP AND FULLY PAID
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3 (2018: 3) Ordinary shares of £1.00 each
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Page 8
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BELLE ISLE HOTELS (CORNWALL) MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £32,853 (2018: £24,414). Contributions totalling £5,073 (2018: £2,617) were payable to the fund at the balance sheet date and are included in creditors
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RELATED PARTY TRANSACTIONS
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During the year the company paid rent of £224,000 (2018: £224,000) to a fellow subsidiary. The company also incurred costs on behalf of a fellow subsidiary of £426 (2018: £2,483). At the year end a fellow subsidiary owed the company £7,950 (2018: £135,660 owed to a fellow subsidiary).
During the year the company charged service charges of £174,901 (2018: £223,183) to a company under common control. The company also received rent on behalf of a company under common control of £279,117 (2018: £298,140). At the year end the company owed a company under common control £68,694 (2018: £10,059).
The directors of the company were paid total remuneration of £97,882 (2018: £96,606).
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The auditors' report on the financial statements for the year ended 31 October 2019 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
We draw attention to note 2.2 in the financial statements, which refers to the significant challenges and uncertainties caused by the current Covid-19 pandemic. The company is reliant on the business being able to operate reasonably in line with the Directors’ forecasts. As stated in note 2.2, the significant challenges and uncertainties caused by the pandemic may result in circumstances which are not forecasted and therefore indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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The audit report was signed on 30 October 2020 by Alison Oliver FCA (Senior statutory auditor) on behalf of Bishop Fleming LLP.
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