Company Registration No. SC225775 (Scotland)
STRATHMORE HOTELS (SCOTLAND) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
STRATHMORE HOTELS (SCOTLAND) LIMITED
COMPANY INFORMATION
Directors
B Rickard
L Cormack
L G Hamill
C L Rickard
Company number
SC225775
Registered office
116 Strathmore House
East Kilbride
Lanarkshire
G74 1LF
Auditor
Johnston Carmichael LLP
227 West George Street
Glasgow
G2 2ND
STRATHMORE HOTELS (SCOTLAND) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 31
STRATHMORE HOTELS (SCOTLAND) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

Business review

2022 saw a continuation of increasing costs due to the War in Ukraine pushing energy costs upwards. Continued supply chain issues also saw significant inflationary pressures and by extension interest rate increases. However due to Strathmore Hotels historic strategy of only operating units within key tourist and conference locations the group was, and is, always placed well to recover swiftly from any forced restriction on trade. In turn, the group has always maintained prudence and risk aversion in terms of borrowing so low Loan to Value ("LTV") have always been maintained. This, coupled with shift away in 2014 in relying on fossil fuels as it’s primary energy source, means that, although the group has experienced significant increases in costs – the group is as well placed as any other to cope, and absorb, such increasing cost pressures.

Principal risks and uncertainties

Operating Climate

The directors regard the group as having a strong and stable customer base. The majority of the customers are UK and European based. Guest demographic and strong location of the hotels maintains a demand that the directors believe assures the group’s core business. The principal risk in the medium term is the continuing economic climate.

 

Interest Rate risk

The group finances it operations through a mixture of retained profits and bank borrowings. It is the group’s policy to undertake borrowings on the basis of variable interest rate facilities. The performance of the group during the pandemic and its consequential lack of requirement of extra borrowing, government assistance (i.e CBILS loan etc) , coupled with its long term strategy of minimising (LTV), means the directors are confident that the overall resources of the group are sufficient to enable it to absorb any potential adverse change in interest rate.

 

Energy Costs

The war in Ukraine, coupled with a sharp increase of post pandemic demand for Oil and Gas has resulted in record high prices of fossil fuel. In 2014 the directors decided to convert the hotels primary energy source from Gas to sustainable Biomass. This conversion has been extremely successful and has been operating well for several years. As a result, the directors are confident that the group is well placed to avoid extreme energy costs due to its lack of reliance on Gas. 2023 saw the completion of installation and certification of a new Biomass system at the Ben Wyvis Hotel in Strathpeffer, replacing the aging Oil Heating system that was in situ. This new system, in addition to being sustainable, will see a significant decrease in energy costs at the site.

Key performance indicators

An analysis of the group's key performance indicators is as follows:

 

 

2022

2021

 

£m

£m

Turnover

17.6

13.2

Gross profit

7.1

5.3

Operating profit

1.2

1.7

Profit before tax

0.8

1.4

Interest cover

2.8

5.0

Net assets

18.4

17.6

Bed Occupancy

62%

35%

Future developments

The directors will continue with current management policies which have resulted in the group’s growth in recent years.

STRATHMORE HOTELS (SCOTLAND) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Section 172 statement

 

The likely consequences of any decision in the long term

The directors are fully committed to the long-term sustainability of the group. This is evidenced by recent hotel additions and the continuing refurbishment of the hotel portfolio. All strategic decisions are made with a long term focus in mind.

 

The interests of the group’s employees

The directors recognise the role the employees play in delivering customer service to guests through not only customer-facing roles, but also in back-office administration and maintenance of the buildings and grounds.

 

We are active in training and motivating our workforce to retain our employees and provide the level of service that we pride ourselves in.

 

The impact of the group’s operations on the community and the environment

We are committed to supporting the communities that we are based in and being environmentally responsible.

 

The importance of the group’s business relationships with suppliers, customers and others

We aim to give a high level of service to our customers. Guest feedback is sought by way of satisfaction questionnaires and KPIs.

 

There are a number of key suppliers that maintain engagement with the individual hotels. We work closely with our regular suppliers and maintain regular contact by phone and email.

The desirability of the group maintaining a reputation for high standards of business conduct

The directors are determined to ensure that the business operates to the highest standards possible. The directors review performance regularly to ensure that the business is able to meet these standards.

 

The need to act fairly between members of the group

The directors and members work closely together to ensure that all relevant parties are consulted when determining a course of action for the business.

On behalf of the board

C L Rickard
Director
29 March 2024
STRATHMORE HOTELS (SCOTLAND) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The company's principal activity is that of a holding company. The group's principal activity is that of owning and operating hotels.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

B Rickard
L Cormack
L G Hamill
C L Rickard
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Matters addressed in the Strategic report

The group has chosen in accordance with the Companies Act 2006, s. 414C(11) to set out in the group'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 future developments and financial risk management objectives and policies (as applicable).

Auditor

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

STRATHMORE HOTELS (SCOTLAND) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Energy and carbon report

From financial years beginning after 1 April 2019, large UK companies are required to report publicly on their global energy use and carbon emissions within their Directors’ Report. Although the company's subsidiary undertaking is eligible to make the necessary disclosures, exemption has been taken from including the disclosures within these financial statements as Strathmore Hotels (Scotland) Limited is itself a subsidiary undertaking of Strathmore Leisure Limited and the relevant disclosures are made within those financial statements.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
C L Rickard
Director
29 March 2024
STRATHMORE HOTELS (SCOTLAND) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STRATHMORE HOTELS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STRATHMORE HOTELS (SCOTLAND) LIMITED
- 6 -
Opinion

We have audited the financial statements of Strathmore Hotels (Scotland) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

 

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.

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 group's and parent 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.

Other information

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.

STRATHMORE HOTELS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE HOTELS (SCOTLAND) 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:

 

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

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 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor 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.

 

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

STRATHMORE HOTELS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE HOTELS (SCOTLAND) LIMITED
- 8 -
Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)

We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

 

We gained an understanding of how the group and the parent company are complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections, and relevant correspondence with regulatory bodies.

We assessed the susceptibility of the group’s and parent company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

 

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

STRATHMORE HOTELS (SCOTLAND) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STRATHMORE HOTELS (SCOTLAND) LIMITED
- 9 -

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.

Ryan Crilley (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
29 March 2024
Chartered Accountants
Statutory Auditor
227 West George Street
Glasgow
G2 2ND
STRATHMORE HOTELS (SCOTLAND) LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
2022
2021
Notes
£
£
Turnover
3
17,613,576
13,223,007
Cost of sales
(10,471,883)
(7,933,385)
Gross profit
7,141,693
5,289,622
Administrative expenses
(5,974,327)
(4,336,600)
Other operating income
-
783,686
Operating profit
4
1,167,366
1,736,708
Interest payable and similar expenses
8
(416,234)
(348,458)
Profit before taxation
751,132
1,388,250
Tax on profit
9
18,979
(1,297,963)
Profit for the financial year
21
770,111
90,287
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
STRATHMORE HOTELS (SCOTLAND) LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
31,870,783
32,223,566
Current assets
Stocks
13
288,752
211,371
Debtors
14
5,600,093
4,043,627
Cash at bank and in hand
19,649
61,174
5,908,494
4,316,172
Creditors: amounts falling due within one year
15
(5,108,319)
(14,094,391)
Net current assets/(liabilities)
800,175
(9,778,219)
Total assets less current liabilities
32,670,958
22,445,347
Creditors: amounts falling due after more than one year
16
(10,052,855)
(433,500)
Provisions for liabilities
Deferred tax liability
18
4,225,507
4,389,362
(4,225,507)
(4,389,362)
Net assets
18,392,596
17,622,485
Capital and reserves
Called up share capital
20
302,000
302,000
Revaluation reserve
21
4,833,011
4,833,011
Profit and loss reserves
21
13,257,585
12,487,474
Total equity
18,392,596
17,622,485
The financial statements were approved by the board of directors and authorised for issue on 29 March 2024 and are signed on its behalf by:
29 March 2024
C L Rickard
Director
STRATHMORE HOTELS (SCOTLAND) LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
11
3,799,860
3,799,860
Current assets
-
-
Creditors: amounts falling due within one year
15
(933,247)
(933,247)
Net current liabilities
(933,247)
(933,247)
Total assets less current liabilities
2,866,613
2,866,613
Creditors: amounts falling due after more than one year
16
(433,500)
(433,500)
Net assets
2,433,113
2,433,113
Capital and reserves
Called up share capital
20
302,000
302,000
Profit and loss reserves
21
2,131,113
2,131,113
Total equity
2,433,113
2,433,113

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2021 - £9,360 loss).

The financial statements were approved by the board of directors and authorised for issue on 29 March 2024 and are signed on its behalf by:
29 March 2024
C L Rickard
Director
Company Registration No. SC225775
STRATHMORE HOTELS (SCOTLAND) LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
302,000
4,958,011
12,272,187
17,532,198
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
90,287
90,287
Transfers
-
(125,000)
125,000
-
Balance at 31 December 2021
302,000
4,833,011
12,487,474
17,622,485
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
770,111
770,111
Balance at 31 December 2022
302,000
4,833,011
13,257,585
18,392,596
STRATHMORE HOTELS (SCOTLAND) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
302,000
2,140,473
2,442,473
Year ended 31 December 2021:
Loss and total comprehensive expense for the year
-
(9,360)
(9,360)
Balance at 31 December 2021
302,000
2,131,113
2,433,113
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
0
Balance at 31 December 2022
302,000
2,131,113
2,433,113
STRATHMORE HOTELS (SCOTLAND) LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,109,234
2,600,014
Interest paid
(416,234)
(348,458)
Income taxes refunded
3,984
3,119
Net cash inflow from operating activities
696,984
2,254,675
Investing activities
Purchase of tangible fixed assets
(765,594)
(104,474)
Net cash used in investing activities
(765,594)
(104,474)
Financing activities
Proceeds from new bank borrowings
10,592,108
-
Repayment of bank loans
(11,370,308)
-
Net cash used in financing activities
(778,200)
-
Net (decrease)/increase in cash and cash equivalents
(846,810)
2,150,201
Cash and cash equivalents at beginning of year
(11,920)
(2,162,121)
Cash and cash equivalents at end of year
(858,730)
(11,920)
Relating to:
Cash at bank and in hand
19,649
61,174
Bank overdrafts included in creditors payable within one year
(878,379)
(73,094)
STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
1
Accounting policies
Company information

Strathmore Hotels (Scotland) Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 116 Strathmore House, East Kilbride, G74 1LF

 

The group consists of Strathmore Hotels (Scotland) Limited and its subsidiary.

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, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements (where applicable):

 

1.2
Basis of consolidation

The consolidated financial statements incorporate those of Strathmore Hotels (Scotland) Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).

 

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group and parent company have adequate funding facilities from external lenders and expect to have continued access to those facilities, allowing the group and parent company to continue in operational existence and meet their financial liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements. The directors have prepared cash flow projections which allow them to form this judgement.

Based on the above factors the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.4
Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable for the provision of accommodation and ancillary supplies, excluding discounts, rebates, value added tax and other sales taxes.

 

Room revenue is recognised at the point at which the rooms are occupied, whilst food and beverage sales are recognised at the point of sale.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold property
Over 50 years
Leasehold properties
Over 20 years
Buildings enhancements
Over 5 - 25 years
Fixtures & fittings
Over 5 - 30 years
Motor vehicles
Over 4 years

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 recognised in the profit and loss account.

Properties are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in the profit and loss account or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in the profit and loss account.

1.6
Fixed asset investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

1.7
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include certain 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.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
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 the profit and loss account.

 

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 in the profit and loss account.

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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including certain creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.15
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

Government grants are recognised in accordance with the accruals model. Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in the profit and loss account.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Critical judgements and estimates

The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.

Property Valuations (2020: £12,134K (2019: £12,201K))

Individual freehold and leasehold properties are carried at fair value at the balance sheet date. A full valuation is obtained on a regular basis, and in any year where it is likely that there has been a material change in value. In years where no valuation is performed an assessment of valuation is carried out by the directors in light of current market conditions.

 

The carrying value of tangible fixed assets carried at valuation is outlined at note 10.

Depreciation (2020: £1,142K (2019: £1,400K))

The estimates and assumptions made to determine asset lives require judgements to be made as regards useful lives and residual values. The useful lives and residual values of the group's fixed assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets. Historically, changes in useful lives have not resulted in material changes to the group's depreciation charge.

 

The depreciation charge in the year is outlined at note 10.

Carrying value of investments (2020: £3,800K (2019: £3,800K))

The company holds an investment in subsidiary which is initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The directors review the investment on an annual basis for any indicators of impairment.

 

The carrying value of fixed asset investments is outlined at note 11.

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Owning and operating hotels
17,613,576
13,223,007
2022
2021
£
£
Other significant revenue
Grants received
-
783,686

Grants received in the prior reporting period represent monies received from the UK Government's Coronavirus Job Retention Scheme.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
4
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
-
(783,686)
Depreciation of owned tangible fixed assets
1,118,377
1,134,193
Operating lease charges
133,683
131,755
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
26,825
26,000
For other services
Other taxation services
6,250
6,250
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Hotels
366
279
-
-
Administration
14
12
4
4
Total
380
291
4
4

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
6,562,340
5,044,480
-
0
-
0
Social security costs
451,911
347,692
-
-
Pension costs
129,689
99,350
-
0
-
0
7,143,940
5,491,522
-
0
-
0
STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
228,333
225,000
Company pension contributions to defined contribution schemes
5,433
5,263
233,766
230,263

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 2).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
87,500
85,000
Company pension contributions to defined contribution schemes
1,321
1,319
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
416,234
339,098
Other interest on financial liabilities
-
9,360
Total finance costs
416,234
348,458
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
164,105
351,795
Adjustments in respect of prior periods
(19,229)
(152,019)
Total current tax
144,876
199,776
Deferred tax
Origination and reversal of timing differences
95,245
12,160
Changes in tax rates
-
0
1,086,027
Adjustment in respect of prior periods
(259,100)
-
0
Total deferred tax
(163,855)
1,098,187
Total tax (credit)/charge
(18,979)
1,297,963
STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Taxation
(Continued)
- 24 -

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Profit before taxation
751,132
1,388,250
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
142,715
263,768
Tax effect of expenses that are not deductible in determining taxable profit
3,418
6,702
Adjustments in respect of prior years
(19,229)
(152,019)
Group relief
(9,191)
(17,242)
Other permanent differences
-
0
(12,160)
Deferred tax adjustments in respect of prior years
(259,100)
-
0
Fixed asset differences
99,549
110,727
Remeasurement of deferred tax for changes in tax rates
22,859
1,098,187
Taxation (credit)/charge
(18,979)
1,297,963

A change in the future UK Corporation tax rate to 25% with effect from 1 April 2023 was announced in the March 2021 budget and substantively enacted on 24 May 2021. This change will have a consequential effect on the group's future tax charge in the UK and as the 25% tax rate was substantively enacted prior to the reporting date, deferred tax expected to unwind after 1 April 2023 has been calculated at 25% as opposed to the current tax rate of 19%.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
10
Tangible fixed assets
Group
Freehold property
Leasehold properties
Fixtures & fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2022
20,472,198
13,028,820
4,602,932
84,133
38,188,083
Additions
514,411
111,444
139,739
-
0
765,594
Revaluation
846,782
(846,782)
-
0
-
0
-
0
Transfers
5,954,074
(5,954,074)
-
0
-
0
-
0
At 31 December 2022
27,787,465
6,339,408
4,742,671
84,133
38,953,677
Depreciation and impairment
At 1 January 2022
2,092,752
1,197,522
2,590,110
84,133
5,964,517
Depreciation charged in the year
596,004
274,253
248,120
-
0
1,118,377
Transfers
467,367
(467,367)
-
0
-
0
-
0
At 31 December 2022
3,156,123
1,004,408
2,838,230
84,133
7,082,894
Carrying amount
At 31 December 2022
24,631,342
5,335,000
1,904,441
-
0
31,870,783
At 31 December 2021
18,379,446
11,831,298
2,012,822
-
0
32,223,566
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.

Transfers during the year are in relation to properties which were previously held leasehold, but are now held freehold.

 

Included in freehold property is freehold land at a cost of £11,302,957 (2021 - £11,302,957).

As at 1 June 2021 the group's hotel properties and leasehold properties were valued by JLL, independent valuers and surveyors, on a fair value basis. The hotels were valued as fully equipped operational entities having regard to trading potential. Leasehold properties includes the Cairn Hotel valued on a leasehold interest basis. Valuations were undertaken in accordance with the RICS Appraisal and Valuation Manual. In assessing fair value of the group's hotels, multiples are applied to the maintainable operating profits for each hotel, with an adjustment made for capital expenditure. In making their fair value assessment at the reporting date, the directors have considered the June 2021 valuations and subsequent events and are satisfied that the carrying values stated above represent an appropriate fair value.

 

If the group's fixed assets carried at valuation were measured using an historic cost basis, the carrying amounts would have been:

2022
2021
£
£
Group
Cost
28,052,342
25,909,709
Accumulated depreciation
(6,047,093)
(5,300,801)
Carrying value
22,005,249
20,608,908
STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
11
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
12
-
0
-
0
3,799,860
3,799,860
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
3,799,860
Carrying amount
At 31 December 2022
3,799,860
At 31 December 2021
3,799,860
12
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Strathmore Hotels Limited
See below
Owning and operating hotels
Ordinary
100.00

The registered office of Strathmore Hotels Limited is 116 Strathmore House, East Kilbride, G74 1LF.

13
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Finished goods and goods for resale
288,752
211,371
-
0
-
0
14
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
330,681
231,322
-
0
-
0
Amounts owed by group undertakings
2,047,100
1,216,524
-
-
Other debtors
2,595,354
2,146,208
-
0
-
0
Prepayments and accrued income
626,958
449,573
-
0
-
0
5,600,093
4,043,627
-
-
STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
14
Debtors
(Continued)
- 27 -

Included within other debtors is £393,062 (2021: £Nil) owed by connected companies.

15
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
17
1,656,582
11,248,852
-
0
-
0
Trade creditors
1,617,339
897,116
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
870,809
870,809
Corporation tax payable
402,187
219,611
-
0
-
0
Other taxation and social security
895,777
1,270,978
-
-
Other creditors
200,286
88,227
-
0
-
0
Accruals and deferred income
336,148
369,607
62,438
62,438
5,108,319
14,094,391
933,247
933,247

Included within other creditors is £47,582 (2021: £47,582) owed to connected companies.

 

Details of security given for bank loans and overdrafts are included in note 17.

16
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
17
9,619,355
-
0
-
0
-
0
Preference shares
17
433,500
433,500
433,500
433,500
10,052,855
433,500
433,500
433,500
17
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
10,397,558
11,175,758
-
0
-
0
Bank overdrafts
878,379
73,094
-
0
-
0
Preference shares
433,500
433,500
433,500
433,500
11,709,437
11,682,352
433,500
433,500
Payable within one year
1,656,582
11,248,852
-
0
-
0
Payable after one year
10,052,855
433,500
433,500
433,500
STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
17
Loans and overdrafts
(Continued)
- 28 -

In September 2022, the group refinanced its bank borrowings to a new £10.6m, 3 year facility with interest payable at 2.7% above base rate. £2.3m of the loan is repayable in quarterly instalments, with the remaining £8.3m repayable at the maturity date.

 

The bank loans and overdrafts are secured by standard securities and debentures over the group's hotel properties, together with a bond and floating charge over the assets of the group.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
2,207,384
2,371,239
Capital gains
2,018,123
2,018,123
4,225,507
4,389,362
The company has no deferred tax assets or liabilities.
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
4,389,362
-
Credit to profit or loss
(163,855)
-
Liability at 31 December 2022
4,225,507
-

 

19
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
135,122
99,350

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 29 -
20
Share capital
Group and company
2022
2021
£
£
Shares classified as equity
Alloted, called up and fully paid
263,000 Ordinary Shares of £1 each
263,000
263,000
39,000 Convertible Redeemable Preference Shares of £1 each
39,000
39,000
302,000
302,000
Shares classified as debt
Alloted, called up and fully paid
433,500 Redeemable Preference Shares of £1 each
433,500
433,500
433,500
433,500

The £1 convertible redeemable preference shares are convertible into ordinary shares at any time, if so required by the group.

 

The redeemable preference shares became redeemable at any time after 12 February 2005.

 

In the event of there being insufficient funds available for distribution in respect of any period for payment of the preference dividend or in the event of the company being prevented from paying the preference dividend for any other reason on the due date for payment:-

 

a) the principal amount of preference dividend shall, not withstanding that it is expressed to be cumulative, become and remain a debt due by the company to the holders of the preference shares until paid; and

 

b) interest on the principal amount of preference dividend outstanding from time to time shall accrue daily at the rate of 2% above the base lending rate from time to time of the Royal Bank of Scotland plc from the due date for payment of such preference dividend until payment in full is made.

 

Each holder of preference shares and convertible redeemable preference shares (prior to conversion) shall have the right to receive notice of and to attend all General Meetings of the company, but shall have no right to vote. In the event of a winding up or other capital reduction, holders of both these classes of share capital will be entitled to all unpaid arrears or accruals of the preference dividend. The holders of the preference shares are also entitled to (pari passu in portion to the number of preference shares held by them) the sum of £1 per share.

21
Reserves
Profit and loss reserves

The profit and loss reserves account represents the accumulated profits and losses to the group less distributions made to shareholders.

 

Revaluation Reserve

This reserve is used to record increases in the fair value of land and buildings and decreases to the extent that such decrease relates to an increase on the same asset. Deferred tax adjustments on the revaluation of property are charged to this reserve.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
22
Financial commitments, guarantees and contingent liabilities

The group has provided guarantees in respect of the bank borrowings of its parent company, Strathmore Leisure Limited. The amount outstanding in respect of these guarantees at 31 December 2022 was £1,490,594 (2021 - £1,618,517).

23
Operating lease commitments
Lessee

At 31 December 2022 the group had a lease for the Cairn Hotel, Harrogate. The period remaining is 79 years and the total amount payable is £8,967,118 (2021 - £9,082,118). The repayment profile of the lease is a payment of £115,000 per annum.

24
Related party transactions

The company has taken advantage of the exemption in FRS 102 not to disclose transactions transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

Included within amounts owed by group undertakings within note 14 is £2,047,100 (2021 - £1,216,524) owed from group undertakings not part of the wholly owned group.

Details of amounts owed from or to connected undertakings have also been outlined within notes 14 and 15 respectively.

25
Directors' transactions

The following directors had interest free loans during the year. The loans are repayable on demand. The amounts repayable to the group at the reporting date were as follows:

Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
B Rickard
-
934,079
-
934,079
L Cormack
-
252,000
-
252,000
L Hamill
-
39,921
9,741
49,662
C L Rickard
-
(135,684)
225,842
90,158
1,090,316
235,583
1,325,899
26
Controlling party

The ultimate parent company is Strathmore Leisure Limited, a company registered in Scotland whose registered address is 116 Strathmore House, East Kilbride, G74 1LF.

 

Strathmore Leisure Limited prepares group financial statements and copies can be obtained from the Companies House online register at https://www.gov.uk/government/organisations/companies-house.

STRATHMORE HOTELS (SCOTLAND) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 31 -
27
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
770,111
90,287
Adjustments for:
Taxation (credited)/charged
(18,979)
1,297,963
Finance costs
416,234
348,458
Depreciation and impairment of tangible fixed assets
1,118,377
1,134,193
Movements in working capital:
Increase in stocks
(77,381)
(34,618)
Increase in debtors
(1,522,750)
(572,956)
Increase in creditors
423,622
336,687
Cash generated from operations
1,109,234
2,600,014
28
Analysis of changes in net debt - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
61,174
(41,525)
19,649
Bank overdrafts
(73,094)
(805,285)
(878,379)
(11,920)
(846,810)
(858,730)
Borrowings excluding overdrafts
(11,609,258)
778,200
(10,831,058)
(11,621,178)
(68,610)
(11,689,788)
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