Company registration number 02418974 (England and Wales)
CASTERTON LEISURE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 24 FEBRUARY 2023
CASTERTON LEISURE LIMITED
COMPANY INFORMATION
Directors
Dr E Wildsmith
Mrs C Wildsmith
Mr A Wildsmith
Mr A I Elwick
(Appointed 28 June 2023)
Mr P Leonard
(Appointed 28 June 2023)
Secretary
Mrs C Wildsmith
Company number
02418974
Registered office
Priory Close
St Marys Gate
Lancaster
LA1 1XB
Auditor
MHA Moore and Smalley
Priory Close
St Marys Gate
Lancaster
LA1 1XB
CASTERTON LEISURE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
CASTERTON LEISURE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 1 -
The directors present the strategic report for the year ended 24 February 2023.
Fair review of the business
The year ended February 2023 proved to be challenging in many ways with further price rises in both food and drink, the return to 20% VAT and continued inflation generally. An analysis of how best to mitigate these challenges led to us exploring dynamic pricing strategies to optimize the ARR as well as evaluating sustainability initiatives impacting both cost savings and our environmental responsibility.
After the increased occupancy levels that followed from the COVID-19 pandemic the business seems to have stabilized once again and the drop in occupancy levels has been significant.
Turnover for the period is £3,116,683 (2022: £3,824,634) which represents an 19% decrease on last year’s performance. A balance of increased trading in the year (2022 was impacted by COVID-19) and the loss of revenue from the closure of the Ryebeck. Profit before tax for the year was (£338,729) (2022: £663,685). At the balance sheet date, the company is showing a total equity of £6,360,674 (2022: £6,699,403).
As ever, we continue our fight to remain relevant at all the operating properties. Hospitality remains a fast-paced industry that provides the consumer with many different ways to spend their hard earned cash. Cost pressures continue to mount across the board, with increasing costs particularly in food, utilities, payroll, and a need to maintain a suitable differential in remuneration throughout the business providing our greatest challenge. Each hotel’s performance was assessed separately in an aid to improve decision making. As a result, the decision was taken not to reopen The Ryebeck and post year end, the property has been marketed for sale.
While the remaining hotels face challenges, a review of the financial year outlines promising initiatives to overcome them. By capitalizing on opportunities, optimizing operational efficiency and staying attuned to market trends, the hotels are well positioned for sustained growth and success in the competitive hospitality industry.
Hipping Hall
Hipping Hall is a 16th century blacksmith’s transformed into a gourmet bolthole on the very edge of the Yorkshire Dales. A small intimate venue with food at the forefront of the operation, Hipping Hall specialises in romantic nights away, small scale weddings and total takeovers.
Hipping Hall maintained it 5 Gold stars award from the AA and was awarded their inspector’s award putting us in the top 1% of all accommodation providers in the UK.
The new layout and open kitchen installed in October 2018 continues to transform the guest experience at Hipping Hall. Our intentions, to break down the perceived barriers between, guest, chef and front of house whilst creating a greatly improved working environment for the whole team has largely been achieved. We continued to explore new ways to run service and delight our guests. We were also very excited to welcome a new Head Chef to Hipping Hall in November 2021. Peter Howarth came to Hipping with a great track record and his food was awarded 3 AA rosettes on first inspection.
Forest Side
The Forest Side is a gothic former hunting lodge turned gastronomic retreat on the outskirts of Grasmere village. The principal behind Forest Side was that it is inspired by the surroundings in which is sits. A kitchen garden provides much of the produce which is served in its restaurant and is a focal point of the site. We continue on our journey to create the go to venue for a gastronomic break in the Lake District.
CASTERTON LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 2 -
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the group are:
Human resources
Despite our best efforts, finding, recruiting and retaining the top quality staff that our business requires continues to be of significant concern. Efforts in the years ahead are to create an exciting and dynamic working environment that puts training, staff welfare and progression at the heart of our operation.
Economic
Like any business that relies on discretionary spend we are susceptible to downturns in the economic environment.
Competition
We are acutely aware of the number of new openings and developments that are currently ongoing throughout the Lake District. We aim to set ourselves apart from these operations by offering a high quality personal service not commonly found elsewhere.
Regulation
The hotel and restaurant sector continues to operate under the increasing burden of health and safety regulation (including food safety and fire legislation). Failure to comply with our obligations in this area could potentially lead to injury, illness or loss of life to customers or employees. The resulting negative reputational impact could potentially be catastrophic to our business. We mitigate this risk by carrying out internal and external audits of our procedures to make sure we are compliant and out policies are up to date.
Key performance indicators
The management team and general manager continue to monitor the performance on a monthly basis. Timely management accounts continue to be prepared by our financial controller and these are being compared to budget and bi-weekly forecasts for the year adjusted accordingly.
The Key performance indicators that are used to monitor performance are:
Turnover
Occupancy
Average Room Rates
Cost per Room
Average spend per head (Food and Beverage)
Profit Margin (Food and Beverage)
Labour Cost as a percentage of turnover
Overheads
CASTERTON LEISURE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 3 -
Turnover
The results for the year ended February 2023 highlight a resilient landscape amidst challenges. With a revenue of £3,116,683, indicating a solid performance, an occupancy rate of below 50% underscores the need for targeted efforts to boost reservations and enhance overall revenue streams. Economic fluctuations and uncertainties had an impact on the hotel industry, demanding agile strategies to adapt to changing consumer spending patterns.
Overheads
Overheads continue to increase although tight controls remain in place. Fixed costs incurred by The Ryebeck which was not operational has also helped contribute to the addition in costs, however this only causes a temporary impact.
Labour %
The payroll cost again has and will remain another area of concentration for hotels with regular training in an aim to enhance skills and productivity and strive to achieve an acceptable cost of the industry standard in which we operate.
Mr A Wildsmith
Director
24 November 2023
CASTERTON LEISURE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 4 -
The directors present their annual report and financial statements for the year ended 24 February 2023.
Principal activities
The principal activity of the Wildsmith Hotel group is the management and operation of two high end hotels and restaurants across the North West of England. The three sites are The Forest Side in Grasmere and Hipping Hall near the market town of Kirkby Lonsdale. The Ryebeck in Bowness on Windermere was shut throughout the year and has subsequently been sold.
Results and dividends
The results for the year 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 year and up to the date of signature of the financial statements were as follows:
Dr E Wildsmith
Mrs C Wildsmith
Mr A Wildsmith
Mr A I Elwick
(Appointed 28 June 2023)
Mr P Leonard
(Appointed 28 June 2023)
Auditor
In accordance with the company's articles, a resolution proposing that MHA Moore and Smalley be reappointed as auditor of the company will be put at a General Meeting.
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. It has done so in respect of post year end events, principal risks and uncertainties and research and development activities.
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
Mr A Wildsmith
Director
24 November 2023
CASTERTON LEISURE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 5 -
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.
CASTERTON LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CASTERTON LEISURE LIMITED
- 6 -
Opinion
We have audited the financial statements of Casterton Leisure Limited (the 'company') for the year ended 24 February 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 24 February 2023 and of its loss 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.
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.
CASTERTON LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASTERTON LEISURE LIMITED
- 7 -
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 year 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 or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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:
Enquiries with management about any known or suspect instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to future performance;
An evaluation of the risk of management override of controls and subsequent testing, including through testing journal entries and other adjustments for appropriateness;
An evaluation of the company's internal control environment; and
Auditing the risk of fraud in revenue, including through the testing of the cut off of income at the year end and sales transaction testing to ensure revenue is complete in the financial statements and recognised in the correct accounting period.
Reviewing the financial statement disclosures and testing of supporting documentation to assess compliance with the relevant laws and regulations. We consider these to be the Health and Safety Act 1974, the Food Safety Act 1990 and compliance with the UK Companies Act 2006.
CASTERTON LEISURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CASTERTON LEISURE LIMITED
- 8 -
Because of the industry in which the company operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and safety, food hygiene regulations, employment law, and compliance with the Companies Act.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor s to become aware of it or to recognise the non-compliance.
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.
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.
Jenny McCabe
Senior Statutory Auditor
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Priory Close
St Marys Gate
Lancaster
LA1 1XB
24 November 2023
CASTERTON LEISURE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
3,116,683
3,824,634
Cost of sales
(2,518,273)
(2,586,610)
Gross profit
598,410
1,238,024
Administrative expenses
(943,139)
(830,403)
Other operating income
6,000
256,064
(Loss)/profit before taxation
(338,729)
663,685
Tax on (loss)/profit
7
84,466
(Loss)/profit for the financial year
(338,729)
748,151
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CASTERTON LEISURE LIMITED
BALANCE SHEET
AS AT
24 FEBRUARY 2023
24 February 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
8
8,450
11,050
Tangible assets
9
7,916,717
8,028,780
7,925,167
8,039,830
Current assets
Stocks
10
79,052
45,289
Debtors
11
147,351
144,175
Cash at bank and in hand
763,317
1,430,721
989,720
1,620,185
Creditors: amounts falling due within one year
12
(1,710,341)
(1,531,236)
Net current (liabilities)/assets
(720,621)
88,949
Total assets less current liabilities
7,204,546
8,128,779
Creditors: amounts falling due after more than one year
13
(843,872)
(1,429,376)
Net assets
6,360,674
6,699,403
Capital and reserves
Called up share capital
15
12,000,000
12,000,000
Profit and loss reserves
(5,639,326)
(5,300,597)
Total equity
6,360,674
6,699,403
The financial statements were approved by the board of directors and authorised for issue on 24 November 2023 and are signed on its behalf by:
Mr A Wildsmith
Director
Company Registration No. 02418974
CASTERTON LEISURE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 25 February 2021
12,000,000
(6,048,748)
5,951,252
Year ended 24 February 2022:
Profit and total comprehensive income for the year
-
748,151
748,151
Balance at 24 February 2022
12,000,000
(5,300,597)
6,699,403
Year ended 24 February 2023:
Loss and total comprehensive income for the year
-
(338,729)
(338,729)
Balance at 24 February 2023
12,000,000
(5,639,326)
6,360,674
CASTERTON LEISURE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(243,468)
1,027,642
Income taxes refunded
20,755
Net cash (outflow)/inflow from operating activities
(222,713)
1,027,642
Investing activities
Purchase of tangible fixed assets
(104,691)
(77,273)
Net cash used in investing activities
(104,691)
(77,273)
Financing activities
Repayment of borrowings
(340,000)
(99,544)
Net cash used in financing activities
(340,000)
(99,544)
Net (decrease)/increase in cash and cash equivalents
(667,404)
850,825
Cash and cash equivalents at beginning of year
1,430,721
579,896
Cash and cash equivalents at end of year
763,317
1,430,721
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 13 -
1
Accounting policies
Company information
Casterton Leisure Limited is a private company limited by shares incorporated in England and Wales. The registered office is Priory Close, St Marys Gate, Lancaster, LA1 1XB. The company conducts its business across three sites in North West England. These are;
Hipping Hall, Cowan Bridge, Kirkby Lonsdale, Lancashire, LA6 2JJ;
The Forest Side Hotel, Keswick Road, Grasmere, Cumbria, LA22 9RN.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The directors trueacknowledge that it has been a challenging year in many ways with further price rises in both food and drink, the return to 20% VAT and continued inflation generally. However, the company has received confirmation of the support from its director for the foreseeable future.
The directors do not consider there to be a material uncertainty at this time, and there is 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 represents amounts receivable for hotel accommodation and other hospitality services net of VAT and trade discounts, to the extent that the company has a right to consideration arising from the performance of its contractual arrangements.
1.4
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.
1.5
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 of assets less their residual values over their useful lives on the following bases:
Website
10 years straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold Property
50 years straight line
Fixtures & Fittings
15% reducing balance
Equipment
15% reducing balance
Motor Vehicles
25% reducing balance
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.
1.7
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).
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises the cost of goods purchased.
1.9
Cash and cash equivalents
Cash at bank and in hand 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’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
1
Accounting policies
(Continued)
- 15 -
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.
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.
Basic financial liabilities
Basic financial liabilities, including creditors, 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
1
Accounting policies
(Continued)
- 16 -
1.11
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 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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense. 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Government grants
Government grants receivable represent income under the Coronavirus Job Retention Scheme (CJRS) to reimburse the company of costs incurred in retaining staff who were furloughed due to the impact of closure due to COVID-19. CJRS grants are recognised to match the costs incurred by the company for the period claims are made.
Other grants receivable represent income from the local council authorities for continued business disruption resultant of Covid restrictions. These grants are recognised by the company for the period the claims are made.
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 17 -
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.
For the current and previous period, the directors have concluded that there are no such items requiring disclosure in the accounts.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Accommodation and hospitality services
3,116,683
3,824,634
2023
2022
£
£
Other revenue
Grants received
6,000
256,064
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
(6,000)
(256,064)
Fees payable to the company's auditor for the audit of the company's financial statements
9,000
8,000
Depreciation of owned tangible fixed assets
216,754
213,944
Loss on disposal of tangible fixed assets
-
749
Amortisation of intangible assets
2,600
2,600
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 18 -
5
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
Service staff
67
68
Administrative and management staff
8
7
Total
75
75
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,566,027
1,549,702
Social security costs
163,121
155,110
Pension costs
30,561
29,686
1,759,709
1,734,498
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
9,075
8,839
7
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(84,466)
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
7
Taxation
(Continued)
- 19 -
The actual charge/(credit) for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(338,729)
663,685
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(64,359)
126,100
Tax effect of expenses that are not deductible in determining taxable profit
5,723
37,918
Tax effect of income not taxable in determining taxable profit
(1,761)
Tax effect of utilisation of tax losses not previously recognised
(162,257)
Change in unrecognised deferred tax assets
25,094
Adjustments in respect of prior years
(494)
Permanent capital allowances in excess of depreciation
(2,037)
Depreciation on assets not qualifying for tax allowances
36,127
Research and development tax credit
(84,466)
Other non-reversing timing differences
(54)
Taxation (credit) for the year
-
(84,466)
8
Intangible fixed assets
Goodwill
Website
Total
£
£
£
Cost
At 25 February 2022 and 24 February 2023
1,060,000
26,000
1,086,000
Amortisation and impairment
At 25 February 2022
1,060,000
14,950
1,074,950
Amortisation charged for the year
2,600
2,600
At 24 February 2023
1,060,000
17,550
1,077,550
Carrying amount
At 24 February 2023
8,450
8,450
At 24 February 2022
11,050
11,050
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 20 -
9
Tangible fixed assets
Freehold Property
Fixtures & Fittings
Equipment
Motor Vehicles
Total
£
£
£
£
£
Cost
At 25 February 2022
9,798,432
954,736
38,026
16,270
10,807,464
Additions
78,221
26,470
104,691
At 24 February 2023
9,876,653
981,206
38,026
16,270
10,912,155
Depreciation and impairment
At 25 February 2022
1,964,284
771,683
28,913
13,804
2,778,684
Depreciation charged in the year
191,301
23,341
1,388
724
216,754
At 24 February 2023
2,155,585
795,024
30,301
14,528
2,995,438
Carrying amount
At 24 February 2023
7,721,068
186,182
7,725
1,742
7,916,717
At 24 February 2022
7,834,148
183,053
9,113
2,466
8,028,780
10
Stocks
2023
2022
£
£
Food and drink stock
79,052
45,289
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
462
1,653
Corporation tax recoverable
63,711
84,466
Other debtors
21,867
19,553
Prepayments and accrued income
61,311
38,503
147,351
144,175
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 21 -
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
109,719
128,308
Taxation and social security
135,744
107,408
Other creditors
1,244,497
1,106,213
Accruals and deferred income
220,381
189,307
1,710,341
1,531,236
13
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other borrowings
843,872
1,429,376
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
30,561
29,686
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.
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
12,000,000
12,000,000
12,000,000
12,000,000
16
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
46,370
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 22 -
17
Events after the reporting date
After the balance sheet date but before the approval of the accounts, The Ryebeck hotel sold in October 2023 for £2,800,000. As part of the deal, the company will continue to have a first charge over the land and buildings.
Hipping Hall hotel closed in July 2023 and the directors have elected to place the hotel on the market for a list value of £3,300,000. This property remains unsold at the date of approval.
18
Related party transactions
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Key management personnel
1,808,776
2,148,776
Other related parties
69,401
69,401
19
Ultimate controlling party
The ultimate controlling party is Dr E Wildsmith, a director and majority shareholder.
20
Cash (absorbed by)/generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(338,729)
748,151
Adjustments for:
Taxation charged/(credited)
(84,466)
(Gain)/loss on disposal of tangible fixed assets
-
749
Amortisation and impairment of intangible assets
2,600
2,600
Depreciation and impairment of tangible fixed assets
216,754
213,944
Impairment of loans
-
100,000
Movements in working capital:
Increase in stocks
(33,763)
(28,829)
(Increase)/decrease in debtors
(23,931)
53,601
(Decrease)/increase in creditors
(66,399)
21,892
Cash (absorbed by)/generated from operations
(243,468)
1,027,642
CASTERTON LEISURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 24 FEBRUARY 2023
- 23 -
21
Analysis of changes in net funds/(debt)
25 February 2022
Cash flows
24 February 2023
£
£
£
Cash at bank and in hand
1,430,721
(667,404)
763,317
Borrowings excluding overdrafts
(1,429,376)
585,504
(843,872)
1,345
(81,900)
(80,555)
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