Company registration number 01274376 (England and Wales)
MALLORY COURT HOTEL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
MALLORY COURT HOTEL LIMITED
COMPANY INFORMATION
Directors
Mr M E S Chambers
Mr D G Buck
Company number
01274376
Registered office
Harbury Lane
Bishops Tachbrook
Leamington Spa
Warwickshire
CV33 9QB
Auditor
Ormerod Rutter Limited
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
MALLORY COURT HOTEL LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
MALLORY COURT HOTEL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

 

Background

Eden Hotel Collection (“EHC”) is a group consisting of a portfolio of six luxury sites across the Midlands, Cotswolds & South West, with a total of 200 hotel bedrooms and 22 three bedroom lodges.

 

• Bovey Castle Estate, Dartmoor

• Mallory Court Country House Hotel & Spa, Royal Leamington Spa

• Arden Hotel, Stratford-upon-Avon

• Arden House - Stratford-upon-Avon (sold post balance sheet date)

• Brockencote Hall, Chaddesley Corbett

• The Greenway Hotel & Spa, Cheltenham

 

Multi award winning, EHC is widely recognised as one of UK’s Top 5 privately owned group of luxury boutique hotel operators. The collection sits in the traditional hotels sector and is a major player in the 4 & 5 red star market. EHC operates within the non-branded core hotel, restaurant and spa space. The business operates across the leisure, corporate, M&E markets and, without exception, ranks in local and regional territories as a ‘best in class’. A leading operator of weddings, both local and destination, makes the group a stand-out performer in this space, whilst excellence around food is a cornerstone of the business, as is the luxury spa brand ‘Elan’ which operates at 3 key locations.

 

EHC Ltd is a subsidiary of the Rigby Group (RG) plc (Rigby Group). Rigby Group is a family-owned highly successful business operating across Europe. Diversifying from its origins as a technology re-seller, Rigby Group is currently comprised of five key divisions: Technology, Airports, Real Estate, Hotels, and Technology Investments. Since its origins in 1975 the Group has grown to be the 12th largest family business in the United Kingdom (source https://familybusinessindex.com), employing over 8000 people and with a consolidated turnover of over £3.5bn. The group has a distinguished reputation as both an investor and business operator built around core family values of foresight, working hard and enabling others. The Rigby Group is a keen supporter of job creation, enterprise and charitable causes in the regions in which it operates and takes its responsibility for the environment seriously. Further information is available at www.rigbygroupplc.com.

 

Review of Business

Whilst the direct impact of the Covid 19 pandemic has come to an end and in general terms the sector has recovered, there continue to be longer term and regional effects which have impacted the business. In particular customer booking patterns are much less predictable with a greater degree of cancellation than historic norms.

 

Inflation and cost of living has had an impact during the year, both on the customer base which has been forced to be more selective in their discretionary spend, and in the internal cost base where food inflation in particular has been extreme, together with increased payroll putting pressure on margins.

 

The EHC employee brand goes from strength to strength with expansion of Eden Extras, the fully featured benefits program, to encompass a peer to peer recognition platform, the Happy Hub. Support has also grown with improved family friendly policies, including extended maternity, paternity and adoption benefits, together with various mental, physical and financial wellbeing workshops and activities. In the industry Springboard Awards, EHC was again nominated as Best Employer, and additionally nominated as Best for Employee Engagement and Best for Employee Health and Wellbeing, winning the latter two awards immediately post year end.

 

Across the wider ESG agenda EHC has committed to be NetZero for 2040 and the hotel was awarded a bronze Green Tourism award in the year on their first submission.

 

The company saw turnover increase by £14,000 to £4,295,000 in 2024 and the operating loss increase by £435,000 to £540,000. This is the direct result of the commencement of a major bedroom refurbishment which commenced in Jan 24. As at 31st March 2024 the company had net assets of £4,954,000, a decrease of £417,000 from the prior year end. No dividends were taken or proposed in the year.

 

The directors recognise that trade continues to be affected by both market changes from Covid recovery and the current economic uncertainty. Additionally, disruption from commencement of the bedroom refurbishment was significant in the final performance. The directors remain confident in the underlying trade and returning to future profitability.

MALLORY COURT HOTEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Principal risks and uncertainties

The group uses various financial instruments. These include loans from related undertakings; cash and overdrafts; preference shares; loans from banks and various working capital items such as trade debtors and trade creditors which arise from its operations. The main purpose of these financial instruments is to raise finance for the group's operations. The existence of these financial instruments exposes the group to a number of financial risks, the principal ones of which are market risk, interest rate risk, liquidity risk and credit risk. The principal commercial risks facing the group centre on economic conditions, competition and property valuations.

 

Market risk

Property values are cyclical, so the business will always be subject to variations in valuations. The group takes a long term view, with less focus on short term fluctuations, and more emphasis on underlying revenue generation and capital enhancement programmes when assessing valuations of properties.

 

Interest rate risk and financing risk

The group finances its operations primarily through investments made by related parties, including preference shares held by the principal shareholder and preferred ordinary shares held by Rigby Group (RG) plc ("Rigby Group").

 

In addition, there are short term banking facilities including a bank loan (repaid post year end) secured over the freehold property of Bovey Castle owned by the group. The group's exposure to interest rate fluctuations on its borrowings is managed actively to ensure that competitive rates are obtained, with interest rate swaps purchased where appropriate and matched to the group's long term funding requirements. As part of its bank facilities, the group is subject to a number of financial covenant tests which it monitors on a regular basis.

 

Liquidity risk

The group seeks to manage financial risks by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The group's operations are financed primarily by shareholders and bank borrowings.

 

Credit risk

The group's principal credit risk relates to the recovery of trade debtors, although it is not considered significant due to the nature of the group's business. Amounts owed by credit card companies represent a more significant proportion of the group's trade debtors. However, the directors consider credit risk to be limited due to the terms that the group has with the credit card companies. In order to manage credit risk related to other trade debtors, credit controllers and the directors review the aged debtors and collection history on a regular basis, and a high level of deposits are taken.

 

Economic conditions

The division operates in an industry which is impacted by consumer discretionary spending levels. The division's coverage, not being concentrated in one location or region together with the fact that the hotels operate in a variety of markets, including corporate, leisure, conference and functions, provides adequate sheltering from the impact of any drop in consumer spending levels.

 

Shock Events/Covid 19 Pandemic

The unpredictable nature of external shock events, such as pandemics, presents an infrequent but high risk to any business. In so far as possible the effects of these are mitigated by means of appropriate insurance cover, but the company recognises that the greatest protection comes from an ability to respond rapidly to events. The Directors and Shareholders remain close to the business and can quickly approve any decisive actions needed. The directors also ensure operations retain flexibility and scaleability and can work with EHC sister companies to manage risk. The company also benefits from the additional security of belonging to a large and diversified group.

 

Competition

The division operates in competitive markets. Product and service offerings by competitors could adversely impact the division. The division's focus on quality and standards, the quality of operations, strong focus on quality on cost control, continual investment in its hotels and products, combined with the unique, award winning hotels in sought after locations reduces the possible effect of any single competitor. Significant efforts are made to develop the division's brand and ensure new business is won continually, and key customer relationships are monitored on a regular basis. The division focuses on areas where it has a competitive advantage including quality, and the development of its staff to provide high levels of service.

MALLORY COURT HOTEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

On behalf of the board

Mr M E S Chambers
Director
17 September 2024
MALLORY COURT HOTEL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company is the ownership, operation and management of the Mallory Court Country House Hotel & Spa, a 43 bed luxury Lutyen style manor house hotel set in 10 acres of grounds near Royal Leamington Spa, Warwickshire. Mallory Court is one of the Midland's finest luxury hotel, conference and wedding venues, which has been a member of Relais & Chateaux since 1983 and features an award winning restaurant.

Results and dividends

The results for the year are set out on page 9.

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

Directors

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

Mr M E S Chambers
Mr D G Buck
Auditor

The auditors, Ormerod Rutter Limited, will be proposed for re-appointment in accordance with Section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

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

Disclosure in the strategic report

A separate Strategic Report has been prepared in compliance with Companies Act 2006 and contains information about likely future developments, and an assessment of the principal risks and uncertainties to the company.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

MALLORY COURT HOTEL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr M E S Chambers
Director
17 September 2024
MALLORY COURT HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MALLORY COURT HOTEL LIMITED
- 6 -
Opinion

We have audited the financial statements of Mallory Court Hotel Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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.

Opinions on other matters prescribed by the Companies Act 2006

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

MALLORY COURT HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MALLORY COURT HOTEL LIMITED (CONTINUED)
- 7 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

To address the risk of fraud through management bias and override of controls, we:

 

MALLORY COURT HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MALLORY COURT HOTEL LIMITED (CONTINUED)
- 8 -

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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

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.

Colm McGrory FCA
Senior Statutory Auditor
For and on behalf of Ormerod Rutter Limited
20 September 2024
Chartered Accountants
Statutory Auditor
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
MALLORY COURT HOTEL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
4,294,649
4,281,184
Cost of sales
(3,075,265)
(2,777,085)
Gross profit
1,219,384
1,504,099
Administrative expenses
(1,759,766)
(1,609,467)
Loss before taxation
(540,382)
(105,368)
Tax on loss
8
123,482
43,906
Loss for the financial year
(416,900)
(61,462)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

MALLORY COURT HOTEL LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
9,343,514
8,811,023
Current assets
Stocks
10
45,432
44,304
Debtors
11
656,860
375,050
Cash at bank and in hand
1,090
259,320
703,382
678,674
Creditors: amounts falling due within one year
12
(5,093,117)
(4,119,018)
Net current liabilities
(4,389,735)
(3,440,344)
Net assets
4,953,779
5,370,679
Capital and reserves
Called up share capital
16
10,800,000
10,800,000
Share premium account
17
1,050,787
1,050,787
Profit and loss reserves
(6,897,008)
(6,480,108)
Total equity
4,953,779
5,370,679

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 17 September 2024 and are signed on its behalf by:
Mr M E S Chambers
Director
Company registration number 01274376 (England and Wales)
MALLORY COURT HOTEL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 April 2022
10,800,000
1,050,787
(6,418,646)
5,432,141
Year ended 31 March 2023:
Loss and total comprehensive income
-
-
(61,462)
(61,462)
Balance at 31 March 2023
10,800,000
1,050,787
(6,480,108)
5,370,679
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
(416,900)
(416,900)
Balance at 31 March 2024
10,800,000
1,050,787
(6,897,008)
4,953,779
MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
1
Accounting policies
Company information

Mallory Court Hotel Limited is a private company limited by shares incorporated in England and Wales. The registered office is Harbury Lane, Bishops Tachbrook, Leamington Spa, Warwickshire, United Kingdom, CV33 9QB.

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 functional currency of Mallory Court Hotel Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the company operates.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council.

Mallory Court Hotel Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect of its financial statements. Exemptions have been taken in relation to related party transactions with wholly owned group companies, share-based payments, financial instruments, presentation of a cash flow statement and remuneration of key management personnel.

 

The financial statements of the company are consolidated in the financial statements of Eden Hotel Collection Limited. These consolidated financial statements are available from its registered office, Harbury Lane, Bishops Tachbrook, Leamington Spa, Warwickshire, United Kingdom, CV33 9QB.

1.2
Going concern

The accounts have been prepared on a going concern basis which the directors consider appropriate. The company relies on support from the trueultimate parent company, Rigby Group (RG) plc which is considered to be available for the foreseeable future and for at least the next twelve months from the date of approval of the accounts. Should the going concern basis not be applicable adjustments would have to be made to reduce assets to their recoverable amounts and reclassify long term liabilities as short term liabilities.

1.3
Turnover

Revenue is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer.

 

Revenue from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable.

1.4
Tangible fixed assets

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

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -

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 buildings:

- Land             - not depreciated

- Structural buildings         - over up to 200 years

- Ancillary buildings         - over up to 50 years

 

Fixtures and equipment:

- Antiques              - over up to 100 years

- Fixtures             - over up to 10 years

- Furniture             - over up to 5 years

- Plant             - over up to 10 years

- Small equipment         - over up to 5 years

- Computer equipment         - over up to 4 years

 

Motor vehicles         - over up to 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 credited or charged to profit or loss.

Assets under construction represents on-going construction costs of freehold buildings and fixtures and fittings not yet completed. Such costs will be transferred to either freehold buildings or fixtures and fittings upon completion. Assets under construction are not depreciated as they are not available for use until they have been completed.

 

On transition to FRS 102, in accordance with Section 35 of FRS 102, the company elected to measure items of property, plant and equipment on the date of transition to this FRS at its fair value and use that fair value as its deemed cost at that date.

1.5
Impairment of fixed assets

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

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

 

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

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

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.6
Stocks

Stocks held for resale are stated at the lower of cost and net realisable value. Provision is made for obsolete, slow-moving or defective items where appropriate.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument.

 

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.

 

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Fair value measurement of financial instruments

Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
Basic financial assets

Debt instruments which meet the following conditions are subsequently measured at amortised cost using the effective interest method:

 

  1. The contractual return to the holder is:

    1. a fixed amount;

    2. a positive fixed rate or a positive variable rate; or

    3. a combination of a positive or a negative fixed rate and a positive variable rate.

       

  2. The contract may provide for repayments of the principal or the return to the holder (but not both) to be linked to a single relevant observable index of general price inflation of the currency in which the debt instrument is denominated, provided such links are not leveraged.

     

  3. The contract may provide for a determinable variation of the return to the holder during the life of the instrument, provided that:

    1. the new rate satisfies condition (a) and the variation is not contingent on future events other than:

      1. a change of a contractual variable rate;

      2. to protect the holder against credit deterioration of the issuer;

      3. changes in levies applied by a central bank or arising from changes in relevant taxation or law; or

    2. the new rate is a market rate of interest and satisfies condition (a).

       

  4. There is no contractual provision that could, by its terms, result in the holder losing the principal amount or any interest attributable to the current period or prior periods.

     

  5. Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back to the issuer before maturity are not contingent on future events, other than to protect the holder against the credit deterioration of the issuer or a change in control of the issuer, or to protect the holder or issuer against changes in levies applied by a central bank or arising from changes in relevant taxation or law.

     

  6. Contractual provisions may permit the extension of the term of the debt instrument, provided that the return to the holder and any other contractual provisions applicable during the extended term satisfy the conditions of paragraphs (a) to (c).

Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet the above conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

 

With the exception of some hedging instruments, other debt instruments not meeting these conditions are measured at fair value through profit or loss.

 

Commitments to make and receive loans which meet the conditions mentioned above are measured at cost (which may be nil) less impairment.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -

Financial assets are derecognised when and only when:

 

  1. a.the contractual rights to the cash flows from the financial asset expire or are settled;

     

  2. b.the group transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or

     

  3. c.the group, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the fair value of cash or other resources received or receivable, net of direct issue costs.

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
1.10
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

 

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax liabilities are recognised for timing differences arising from investments in subsidiaries and associates, except where the company is able to control the reversal of the timing difference and it is probable that it will not reverse in the foreseeable future.

 

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of the timing difference. Deferred tax relating to property, plant and equipment measured using the revaluation model and investment property is measured using the tax rates and allowances that apply to sale of the asset.

 

Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income.

 

Current tax assets and liabilities are offset only when there is a legally enforceable right to set off the amounts and the company intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Deferred tax assets and liabilities are offset only if: a) the company has a legally enforceable right to set off current tax assets against current tax liabilities; and b) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

1.12
Employee benefits

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

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits

For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs and other retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

1.14
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Depreciation of tangible fixed assets

The carrying value of tangible fixed assets is dependent on both the annual depreciation charge and any provisions for impairment.

 

The annual depreciation charge for tangible fixed assets is sensitive to changes in useful economic lives, which are reassessed annually, is based on physical condition, economic utilisation, schedule of repairs and renovation and, where relevant, technical advancements.

 

Management perform an annual assessment for impairment on tangible fixed assets, which includes consideration of the current estimation of the market value of the hotel as a whole, the economic utilisation of individually material assets and the feasibility of completing ongoing capital projects whose costs are held within assets under construction at the year end.

 

The accounting policies for depreciation of tangible fixed assets can be found in note 1 and the carrying value of tangible fixed assets can be found in note 9.

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Sale of goods
1,574,552
1,577,756
Rendering of service
2,720,097
2,703,428
4,294,649
4,281,184
4
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£
£
Exchange losses
1,145
-
0
Depreciation of owned tangible fixed assets
185,633
198,323
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
4,175
3,950
6
Employees

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

2024
2023
Number
Number
Hotel staff
101
95
Directors
2
2
Total
103
97

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,942,451
1,850,746
Social security costs
146,402
148,262
Pension costs
25,750
33,338
2,114,603
2,032,346
MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
7
Directors' remuneration

Mr M E S Chambers and Mr D G Buck did not receive any remuneration for their qualifying services to the company during the year. The total emoluments for Mr M E S Chambers and Mr D G Buck are included in the directors' emoluments of Eden Hotel Collection Limited.

 

8
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
(67,996)
-
0
Deferred tax
Origination and reversal of timing differences
(145,367)
(28,393)
Changes in tax rates
-
0
(8,966)
Adjustment in respect of prior periods
89,881
(6,547)
Total deferred tax
(55,486)
(43,906)
Total tax credit
(123,482)
(43,906)

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

2024
2023
£
£
Loss before taxation
(540,382)
(105,368)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(135,096)
(20,020)
Tax effect of expenses that are not deductible in determining taxable profit
23,094
19,124
Tax effect of income not taxable in determining taxable profit
-
0
(4,830)
Under/(over) provided in prior years
21,886
(6,547)
Transfer pricing adjustments
(27,722)
(22,667)
Tax rate changes
-
0
(8,966)
Effects of tax reliefs
(5,648)
-
0
Roundings
4
-
0
Taxation credit for the year
(123,482)
(43,906)

The Company is member of a group that is in scope of the Global Minimum Tax rules, otherwise known as Pillar Two, implemented by the OECD. The Company has reviewed the rules and does not expect there to be a material impact to tax expense and liability for the current and future periods as a result of these rules.

The standard rate of corporation tax in the UK is currently 25%. An increase to the main rate of corporation tax in the UK to 25% from April 2023 was substantively enacted on 24 May 2021. Deferred tax at the balance sheet date has been measured using this enacted tax rate and reflected in these financial statements

 

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
9
Tangible fixed assets
Freehold land and buildings
Assets under construction
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
11,374,157
105,981
2,395,190
61,567
13,936,895
Additions
-
0
718,124
-
0
-
0
718,124
Transfers
-
0
(96,481)
96,481
-
0
-
0
At 31 March 2024
11,374,157
727,624
2,491,671
61,567
14,655,019
Depreciation and impairment
At 1 April 2023
2,855,740
-
0
2,208,565
61,567
5,125,872
Depreciation charged in the year
102,775
-
0
82,858
-
0
185,633
At 31 March 2024
2,958,515
-
0
2,291,423
61,567
5,311,505
Carrying amount
At 31 March 2024
8,415,642
727,624
200,248
-
0
9,343,514
At 31 March 2023
8,518,417
105,981
186,625
-
0
8,811,023

Included in cost of freehold land and buildings is freehold land of £1,930,500 (2023 - £1,930,500) which is not depreciated.

10
Stocks
2024
2023
£
£
Finished goods and goods for resale
45,432
44,304

The difference between purchase price of stocks and their replacement cost is not material.

11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
67,918
46,138
Amounts owed by group undertakings
318
505
Other debtors
302,450
89,928
Prepayments and accrued income
51,567
59,358
422,253
195,929
Deferred tax asset (note 14)
234,607
124,870
656,860
320,799
MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Debtors
(Continued)
- 22 -
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 14)
-
0
54,251
Total debtors
656,860
375,050
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
13
16,698
-
0
Payments received on account
120,257
124,382
Trade creditors
308,839
212,049
Amounts owed to group undertakings
4,435,462
3,651,194
Other creditors
29,655
28,259
Accruals and deferred income
182,206
103,134
5,093,117
4,119,018
13
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
16,698
-
0
Payable within one year
16,698
-
0

The company is party to an unlimited intercompany guarantee securing all amounts due to the National Westminster Bank Plc from Eden Hotel Collection Limited and all its subsidiaries.

 

At the year end current amounts owed to National Westminster Bank Plc by the group were £6,652,000 (2023: £7,762,913) from Bovey Castle Property Limited, £168,236 (2023: £55,609) from Brockencote Hall Hotel Limited and £702,828 (2023: £170,316) from The Greenway Hotel & Spa Limited and £46,798 (2023: £158,450) from Arden Hotel Investments Limited.

 

MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
14
Deferred taxation

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

Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(15,377)
83,701
Tax losses
247,529
93,537
Short term timing differences
2,455
1,883
234,607
179,121
The deferred tax assets and liabilities will reverse over the following periods:
2024
2023
£
£
Deferred tax (assets)
Within one year
(2,455)
(124,870)
After more than one year
(247,529)
(54,251)
(249,984)
(179,121)
Deferred tax liabilities
Within one year
-
-
After more than one year
15,377
-
15,377
-
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
25,750
33,338

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
10,800,000
10,800,000
10,800,000
10,800,000
MALLORY COURT HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
17
Share premium account

The share premium account represents the amount by which shares have been issued at a price greater than nominal value less issue costs.

18
Capital commitments

Amounts contracted for but not provided in the financial statements:

2024
2023
£
£
Acquisition of tangible fixed assets
340,000
-
19
Ultimate controlling party

Rigby Group (RG) plc is regarded by the directors as being the company's ultimate parent company.

 

The Rigby Family control the company as a result of being members of the group of trustees and the only beneficiaries of trusts which own 100% of the issued ordinary share capital and control 100% of the voting rights of Rigby Group (RG) Plc, the ultimate parent company.

 

The registered office address of Rigby Group (RG) plc continues to be Bridgeway House, Bridgeway, Stratford-upon-Avon, Warwickshire, CV37 6YX.

 

Rigby Group (RG) plc continues to be the largest group to consolidate and prepare consolidated accounts.

 

Eden Hotel Collection Limited, the immediate parent company is the smallest group to consolidate these financial statements.

 

The consolidated statements for both Rigby Group (RG) plc and Eden Hotel Collection Limited are available at the above address.

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