OLD_THORNS_LUXURY_APARTME - Accounts

The directors of the company have 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.

Old Thorns Luxury Apartments Limited is a private company limited by shares incorporated in England and Wales. The registered office is Old Thorns Golf Hotel and Country Estate, Longmoor Road, Liphook, Hampshire, United Kingdom, GU30 7PE.

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 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.

Atruet 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 directors are aware that the company continues to make losses which may cast doubts on the company's ability to continue as a going concern, however the directors have confirmation that the company will continue to be supported by its ultimate parent company, Stellar Partners Ltd. However. the directors are aware that the company continues to make losses and, as with all companies within the hospitality industry, has been affected by the COVID-19 pandemic which may cast doubt on the company's ability to continue as a going concern.

The company started the financial year in unprecedented times as we navigated the COVID-19 crisis. It has been particularly challenging for the hospitality industry having to follow Government advice to close hotels during the initial period of lockdown and subsequent two further lockdowns. During the short period in the summer and autumn when the apartments were allowed to reopen, the company has seen a reduction in revenue as a result of having to operate at lower levels of occupancy with social distancing restrictions in place. However, the directors have taken appropriate actions to steer the hotel through this difficult period with the introduction of revenue generating campaigns, cost saving initiatives and through the government levels of support including VAT deferment and 12-month business rates holiday. With the success of the vaccine rollout and reduction in infection rates, the hospitality industry is set to reopen in spring as part of Step 3 of the government’s roadmap out of lockdown. Whilst occupancy levels are forecast to be considerably lower and it will be a long road to return to pre COVID 19 levels, we believe that the company is well-placed to overcome the challenges.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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:

Freehold land is not depreciated.

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.

At each reporting period end date, the company 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.

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.

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 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, 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 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, 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.

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.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

There are no employees other than the directors.

Other borrowings relates to a loan payable to Pristine Star Limited S.a.r.l., the immediate parent company.

The loan is secured by the way of a debenture over the assets of the company. The maturity of loan is on 20 October 2021 with an effective interest rate of 4.66% over the loan term. There is an option to extend the repayment of the loan by 5 years beyond the maturity date.

Due to the Covid-19 pandemic, after the balance sheet date, the company defaulted on its loan interest covenant. The directors have entered into discussions with Pristine Star Limited S.a.r.l to re-negotiate the loan terms in light of this. The directors are confident of being able to reach an agreement.

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 unqualified.

During the year the following transactions were made with Old Thorns Golf Hotel and Country Estate Limited, a fellow group undertaking; sale of assets of £nil (2019: £2,250) were made to Old Thorns Golf Hotel and Country Estate Limited. Management charges of £26,880 (2019: £16,423) and cost recoveries of £40,320 (2019: £40,129) were charged from Old Thorns Golf Hotel and Country Estate Limited. A working capital loan of £100,000 (2019: £2,136,500) was provided by Old Thorns Golf Hotel and Country Estate Limited of which £2,561,000 (2019: £190,000) was repaid in the year. At the year end the balance due to Old Thorns Golf Hotel and Country Estate Limited was included in creditors of £251,045 (2019: 2,442,032).

During the year, the company novated the £8,000,000 loan owed from EagleResort Limited, the minority shareholder until they sold their share. At the year end the company was owed £nil (2019: £8,000,000) from EagleResort Limited. The loan was novated to Tech Union, the current minority shareholder, at the year end the company was owed £4,406,647 (2019: £nil).

The immediate parent company is Pristine Star Limited S.a.r.l, a company incorporated in Luxembourg. The ultimate parent company is Stellar Partners Ltd, a company incorporated in the British Virgin Islands.

The ultimate controlling party is K J Soh, a director.