Porthmeor Holdings Limited - Limited company accounts 23.2

REGISTERED NUMBER: 08821894 (England and Wales)

Porthmeor Holdings Limited

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements

for the Period 3rd January 2022 to 1st January 2023

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 3rd January 2022 to 1st January 2023.

REVIEW OF BUSINESS

Trading in both 2020 and 2021 was significantly affected by the Covid-19 pandemic. 2022 was more comparable with 2019 but still experienced the after effects of the pandemic lockdown with reduced demand for holiday accommodation as overseas holidays became popular once again. The high rate of inflation, primarily caused by the war in Ukraine, has substantially reduced people's disposable income with a consequent material impact on demand in the hospitality sector. A continuing consequence of the pandemic has been the significant and continuing challenge in recruiting staff for the hospitality industry. This has affected both companies - Sail Lofts-St Ives Limited ('SLSI') and Suffolk Country Inns Limited ('SCIL').

The Directors thank all staff in the Group who have worked so hard throughout the year. At SLSI trading is good and (apart from the exceptional results in 2021), the best in the company's history.

The year started with only one site operational at SCIL because renovations were ongoing at the Angel. Difficulty in recruiting staff had meant that the Anchor was only open five days per week after re-opening following the pandemic. The difficulty in recruitment and therefore a reluctance to reduce staffing during the quieter winter months followed by reduced demand in the summer contributed to a disappointing result in SCIL.

The Angel re-opened in late April but once again the problem of recruiting staff with the right experience has hampered trading with the site open for four days a week. The quality of both the food, service and the accommodation has immediately impressed visitors and resulted in a strong branding proposition. The Angel was awarded Hotel of the Year 2023, East of England by the Sunday Times and was among the top scoring restaurants in the UK for food and wine by the Times Travel Guide.

The Angel has a high level of fixed costs due to the quality of service and in this initial period of re-opening and establishing the brand, material losses have been incurred. However, the Directors believe that the significant investment and growing reputation of The Angel will prove to be profitable.

PRINCIPAL RISKS AND UNCERTAINTIES

The real increases in costs which have been experienced and the possibility of on- going high inflation will place significant pressure on families' disposable income and will inevitably affect spending on hospitality.

Staff recruitment remains a significant challenge and as a consequence opening hours are being restricted until sufficient quality staff can be recruited.

Our forecasts for 2024 take these factors into consideration. The Directors keep these risks under review at their regular 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

2022

2021

£'000s

£'000s

Turnover

609

671

Profit before tax excluding exceptional items

234

355

Suffolk Country Inns Ltd

2022

2021

£'000s

£'000s

Turnover excluding gratuities

1,260

1,315

Operating (loss)/profit before overheads

(144)

361

FUTURE DEVELOPMENT

Upgrading and refurbishment of apartments is continuing at SLSI in order to maintain our position in the premium market.

In recognition of the economic climate, the offering at the Anchor has been adjusted to provide good quality dishes at lower prices. This combined with controlling expenditure more tightly is resulting in a better trading performance in the current year. The re-positioning of The Angel to address the top end of the market should also help in ensuring that a substantial proportion of our customer-base is less susceptible to cost of living and spending pressures.

POST BALANCE SHEET EVENT

On 14th June 2023 the share capital of £1,000,000 was increased by £2,000,000 to £3,000,000 by way of converting existing debt within the Group. This followed the novation of part of the loan from Mr R J Clark to Porthmeor Holdings Ltd in return for a loan from the company to Porthmeor Holdings Ltd.

ON BEHALF OF THE BOARD:

R J Clark - Director

30th June 2023

The directors present their report with the financial statements of the company and the group for the period 3rd January 2022 to 1st January 2023.

DIVIDENDS

No dividends will be distributed for the period ended 1st January 2023.

EVENTS SINCE THE END OF THE PERIOD

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

DIRECTORS

The directors shown below have held office during the whole of the period from 3rd January 2022 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

30th June 2023

Opinion

We have audited the financial statements of Porthmeor Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 1st January 2023 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 1st January 2023 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 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

-

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 irregularities;

-

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.

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

30th June 2023

TURNOVER

4

1,964,889

2,064,413

Cost of sales

(1,522,744

)

(1,256,498

)

GROSS PROFIT

442,145

807,915

Administrative expenses

(1,038,352

)

(567,223

)

(596,207

)

240,692

Other operating income

34,263

367,338

OPERATING (LOSS)/PROFIT

6

(561,944

)

608,030

Income from fixed asset investments

7

962

274

Interest receivable and similar income

8

215

35

(560,767

)

608,339

Gain/loss on revaluation of assets

(185

)

3,183

(560,952

)

611,522

Interest payable and similar expenses

9

(3,806

)

(697

)

(LOSS)/PROFIT BEFORE TAXATION

(564,758

)

610,825

Tax on (loss)/profit

10

40,348

(57,996

)

(LOSS)/PROFIT FOR THE FINANCIAL PERIOD

(524,410

)

552,829

Retained earnings at beginning of period

587,053

34,224

RETAINED EARNINGS FOR THE GROUP AT END OF PERIOD

62,643

587,053

(Loss)/profit attributable to:

Owners of the parent

(524,410

)

552,829

FIXED ASSETS

Tangible assets

12

5,821,501

5,587,686

Investments

13

23,282

22,505

5,844,783

5,610,191

CURRENT ASSETS

Stocks

14

58,642

22,285

Debtors

15

29,777

41,022

Cash at bank and in hand

68,448

244,753

156,867

308,060

CREDITORS

Amounts falling due within one year

16

(493,429

)

(546,227

)

NET CURRENT LIABILITIES

(336,562

)

(238,167

)

TOTAL ASSETS LESS CURRENT LIABILITIES

5,508,221

5,372,024

CREDITORS

Amounts falling due after more than one year

17

(3,855,329

)

(3,154,374

)

PROVISIONS FOR LIABILITIES

20

(4,808

)

(45,156

)

NET ASSETS

1,648,084

2,172,494

CAPITAL AND RESERVES

Called up share capital

21

100,001

100,001

Other reserves

22

1,485,440

1,485,440

Retained earnings

22

62,643

587,053

SHAREHOLDERS' FUNDS

1,648,084

2,172,494

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 30th June 2023 and were signed on its behalf by:

R J Clark - Director

FIXED ASSETS

Tangible assets

12

-

-

Investments

13

123,283

122,505

123,283

122,505

CURRENT ASSETS

Debtors

15

120,838

48,618

Cash at bank

459

36,797

121,297

85,415

CREDITORS

Amounts falling due within one year

16

(37,168

)

(31,108

)

NET CURRENT ASSETS

84,129

54,307

TOTAL ASSETS LESS CURRENT LIABILITIES

207,412

176,812

CREDITORS

Amounts falling due after more than one year

17

(84,993

)

(89,993

)

PROVISIONS FOR LIABILITIES

20

(1,650

)

(1,685

)

NET ASSETS

120,769

85,134

CAPITAL AND RESERVES

Called up share capital

21

100,001

100,001

Retained earnings

20,768

(14,867

)

SHAREHOLDERS' FUNDS

120,769

85,134

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

35,635

(5,394

)

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 30th June 2023 and were signed on its behalf by:

R J Clark - Director

Cash flows from operating activities

Cash generated from operations

1

(146,036

)

474,296

Interest paid

(3,806

)

(697

)

Tax paid

-

(6,170

)

Net cash from operating activities

(149,842

)

467,429

Cash flows from investing activities

Purchase of tangible fixed assets

(450,160

)

(1,278,903

)

Purchase of fixed asset investments

(962

)

(201

)

Sale of tangible fixed assets

-

1,095,847

Interest received

215

35

Dividends received

962

274

Net cash from investing activities

(449,945

)

(182,948

)

Cash flows from financing activities

Amount introduced by directors

694,999

675,000

Amount withdrawn by directors

(271,517

)

(1,086,619

)

Net cash from financing activities

423,482

(411,619

)

Decrease in cash and cash equivalents

(176,305

)

(127,138

)

Cash and cash equivalents at beginning of period

2

244,753

371,891

Cash and cash equivalents at end of period

2

68,448

244,753

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

Period

3.1.22

4.1.21

to

to

1.1.23

2.1.22

£

£

(Loss)/profit before taxation

(564,758

)

610,825

Depreciation charges

214,982

93,837

Loss/(profit) on disposal of fixed assets

1,364

(270,527

)

Loss/(gain) on revaluation of fixed assets

185

(3,183

)

Finance costs

3,806

697

Finance income

(1,177

)

(309

)

(345,598

)

431,340

(Increase)/decrease in stocks

(36,357

)

6,682

Increase in trade and other debtors

(73,967

)

(22,486

)

Increase in trade and other creditors

309,886

58,760

Cash generated from operations

(146,036

)

474,296

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 1st January 2023

1.1.23

3.1.22

£

£

Cash and cash equivalents

68,448

244,753

Period ended 2nd January 2022

2.1.22

4.1.21

£

£

Cash and cash equivalents

244,753

371,891

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 3.1.22

Cash flow

At 1.1.23

£

£

£

Net cash

Cash at bank and in hand

244,753

(176,305

)

68,448

244,753

(176,305

)

68,448

Debt

Debts falling due within 1 year

(9,646

)

(20,503

)

(30,149

)

Debts falling due after 1 year

(34,837

)

(200,472

)

(235,309

)

(44,483

)

(220,975

)

(265,458

)

Total

200,270

(397,280

)

(197,010

)

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.

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

-

2% on cost and not provided for on Land

Improvements to property

-

2% on cost

Plant and machinery

-

33% on cost, 20% on cost, 10% on cost and 6.67% on cost

Fixtures and fittings

-

33% on cost and 25% on cost

Computer equipment

-

33% on cost

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 incurred a loss of £524,410 in the current year (Prior year profit: £552,829). At the year-end date, the group had net current liabilities of £336,562 (Prior year: £238,167 liabilities) and net assets of £1,648,084 (Prior year: £2,172,494).

The company has carried out significant refurbishment works at one of its sites which was, as a result, closed to the public until April 2022 when it was re-opened on a phased basis.

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

Management have prepared group cash flow projections for the period to June 2024 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

Apportionment of Freehold property historic cost between land and buildings (Suffolk Country Inns Ltd)

On acquisition of the company's freehold properties, the price of land and buildings were not separately identified, The directors estimate that the historic cost of the land on which the company's freehold buildings are situated was £718,000 and together with the actual cost of the car park at £45,000 the total historic cost of land has been included in the financial statements at £763,000. Therefore, the amount of the historic cost apportioned to freehold buildings has been estimated at £950,899. The estimated land value is high relative to the total cost of the sites as substantial renovation work was required at both sites following acquisition.

Fixed asset impairment (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.

Apportionment of Freehold property historic cost between land and buildings (Sail lofts St Ives Ltd)

On acquisition of the company's freehold property, the valuation of land and buildings were not separately identified. The freehold was valued at £3,000,000 on incorporation excluding the integral features. Since then Slipway has been sold. The Directors estimate that the deemed historic cost of the land on which the company's freehold buildings are situated was £1,500,000 based on comparable market data. Therefore, the amount of the historic cost apportioned to freehold buildings has been estimated at £860,108.

4.

TURNOVER

The turnover and loss (2022 - 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

3.1.22

4.1.21

to

to

1.1.23

2.1.22

£

£

Inns and restaurants

1,356,276

1,393,633

Accommodation

608,613

670,780

1,964,889

2,064,413

5.	EMPLOYEES AND DIRECTORS

Period

Period

3.1.22

4.1.21

to

to

1.1.23

2.1.22

£

£

Wages and salaries

1,098,872

904,951

Social security costs

113,379

76,331

Other pension costs

12,269

6,357

1,224,520

987,639

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

Period

Period

3.1.22

4.1.21

to

to

1.1.23

2.1.22

Directors

3

3

Inns and restaurants

68

68

Accommodation

12

14

83

85

The average number of employees by undertakings that were proportionately consolidated during the period was 82 (2022 - 85 ) .

Period

Period

3.1.22

4.1.21

to

to

1.1.23

2.1.22

£

£

Directors' remuneration

78,375

60,000

6.	OPERATING (LOSS)/PROFIT

The operating loss (2022 - operating profit) is stated after charging/(crediting):

Period

Period

3.1.22

4.1.21

to

to

1.1.23

2.1.22

£

£

Hire of plant and machinery

12,640

66,099

Other operating leases

2,750

-

Depreciation - owned assets

214,981

93,837

Loss/(profit) on disposal of fixed assets

1,364

(270,527

)

Auditors' remuneration

38,700

3,500