EASTHAMPSTEAD_HOLDINGS_LI - Accounts

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

Easthampstead Park Conference centre (EPCC) was acquired on the 8th October 2018 for £4.3m all cash no debt. Planning permission was sought in early 2019 for permission to refurbish the existing two buildings to provide a total of 106 bedrooms of which phase 1 refurbishment would take the existing bedrooms from 29 to 93 bedrooms, incorporate within the buildings new gym , refurbish existing Ballroom , meeting rooms, restaurants x2, bar x1 and create further bar.

Planning permissions were received during first half of 2019. Mobilisation for building works was commenced 2nd half of 2019 with agreement with Coutts and Co for a refurbishment development loan of £9.5m to complete first phase refurbishment by December 2020 with commencement October 2019.

The works are proceeding smoothly, on budget and time. EPCC has continued to trade throughout 2019. This is the first period since incorporation for the group.

The Group has reported revenues of £1.3m (March 2019: £637k) for the period with an operating loss of £606k (March 2019: £383K). The group balance sheet at the period end shows net assets in excess of £3.6m (March 2019: £4.2m).

There were no other significant matters or events during the period. All issues that arose were dealt with efficiently within the business and the business plan. The refurbishment has continued into 2020 as envisaged by the business plan

Management consider occupancy and rates to be a key measure of performance. Occupancy and rates were as predicted due to the refurbishment.

The outlook was continuing as per the business plan at the start of 2020 until it was stopped dead in its tracks by the emergence of the Covid 19 pandemic. However, the directors consider the Group to be well positioned to deal with such challenges and closed the hotel operations to concentrate on delivery of the refurbishment on time and on budget and look forward once the phase 1 refurbishment is complete to continuing to drive both revenues and profitability.

The principal risk for the company is the refurbishment, as at January 2020 no risks identified and refurbishment proceeding on time and on budget.

The financial risks and associated risk management objectives and procedures

The financial risk management within the group is governed by policies set by the board of directors and senior management. These policies cover interest rate risk and other areas, such as cash management.

Credit risk

The group has minimal exposure to credit risk. All cash is deposited with its UK banks. The principal amount disclosed within debtors are amounts due from UK-based customers.

Foreign exchange risk

The group is not exposed to foreign exchange risk as all of its income is derived from activities undertaken in the UK and all of its trade and other suppliers invoice in sterling.

The risks set out above are not exhaustive and additional risks and uncertainties may arise or become material in the future. The board of directors monitors risks and uncertainties faced by the group on a continual basis.

The group sees the average room rate, occupancy levels and food and beverage gross profit margins as their key performance indicators (KPIs). These KPIs allow the group to monitor the performance of its financial model as well as its wider responsibilities to its stakeholders.

There is one further phase of development envisaged by the Group to complete the business plan which is as follows.

• Phase 2

  • The refurbishment of the stable block from meeting rooms to 11 duplex bedrooms

  • The refurbishment of the ladies toilets on the groundfloor of the Mansion House overlooking the stable yard courtyard to either serviced offices or a dry spa

  • The refurbishment of the basement in the groundfloor of the Mansion House to back of house offices

Phase 2 is currently on hold for the foreseeable future and will be reviewed post the covid pandemic.

On behalf of the board

The directors present their annual report and financial statements for the period ended 31 December 2019.

During the period the company changed its accounting reference date to 31 December.

The principal activity of the company was that of a holding company. The principal activity of the group is that of the operation and management of Easthampstead Park.

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

The results for the period are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

The auditor, Gerald Edelman, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The directors are responsible for preparing the Annual Report 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). 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 group and company, and of the profit or loss of the group 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;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     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 group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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.

The financial statements have been prepared on the assumption that the group is a going concern. At the balance sheet date, the group had net current liabilities of £724,349 (March 2019: £711,482). The group meets its day to day working capital requirements through operating cash flows and through the financial support provided by its shareholders and banking facility. If the group directors believe further financial support is required then they assert that they can seek this additional funding either from existing shareholders or the bank as they have done in the past in order to provide the necessary finance. As with placing reliance on any sources of funding, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

With respect to the recent Covid-19 outbreak, the directors have considered the impact of the pandemic on the group’s operations. Like many businesses, the result of the group is impacted by the health of the UK economy, with any potential downturn likely to have an impact upon the group’s operations. Having considered this, the directors expect any impact on the group to be limited to the short-term and therefore do not believe it to pose a significant long-term risk to the business.

Taking all matters and information into account the directors have at the time of approving the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

We have audited the financial statements of Easthampstead Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2019 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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 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 2019 and of the group's loss for the period 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 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 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 group's or the parent 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 included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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 our audit:

• the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' 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.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the 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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £16,160 (2019 - £180 loss).

Easthampstead Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 73 Cornhill, London, EC3V 3QQ.

The group consists of Easthampstead Holdings Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. 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. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of Easthampstead Holdings Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 December 2019. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The financial statements have been prepared on the assumption that the group is a going concern. At the balance sheet date, the group had net current liabilities of £652,683 (2019: £711,482). The group meets its day to day working capital requirements through operating cash flows and through the financial support provided by its shareholders and banking facility. If the group directors believe further financial support is required then they assert that they can seek this additional funding either from existing shareholders or the bank in order to provide the necessary finance. As with placing reliance on any sources of funding, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

With respect to the recent Covid-19 outbreak, the directors have considered the impact of the pandemic on the group’s operations. Like many businesses, the result of the group is impacted by the health of the UK economy, with any potential downturn likely to have an impact upon the group’s operations. Having considered this, the directors expect any impact on the group to be limited to the short-term and therefore do not believe it to pose a significant long-term risk to the business.

Taking all matters and information into account the directors have at the time of approving the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

These accounts are prepared from the 1 April 2019 to 31 December 2019.

Turnover represents the amount derived from the provision of accommodation, services and sale of goods which fall within the group's ordinary activities stated net of value added tax and trade discounts.

Revenue from room sales and other guest services is recognised when rooms are occupied and as services are provided.

Revenue from the provision of hotel services is recognised as the services are provided to and received by the hotel's guests.

Revenue from the sale of food and beverage is recognised at the point at which the products have been transferred to the customer.

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:

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 profit and loss account.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The 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.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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.

Stocks 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 stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors 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.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments 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. Amounts 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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Turnover is derived from the group's principal activity, undertaken wholly within the United Kingdom.

The average monthly number of persons (including directors) employed by the group and company during the period was:

Their aggregate remuneration comprised:

The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:

Details of the company's subsidiaries at 31 December 2019 are as follows:

The bank loan is secured by way of legal charge on the freehold property known as Easthampstead Park Hotel, Peacock Lane, Wokingham, Berkshire RG40 3DF. There are fixed and floating charges on the assets of the company, and the assets of Easthampstead Hospitality Limited and Easthampstead Hotel Limited, subsidiaries of the company.

The loan is subject to annual interest at 3.25% over the base rate and is repayable after 33 months from the facility agreement dated 13 September 2019 and thereafter 16 quarterly repayments per repayment schedule provided in the facility agreement.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

The "A" and "B" shares rank equally in all respects save that the "B" shares have no right to any dividend unless so declared and approved by the Board. The preference shares have priority over the "A" and "B" shares on winding up, liquidation or sale insofar as their nominal value is redeemed.

The disclosure requirement of section 33 of FRS 102 allows the company not to disclose transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly-owned by such a member.

Included in group administrative expenses are management charges of £35,833 (March 2019:£25,000) to Woodstock Oxford Property Limited, a company which B Cave is the sole shareholder and director and £35,833 (March 2019: £25,000) to Storm Olive Communications Limited, a company which R Aspland-Robinson, who is considered key management personnel, is a shareholder and director. Included in group creditors is an amount of £5,000 (March 2019: £5,000) due to Storm Olive Communications Limited.

Included within group other debtors are balances of £55,702 (March 2019: £33,293) and £4,063 (March 2019: £4,063) due from Gorse Hill Hotel Limited and Active Hospitality Limited respectively.

Included in group creditors is an amount of £280,654 (March 2019: £nil) due to Gorse Hill Hotel Limited, companies in which B Cave, J Harrison and J Shashou are directors. Also included in creditors are shareholder loans amounting to £664,650 (March 2019: £819,650).