Porthmeor Holdings Limited - Limited company accounts 22.3

REGISTERED NUMBER: 08821894 (England and Wales)

Porthmeor Holdings Limited

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements

for the Period 4th January 2021 to 2nd January 2022

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Statement of Income and Retained Earnings

9

Consolidated Statement of Financial Position

10

Company Statement of Financial Position

11

Consolidated Statement of Cash Flows

12

Notes to the Consolidated Statement of Cash Flows

13

Notes to the Consolidated Financial Statements

14

DIRECTORS:

R J Clark

P J D Hodgson FCA

Mrs E H Davies

REGISTERED OFFICE:

7 Sail Lofts

Porthmeor Road

St Ives

Cornwall

TR26 1GB

REGISTERED NUMBER:

08821894 (England and Wales)

AUDITORS:

Bishop Fleming LLP

Chartered Accountants and Statutory Auditors

Chy Nyverow

Newham Road

Truro

Cornwall

TR1 2DP

The directors present their strategic report of the company and the group for the period 4th January 2021 to 2nd January 2022.

REVIEW OF BUSINESS

2021 started with business at Sail lofts-St Ives Limited ('SLSI') and at Suffolk Country Inns Limited ('SCIL') closed because of the covid-19 Government imposed lockdown. Lockdown was lifted during March and both businesses opened as soon as they were able and permitted. A recurring consequence of the pandemic and other factors has been the significant and continuing challenge in recruiting staff for the hospitality industry. This had a particular effect on SCIL but also effected the recruitment and retention of cleaners at SLSI. The Directors thank all staff in the Group who worked so hard and often in difficult circumstances throughout the year.

Once Lockdown was lifted, demand for holiday accommodation was very strong in part driven by the fact that overseas holidays were not easily available. SLSI experienced its best year since it started trading in 2010 with good demand spreading into the shoulder and out of season months. The results for the year were enhanced by a successful claim under its Business Interruption Policy, which was accepted by the insurers following the Supreme Court ruling in January 2021.

In late 2020, the Directors sold one apartment within SLSI's estate while retaining management rights over it for a period of five years. The surplus on sale over book value was £307,972.

Trading at SCIL was good once re-opening was allowed but was not as frenetic as in 2020 when there was a huge pent-up demand caused by the long periods of lockdown. Trading was restricted to the Anchor in Nayland because the Angel in Stoke by Nayland was closed for renovation. Because of staff shortages, the Anchor was only open for five days a week.

As soon as lockdown regulations permitted, the re-development of the Angel started. In late 2020, a neighbouring property 'the Stables' was purchased and planning consent obtained to convert it into additional letting rooms. The re-development included renewing all the services as well as installing air conditioning in all the bedrooms; all bedrooms and bathrooms have been finished to the highest standards as have the public areas. The kitchen was completely re-equipped; the outside areas have been redeveloped to a design by Tom Hoblyn. Work was substantially complete by the year end; a phased re-opening took place in April 2022.

Recruitment of staff of sufficient calibre was undertaken from mid-2021 onwards. This was a deliberate policy to secure the right personnel as they became available and to prepare for the opening. The cost of early recruitment and a substantial repair element of the work undertaken at the Angel have had a significant impact on the results of SCIL despite a good profit at the Anchor.

PRINCIPAL RISKS AND UNCERTAINTIES

The real increases in costs which have been experienced and the possibility of further substantial increases in energy prices and business rates will affect future profitability because it is unlikely that these will all be able to be fully reflected in the pricing responses to inflationary pressures. Consumer price inflation not seen in recent years may restrict spending on hospitality.

Staff recruitment is likely to remain a significant challenge at least in the short term. A consequence is that opening hours could be restricted if sufficient staff cannot be recruited.

Our forecasts for 2023 take these factors into consideration. The Directors keep these risks under review at their weekly board meetings and will take any necessary action to mitigate the consequences.

FINANCIAL KEY PERFORMANCE INDICATORS

The performance indicators that the Directors monitor through the management accounts are:

Sail lofts St Ives Ltd

2021

2020

£'000s

£'000s

Turnover

671

446

Profit before tax excluding exceptional items

355

38

Suffolk Country Inns Ltd

2021

2020

£'000s

£'000s

Turnover excluding gratuities

1,315

1,317

Operating Profit before overheads

361

415

FUTURE DEVELOPMENT

SLSI has obtained planning consent for the development of an office and stores unit into a one bedroom apartment. It is likely that that conversion will take place during the winter of 2023/24. The upgrading and refurbishment of apartments continues to maintain our position in the premium market.

The priority for SCIL is to extend the opening days at the Angel. The redevelopment of the buildings and site were completed early in 2022 but staff recruitment, and their subsequent training, has delayed expanding the number of covers available to the maximum. No further material capital expenditure is envisaged in the medium term.

ON BEHALF OF THE BOARD:

R J Clark - Director

3rd February 2023

The directors present their report with the financial statements of the company and the group for the period 4th January 2021 to 2nd January 2022.

DIVIDENDS

No dividends will be distributed for the period ended 2nd January 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 4th January 2021 to the date of this report.

R J Clark

P J D Hodgson FCA

Mrs E H Davies

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, Bishop Fleming LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R J Clark - Director

3rd February 2023

Opinion

We have audited the financial statements of Porthmeor Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 2nd January 2022 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 2nd January 2022 and of the group's profit 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 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 this gives rise to a material misstatement in the financial statements themselves. 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 four, 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Identifying and assessing potential risks related to irregularities

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

-

We have considered the nature of the industry and sector, control environment and business performance, key drivers for directors' remuneration, bonus levels and performance targets;

-

We have considered the results of our enquiries of management about their own identification and assessment of the risks of irrationalities

-

Any matters identified having obtained and reviewed the Group and parent Company's documentation of their policies and procedures relating to:

-

Identifying, evaluation and complying with laws and regulations and whether they were aware of any instances of non-compliance;

-

Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

The internal controls established to mitigate risks of fraud or noncompliance with laws and regulations; and

-

We have considered the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As Group and component auditors, our assessment relating to non-compliance with laws and regulations and fraud encompassed all entities within the Group.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in revenue recognition.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulators frameworks that the Group and parent Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, Financial Reporting Standard 102 and UK tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group's ability to operate or to avoid a material penalty. These included; control of substances hazardous to health, licencing act, food safety regulations, fire regulations, data protection regulations, occupational health and safety regulations, and employment legislation.

Audit response to risks identified

Our procedures to respond to the risks identified included the following:

-

Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having direct effect on the financial statements;

-

Enquiring of management concerning actual and potential litigation and claims;

-

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

Performing sample based substantive testing over all material income streams; and

-

In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries, and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of the business.

We also communicated relevant identified laws and regulations and potential fraud risk to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements,

recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not

detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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.

Other matters

The financial statements of the Company for the period ended 3 January 2021 were not audited.

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.

Kevin Connor FCA (Senior Statutory Auditor)

for and on behalf of Bishop Fleming LLP

Chartered Accountants and Statutory Auditors

Chy Nyverow

Newham Road

Truro

Cornwall

TR1 2DP

6th February 2023

TURNOVER

4

2,064,413

1,830,613

Cost of sales

(1,256,498

)

(1,142,632

)

GROSS PROFIT

807,915

687,981

Administrative expenses

(567,223

)

(739,065

)

240,692

(51,084

)

Other operating income

367,338

192,922

OPERATING PROFIT

6

608,030

141,838

Income from fixed asset investments

7

274

180

Interest receivable and similar income

8

35

271

608,339

142,289

Gain/loss on revaluation of assets

3,183

6,330

611,522

148,619

Interest payable and similar expenses

9

(697

)

-

PROFIT BEFORE TAXATION

610,825

148,619

Tax on profit

10

(57,996

)

(30,065

)

PROFIT FOR THE FINANCIAL PERIOD

552,829

118,554

Retained earnings at beginning of period

34,224

(84,330

)

RETAINED EARNINGS FOR THE GROUP AT END OF PERIOD

587,053

34,224

Profit attributable to:

Owners of the parent

552,829

118,554

FIXED ASSETS

Tangible assets

12

5,587,686

5,227,940

Investments

13

22,505

19,121

5,610,191

5,247,061

CURRENT ASSETS

Stocks

14

22,285

28,967

Debtors

15

41,022

69,291

Cash at bank and in hand

244,753

371,891

308,060

470,149

CREDITORS

Amounts falling due within one year

16

(546,227

)

(511,064

)

NET CURRENT LIABILITIES

(238,167

)

(40,915

)

TOTAL ASSETS LESS CURRENT LIABILITIES

5,372,024

5,206,146

CREDITORS

Amounts falling due after more than one year

17

(3,154,374

)

(3,574,844

)

PROVISIONS FOR LIABILITIES

20

(45,156

)

(11,637

)

NET ASSETS

2,172,494

1,619,665

CAPITAL AND RESERVES

Called up share capital

21

100,001

100,001

Other reserves

22

1,485,440

1,485,440

Retained earnings

22

587,053

34,224

SHAREHOLDERS' FUNDS

2,172,494

1,619,665

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 3rd February 2023 and were signed on its behalf by:

R J Clark - Director

FIXED ASSETS

Tangible assets

12

-

-

Investments

13

122,505

119,121

122,505

119,121

CURRENT ASSETS

Debtors

15

48,618

34,780

Cash at bank

36,797

21,744

85,415

56,524

CREDITORS

Amounts falling due within one year

16

(31,108

)

(35,044

)

NET CURRENT ASSETS

54,307

21,480

TOTAL ASSETS LESS CURRENT LIABILITIES

176,812

140,601

CREDITORS

Amounts falling due after more than one year

17

(89,993

)

(48,993

)

PROVISIONS FOR LIABILITIES

20

(1,685

)

(1,080

)

NET ASSETS

85,134

90,528

CAPITAL AND RESERVES

Called up share capital

21

100,001

100,001

Retained earnings

(14,867

)

(9,473

)

SHAREHOLDERS' FUNDS

85,134

90,528

Company's (loss)/profit for the financial year

(5,394

)

1,617

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 3rd February 2023 and were signed on its behalf by:

.................................................................

R J Clark - Director

Cash flows from operating activities

Cash generated from operations

1

474,296

339,780

Interest paid

(697

)

-

Tax paid

(6,170

)

(8,146

)

Net cash from operating activities

467,429

331,634

Cash flows from investing activities

Purchase of tangible fixed assets

(1,278,903

)

(884,295

)

Purchase of fixed asset investments

(201

)

(156

)

Sale of tangible fixed assets

1,095,847

-

Sale of fixed asset investments

-

96,466

Interest received

35

271

Dividends received

274

180

Net cash from investing activities

(182,948

)

(787,534

)

Cash flows from financing activities

Amount introduced by directors

675,000

515,270

Amount withdrawn by directors

(1,086,619

)

(254,300

)

Net cash from financing activities

(411,619

)

260,970

Decrease in cash and cash equivalents

(127,138

)

(194,930

)

Cash and cash equivalents at beginning of period

2

371,891

566,821

Cash and cash equivalents at end of period

2

244,753

371,891

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

Period

Period

4.1.21

30.12.19

to

to

2.1.22

3.1.21

£

£

Profit before taxation

610,825

148,619

Depreciation charges

93,837

82,777

(Profit)/loss on disposal of fixed assets

(270,527

)

7,338

Gain on revaluation of fixed assets

(3,183

)

(6,330

)

Finance costs

697

-

Finance income

(309

)

(451

)

431,340

231,953

Decrease/(increase) in stocks

6,682

(6,296

)

(Increase)/decrease in trade and other debtors

(22,486

)

52,567

Increase in trade and other creditors

58,760

61,556

Cash generated from operations

474,296

339,780

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Period ended 2nd January 2022

2.1.22

4.1.21

£

£

Cash and cash equivalents

244,753

371,891

Period ended 3rd January 2021

3.1.21

30.12.19

£

£

Cash and cash equivalents

371,891

566,821

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 4.1.21

Cash flow

At 2.1.22

£

£

£

Net cash

Cash at bank and in hand

371,891

(127,138

)

244,753

371,891

(127,138

)

244,753

Debt

Debts falling due within 1 year

(6,311

)

(3,335

)

(9,646

)

Debts falling due after 1 year

(43,688

)

8,851

(34,837

)

(49,999

)

5,516

(44,483

)

Total

321,892

(121,622

)

200,270

1.	STATUTORY INFORMATION

Porthmeor Holdings Ltd ('the Company') and its subsidiaries ('the Group') operate as accommodation providers in Cornwall and boutique gastro-pubs in Suffolk.

The company is a private company, limited by shares, registered in England and Wales. The company's registered number is 08821894 and the registered office is 7 Sail Lofts, Porthmeor Road, St Ives, Cornwall, TR26 1GB.

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 as modified by the revaluation of certain assets.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the companies that continue to be controlled by the Group.

Control exists where the Group has the power to govern and control the financial and operating policies of the entity, generally conferred by holding a majority of voting rights.

All intra-group balances, transactions, income and expenses are eliminated on consolidation. The consolidated accounts are prepared using uniform accounting policies.

Significant judgements and estimates

The decision not to depreciate the property is a significant jusdgement due to the value of the property. This has been disclosed under the Tangible fixed assets accounting policy and the reason why also detailed.

Turnover

Turnover is measured at the fair value of consideration received or receivable, excluding donations, rebates and value added tax.

Turnover is recognised when the goods or service is provided.

Tangible fixed assets

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

Freehold property

-

Nil and not provided

Improvements to property

-

2% on cost

Plant and machinery

-

20% on cost and 6.67% on cost

Fixtures and fittings

-

33% on cost and 25% on cost

Computer equipment

-

33% on cost

FRS 102 requires freehold properties to be depreciated over their estimated useful economic life. In the opinion of the directors the depreciation charge and accumulated depreciation charge is immaterial to the financial statements and the directors believe that complying with the accounting standard will not give the financial statements a true and fair view.

Stocks

Stocks are valued at the lower of cost and estimated selling price less costs to sell, after making due allowance for obsolete and slow moving items.

The cost formula used in measuring stock is FIFO.

Taxation

Taxation for the period 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 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 period 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.

Operating leases

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

The company has chosen to adopt the Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts, discounted at a market rate of interest.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of future receipts, discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Going concern

The group has generated a profit of £552,829 in the current year (Prior year: £118,554). At the year-end date, the group had net current liabilities of £0.238m (Prior year: £0.04m liabilities) and net assets of £2.172m (Prior year: £1.62m).

Following COVID impacted periods in 2020 and 2021, the group has carried out significant refurbishment works at one of the sites owned by a 100% subsidiary company. As a result, the site was closed to the public for a large part of the year. The refurbished site eventually re-opened on a phased basis from April 2022.

The group continues to benefit from support by its director/shareholder.

Management have prepared group cash flow projections for the period to 12 months from the approval of the financial statements which demonstrate that they expect sufficient cash will be available to the group to continue to operate. The projections prepared include key judgements, in particular regarding the ongoing expected trading performance of the sites within a group subsidiary company and the Directors assessment is reliant on the sites achieving certain levels of forecast trade performance.

Based on the review undertaken, the Directors are of the opinion that the going concern basis remains appropriate.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Freehold property impairment review (Suffolk Country Inns Ltd)

The Directors assess annually the carrying value of freehold property comparing this to the higher of its deemed value in use and its fair value. An independent third party valuation was carried out in respect of one of the sites held in freehold property which has been used to demonstrate that the fair value is considered to be in excess of carrying value. Due to the refurbishment and period of closure of the other site held within freehold property it has not been possible to consider a value in use basis and the Directors have based their assessment of fair value on a historical valuation and taken into account the current year refurbishment expenditure bringing the asset into its current position.

Freehold property impairment review (Sail Lofts St Ives Ltd)

The Directors assess annually the carrying value of freehold property comparing this to the higher of its deemed value in use and its fair value. The Directors have considered the evidence of profit generated by the sale of one unit in the period, interest in a potential unit sale post year end and the ongoing forecast performance of the company to confirm the fair value of freehold property remains in excess of the carrying value held in the financial statements.

4.

TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the group.

An analysis of turnover by class of business is given below:

Period

Period

4.1.21

30.12.19

to

to

2.1.22

3.1.21

£

£

Inns and restaurants

1,393,633

1,384,268

Accommodation

670,780

446,345

2,064,413

1,830,613

5.	EMPLOYEES AND DIRECTORS

Period

Period

4.1.21

30.12.19

to

to

2.1.22

3.1.21

£

£

Wages and salaries

904,951

818,373

Social security costs

76,331

95,902

Other pension costs

6,357

6,862

987,639

921,137

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

Period

Period

4.1.21

30.12.19

to

to

2.1.22

3.1.21

Directors

3

3

Inns and restaurants

68

52

Accommodation

14

15

85

70

The average number of employees by undertakings that were proportionately consolidated during the period was 85 (2021 - 70 ) .

Period

Period

4.1.21

30.12.19

to

to

2.1.22

3.1.21

£

£

Directors' remuneration

60,000

60,000

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period

Period

4.1.21

30.12.19

to

to

2.1.22

3.1.21

£

£

Hire of plant and machinery

66,099

24,170

Depreciation - owned assets

93,837

82,777

(Profit)/loss on disposal of fixed assets

(270,527

)

7,338

Auditors' remuneration

3,500

-