Company Registration No. SC199961 (Scotland)
AYRE HOTEL (KIRKWALL) LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
PAGES FOR FILING WITH REGISTRAR
AYRE HOTEL (KIRKWALL) LIMITED
CONTENTS
Page
Accountants' report
1
Balance sheet
2 - 3
Notes to the financial statements
4 - 10
AYRE HOTEL (KIRKWALL) LIMITED
REPORT TO THE DIRECTOR ON THE PREPARATION OF THE UNAUDITED STATUTORY ACCOUNTS OF AYRE HOTEL (KIRKWALL) LIMITED
- 1 -
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Ayre Hotel (Kirkwall) Limited for the year ended 31 March 2018 which comprise, the Balance Sheet and the related notes from the company’s accounting records and from information and explanations you have given us.
As a practising member firm of the ICAS we are subject to its ethical and other professional requirements which are detailed at https://www.icas.com/FrameworkforthePreparationofAccounts.
This report is made solely to the Board of Directors of Ayre Hotel (Kirkwall) Limited, as a body, in accordance with the terms of our engagement letter dated 11 August 2008. Our work has been undertaken solely to prepare for your approval the financial statements of Ayre Hotel (Kirkwall) Limited and state those matters that we have agreed to state to the Board of Directors of Ayre Hotel (Kirkwall) Limited, as a body, in this report in accordance with the requirements of the ICAS as detailed at https://www.icas.com/FrameworkforthePreparationofAccounts. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Ayre Hotel (Kirkwall) Limited and its Board of Directors as a body, for our work or for this report.
It is your duty to ensure that Ayre Hotel (Kirkwall) Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and profit of Ayre Hotel (Kirkwall) Limited. You consider that Ayre Hotel (Kirkwall) Limited is exempt from the statutory audit requirement for the year.
We have not been instructed to carry out an audit or a review of the financial statements of Ayre Hotel (Kirkwall) Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
A J B Scholes Ltd
28 May 2018
Chartered Accountants
8 Albert Street
Kirkwall
Orkney
KW15 1HP
AYRE HOTEL (KIRKWALL) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2018
31 March 2018
- 2 -
2018
2017
Notes
£
£
£
£
Fixed assets
Goodwill
3
16,667
36,667
Other intangible assets
3
3,800
4,275
Intangible assets
3
20,467
40,942
Tangible assets
4
4,454,596
4,480,111
Investment properties
5
151,280
151,280
Investments
6
5
5
4,626,348
4,672,338
Current assets
Stocks
12,479
12,498
Debtors
7
53,026
65,459
Cash at bank and in hand
408,316
279,942
473,821
357,899
Creditors: amounts falling due within one year
8
(540,922)
(404,716)
Net current liabilities
(67,101)
(46,817)
Total assets less current liabilities
4,559,247
4,625,521
Creditors: amounts falling due after more than one year
9
(268,469)
(853,492)
Provisions for liabilities
10
(131,463)
(134,825)
Net assets
4,159,315
3,637,204
Capital and reserves
Called up share capital
11
2
2
Share premium account
190,998
190,998
Profit and loss reserves
3,968,315
3,446,204
Total equity
4,159,315
3,637,204
AYRE HOTEL (KIRKWALL) LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 MARCH 2018
31 March 2018
- 3 -
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 31 March 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and signed by the director and authorised for issue on 28 May 2018
Lyall Harray
Director
Company Registration No. SC199961
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
- 4 -
1
Accounting policies
Company information
Ayre Hotel (Kirkwall) Limited is a private company limited by shares incorporated in Scotland. The registered office is Ayre Villa, Ayre Road, Kirkwall, Orkney, KW15 1QX.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
1.2
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.
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 the provision of services - typically accommodation and the service of food and drink - is recognised once the service is provided.
1.3
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Software
10% straight line basis
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
1
Accounting policies
(Continued)
- 5 -
1.5
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:
Land and buildings Freehold
2% - 10% straight line basis
Fixtures, fittings & equipment
20% reducing balance basis
Computer equipment
33% reducing balance 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.
1.6
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in profit or loss.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
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.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price. Stocks comprise food and drink and consumables.
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
1
Accounting policies
(Continued)
- 6 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
Impairment of financial assets
Financial assets 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.
Classification of financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans 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.
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
1
Accounting policies
(Continued)
- 7 -
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 33 (2017 - 33).
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 8 -
3
Intangible fixed assets
Goodwill
Other
Total
£
£
£
Cost
At 1 April 2017 and 31 March 2018
200,000
4,750
204,750
Amortisation and impairment
At 1 April 2017
163,333
475
163,808
Amortisation charged for the year
20,000
475
20,475
At 31 March 2018
183,333
950
184,283
Carrying amount
At 31 March 2018
16,667
3,800
20,467
At 31 March 2017
36,667
4,275
40,942
4
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 April 2017
4,843,701
403,871
5,247,572
Additions
92,854
25,645
118,499
At 31 March 2018
4,936,555
429,516
5,366,071
Depreciation and impairment
At 1 April 2017
520,030
247,431
767,461
Depreciation charged in the year
107,453
36,561
144,014
At 31 March 2018
627,483
283,992
911,475
Carrying amount
At 31 March 2018
4,309,072
145,524
4,454,596
At 31 March 2017
4,323,671
156,440
4,480,111
5
Investment property
2018
£
Fair value
At 1 April 2017 and 31 March 2018
151,280
Investment property comprises a property in Talmine, Lairg. The fair value of the investment property has been determined with reference to the purchase price as at 31 March 2016. The director considers this to be the fair value of the property as at the balance sheet date.
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
5
Investment property
(Continued)
- 9 -
6
Fixed asset investments
2018
2017
£
£
Investments
5
5
Fixed asset investments are valued at historic cost. The investments are unlisted and no market value is available.
Movements in fixed asset investments
Investments other than loans
£
Cost or valuation
At 1 April 2017 & 31 March 2018
5
Carrying amount
At 31 March 2018
5
At 31 March 2017
5
7
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
46,472
56,985
Other debtors
6,554
8,474
53,026
65,459
8
Creditors: amounts falling due within one year
2018
2017
£
£
Bank loans and overdrafts
65,680
57,337
Trade creditors
175,397
93,887
Other taxation and social security
199,188
174,608
Other creditors
100,657
78,884
540,922
404,716
AYRE HOTEL (KIRKWALL) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 10 -
9
Creditors: amounts falling due after more than one year
2018
2017
£
£
Bank loans and overdrafts
238,469
823,492
Other creditors
30,000
30,000
268,469
853,492
The company has granted to the Royal Bank of Scotland PLC a standard security over the Ayre Hotel premises and a bond and floating charge, as security against its borrowings.
Creditors which fall due after five years are as follows:
2018
2017
£
£
Payable by instalments
-
580,808
10
Provisions for liabilities
2018
2017
£
£
Deferred tax liabilities
131,463
134,825
11
Called up share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
2 Ordinary shares of £1 each
2
2
2
2
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