Hollybourne Developments Limited - Accounts

Registered number

01131582

Hollybourne Developments Limited

Annual Report and Financial Statements

30 June 2017

G R STONE

CHARTERED ACCOUNTANTS

Hollybourne Developments Limited
Report and accounts
Contents
Page
Company information		1
Director's report		2-3
Strategic report		4
Independent auditors' report		5-6
Income statement		7
Statement of comprehensive income		8
Statement of financial position		9
Statement of changes in equity		10
Statement of cash flows		11
Notes to the financial statements		12-19

Hollybourne Developments Limited

Company Information

Director

A R Bailey

Secretary

M J Tollow

Auditors

G R Stone Limited

Chartered Accountants

1 Union Street

Fareham

Hampshire

PO16 7XX

Bankers

HSBC

Landsdowne House

74 High Street

Alton

Hampshire

GU34 1EZ

Registered office

Bellcroft

Vicarage Hill

Alton

Hampshire

GU34 2BT

Registered number

01131582

Hollybourne Developments Limited
Registered number:				01131582
Director's Report
The director presents his report and financial statements for the year ended 30 June 2017.
Principal activities
The company's principal activity is the provision of hotel services.
Future developments
The company continues to progress its refurbishment programme with extensions at the Farnham House Hotel in the 2017/18 year. This programme will continue for another three and a half years to improve all three hotels. The company is also considering developing or selling surplus land at the rear of Alton House Hotel.
Directors
The following persons served as directors during the year:
	A R Bailey
Director's responsibilities

The director is responsible for preparing the annual report and financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (Financial Reporting Standard 102 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 of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

●	select suitable accounting policies and then apply them consistently;

●	make judgements and estimates that are reasonable and prudent;

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

●	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditors

The director confirms that:

●	so far as he is aware, there is no relevant audit information of which the company's auditor is unaware; and

●	he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board on 4 December 2017 and signed on its behalf.
A R Bailey
Director

Hollybourne Developments Limited
Strategic Report
The director presents his strategic report for the year ended 30 June 2017.
Review of business
The company's key financial performance indicators are considered to be:
				2017		2016
				£		£
	Turnover			3,442,634		3,181,346
	Gross profit			2,682,404		2,487,269
The company's business improved in 2016/17 due to the improved trading and the sale of land stock.
Principal risks and uncertainties
The risks that are identified are regarding the uncertainties of the Brexit process which could offset trade. We continue to monitor these situations.
The company does not have any bank loans so it will not be affected by fluctuations in bank rates. The only existing pension loan is as a fixed rate and controllable.
Future developments
The company continues to actively assess situations to ensure its viability.
This report was approved by the board on 4 December 2017 and signed on its behalf.
A R Bailey
Director

Hollybourne Developments Limited

Independent auditors' report

to the member of Hollybourne Developments Limited

We have audited the financial statements of Hollybourne Developments Limited for the year ended 30 June 2017 which comprise the Income Statement, the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Director's Responsibilities, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the accounts

A description of the scope of an audit of financial statements is provided on the APB’s website at: www.frc.org.uk/auditscopeukprivate.

The comparative information in these financial statements is unaudited as the company was exempt from audit last year as it qualified as a small company.

Opinion on the accounts

In our opinion the accounts:
●	give a true and fair view of the state of the company's affairs as at 30 June 2017 and of its 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the Director's Report and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. No material misstatements have been identified in either Report.

Matters on which we are required to report by exception

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, or returns adequate for our audit have not been received from branches not visited by us; or
●	the accounts 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.

Gary Stone
(Senior Statutory Auditor)
for and on behalf of		1 Union Street
G R Stone Limited		Fareham
Accountants and Statutory Auditors		Hampshire
4 December 2017		PO16 7XX

Hollybourne Developments Limited
Income Statement
for the year ended 30 June 2017
Notes						2017		2016
£							£
Turnover				2		3,442,634		3,181,346
Cost of sales						(760,230)		(694,077)
Gross profit						2,682,404		2,487,269
Administrative expenses						(2,415,006)		(2,329,567)
Other operating income						185,794		51,017
Operating profit				3		453,192		208,719
Interest payable				6		(23,102)		(32,962)
Profit on ordinary activities before taxation						430,090		175,757
Tax on profit on ordinary activities				7		(47,710)		(1,345)
Profit for the financial year						382,380		174,412

Hollybourne Developments Limited
Statement of comprehensive income
for the year ended 30 June 2017
Notes					2017		2016
£						£
Profit for the financial year					382,380		174,412
Other comprehensive income					-		-
Total comprehensive income for the year					382,380		174,412

Hollybourne Developments Limited
Statement of Financial Position
as at 30 June 2017
Notes				2017			2016
£					£
Fixed assets
Tangible assets	8			7,351,333			7,354,987
Current assets
Stocks	9		45,717			423,067
Debtors	10		152,283			178,611
Cash at bank and in hand			203,984			119,992
			401,984			721,670
Creditors: amounts falling due within one year	11		(5,855,233)			(6,346,899)
Net current liabilities				(5,453,249)			(5,625,229)
Total assets less current liabilities				1,898,084			1,729,758
Creditors: amounts falling due after more than one year	12			(335,398)			(549,452)
Net assets				1,562,686			1,180,306
Capital and reserves
Called up share capital	13			4,000			4,000
Profit and loss account	14			1,558,686			1,176,306
Total equity				1,562,686			1,180,306
A R Bailey
Director
Approved by the board on 4 December 2017

Hollybourne Developments Limited
Statement of Changes in Equity
for the year ended 30 June 2017
Share			Share		Other		Profit		Total
capital			premium		reserves		and loss
account
£			£		£		£		£
At 1 July 2015		4,000		-		-		1,001,894		1,005,894
Profit for the financial year								174,412		174,412
At 30 June 2016		4,000		-		-		1,176,306		1,180,306
At 1 July 2016		4,000		-		-		1,176,306		1,180,306
Profit for the financial year								382,380		382,380
At 30 June 2017		4,000		-		-		1,558,686		1,562,686

Hollybourne Developments Limited
Statement of Cash Flows
for the year ended 30 June 2017
Notes			2017		2016
£				£
Operating activities
Profit for the financial year			382,380		174,412
Adjustments for:
Interest payable			23,102		32,962
Tax on profit on ordinary activities			47,710		1,345
Depreciation			14,506		13,712
Decrease/(increase) in stocks			377,350		(32,231)
Decrease in debtors			26,328		27,251
(Decrease)/increase in creditors			(546,706)		23,610
			324,670		241,061
Interest paid			(23,102)		(32,962)
Corporation tax paid			-		(7,511)
Cash generated by operating activities			301,568		200,588
Investing activities
Payments to acquire tangible fixed assets			(10,852)		(29,540)
Cash used in investing activities			(10,852)		(29,540)
Financing activities
Repayment of loans			(206,724)		(196,864)
Cash used in financing activities			(206,724)		(196,864)
Net cash generated/(used)
Cash generated by operating activities			301,568		200,588
Cash used in investing activities			(10,852)		(29,540)
Cash used in financing activities			(206,724)		(196,864)
Net cash generated/(used)			83,992		(25,816)
Cash and cash equivalents at 1 July			119,992		145,808
Cash and cash equivalents at 30 June			203,984		119,992
Cash and cash equivalents comprise:
Cash at bank			203,984		119,992

Hollybourne Developments Limited
Notes to the Accounts
for the year ended 30 June 2017
1	Summary of significant accounting policies
	Basis of preparation
	The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland.
	Turnover
	Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs.
	Tangible fixed assets

	Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:
	Land				0%

Property

0% - see below

Plant and machinery

25% on the reducing balance

Furniture, fittings and equipment

25% on the reducing balance

	Motor vehicles				25% on the reducing balance
	"Property" represents 3 hotel buildings. It is management's intention to maintain the properties in a good state of repair such that the residual value should never significantly fall below cost, hence the depreciation rate is 0%.
	Stocks
	Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised.
	Debtors
	Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts.
	Creditors
	Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.
	Taxation
	A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted.
	Leased assets
	A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term.
	Pensions
	Contributions to defined contribution plans are expensed in the period to which they relate.
2	Analysis of turnover						2017		2016
£								£
	Hotel services						3,442,634		3,181,346
	By geographical market:
	UK						3,442,634		3,181,346
3	Operating profit						2017		2016
£								£
	This is stated after charging:
	Depreciation of owned fixed assets						14,506		13,712
	Operating lease rentals - land and buildings						18,750		25,000
	Auditors' remuneration for audit services						3,750		-
	Contributions to defined benefit pension plans						5,699		3,672
	Key management personnel compensation (including directors' emoluments)						13,946		13,155
4	Director's emoluments						2017		2016
£								£
	Emoluments						13,946		13,155
	Number of directors to whom retirement benefits accrued:						2017		2016
Number								Number
	Defined contribution plans						1		1
5	Staff costs						2017		2016
£								£
	Wages and salaries						1,358,309		1,293,946
	Social security costs						74,723		71,334
	Other pension costs						9,282		6,570
							1,442,314		1,371,850
	Average number of employees during the year						Number	Number
	Administration						9		8
	Sales						100		89
							109		97
6	Interest payable						2017		2016
£								£
	Other loans						23,102		32,962
7	Taxation						2017		2016
£								£
	Analysis of charge in period
	Current tax:
	UK corporation tax on profits of the period						47,710		-
	Adjustments in respect of previous periods						-		1,345
							47,710		1,345
	Tax on profit on ordinary activities						47,710		1,345
	Factors affecting tax charge for period
	The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows:
							2017		2016
£								£
	Profit on ordinary activities before tax						430,090		175,757
	Standard rate of corporation tax in the UK						19.75%		20%
	(the rate of corporation tax in the UK changed on 01.04.17 from 20% to 19%)
£								£
	Profit on ordinary activities multiplied by the standard rate of corporation tax						84,943		35,151
	Effects of:
	Expenses not deductible for tax purposes						43		527
	Capital allowances for period in excess of depreciation						722		(3,331)
	Utilisation of tax losses						(37,998)		(32,347)
	Adjustments to tax charge in respect of previous periods						-		1,345
	Total tax charge for period						47,710		1,345
8	Tangible fixed assets
			Freehold land and buildings		Equipment and fixtures		Motor vehicles		Total
			At cost		At cost		At cost
£				£		£		£
	Cost or valuation
	At 1 July 2016		7,307,258		88,196		30,726		7,426,180
	Additions		-		10,852		-		10,852
	At 30 June 2017		7,307,258		99,048		30,726		7,437,032
	Depreciation
	At 1 July 2016		-		46,480		24,713		71,193
	Charge for the year		-		13,303		1,203		14,506
	At 30 June 2017		-		59,783		25,916		85,699
	Carrying amount
	At 30 June 2017		7,307,258		39,265		4,810		7,351,333
	At 30 June 2016		7,307,258		41,716		6,013		7,354,987
9	Stocks						2017		2016
£								£
	Hotel catering and liquor stocks						30,124		28,671
	Land stock and work in progress						15,593		394,396
10	Debtors						2017		2016
£								£
	Trade debtors						127,515		146,581
	Other debtors						1,329		824
	Prepayments and accrued income						23,439		31,206
							152,283		178,611
11	Creditors: amounts falling due within one year						2017		2016
£								£
	Other loans (secured)						214,054		206,724
	Trade creditors						123,779		163,053
	Corporation tax						47,710		-
	Directors loan account						5,124,934		5,636,026
	Other taxes and social security costs						156,730		143,118
	Other creditors						146,101		126,743
	Accruals and deferred income						41,925		71,235
							5,855,233		6,346,899
	The balance shown above for "other loans" is a loan from Hollybourne Developments Executive Pension Scheme. The full amount of the outstanding loan is secured on the company's freehold premises known as The Red Lion Hotel.
	The loan from the director, A Bailey, is unsecured, interest-free and repayable on demand.
12	Creditors: amounts falling due after one year						2017		2016
£								£
	Other loans (secured) - see note above						335,398		549,452
13	Share capital		Nominal		2017		2017		2016
value				Number		£		£
	Allotted, called up and fully paid:
	Ordinary shares	£1 each			4,000		4,000		4,000
	The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company.
14	Profit and loss account						2017		2016
£								£
	At 1 July						1,176,306		1,001,894
	Profit for the financial year						382,380		174,412
	At 30 June						1,558,686		1,176,306
15	Other financial commitments
	Total future minimum lease payments under non-cancellable operating leases:
			Land and buildings		Land and buildings	Other		Other
			2017		2016		2017		2016
£				£		£		£
	Falling due:
	within two to five years		25,000		25,000		-		-
16	Related party transactions
	The company occupies premises owned by Hollybourne Developments Limited Executive Pension Scheme under a lease which was renewed on 11th June 2014 for a period of five years at a normal commercial rent of £25,000 per annum. At the balance sheet date no amount was outstanding (2016: £nil).
	As stated at note 11, the company has a secured loan from the Hollybourne Developments Executive Pension Scheme ("HDEPS") of which A Bailey, director, is a trustee and beneficiary. The loan is provided on normal commercial terms with interest charged in the period of £23,102 (£2016: £32,962). At the year end the total loan outstanding was £549,452 (2016: £756,176).
	During the year, consultancy fees of £54,423 were paid to Julia Langford, the daughter of the director A Bailey (2016: £16,750). These were provided on normal commercial terms. There were no amounts outstanding at the year end (2016: £24,792 accrued).
17	Controlling party
	The company is controlled by A R Bailey, the sole director, by virtue of his 100% shareholding.
18	Presentation currency
	The financial statements are presented in Sterling.
19	Legal form of entity and country of incorporation
	Hollybourne Developments Limited is a private company limited by shares and incorporated in England. Its registered number is 01131582
20	Principal place of business
	The address of the company's principal place of business and registered office is:
	Bellcroft
	Vicarage Hill
	Alton
	Hampshire
	GU34 2BT
21	Reconciliations on adoption of FRS 102
	Profit and loss for the year ended 30 June 2016						£
	Profit under former UK GAAP						174,412
	Profit under FRS 102						174,412
	Balance sheet at 30 June 2016						£
	Equity under former UK GAAP						1,180,306
	Equity under FRS 102						1,180,306
	Balance sheet at 1 July 2015						£
	Equity under former UK GAAP						-
	Equity under FRS 102						-
	There has been no significant effect on the comparative information on the transition to FRS 102 since accounting policies under both the old and new regime have stayed the same.