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Budock Vean Holdings Limited

Annual Report and Consolidated Financial Statements
Year Ended 31 December 2022

Registration number: 00863550

 

Budock Vean Holdings Limited

Contents

Company Information

1

Strategic Report

2 to 3

Director's Report

4 to 5

Statement of Director's Responsibilities

6

Independent Auditor's Report

7 to 10

Consolidated Statement of Income and Retained Earnings

11

Consolidated Balance Sheet

12

Balance Sheet

13

Consolidated Statement of Cash Flows

14

Notes to the Financial Statements

15 to 37

 

Budock Vean Holdings Limited

Company Information

Registered office

Budock Vean Hotel
Mawnan Smith
Falmouth
TR11 5LG

Auditors

PKF Francis Clark
Statutory Auditors
Lowin House
Tregolls Road
Truro
Cornwall
TR1 2NA

Director

M E Barlow

 

Budock Vean Holdings Limited

Strategic Report

Year Ended 31 December 2022

The director presents his strategic report for the year ended 31 December 2022.

Principal activity

The principal activity of the group is that of hoteliers and providers of self catering accommodation, operating the Budock Vean Hotel and Budock Vean Holidays, and the development of lodges for sale to third parties through Budock Vean Developments.

Fair review of the business

The Directors announce a loss before tax for the year of £278,718 (2021 profit - £673,631).

Revenue in the period has risen to £3.48m (2021 - £3.10m), largely due to lifting of Covid restrictions. Inflationary pressures have adversely impacted on margin leading to the gross profit margin decreasing to 59.36% (2021 - 62.59%). The prior year results were impacted by Covid 19 restrictions, coupled with government support measures through government grant schemes, reduced rates costs and reduced rates of VAT, which returned to pre Covid 19 levels during the period. The removal of restrictions has meant that the hotel has been able to trade for the full year to 31 December 2022, however inflationary pressures in areas such as wages and light and heat have impacted profitability. In addition the company received £nil (2021 - 276k) in respect of the government's Coronavirus Job Retention Scheme. The company reports an operating profit of 47k (2021 - profit of £793k).

The group's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2022

2021

Revenue

£000

3,481

3,104

Operating (loss)/profit

£000

47

793

EBITDA

£000

277

963

Staff numbers

No.

83

79

Net debt

£000

5,022

3,997

 

Budock Vean Holdings Limited

Strategic Report

Year Ended 31 December 2022

Principal risks and uncertainties

The group is exposed to the same risks as other companies within the leisure industry, however the Directors feel that through a robust assessment of the market that the group is well positioned to deal with any risks and uncertainties, whilst being able to capitalise on any opportunities, as they arise.

The group operates in a competitive marketplace however the directors believe that the ongoing investment in the hotel facilities, coupled with its reputation for standards of service, mitigates this risk and supports retained customers.

Environmental matters

Since 2004 the Budock Vean has been one of the most proactive hotels in Cornwall in terms of instigating a suitable environmentally friendly policy. We are an ambassador for COAST; a member of the International Tree Foundation and a corporate member of Cornwall Wildlife Trust. We are totally committed to purchasing as many products and services as possible from Cornwall and particularly local based suppliers, on the basis that they meet our requirements of value, quality and reliability of supply. Menus clearly show items that have been purchased locally.

We believe that one of the greatest assets of the hotel is its grounds and location nestled on the banks of the Helford River. This is an Area of Outstanding Natural Beauty (AONB) and a Special Area of Conservation (SAC) which is rich in natural beauty and high biodiversity.

We see our role as custodians of this wonderful natural asset and are committed to its long term sustainability. We take all reasonable measures to preserve and maintain the immediate and wider environment for the enjoyment of future generations. The continued commercial success of the hotel will further ensure the long term preservation and sustainability of the Budock Vean Hotel Estate and its surrounds.

Approved by the director on 29 January 2024 and signed on its behalf by:

.........................................
M E Barlow
Director

   
     
 

Budock Vean Holdings Limited

Director's Report

Year Ended 31 December 2022

The director presents his report and the for the year ended 31 December 2022.

Directors of the group

The directors who held office during the year were as follows:

E H Barlow (ceased 14 May 2023)

M E Barlow

Financial instruments

Objectives and policies

The groups principal financial instruments comprise of bank balances, trade creditors, deposits in advance from customers and bank loans. The main purpose of these instruments is to raise funds for the groups main operations. The Directors believe that the group is dealing proactively with the risks and uncertainties which it faces.

Price risk, credit risk, liquidity risk and cash flow risk

The risks applicable to financial instruments are illustrated below:

Liquidity risk
The group manages this particular risk through a combination of compiling projections and regular review of the available management information by the Directors.

Price risk
The group operates a set tariff for customers staying at the hotel. The tariff is set by the Directors and regularly reviewed in order to ensure that the price is appropriate. Tariff changes are also factored into projections that enable the group to ensure that sufficient funds are available.

Deposits received in advance help fund the group and therefore setting tariffs to ensure that they encourage payments in advance is an important element in assisting cash flow.

Operational risk
The Directors are aware of the continual changes in laws and regulations and the associated compliance costs and plan ahead accordingly.

Credit risk
Given that customers are required to pay a deposit to reserve a room, and that all accounts are liable for settlement upon arrival the Directors do not believe that the group is adversely affected by credit risk.

 

Budock Vean Holdings Limited

Director's Report

Year Ended 31 December 2022

Going concern

The Director intends to sell the trade and assets of the group and therefore does not consider it appropriate to adopt the going concern basis of accounting.

Further commentary in this area is provided within note 2 to the financial statements.

Director's liabilities

Appropriate directors' and officers' liability cover is in place in respect of all the Directors of the group.

Disclosure of information to the auditor

The director has taken steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditor is unaware.

Approved and authorised by the director on 29 January 2024
 

.........................................
M E Barlow
Director

 

Budock Vean Holdings Limited

Statement of Director's Responsibilities

The director acknowledges his responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

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

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

 

Budock Vean Holdings Limited

Independent Auditor's Report to the Members of Budock Vean Holdings Limited

Opinion

We have audited the financial statements of Budock Vean Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022, which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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 group's and the parent company's affairs as at 31 December 2022 and of the group's 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.

Basis for opinion

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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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.

Emphasis of matter - financial statements prepared on a basis other than going concern

We draw your attention to Note 2 to the financial statements which explains that the director intends to sell the trade and assets of the group and therefore does not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in Note 2. Our opinion is not modified in respect of this matter.
 

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Budock Vean Holdings Limited

Independent Auditor's Report to the Members of Budock Vean Holdings Limited

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 Director's 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of the director

As explained more fully in the Statement of Director's Responsibilities set out on page 6, the director is 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 director determines 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 director is responsible for assessing the group’s and the parent 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 director either intends to liquidate the group or the parent 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.

 

Budock Vean Holdings Limited

Independent Auditor's Report to the Members of Budock Vean Holdings Limited

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:

As part of our audit planning we obtained an understanding of the legal and regulatory framework that is applicable to the entity and industry/sector in which it operates to identify the key laws and regulations affecting the entity. As part of this assessment process we have identified key laws and regulations of the entity and investigated whether any of these have breached in the year.

The key laws and regulations we identified were:
- The Health and Safety at Work Act 1974
- Credit Card Order 1990
- Employer's Liability (Compulsory Insurance) Act 1969
- Licensing Act 1964
- GDPR

We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, primarily the Companies Act 2006.

We discussed with management how the compliance of these laws and regulations is monitored and discussed policies and procedures in place. We also identified the individuals who have responsibility for ensuring that the entity complies with laws and regulations and deals with reporting any issues if they arise.

As part of our planning procedures, we assessed the risk of any non-compliance with laws and regulations. Our procedures involved the following:

- Enquiries of management and those charged with governance regarding their knowledge of any non-compliance with laws and regulations that could affect the financial statements;
- Reviewed legal and professional costs to identify any possible non-compliance or legal costs in respect of any potential non-compliance; and
- Obtained copies of documentation proving compliance with relevant laws and regulations where possible.

As part of our enquiries we discussed with management whether there have been any known instances, allegations or suspicions of fraud, of which there were none.

We also evaluated the risk of fraud through management override including that arising from management's incentives. The key risk we identified was financial covenant compliance and we determined that the principal risks were related to the overstatement of EBITDA, either through overstating revenue, understating expenditure, or management bias in relation to accounting estimates.

In response to the identified risk, as part of our audit work, we:

- Used data analytics to test journal entries throughout the year, for appropriateness;
- Reviewed estimates and judgements made in the financial statements for any indication of bias and challenged assumptions used by management in making the estimates.

 

Budock Vean Holdings Limited

Independent Auditor's Report to the Members of Budock Vean Holdings Limited

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our 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.

......................................
Thomas Roach BSc FCA (Senior Statutory Auditor)
PKF Francis Clark, Statutory Auditor

Lowin House
Tregolls Road
Truro
Cornwall
TR1 2NA

30 January 2024

 

Budock Vean Holdings Limited

Consolidated Statement of Income and Retained Earnings for the Year Ended 31 December 2022

Note

2022
 £

2021
 £

Turnover

3

3,481,278

3,104,053

Cost of sales

 

(1,414,664)

(1,161,378)

Gross profit

 

2,066,614

1,942,675

Establishment costs

 

(1,520,430)

(1,099,308)

Administrative expenses

 

(499,530)

(326,124)

Other operating income

4

-

276,029

Operating profit

5

46,654

793,272

Interest payable and similar charges

9

(166,989)

(119,641)

Impairment

 

(158,383)

-

(Loss)/profit before tax

 

(278,718)

673,631

Taxation

10

137,423

(298,252)

(Loss)/profit for the financial year

 

(141,295)

375,379

Profit/(loss) attributable to:

 

Owners of the company

 

(141,295)

375,379

Retained earnings brought forward

 

460,627

85,248

Retained earnings carried forward

 

319,332

460,627

 

Budock Vean Holdings Limited

Consolidated Balance Sheet

31 December 2022

Note

2022
£

2021
£

Fixed assets

 

Intangible assets

11

-

(320,927)

Tangible assets

12

7,000,000

6,832,989

 

7,000,000

6,512,062

Current assets

 

Stocks

14

183,481

183,991

Debtors

15

343,491

777,308

Cash at bank and in hand

17

408,459

1,015,444

 

935,431

1,976,743

Creditors: Amounts falling due within one year

18

(1,428,577)

(2,130,464)

Net current liabilities

 

(493,146)

(153,721)

Total assets less current liabilities

 

6,506,854

6,358,341

Creditors: Amounts falling due after more than one year

18

(5,188,433)

(4,750,213)

Provisions for liabilities

22

(583,077)

(731,489)

Net assets

 

735,344

876,639

Capital and reserves

 

Called up share capital

25

64,150

64,150

Share premium reserve

24

351,862

351,862

Profit and loss account

24

319,332

460,627

Equity attributable to owners of the company

 

735,344

876,639

Total equity

 

735,344

876,639

Approved and authorised by the director on 29 January 2024
 

.........................................
M E Barlow
Director

Company Registration Number: 00863550

 

Budock Vean Holdings Limited

Balance Sheet

31 December 2022

Note

2022
£

2021
£

Fixed assets

 

Investments

13

539,885

539,885

Current assets

 

Debtors

15

1,852,100

1,217,000

Creditors: Amounts falling due within one year

18

(5,545)

(542)

Net current assets

 

1,846,555

1,216,458

Total assets less current liabilities

 

2,386,440

1,756,343

Creditors: Amounts falling due after more than one year

18

(1,762,100)

(1,117,000)

Net assets

 

624,340

639,343

Capital and reserves

 

Called up share capital

25

64,150

64,150

Share premium reserve

351,862

351,862

Profit and loss account

208,328

223,331

Total equity

 

624,340

639,343

Approved and authorised by the director on 29 January 2024
 

.........................................
M E Barlow
Director

Company Registration Number: 00863550

 

Budock Vean Holdings Limited

Consolidated Statement of Cash Flows

Year Ended 31 December 2022

Note

2022
 £

2021
 £

Cash flows from operating activities

(Loss)/profit for the year

 

(141,295)

375,379

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

208,292

170,445

Loss on disposal of tangible assets

2,822

-

Impairment of fixed assets

158,383

-

Finance costs

9

166,989

119,641

Income tax expense

10

(137,423)

298,252

 

257,768

963,717

Working capital adjustments

 

Decrease/(increase) in stocks

14

510

(16,389)

Decrease/(increase) in trade debtors and other debtors

15

432,904

(739,648)

(Decrease)/increase in trade creditors and other creditors

18

(628,721)

782,138

Cash generated from operations

 

62,461

989,818

Income taxes paid

10

(62,443)

(1,357)

Net cash flow from operating activities

 

18

988,461

Cash flows from investing activities

 

Acquisitions of tangible assets

(857,435)

(94,404)

Cash flows from financing activities

 

Interest paid

9

(166,989)

(119,641)

Repayment of bank borrowing

 

(205,000)

(181,667)

Proceeds from issue of shares classified as liabilities

 

645,100

-

Payments to finance lease creditors

 

(22,679)

(24,288)

Net cash flows from financing activities

 

250,432

(325,596)

Net (decrease)/increase in cash and cash equivalents

 

(606,985)

568,461

Cash and cash equivalents at 1 January

 

1,015,444

446,983

Cash and cash equivalents at 31 December

 

408,459

1,015,444

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The principal place of trade for the group is the same as its registered office.

The address of its registered office is:
Budock Vean Hotel
Mawnan Smith
Falmouth
TR11 5LG

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

The group's financial statements have been prepared in accordance with FRS102 - the Financial Reporting Standard applicable in the UK and Republic of Ireland.

The preparation of financial statements in conformity with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

The presentational currency of the financial statements is Pound Sterling, being the functional currency of the primary economic environment in which the company operates.

Monetary amounts in these financial statements are rounded to the nearest pound.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Basis of consolidation

The group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2022.

No income statement is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial year of £15,003 (2021 - loss of £122).

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the Group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Summary of disclosure exemptions

FRS102 allows a qualifying entity certain disclosure exemptions subject to certain conditions which the company has complied with. On this basis the company has taken advantage of the following exemptions:

i) From preparing a statement of cash flows, on the basis that it is a qualifying entity and the consolidated statement of cash flows included in these financial statements includes the Company's cash flows;

ii) From the financial instrument disclosures, required under FRS102 paragraphs 11.39 to 11.48A as the information is provided in the consolidated financial statement disclosures.

The group and company has also taken advantage of the exemption under FRS102 paragraph 33.1A in respect of transactions between members of the group, on the basis that the group companies are 100% owned.

Going concern

The financial statements have been prepared on a basis other than that of going concern as it is the intention of the director that the assets of the group will be sold after the balance sheet date. The hotel within the group is being marketed for sale to a third party and the outstanding loans will be repaid. Future costs of terminating the business that were not committed to at the balance sheet date are not included.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Revenue recognition

Revenue comprises the fair value of the consideration received, or receivable for the provision of services in the ordinary course of the Group's activities. Revenue is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

Revenue represents the core operations of the group, which includes:

- The provision of services associated with the running of a hotel, with ancillary facilities including a restaurant, bar, golf course and spa.

- The construction of lodges on the hotel premises for resale, and subsequent lettings management services.

In respect of accommodation income, revenue is recognised at the point of a customer staying in a room. Deposits are received in advance of customer stays in accordance with the group booking policies, and these are treated as payments on account and recognised within creditors due in less than one year.

Food, beverage, golf and other hotel income are recognised at the point of sale.

Turnover arising from the sale of lodges is recognised at the point of practical completion. Instalment payments received from purchasers prior to completion have been deferred and are recognised within accruals and deferred income. The associated costs of development prior to sale are similarly recognised as work in progress. The profit arising from the disposal of land on which lodge development has taken place has been recognised within other operating income. The sale of land is recognised on completion.

Lettings commissions are recognised at the point of a customer staying in a room.

Revenue derives from the activities of the group which are wholly undertaken in the UK.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

Current or deferred tax liabilities are not discounted.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the Group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Property, plant and equipment

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold buildings

Straight line over 50 years

Furniture, fittings and equipment

Between 10% to 25% reducing balance

Intangible assets

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Negative goodwill

Straight line over 50 years

Investments

Investments represent the company investment in subsidiary undertakings, which are held in the financial statements at cost.

Other investments represents monies advanced to the Helford River Ferry, and is stated at cost less accumulated impairment losses.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Financial instruments

Classification
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. All financial instruments are classified as basic.

Recognition and measurement
Financial instruments are recognised in the company's statement of financial position 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, which include trade and other receivables and cash and bank balances, are initially measured at transaction price, including transaction costs, and are subsequently carried at the
undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

Basic financial liabilities, including trade and other payables, bank loans, and loans from fellow group companies are initially measured at transaction price, including transaction costs, and are
subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

Impairment
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.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Judgements

Management evaluate estimates and judgements on an annual basis, and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In applying the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In the opinion of the directors the key areas of judgement in the financial statements are as follows:

Carrying value of fixed assets (note 12)
At the balance sheet date the carrying value of freehold land and buildings is £6,138,362 (2021 - £6,188,597).

It is the group's practice to maintain the hotel building in a continual state of sound repair and to extend and make improvements thereto from time to time and accordingly the directors consider that the lives of these assets are so long and residual values so high that their depreciation is immaterial.

3

Turnover

The analysis of the group's revenue for the year from continuing operations is as follows:

2022
£

2021
£

Rendering of services

3,481,278

3,104,053

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2022
 £

2021
 £

Other income

-

276,029

5

Operating (loss)/profit

Arrived at after charging/(crediting)

2022
 £

2021
 £

Depreciation expense

230,689

192,841

Amortisation expense

(22,397)

(22,397)

Operating lease expense - plant and machinery

11,977

8,040

Loss on disposal of property, plant and equipment

2,822

-

6

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2022
£

2021
£

Wages and salaries

1,399,708

1,136,047

Social security costs

84,714

38,218

Pension costs, defined contribution scheme

19,073

15,062

Other employee expense

7,198

7,707

1,510,693

1,197,034

The average number of persons employed by the group (including the director) during the year, analysed by category was as follows:

2022
 No.

2021
 No.

Hotel staff

83

79

83

79

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

7

Director's remuneration

The director's remuneration for the year was as follows:

2022
£

2021
£

Remuneration

114,680

78,431

8

Auditors' remuneration

2022
£

2021
£

Audit of these financial statements

8,183

7,439


 

The audit fee for the company is borne by a subsidiary undertaking and is £520 (2021 - £475).

9

Interest payable and similar expenses

2022
£

2021
£

Interest on bank overdrafts and borrowings

148,684

115,020

Interest on preference shares

15,003

122

Interest on obligations under finance leases and hire purchase contracts

3,237

3,514

Interest expense on other finance liabilities

65

985

166,989

119,641

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

10

Taxation

Tax charged/(credited) in the profit and loss account

2022
 £

2021
 £

Current taxation

UK corporation tax

-

61,510

UK corporation tax adjustment to prior periods

10,989

-

10,989

61,510

Deferred taxation

Arising from origination and reversal of timing differences

(148,412)

236,742

Tax (receipt)/expense in the income statement

(137,423)

298,252

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2021 - lower than the standard rate of corporation tax in the UK) of 19% (2021 - 19%).

The differences are reconciled below:

2022
£

2021
£

(Loss)/profit before tax

(278,718)

673,631

Corporation tax at standard rate

(52,956)

127,990

Effect of expense not deductible in determining taxable profit (tax loss)

4,773

684

Effect of tax losses

-

2,149

Other tax effects for reconciliation between accounting profit and tax expense (income)

(89,240)

167,429

Total tax (credit)/charge

(137,423)

298,252

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Deferred tax

Group

Deferred tax assets and liabilities

2022

Asset
£

Liability
£

Capital allowances in excess of depreciation

-

206,187

Pension costs deductible when paid

-

(1,052)

Deferred tax on revalued assets

-

416,067

Tax losses carried forward

-

(87,560)

Rolled over gains

-

49,435

-

583,077

2021

Asset
£

Liability
£

Capital allowances in excess of depreciation

-

154,714

Pension costs deductible when paid

-

(788)

Deferred tax on revalued assets

-

528,128

Rolled over gains

-

49,435

-

731,489

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

11

Intangible assets

Group

Goodwill
 £

Total
£

Cost or valuation

At 1 January 2022

(2,100,497)

(2,100,497)

At 31 December 2022

(2,100,497)

(2,100,497)

Amortisation

At 1 January 2022

(1,779,570)

(1,779,570)

Amortisation charge

(22,397)

(22,397)

Impairment

(298,530)

(298,530)

At 31 December 2022

(2,100,497)

(2,100,497)

Carrying amount

At 31 December 2022

-

-

At 31 December 2021

(320,927)

(320,927)

The release of negative goodwill through profit and loss is recognised within administrative expenses.

The negative goodwill has been released completely to reflect the valuation of the fixed assets (see note 12) in accordance with the basis of preparation being other than going concern.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

12

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Total
£

Cost or valuation

At 1 January 2022

6,188,597

3,691,952

9,880,549

Impairment

(456,913)

-

(456,913)

Additions

409,500

447,935

857,435

Disposals

(2,822)

-

(2,822)

At 31 December 2022

6,138,362

4,139,887

10,278,249

Depreciation

At 1 January 2022

-

3,047,560

3,047,560

Charge for the year

-

230,689

230,689

At 31 December 2022

-

3,278,249

3,278,249

Carrying amount

At 31 December 2022

6,138,362

861,638

7,000,000

At 31 December 2021

6,188,597

644,392

6,832,989

Impairment

Freehold land and buildings
The directors have been in negotiations since the middle of December to sell the hotel. The fixed assets have been impaired to reflect the anticipated recoverable amount based on these discussions.

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2022
£

2021
£

Furniture, fittings and equipment

14,354

38,597

     

The depreciation charge on leased assets recognised in profit and loss in the year was £4,785 (2021 - £12,866).

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

13

Investments

Company

Subsidiaries

£

Cost or valuation

At 1 January 2022 and 31 December 2019

760,598

Provision

At 1 January 2022 and 31 December 2019

(220,713)

Carrying amount

At 31 December 2022

539,885

At 31 December 2021

539,885

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Holding

Proportion of voting rights and shares held

     

2022

2021

Subsidiary undertakings

Budock Vean Hotel Limited

Ordinary and deferred

100%

100%

         

Budock Vean Developments Limited

Ordinary

100%

100%

         

Budock Vean Holidays Limited

Ordinary

100%

100%

         

Budock Vean Holdings Limited owns 100% of the share capital of Budock Vean Hotel Limited. Budock Vean Hotel Limited in turn owns the share capital of Budock Vean Developments Limited and Budock Vean Holidays Limited.

The principal operation of Budock Vean Hotel Limited is that of a hotelier. Budock Vean Developments Limited operates as a property development company, with the principal operation of Budock Vean Holidays being lettings management.

The registered office of Budock Vean Hotel Limited and Budock Vean Developments Limited is Budock Vean Hotel, Mawnan Smith, Falmouth, TR11 5LG.

The registered office of Budock Vean Holidays Limited is Lowin House, Tregolls Road, Truro, TR1 2NA.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

14

Inventories

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Work in progress

128,143

128,143

-

-

Other inventories

55,338

55,848

-

-

183,481

183,991

-

-

Amounts classified as work in progress relate to the development of lodges on the hotel grounds.

Other inventories relate to stock items held for the delivery of services to customers, including food, bar and spa stocks.

Group

15

Debtors

   

Group

Company

Note

2022
£

2021
£

2022
£

2021
£

Trade debtors

 

325,003

765,101

-

-

Amounts due from group undertakings

26

-

-

1,852,100

1,217,000

Other debtors

 

-

9,276

-

-

Prepayments

 

18,488

1,574

-

-

Income tax asset

10

-

1,357

-

-

 

343,491

777,308

1,852,100

1,217,000

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

16

Other financial assets

Group

Financial assets at cost less impairment
£

Total
£

Non-current financial assets

Cost or valuation

At 1 January 2022

2,000

2,000

At 31 December 2022

2,000

2,000

Impairment

Other adjustments

2,000

2,000

At 31 December 2022

2,000

2,000

Carrying amount

At 31 December 2022

-

-

17

Cash and cash equivalents

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Cash on hand

390

72

-

-

Cash at bank

408,069

1,015,372

-

-

408,459

1,015,444

-

-

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

18

Creditors

   

Group

Company

Note

2022
 £

2021
 £

2022
 £

2021
 £

Due within one year

 

Loans and borrowings

19

241,434

262,233

-

-

Trade creditors

 

174,253

125,425

-

-

Social security and other taxes

 

90,770

22,173

-

-

Outstanding defined contribution pension costs

 

4,209

3,152

-

-

Other creditors

 

24,050

284,563

5,545

542

Accrued expenses

 

132,908

126,911

-

-

Corporation tax

10

-

52,811

-

-

Payments on account

 

760,953

1,253,196

-

-

 

1,428,577

2,130,464

5,545

542

19

Loans and borrowings

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Current loans and borrowings

Bank borrowings

240,000

240,000

-

-

Finance lease liabilities

1,434

22,233

-

-

241,434

262,233

-

-

 

Group

Company

2022
£

2021
£

2022
£

2021
£

Non-current loans and borrowings

Bank borrowings

3,426,333

3,631,333

-

-

Redeemable preference shares

1,762,100

1,117,000

1,762,100

1,117,000

Finance lease liabilities

-

1,880

-

-

5,188,433

4,750,213

1,762,100

1,117,000

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

The conditions and security held in respect of the borrowings of the group can be summarised as follows:

Bank borrowings

In January 2019 the group concluded negotiations on a new bank loan facility with its bankers, HSBC. Debts have been consolidated and a single loan of £3.553 million was agreed and drawn. The facility is interest only for the first 24 months which in the short term will preserve cash in the business to enable further investment in the hotel. Interest is accruing at a rate of margin plus LIBOR, where margin is defined as:

• 3% to the third anniversary of the date of the loan agreement;
• 2.5% thereafter provided that appropriate loan to value conditions are met.

The loan is repayable in full at its termination date, which is five years from the date of drawdown.

In July 2020 the group entered into a Coronavirus Business Interruption Loan Agreement with its bankers, HSBC. The facility of £500,000 is subject to capital repayments of £8,333.53 after the first 12 months, with interest accruing at a rate of base plus 3.99%.

The following security is held in respect of the bank loan:

a) Debenture including Fixed Charge over all present freehold and leasehold property; First Fixed Charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 29 January 2019;

b) First Legal Charge dated 22 October 1986 over Freehold Property known as Budock Vean Hotel, Budock Vean Lane, Mawnan Smith, Falmouth, Cornwall;

c) Fixed Charge over book and other debts, goodwill, uncalled capital and intellectual property and a Floating Charge over all other assets dated 11 September 1995;

d) Shares - Memorandum of Deposit dated 29 January 2019;

e) Debenture including Fixed Charge over all present freehold and leasehold property; First Fixed Charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 18 November 2009;

f) Composite Company Unlimited Multilateral Guarantee dated 15 September 2014 given by Budock Vean Hotel Limited, Budock Vean Holdings Limited, Budock Vean Holidays Limited;

g) Composite Company Unlimited Multilateral Guarantee dated 25 May 2011 given by Budock Vean Hotel Limited, Budock Vean Holdings Limited.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022


Finance lease liabilities
Details pertaining to the finance lease liabilities of the company are disclosed in note 20.

The outstanding balance is secured against the asset to which they relate.

20

Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

2022
£

2021
£

Not later than one year

1,434

22,233

Later than one year and not later than five years

-

1,880

1,434

24,113

Operating leases

The total of future minimum lease payments is as follows:

2022
£

2021
£

-

-

The amount of non-cancellable operating lease payments recognised as an expense during the year was £4,209 (2021 - £4,119).

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

21

Reconciliation of net debt

At 1 January 2022

Cash flow

Other non cash changes

At 31 December 2022

£

£

£

£

Cash at bank and on hand

1,015,444

(606,985)

-

408,459

Bank overdrafts

-

-

-

-

Cash and cash equivalents

1,015,444

(606,985)

-

408,459

Bank loan less than one year

(240,000)

(240,000)

Bank loans more than one year

(3,631,333)

205,000

(3,426,333)

Preference shares classified as debt

(1,117,000)

(645,100)

-

(1,762,100)

Finance leases

(24,113)

22,233

(1,880)

Net debt

(3,997,002)

(1,024,852)

-

(5,021,854)

22

Deferred tax and other provisions

Group

Deferred tax
£

Total
£

At 1 January 2022

731,489

731,489

Increase (decrease) in existing provisions

(148,412)

(148,412)

At 31 December 2022

583,077

583,077

The composition of the deferred tax balance above is outlined in note 10 to the financial statements.

23

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £19,073 (2021 - £15,062).

Contributions totalling £4,209 (2021 - £3,152) were payable to the scheme at the end of the year and are included in creditors.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

24

Reserves

Group

The group has certain equity balances which are disclosed in reserves. The derivation of these amounts can be summarised as follows:
 

Share premium

The share premium account relates to any premium arising on the issue of share capital.

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.

Share capital

Called up share capital represents the nominal value of shares that have been issued.

25

Share capital

Allotted, called up and fully paid shares

 

2022

2021

 

No.

£

No.

£

Ordinary Shares of £1 each

59,150

59,150

59,150

59,150

Deferred Shares of £1 each

5,000

5,000

5,000

5,000

 

64,150

64,150

64,150

64,150

In addition to the equity share capital disclosed above the group has 1,762,100 (2021 - 1,117,000) preference shares at par value. These preference shares are disclosed as liabilities in the financial statements in accordance with their substance applying the principles of FRS102.

Redeemable preference shares

The Redeemable preference shares are redeemable at the option of the company or holder. They are redeemable at £1 per share and carry no voting rights.

During the year 645,100 £1 redeemable preference shares were issued.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

Rights, preferences and restrictions

The Ordinary Shares have the following rights, preferences and restrictions:

The Ordinary Shares entitle the holder, or holders thereof:

a) To receive all dividends and to participate in all profits or surplus assets of the Company, save in the event of a winding up of the Company where the Ordinary Shares shall rank pari passu with the deferred shares in their rights to receive any repayment of share capital.

b) To receive notice of, attend and vote in all general meetings of the Company.

The Deferred Shares have the following rights, preferences and restrictions:

The Deferred Shares do not entitle the holder, or holders thereof:

a) To receive any dividends and to participate in all profits or surplus assets of the Company, save in the event of a winding up of the Company where the Deferred Shares shall rank pari passu with the ordinary shares in their rights to receive any repayment of share capital.

b) To receive notice of nor attend and vote in all general meetings of the company nor to be counted for the purposes of forming a quorum.

The Preference Shares have the following rights, preferences and restrictions:

The Preference Shares do not entitle the holder or holders thereof to receive notice nor attend and vote in any general meeting of the Company nor to be counted for the purposes of forming a quorum.

The holders of the redeemable Preference Shares are entitled to a fixed preferential net cash dividend of 0.01% per annum on each preference share held.

The holders of the 'JB' redeemable Preference Shares are entitled to a fixed preferential net cash dividend of 5% per annum on each preference share held.

The Preference Shares shall be redeemed as follows:

- The company may, at any time not less than 25 Business Days' notice in writing to the holders redeem such Preference Shares that are specified in the notice.
- The Company shall (unless directed to the contrary by the holders) redeem all Preference Shares then in issue immediately prior to a sale, and
- The Company shall redeem all of the Preference Shares then in issue on 1 January 2035.

The redeemable preference shares are classified as liabilities in accordance with UK GAAP.

 

Budock Vean Holdings Limited

Notes to the Financial Statements

Year Ended 31 December 2022

26

Related party transactions

Group

Transactions with the director

There are no key management personnel outside of the Directors. Details of Directors remuneration is provided within note 7 to the financial statements.
 

M E Barlow
During the year M E Barlow has had a loan due from the company . This loan is unsecured, interest free and repayable upon demand.

During the year M E Barlow has advanced £nil (2021 - £nil) to the company, and has been repaid £nil (2021 - £nil).

During the year £95,100 has been converted to preference share capital within the parent company, Budock Vean Holdings Limited.

At the balance sheet date M E Barlow was due £nil (2021 - £95,100) from Budock Vean Hotel Limited.

E H Barlow
During the year E H Barlow has had a loan due from the company. This loan is unsecured, interest free and repayable upon demand.

During the year E H Barlow has advanced £nil (2021 - £4,500) to the company, and has been repaid £nil (2021 - £nil).

During the year £150,000 has been converted to preference share capital within the parent company, Budock Vean Holdings Limited.

At the balance sheet date E H Barlow was due £5,988 (2021 - £155,988) from Budock Vean Hotel Limited.

Summary of transactions with subsidiaries

The group companies are all wholly owned by Budock Vean Holdings Limited. On this basis the group has taken advantage of the exemption in FRS102 not to disclose transactions between the group companies.

27

Parent and ultimate parent undertaking

The ultimate controlling party is M E Barlow.