Grand Hotel (St. Annes) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02829190 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30 September 2020

for

Grand Hotel (St. Annes) Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

Mr R J Webb

Mrs A J Webb

Mr S Webb

Mr T Webb

SECRETARY:

Mrs A J Webb

REGISTERED OFFICE:

South Promenade

Lytham St Annes

Lancashire

FY8 1NB

REGISTERED NUMBER:

02829190 (England and Wales)

AUDITORS:

Ashworth Treasure Limited

Statutory Auditors

17-19 Park Street

Lytham

Lancashire

FY8 5LU

The directors present their strategic report of the company and the group for the year ended 30 September 2020.

REVIEW OF BUSINESS

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

The group trades as exclusive hotels, restaurants and SPA in both St Annes and Grasmere.

The hotels, like all businesses, have suffered the effects of the Covid pandemic. They have shifted strategy by scaling down reinvestment, whilst maintaining standards of quality and service.

The group turnover for the year was £3,073,582 (2019 - £4,262,186). Profits before tax were £362,926 (2019 - £420,633). The reduction in Turnover is a direct affect of being closed for several months due to the Covid pandemic.

The group continues to invest in fixed assets and refurbishment. The directors are still of the opinion that the properties should be well maintained and regularly updated. The main drive on expenditure will be to maximise the hotel guest experience. The group maintains a very strong balance sheet position at the end of the year.

The directors are happy with the group's current position and are confident that the quality reputation of their hotels will produce good results in the forthcoming years.

PRINCIPAL RISKS AND UNCERTAINTIES

Sales income streams are constantly shifting. With the onset of Covid and subsequent cancellations, the hotels have reduced the deposits required to improve any future exposure risk. Current marketing strategy includes adaptation to a more uncertain future along with changes in the customer base and their future requirements

Future plans are to encourage growth especially in the private sector providing a high quality dining experience and possible introduction of themed breaks.

ON BEHALF OF THE BOARD:

Mrs A J Webb - Secretary

5 August 2021

The directors present their report with the financial statements of the company and the group for the year ended 30 September 2020.

DIVIDENDS

Total dividends paid in the year amounted to £250,000.

FUTURE DEVELOPMENTS

The directors are aware the results for 2021 will be heavily affected by the impact of the Covid-19 pandemic, with the lockdown measures being in place for the majority of the year.

They believe however the group is in a good financial position and the risks identified are being well managed by a mixture of government support, financial support and cost cutting. The strategy going forward is to build up a healthy cash reserve to mitigate the impact of any future lockdowns.

The directors are confident the hotels will produce good results once lockdown restrictions are fully lifted. This has been evidenced in the short period following the easing of lockdown in May 2021.

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 October 2019 to the date of this report.

Mr R J Webb

Mrs A J Webb

Mr S Webb

Mr T Webb

DISCLOSURE IN THE STRATEGIC REPORT

The strategic report on the preceding page provides information regarding the performance, developments, and risks

and uncertainties of the group.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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). 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 the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Ashworth Treasure Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mrs A J Webb - Secretary

5 August 2021

Opinion

We have audited the financial statements of Grand Hotel (St. Annes) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2020 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 group's and of the parent company affairs as at 30 September 2020 and of the group's 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 group 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 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 Group 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 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.

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 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.

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.

Victoria Reynolds (Senior Statutory Auditor)

for and on behalf of Ashworth Treasure Limited

Statutory Auditors

17-19 Park Street

Lytham

Lancashire

FY8 5LU

5 August 2021

TURNOVER

3,073,582

4,262,186

Cost of sales

482,325

800,026

GROSS PROFIT

2,591,257

3,462,160

Administrative expenses

2,365,001

2,877,053

226,256

585,107

Other operating income

277,854

-

OPERATING PROFIT

5

504,110

585,107

Interest receivable and similar income

6,155

7,270

510,265

592,377

Interest payable and similar expenses

6

147,339

171,744

PROFIT BEFORE TAXATION

362,926

420,633

Tax on profit

7

72,730

79,988

PROFIT FOR THE FINANCIAL YEAR

290,196

340,645

Profit attributable to:

Owners of the parent

290,196

340,645

PROFIT FOR THE YEAR

290,196

340,645

OTHER COMPREHENSIVE INCOME

Property revaluation

(435,543

)

-

Deferred tax on property revaluation

82,753

-

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(352,790

)

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(62,594

)

340,645

Total comprehensive income attributable to:

Owners of the parent

(62,594

)

340,645

FIXED ASSETS

Intangible assets

10

-

13,349

Tangible assets

11

10,960,395

11,702,276

Investments

12

-

-

10,960,395

11,715,625

CURRENT ASSETS

Stocks

13

63,094

59,501

Debtors

14

198,570

375,442

Cash at bank and in hand

248,417

30,852

510,081

465,795

CREDITORS

Amounts falling due within one year

15

958,726

1,237,855

NET CURRENT LIABILITIES

(448,645

)

(772,060

)

TOTAL ASSETS LESS CURRENT LIABILITIES

10,511,750

10,943,565

CREDITORS

Amounts falling due after more than one year

16

(5,538,465

)

(5,538,465

)

PROVISIONS FOR LIABILITIES

20

(713,567

)

(832,788

)

NET ASSETS

4,259,718

4,572,312

CAPITAL AND RESERVES

Called up share capital

21

1,000

1,000

Revaluation reserve

22

2,344,606

2,697,396

Retained earnings

22

1,914,112

1,873,916

SHAREHOLDERS' FUNDS

4,259,718

4,572,312

The financial statements were approved by the Board of Directors and authorised for issue on 5 August 2021 and were signed on its behalf by:

Mr R J Webb - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

7,338,412

8,471,140

Investments

12

1,000

1,000

7,339,412

8,472,140

CURRENT ASSETS

Stocks

13

42,608

40,254

Debtors

14

1,757,310

1,953,916

Cash at bank and in hand

114,684

9,567

1,914,602

2,003,737

CREDITORS

Amounts falling due within one year

15

660,367

848,858

NET CURRENT ASSETS

1,254,235

1,154,879

TOTAL ASSETS LESS CURRENT LIABILITIES

8,593,647

9,627,019

CREDITORS

Amounts falling due after more than one year

16

(3,640,991

)

(3,640,991

)

PROVISIONS FOR LIABILITIES

20

(508,196

)

(711,544

)

NET ASSETS

4,444,460

5,274,484

CAPITAL AND RESERVES

Called up share capital

21

1,000

1,000

Revaluation reserve

22

1,748,514

2,526,222

Retained earnings

22

2,694,946

2,747,262

SHAREHOLDERS' FUNDS

4,444,460

5,274,484

Company's profit for the financial year

197,684

380,508

The financial statements were approved by the Board of Directors and authorised for issue on 5 August 2021 and were signed on its behalf by:

Mr R J Webb - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 October 2018

1,000

1,835,271

2,697,396

4,533,667

Changes in equity

Dividends

-

(302,000

)

-

(302,000

)

Total comprehensive income

-

340,645

-

340,645

Balance at 30 September 2019

1,000

1,873,916

2,697,396

4,572,312

Changes in equity

Dividends

-

(250,000

)

-

(250,000

)

Total comprehensive income

-

290,196

(352,790

)

(62,594

)

Balance at 30 September 2020

1,000

1,914,112

2,344,606

4,259,718

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 October 2018

1,000

2,668,754

2,526,222

5,195,976

Changes in equity

Dividends

-

(302,000

)

-

(302,000

)

Total comprehensive income

-

380,508

-

380,508

Balance at 30 September 2019

1,000

2,747,262

2,526,222

5,274,484

Changes in equity

Dividends

-

(250,000

)

-

(250,000

)

Total comprehensive income

-

197,684

(777,708

)

(580,024

)

Balance at 30 September 2020

1,000

2,694,946

1,748,514

4,444,460

Cash flows from operating activities

Cash generated from operations

1

739,651

953,804

Interest paid

(147,339

)

(171,744

)

Tax paid

(10,000

)

(82,609

)

Net cash from operating activities

582,312

699,451

Cash flows from investing activities

Purchase of tangible fixed assets

(18,698

)

(156,519

)

Interest received

6,155

7,270

Net cash from investing activities

(12,543

)

(149,249

)

Cash flows from financing activities

Loan repayments in year

(167,506

)

(335,012

)

Amount introduced by directors

268,041

327,312

Amount withdrawn by directors

(202,739

)

(246,831

)

Equity dividends paid

(250,000

)

(302,000

)

Net cash from financing activities

(352,204

)

(556,531

)

Increase/(decrease) in cash and cash equivalents

217,565

(6,329

)

Cash and cash equivalents at beginning of year

2

30,852

37,181

Cash and cash equivalents at end of year

2

248,417

30,852

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2020

2019

£

£

Profit before taxation

362,926

420,633

Depreciation charges

338,385

377,668

Finance costs

147,339

171,744

Finance income

(6,155

)

(7,270

)

842,495

962,775

(Increase)/decrease in stocks

(3,593

)

1,190

Decrease/(increase) in trade and other debtors

113,475

(1,553

)

Decrease in trade and other creditors

(212,726

)

(8,608

)

Cash generated from operations

739,651

953,804

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30 September 2020

30.9.20

1.10.19

£

£

Cash and cash equivalents

248,417

30,852

Year ended 30 September 2019

30.9.19

1.10.18

£

£

Cash and cash equivalents

30,852

40,955

Bank overdrafts

-

(3,774

)

30,852

37,181

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.10.19

Cash flow

At 30.9.20

£

£

£

Net cash

Cash at bank and in hand

30,852

217,565

248,417

30,852

217,565

248,417

Debt

Debts falling due within 1 year

(335,008

)

167,506

(167,502

)

Debts falling due after 1 year

(5,538,465

)

-

(5,538,465

)

(5,873,473

)

167,506

(5,705,967

)

Total

(5,842,621

)

385,071

(5,457,550

)

1.	STATUTORY INFORMATION

Grand Hotel (St. Annes) 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 General Information page.

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

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Going concern

The directors have considered the impact of the Covid-19 pandemic on the group and although the total impact is still uncertain, they believe that it continues to be a going concern due to the strength of the balance sheet and measures put in place as discussed in the strategic report and events after the reporting period in the notes to the accounts.

Basis of consolidation

The group accounts consolidate the accounts of Grand Hotel (St. Annes) Limited and its subsidiary undertaking The Grand @ Grasmere Limited.

Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date on which control passed.

Significant judgements and estimates

In the application of the group's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily available from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both.

The key judgements and sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below:

Estimated useful lives and residual values of fixed assets

Depreciation of tangible fixed assets has been based on estimated useful lives and residual values deemed appropriate by the directors. Estimated useful lives are reviewed annually and revised as appropriate. Revisions take into account estimated useful lives used by other companies operating in the sector and actual asset lives and residual values, as evidenced by disposals during current and prior accounting periods.

Impairment of non-financial assets

Non-financial assets include goodwill, investments and tangible fixed assets. The group assesses at each reporting date whether there is an indication that the carrying amount of an asset may not be recoverable. If there is such an indication then the group estimates the recoverable amount of the asset using the information available at that date. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. If the recoverable amount is less than the carrying amount, the carrying amount of an asset is impaired and it is reduced to its recoverable amount through an impairment in the statement of comprehensive income.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2015, was amortised evenly over its estimated useful life of five years. This has been fully amortised in the year.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Fixtures and fittings

-

20% on reducing balance and 20% on reducing balance and 10% on cost

Freehold land and buildings in the parent company are initially stated at cost and subsequently at valuation. Fixtures and fittings are stated at cost less depreciation. Cost represents purchase price together with any incidental costs of acquisition.

Assets that have been revalued are subject to subsequent revaluations performed with sufficient regularity such that the carrying amount does not differ materially from the fair value at the balance sheet date. The valuations are performed by a qualified external valuer.

Government grants

Grants are recognised under the accrual model or performance model.

Under the accrual model, revenue grants are recognised on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving financial support to the entity with no future related costs are recognised in income in the period in which it become receivable.

Under the performance model, where the grant does not impose specified future performance related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions, it is recognised in income only when those conditions have been met, otherwise they are recognised as a liability.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

The following assets and liabilities are classified as financial instruments - investments in subsidiaries, trade debtors, trade creditors, bank loans, other loans and inter-group balances.

Investments in subsidiary undertakings are measured at cost less impairment.

Bank loans are initially measured at the present value of future payments, discounted at a market rate of interest, and subsequently at amortised cost using the effective interest method.

Inter-group balances (being repayable on demand), trade debtors, trade creditors and other loans are measured at the undiscounted amount of cash or other consideration expected to be paid or received.

Financial assets are assessed at the end of each reporting period for objective evidence of impairment and if applicable recognised as appropriate.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated 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 balance sheet date.