Brayford Hotel Lincoln Limited - Limited company accounts 20.1

REGISTERED NUMBER: 07217450 (England and Wales)

BRAYFORD HOTEL LINCOLN LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

to

5

Income Statement

6

Other Comprehensive Income

7

Statement of Financial Position

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

to

14

DIRECTORS:

L M Hall

D A Wann

SECRETARY:

L M Hall

REGISTERED OFFICE:

The Circus

Belton Park Road

Lumley Fields

Skegness

Lincolnshire

PE25 1GU

REGISTERED NUMBER:

07217450 (England and Wales)

SENIOR STATUTORY AUDITOR:

Damon Brain BFP FCA FMAAT

AUDITORS:

Duncan & Toplis Limited, Statutory Auditor

27-29 Lumley Avenue

Skegness

Lincolnshire

PE25 2AT

BANKERS:

Natwest Bank PLC

225 High Street

Lincoln

Lincolnshire

LN2 1AZ

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

The results for the year and financial position of the group are as shown in the annexed financial statements.

The group's operations and assets are well diversified and as such the levels of operational and other risks are considered by the Directors to be acceptable. The group does not have any material exposure to any high risk market or geographical areas.

Position at the financial reporting date

The directors consider the financial reporting position of the group to be strong, with a comfortable net asset and working capital position. Management remains mindful of the competitive environment in which the group operates and the need to maintain close control over the company's working capital and financial position.

Borrowings and Risk Management

The group's principal financial instruments comprise bank balances, bank loans, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the group operations. The group's approach to managing other risks applicable to the financial instruments minimised the risk to a level that the Directors consider acceptable.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Coronavirus COVID-19 risk

The full impact of the COVID-19 pandemic remains uncertain and continues to develop on a daily basis. The directors are monitoring the exposure to the company's business and have implemented strategies in order to mitigate the risks, including utilising various government support measures. The directors are also monitoring the exposure to its employees, customers and other stakeholders, referring to government and professional advice published to help ensure their safety.

ON BEHALF OF THE BOARD:

L M Hall - Director

8 December 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the company is that of hotel management.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

L M Hall

D A Wann

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are 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 directors are 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

L M Hall - Director

8 December 2020

Opinion

We have audited the financial statements of Brayford Hotel Lincoln Limited (the 'company') for the year ended 31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 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 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 Auditors' 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 opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the 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 or the Report of the Directors.

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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

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 a Report of the Auditors 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.

Damon Brain BFP FCA FMAAT (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Limited, Statutory Auditor

27-29 Lumley Avenue

Skegness

Lincolnshire

PE25 2AT

9 December 2020

REVENUE

6,939,462

6,697,480

Cost of sales

2,538,989

2,468,039

GROSS PROFIT

4,400,473

4,229,441

Administrative expenses

3,294,288

3,153,300

OPERATING PROFIT and

PROFIT BEFORE TAXATION

1,106,185

1,076,141

Tax on profit

5

73,800

(51,166

)

PROFIT FOR THE FINANCIAL YEAR

1,032,385

1,127,307

PROFIT FOR THE YEAR

1,032,385

1,127,307

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,032,385

1,127,307

CURRENT ASSETS

Inventories

6

56,970

52,810

Debtors

7

8,819,867

7,196,611

Cash at bank and in hand

343,540

152,901

9,220,377

7,402,322

CREDITORS

Amounts falling due within one year

8

984,936

2,899,266

NET CURRENT ASSETS

8,235,441

4,503,056

TOTAL ASSETS LESS CURRENT LIABILITIES

8,235,441

4,503,056

CREDITORS

Amounts falling due after more than one year

9

5,183,473

2,483,473

NET ASSETS

3,051,968

2,019,583

CAPITAL AND RESERVES

Called up share capital

13

100

100

Retained earnings

14

3,051,868

2,019,483

SHAREHOLDERS' FUNDS

3,051,968

2,019,583

The financial statements were approved by the Board of Directors and authorised for issue on 8 December 2020 and were signed on its behalf by:

L M Hall - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

100

892,176

892,276

Changes in equity

Total comprehensive income

-

1,127,307

1,127,307

Balance at 31 December 2018

100

2,019,483

2,019,583

Changes in equity

Total comprehensive income

-

1,032,385

1,032,385

Balance at 31 December 2019

100

3,051,868

3,051,968

1.	STATUTORY INFORMATION

Brayford Hotel Lincoln Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover is derived from hotel operations, and arose wholly in the United Kingdom. Turnover is recognised when services have been rendered. The turnover of the hotel is derived primarily from the rental of rooms, conference and hire, food and beverages sales. Turnover is all provision of goods and services. Turnover is measured as the fair value of the consideration received, excluding discounts, rebates, value added tax and other sales taxes.

Stocks

Stocks have been valued at the lower of costs and estimated selling prices less costs to sell.

Financial instruments

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, loans with related parties.

All financial assets and liabilities are initially measured at transaction price and are subsequently measured at amortised cost.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the income statement on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are recognised in the income statement when due.

Going concern

Following the impact of COVID-19, the financial statements have been prepared on a going concern basis, on the understanding that the directors and shareholders will continue to financially support the company during this uncertain period.

The Covid-19 pandemic has bought unprecedented challenges to the economy and in particular the hospitality and leisure sector during the post balance sheet period. The Directors have acted swiftly to access the various government support packages available and reduce costs wherever possible.

The Directors are optimistic for the future of the group, given the provincial locations and lack of reliance on overseas travellers, and anticipate a return to growth once the pandemic is under control.

3.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

1,401,918

1,301,315

Social security costs

90,960

83,281

Other pension costs

28,875

18,035

1,521,753

1,402,631

The average number of employees during the year was as follows:

2019

2018

Direct and administrative

137

129

2019

2018

£

£

Directors' remuneration

-

-

4.	OPERATING PROFIT

The operating profit is stated after charging:

2019

2018

£

£

Hire of plant and machinery

408,543

380,878

5.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

73,800

-

Adjustment re previous years

-

(51,166

)

Tax on profit

73,800

(51,166

)

Reconciliation of total tax charge/(credit) included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2019

2018

£

£

Profit before tax

1,106,185

1,076,141

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

210,175

204,467

Effects of:

Expenses not deductible for tax purposes

1,023

-

Adjustments to tax charge in respect of previous periods

-

(51,166

)

Group relief

(137,398

)

(204,467

)

Total tax charge/(credit)

73,800

(51,166

)

6.	INVENTORIES

2019

2018

£

£

Valuation

56,970

52,810

7.

DEBTORS

2019

2018

£

£

Amounts falling due within one year:

Trade debtors

94,473

59,328

Other debtors

694,124

689,095

Prepayments and accrued income

108,007

113,025

896,604

861,448

Amounts falling due after more than one year:

Amounts owed by group undertakings

7,923,263

6,335,163

Aggregate amounts

8,819,867

7,196,611

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Bank loans and overdrafts (see note 10)

8,375

78,875

Trade creditors

494,824

536,080

Taxation

73,800

-

Other taxes and social security

158,993

136,970

Other creditors

12,912

6,392

Accrued expenses

236,032

2,140,949

984,936

2,899,266

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2019

2018

£

£

Amounts owed to group undertakings

5,183,473

2,483,473

10.

LOANS

An analysis of the maturity of loans is given below:

2019

2018

£

£

Amounts falling due within one year or on demand:

Leaf loan

8,375

78,875

11.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2019

2018

£

£

Within one year

900,444

901,164

Between one and five years

3,600,051

3,600,495

In more than five years

9,000,000

9,900,000

13,500,495

14,401,659

12.	SECURED DEBTS

The debt included in the holding company Brayford Hotel Holdings Limited is secured upon the hotel property held by Brayford Hotels Limited, unlimited inter company guarantees between the company and its subsidiaries, and also by way of personal guarantees to the value of £500,000 given by the directors L M Hall and D A Wann.

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2019

2018

value:

£

£

100

Ordinary

£1

100

100

14.

RESERVES

Retained

earnings

£

At 1 January 2019

2,019,483

Profit for the year

1,032,385

At 31 December 2019

3,051,868

15.	POST BALANCE SHEET EVENTS

The Covid-19 pandemic has bought unprecedented challenges to the economy and in particular the hospitality and leisure sector during the post balance sheet period. The Directors have acted swiftly to access the various government support packages available and reduce costs wherever possible. The full impact of the pandemic is as yet unknown.

16.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Brayford Hotel Holdings Limited.