Company Registration No. 03198626 (England and Wales)
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
27 JUNE 2022
6 Queen Street
Leeds
West Yorkshire
LS1 2TW
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 24
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
COMPANY INFORMATION
Directors
J Houlston
C Hadfield
(Appointed 17 July 2023)
Company number
03198626
Registered office
Ground Floor
6 Queen Street
Leeds
West Yorkshire
United Kingdom
LS1 2TW
Auditor
TC Group
6 Queen Street
Leeds
West Yorkshire
LS1 2TW
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 27 JUNE 2022
- 1 -
The directors present the strategic report for the period ended 27 June 2022.
Business review
After the company's business activities were severely impacted throughout the 2021 financial year (FY2021) due to the coronavirus pandemic, it’s performance recovered throughout the year to June 2022. The removal of remaining restrictions in July 2021 helped contribute towards a significant increase in turnover to £6,004k (2021 £3,416k). With various recovery strategies disclosed in the June 2021 accounts, the ability of the business to operate throughout 2022 has resulted in it delivering a pre-tax profit of £51k, which is a significant improvement on the £267k loss incurred in FY2021.
The new bedroom block and Hotel Spa opened to critical acclaim in March 2022, but the year’s trading was also impacted by its development. The Board firmly believes that the business will continue to go from strength-to-strength over the coming years, with the new-look hotel soon being able to achieve its huge potential.
Principal risks and uncertainties
The company’s activities may be impacted by a number of factors.
Flooding remains a significant risk, although we have introduced numerous flood protection measures and continue to push these plans forward.
Other risks include increases in key operating costs such as wages and direct food costs. The company is protected against any increases in electricity costs up to April 2025, with contracts signed prior to the pandemic.
Being able to recruit and retain quality employees remains a risk, however we have done much to mitigate this and are a leading employer in the area and the sector.
J Houlston
Director
26 September 2023
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 27 JUNE 2022
- 2 -
The directors present their annual report and financial statements for the period ended 27 June 2022.
Principal activities
The principal activity of the Company during the year was that of operation of a hotel and spa.
Results and dividends
The results for the period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
J Houlston
C Hadfield
(Appointed 17 July 2023)
S Gibbs
(Resigned 12 May 2023)
A Rae
(Resigned 17 December 2021)
Financial instruments
Treasury operations
The currency operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company's activities.
The company's principal financial instruments include bank overdrafts and loans, the main purpose of which is to raise finance for the company's operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
Price risk, credit risk and cashflow risk
Liquidity risk
The Company manages its cash and borrowing requirements in order to maximise interest and minimise the interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to fair value interest risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.
Credit risk
Investments of cash surpluses and borrowings are made through banks which must fulfil credit rating criteria approved by the board.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
- 3 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
J Houlston
Director
26 September 2023
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 27 JUNE 2022
- 4 -
The directors are responsible for preparing the annual report 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
- 5 -
Opinion
We have audited the financial statements of The Swan Hotel (Newby Bridge) Limited (the 'company') for the period ended 27 June 2022 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 company's affairs as at 27 June 2022 and of its 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.
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company 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 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
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 financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 directors' responsibilities statement, 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 is 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 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 company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 an auditor's report 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.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
- 7 -
Extent to which the audit was capable of detecting irregularities, including fraud
The objectives of our audit, in respect of fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including key drivers for management's remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from material fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect all non-compliance with laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
- 8 -
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 auditor's 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.
Mark Hunter FCA (Senior Statutory Auditor)
For and on behalf of TC Group
26 September 2023
Statutory Auditor
6 Queen Street
Leeds
West Yorkshire
LS1 2TW
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 27 JUNE 2022
- 9 -
Period
Year
ended
ended
27 June
28 June
2022
2021
Notes
£
£
Turnover
3
6,003,750
3,415,517
Cost of sales
(3,702,448)
(2,179,096)
Gross profit
2,301,302
1,236,421
Administrative expenses
(2,243,902)
(1,895,376)
Other operating income
7,054
403,299
Operating profit/(loss)
4
64,454
(255,656)
Interest payable and similar expenses
7
(13,482)
(11,644)
Profit/(loss) before taxation
50,972
(267,300)
Tax on profit/(loss)
8
(23,264)
81,485
Profit/(loss) for the financial period
27,708
(185,815)
Retained earnings brought forward
4,447,752
4,633,567
Retained earnings carried forward
4,475,460
4,447,752
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
BALANCE SHEET
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
222,829
209,783
Current assets
Stocks
10
55,169
44,408
Debtors
11
6,561,628
5,652,463
Cash at bank and in hand
137,020
449,571
6,753,817
6,146,442
Creditors: amounts falling due within one year
12
(2,389,236)
(1,727,282)
Net current assets
4,364,581
4,419,160
Total assets less current liabilities
4,587,410
4,628,943
Creditors: amounts falling due after more than one year
13
(111,948)
(181,189)
Net assets
4,475,462
4,447,754
Capital and reserves
Called up share capital
17
2
2
Profit and loss reserves
4,475,460
4,447,752
Total equity
4,475,462
4,447,754
The financial statements were approved by the board of directors and authorised for issue on 26 September 2023 and are signed on its behalf by:
J Houlston
Director
Company Registration No. 03198626
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 27 JUNE 2022
- 11 -
1
Accounting policies
Company information
The Swan Hotel (Newby Bridge) Limited is a private company limited by shares incorporated in England and Wales. The registered office address is: Ground Floor, 6 Queen Street, Leeds, West Yorkshire, United Kingdom, LS1 2TW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of B H Hotels Ltd. These consolidated financial statements are available from Companies House.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
1
Accounting policies
(Continued)
- 12 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
5 - 50 years straight line basis
Fixtures and fittings
3 - 15 years straight line basis
Computers
3 - 5 years straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
1
Accounting policies
(Continued)
- 13 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, 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 the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
1
Accounting policies
(Continued)
- 15 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
1
Accounting policies
(Continued)
- 16 -
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation of tangible fixed assets
The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. The carrying amount of tangible fixed assets is detailed in the notes to the financial statements. The depreciation rates applied are summarised in the accounting policies in note 1.
Recoverability of other debtors
The company makes an estimate of the recoverable value of other debtors. When assessing impairment of other debtors, management considers factors including the credit rating of debtors, the aging profile of debtors and historical experience. The carrying amount of debtors is detailed in the notes to the financial statements.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Acommodation
2,393,355
1,303,712
Food and beverages
3,131,745
1,919,737
Leisure
362,275
106,011
Marina
80,149
83,809
Other
36,226
2,248
6,003,750
3,415,517
2022
2021
£
£
Other significant revenue
Grants received
7,054
403,299
All turnover arose within the United Kingdom.
Government grants receivable relate to amounts received under the Coronavirus Job Retention Scheme.
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
- 18 -
4
Operating profit/(loss)
2022
2021
Operating profit/(loss) for the period is stated after charging/(crediting):
£
£
Government grants
(7,054)
(403,299)
Fees payable to the company's auditor for the audit of the company's financial statements
20,071
15,000
Depreciation of owned tangible fixed assets
75,225
164,293
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2022
2021
Number
Number
Management staff
2
4
Hotel staff
123
93
Total
125
97
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,584,511
1,661,124
Social security costs
135,107
105,509
Pension costs
38,774
27,441
2,758,392
1,794,074
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
97,109
53,333
Company pension contributions to defined contribution schemes
5,655
3,576
102,764
56,909
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
6
Directors' remuneration
(Continued)
- 19 -
During the year retirement benefits were accruing to 1 director (2021 - 1) in respect of defined contribution pension schemes.
7
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
13,071
10,336
Other interest on financial liabilities
411
354
Interest on finance leases and hire purchase contracts
-
954
13,482
11,644
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(49,841)
Adjustments in respect of prior periods
71,572
(90,189)
Total current tax
71,572
(140,030)
Deferred tax
Origination and reversal of timing differences
(48,308)
58,545
Total tax charge/(credit)
23,264
(81,485)
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
8
Taxation
(Continued)
- 20 -
The actual charge/(credit) for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit/(loss) before taxation
50,972
(267,300)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
9,685
(50,787)
Tax effect of expenses that are not deductible in determining taxable profit
7,097
26
Tax effect of utilisation of tax losses not previously recognised
(60,346)
49,841
Adjustments in respect of prior years
71,572
(90,189)
Permanent capital allowances in excess of depreciation
(4,744)
409
Deferred tax (credit)/expense from unrecognised tax loss or credit
9,215
Taxation charge/(credit) for the period
23,264
(81,485)
9
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 29 June 2021
73,983
2,904,549
435,957
3,414,489
Additions
46,537
41,734
88,271
At 27 June 2022
73,983
2,951,086
477,691
3,502,760
Depreciation and impairment
At 29 June 2021
6,608
2,786,669
411,429
3,204,706
Depreciation charged in the period
7,398
52,835
14,992
75,225
At 27 June 2022
14,006
2,839,504
426,421
3,279,931
Carrying amount
At 27 June 2022
59,977
111,582
51,270
222,829
At 28 June 2021
67,375
117,880
24,528
209,783
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
- 21 -
10
Stocks
2022
2021
£
£
Finished goods and goods for resale
55,169
44,408
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
449
1,832
Amounts owed by group undertakings
6,118,992
5,461,230
Other debtors
93,333
157,901
Prepayments and accrued income
300,546
31,500
6,513,320
5,652,463
2022
2021
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 15)
48,308
Total debtors
6,561,628
5,652,463
12
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
14
69,240
68,811
Trade creditors
1,049,166
418,843
Taxation and social security
622,103
326,690
Other creditors
131,193
Accruals and deferred income
648,727
781,745
2,389,236
1,727,282
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
- 22 -
13
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
14
111,948
181,189
14
Loans and overdrafts
2022
2021
£
£
Bank loans
181,188
250,000
Payable within one year
69,240
68,811
Payable after one year
111,948
181,189
The bank loan relates to a loan under the Coronavirus Business Interruption (CBILS). The loan is denominated in Pounds Sterling and interest is charged at 6% per annum. Interest for the first interest 12 months is paid by the UK Government. The loan is repayable in equal monthly instalments, with the final payment scheduled for December 2024.
The balance is secured by fixed and floating charges over the assets of the Company.
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
28,187
-
Tax losses
19,466
-
Retirement benefit obligations
655
-
48,308
-
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
15
Deferred taxation
(Continued)
- 23 -
2022
Movements in the period:
£
Liability at 29 June 2021
-
Credit to profit or loss
(48,308)
Asset at 27 June 2022
(48,308)
The deferred tax asset set out above in respect of losses carried is expected to reverse within 12 months. The deferred tax asset in respect of capital allowances is expected to reverse over the useful economic lives of the associated fixed assets in line with the depreciation rates set out in note 1.
16
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
38,774
27,441
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
18
Reserves
Profit and loss account
Share capital represents the number of shares issued at normal price.
The profit and loss account represents accumulated comprehensive income for the year and prior periods, after deduction of dividends paid
THE SWAN HOTEL (NEWBY BRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 27 JUNE 2022
- 24 -
19
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
7,221
7,221
Between two and five years
4,213
11,434
11,434
18,655
20
Related party transactions
The Company has taken the exemption set out in FRS 102 from disclosing transactions with other members of the group.
Unique Boutique Hotels Ltd
Unique Boutique Hotels Ltd is a company under common control. During the year, the company made purchases of £51,716 from Unique Boutique Hotels Ltd. As at 28 June 2022, the company owed £62,059 to Unique Boutique Hotels Ltd.
21
Ultimate controlling party
The Company's immediate parent is The Swan Hotel (Newby Bridge) Holdings Limited, incorporated in the United Kingdom.
The ultimate parent B H Hotels Ltd incorporated in the United Kingdom.
The smallest and largest group preparing consolidated financial statements including the results of the Company is that headed by B H Hotels Ltd. These financial statements are available upon request from Companies House, Cardiff, CF14 3UZ.
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