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 2018 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. |
|
Opinion on the accounts |
Hollybourne Developments Limited |
Statement of Cash Flows |
for the year ended 30 June 2018 |
|
Notes |
|
2018 |
|
2017 |
£ |
£ |
Operating activities |
Profit for the financial year |
173,430 |
|
376,780 |
|
Adjustments for: |
Gain on sale of fixed assets |
(750) |
|
- |
Interest payable |
15,771 |
|
23,102 |
Tax on profit on ordinary activities |
23,895 |
|
46,310 |
Depreciation |
26,842 |
|
14,506 |
Decrease in stocks |
3,789 |
|
377,350 |
Decrease in debtors |
87,707 |
|
26,328 |
Increase/(decrease) in creditors |
231,235 |
|
(546,706) |
|
|
|
561,919 |
|
317,670 |
|
Interest paid |
|
|
(15,771) |
|
(23,102) |
Corporation tax paid |
(46,328) |
|
- |
|
Cash generated by operating activities |
499,820 |
|
294,568 |
|
|
|
|
|
|
Investing activities |
Payments to acquire tangible fixed assets |
(244,511) |
|
(10,852) |
Proceeds from sale of tangible fixed assets |
2,999 |
|
- |
|
Cash used in investing activities |
(241,512) |
|
(10,852) |
|
|
|
|
|
|
Financing activities |
Repayment of loans |
(221,054) |
|
(199,724) |
|
Cash used in financing activities |
(221,054) |
|
(199,724) |
|
|
|
|
|
|
Net cash generated |
Cash generated by operating activities |
499,820 |
|
294,568 |
Cash used in investing activities |
(241,512) |
|
(10,852) |
Cash used in financing activities |
(221,054) |
|
(199,724) |
|
Net cash generated |
37,254 |
|
83,992 |
|
Cash and cash equivalents at 1 July |
203,984 |
|
119,992 |
Cash and cash equivalents at 30 June |
241,238 |
|
203,984 |
|
|
|
|
|
|
Cash and cash equivalents comprise: |
Cash at bank |
241,238 |
|
203,984 |
|
|
|
|
|
|
|
|
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 |
2018 |
|
2017 |
£ |
£ |
|
|
Hotel services |
3,465,134 |
|
3,442,634 |
|
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
3,465,134 |
|
3,442,634 |
|
|
|
|
|
|
|
|
|
|
|
3 |
Operating profit |
2018 |
|
2017 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
26,842 |
|
14,506 |
|
Operating lease rentals - land and buildings |
25,340 |
|
18,750 |
|
Auditors' remuneration for audit services |
4,500 |
|
3,750 |
|
Key management personnel compensation (including directors' emoluments) |
|
17,095 |
|
13,946 |
|
|
|
|
|
|
|
|
|
|
|
4 |
Director's emoluments |
2018 |
|
2017 |
£ |
£ |
|
|
Emoluments |
17,095 |
|
13,946 |
|
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
2018 |
|
2017 |
Number |
Number |
|
|
Defined contribution plans |
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
5 |
Staff costs |
2018 |
|
2017 |
£ |
£ |
|
|
Wages and salaries |
1,416,607 |
|
1,358,309 |
|
Social security costs |
80,063 |
|
74,723 |
|
Other pension costs |
10,943 |
|
9,282 |
|
|
|
|
|
|
|
1,507,613 |
|
1,442,314 |
|
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
8 |
|
9 |
|
Sales |
93 |
|
100 |
|
|
|
|
|
|
|
101 |
|
109 |
|
|
|
|
|
|
|
|
|
|
|
6 |
Interest payable |
2018 |
|
2017 |
£ |
£ |
|
|
Other loans |
15,771 |
|
23,102 |
|
|
|
|
|
|
|
|
|
|
|
7 |
Taxation |
2018 |
|
2017 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
23,877 |
|
46,310 |
|
Adjustments in respect of previous periods |
18 |
|
- |
|
|
|
|
|
|
|
23,895 |
|
46,310 |
|
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
23,895 |
|
46,310 |
|
|
|
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
|
2018 |
|
2017 |
£ |
£ |
|
Profit on ordinary activities before tax |
197,325 |
|
423,090 |
|
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19.00% |
|
19.75% |
|
(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 |
|
37,492 |
|
83,560 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
(28) |
|
26 |
|
Capital allowances for period in excess of depreciation |
(6,597) |
|
722 |
|
Utilisation of tax losses |
(6,990) |
|
(37,998) |
|
Adjustments to tax charge in respect of previous periods |
18 |
|
- |
|
|
Total tax charge for period |
23,895 |
|
46,310 |
|
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
There are no known factors at the current time which might affect future tax charges. |
|
|
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 2017 |
7,307,258 |
|
99,048 |
|
30,726 |
|
7,437,032 |
|
Additions |
179,950 |
|
64,561 |
|
- |
|
244,511 |
|
Disposals |
- |
|
(2,999) |
|
- |
|
(2,999) |
|
At 30 June 2018 |
7,487,208 |
|
160,610 |
|
30,726 |
|
7,678,544 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 July 2017 |
- |
|
59,783 |
|
25,916 |
|
85,699 |
|
Charge for the year |
- |
|
25,880 |
|
962 |
|
26,842 |
|
On disposals |
- |
|
(750) |
|
- |
|
(750) |
|
At 30 June 2018 |
- |
|
84,913 |
|
26,878 |
|
111,791 |
|
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 30 June 2018 |
7,487,208 |
|
75,697 |
|
3,848 |
|
7,566,753 |
|
At 30 June 2017 |
7,307,258 |
|
39,265 |
|
4,810 |
|
7,351,333 |
|
|
|
|
|
|
|
|
|
|
|
|
9 |
Stocks |
2018 |
|
2017 |
£ |
£ |
|
|
Hotel catering and liquor stocks |
26,335 |
|
30,124 |
|
Land stock and work in progress |
15,593 |
|
15,593 |
|
|
|
|
|
|
|
41,928 |
|
45,717 |
|
|
|
|
|
|
|
|
|
|
|
10 |
Debtors |
2018 |
|
2017 |
£ |
£ |
|
|
Trade debtors |
41,792 |
|
127,515 |
|
Other debtors |
- |
|
1,329 |
|
Prepayments and accrued income |
22,784 |
|
23,439 |
|
|
|
|
|
|
|
64,576 |
|
152,283 |
|
|
|
|
|
|
|
|
|
|
|
11 |
Creditors: amounts falling due within one year |
2018 |
|
2017 |
£ |
£ |
|
|
Other loans (secured) |
221,645 |
|
214,054 |
|
Trade creditors |
223,791 |
|
123,779 |
|
Corporation tax |
23,877 |
|
46,310 |
|
Directors loan account |
5,251,260 |
|
5,124,934 |
|
Other taxes and social security costs |
138,348 |
|
156,730 |
|
Other creditors |
1,822 |
|
146,101 |
|
Accruals and deferred income |
209,483 |
|
41,925 |
|
|
|
|
|
|
|
6,070,226 |
|
5,853,833 |
|
|
|
|
|
|
|
|
|
|
|
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 |
2018 |
|
2017 |
£ |
£ |
|
|
Other loans (secured) - see note above |
113,753 |
|
342,398 |
|
|
|
|
|
|
|
|
|
|
|
13 |
Share capital |
Nominal |
|
2018 |
|
2018 |
|
2017 |
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 |
2018 |
|
2017 |
£ |
£ |
|
|
At 1 July |
1,553,086 |
|
1,176,306 |
|
Profit for the financial year |
173,430 |
|
376,780 |
|
|
At 30 June |
1,726,516 |
|
1,553,086 |
|
|
|
|
|
|
|
|
|
|
|
15 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
£ |
£ |
£ |
£ |
|
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 (2017: £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 £15,771 (2017: £23,102). At the year end the total loan outstanding was £335,398 (2017: £549,452). |
|
|
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 |