The directors present the strategic report for the year ended 31 March 2024.
The group made a profit for the year of £293,131 compared to a profit in 2023 of £520,445.
Turnover for the year is £7,256,450 which represents an increase of 11.4% on prior year. The London Golf Club remains committed to providing high quality facilities and services, therefore the club has increased prices in line with inflation to combat rising costs. A significant increase in rounds played combined with price increases account for the uplift in revenue with green fees up 18%, F&B up 13% and membership up 12%.
The club continues to operate at membership capacity with a waiting list for new joiners. Rounds played in the year were up 11% on the previous period with member rounds up 14%. Visitor and golf day rounds were up 7% year on year.
The London Golf Club has faced significant cost increases in the year due to the increased events business, inflation and increased salary costs.
The club remains committed to its repairs and renewals and program. Following a year of reduced investment due to global supply issues, the club has increased investment in new equipment by 186% to bring the fleet in line with long term plans. Global supply issues are now largely resolved, and the club is not expecting further supply issues.
During the year The London Golf Club has fully renovated and reopened a staff accommodation cottage following a period of closure. The club is now able to look outside it’s catchment area to attract staff with the required expertise to the London Golf Club.
The Group’s risk management framework includes a process for identifying, assessing and responding to risk and supporting the company’s strategy and business objectives.
Risk management operates at all levels throughout the business. However, the Board takes overall responsibility, determining the nature and extent of principal risks it is willing to take to achieve the company’s strategic objectives, and maintaining the company’s risk governance structure and appropriate internal control framework.
The principal risks faced by the business are as follows:
Economic factors such as supply chain issues and rising inflation are a concern for The London Golf Club. The year to 31 March 2024 saw significant cost increases in food, beverage, staffing and utilities. The London Golf Club continues to monitor and plan for such issues to ensure the club is well placed to cope with changes to economic conditions.
Weather remains an important risk factor for The London Golf Club with excessive wet or dry periods having an equally detrimental effect. The club currently has adequate water reserves to cope with dry periods but continues to work with local water suppliers to ensure a consistent supply should it be required. The club continues to invest in drainage to ensure the effects of wet weather is mitigated as much as possible.
The directors plan to continue to offer an increasingly high standard of golf and ancillary services to its customers and to make The London Golf Club one of the most prestigious in the region.
The club continues to investigate potential investment projects to increase services and facilities for members and external customers in order to introduce new revenue streams.
The London Golf Club is submitting an updated planning request for a substantial hotel, lodge accommodation and high-quality services and facilities in September 2024. This is an improved version of an already granted planning permission that would see The London Golf Club build into an exclusive resort with the advantage of easy access to and from London. The ability of the Club to host larger events would be substantially enhanced by being able to offer accommodation on site and will make application for major events in the future more viable. There would be considerable ongoing benefits for the area with increased demand for employment, products and services from local suppliers when the project is completed.
The directors have a duty to all stakeholders of the London Golf Club. The directors achieve this by extensively researching both the short term and long-term consequences of decisions before they are made. All decisions taken have regard for the interests of the clubs’ customers, people, relationships with its suppliers and the impact of its operations on the communities in which it operates, and to ensure that it maintains a reputation for high standards of business conduct.
Increasingly stakeholders are becoming more interested in the club’s performance and operations. The directors endeavor to gain an understanding of the perception and attitude of each stakeholder group and assess the correct course of action to ensure the clubs long term success.
Customers
The club aims to provide outstanding facilities and service to meet its customer expectation. The directors assess customer need using surveys, focus groups and competitor review and monitors performance against the customer need using visitor review surveys, 59 club service excellence reviews, mystery shoppers and informal customer feedback.
People
The club’s people are key to the business and as such the directors want the people to feel engaged and empowered to deliver a great service for its customers. The club communicates plans regularly with employees in staff newsletters, provides training, promotes employee feedback via staff surveys and conducts annual career development reviews for each employee. The club has an extensive employee benefits package.
Suppliers
The clubs’ suppliers are critical to its ability to be able to provide excellent service to its customers. The club ensures that suppliers are treated fairly and payment to suppliers are made in an agreed timescale.
Community and Environment
The club promotes the health and wellbeing of the local community by providing excellent facilities and opportunity for all to enjoy the game of golf. Services at the club include The LGC academy, the London Cubs junior tuition program and female only coaching groups. The London Golf club as part of its charity effort supports a charity each year (2024 Community Cupboard) and helps them raise significant funds for their cause. The club continues to support other charities by hosting large charity golf days and providing auction prizes.
The club continues to work closely with the European tour, Kent County Council and Visit Kent to bring international tournaments and exposure to Kent. The London Golf Club has been selected as a finalist host venue for the 2031/2035 Ryder Cups.
The social and environmental impact of the club has never been more important. The club’s investment in more environmentally friendly greenkeeping techniques and water management continues. The club continues to work closely with its partners to improve the sustainability of its business practices and reduce its carbon footprint.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group is funded by equity, loans from related parties, bank loans and cash generated from normal business activities. The board monitors the group’s exposure to commercial, environmental and financial risks on a regular basis and does not consider that these factors have a material impact when assessing the assets, liabilities and overall financial position of the group.
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of The London Golf Club Developments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 group and parent 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 forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in Note 1.4 of the financial statements regarding the net current liabilities position of the group. These conditions indicate the existence of a material uncertainty, which may cast doubt about the group’s ability to continue as a going concern.
We consider that this should be drawn to your attention, but our opinion is not qualified in this respect.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the 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 or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent company or to cease operations, or have no realistic alternative but to do so.
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 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.
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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
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 £293,863 (2023 - £421,339 profit).
The London Golf Club Developments Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is South Ash Manor Estate, Stansted Lane, Ash, Sevenoaks, Kent, United Kingdom, TN15 7EN.
The group consists of The London Golf Club Developments Limited and all of its subsidiaries.
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 investment properties and certain financial instruments at fair value. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company The London Golf Club Developments Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2024. 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Annual individual membership fees are recognised over the period of membership on a straight line basis. Corporate memberships are recognised on a usage basis throughout the year with unused levy (limited to 25% of annual fee) carried over into the following year. Green fees and restaurant transactions are recognised in full when the service is provided.
Non-refundable joining fees which are payable by members on admission to the Club are recognised in full in the statement of comprehensive income in the year that membership is granted. These amounts are included within turnover.
The group offers life membership to certain members of The London Golf Club PLC in return for those members agreeing to transfer their shares and debentures to the company at nil consideration. The directors consider the value of the life membership to be the same as the forfeited repurchase price and this is being credited to turnover over a period of 10 years, being the period the directors’ estimate the members will continue to use the group’s facilities.
Freehold land is not depreciated. Building, course construction costs and works of art are not depreciated because the directors consider that the estimated residual value is not materially different from the net book value shown in the financial statements, due to the regular maintenance and upkeep together with the current condition of the assets. As a result any depreciation charge required is not considered material. Impairment tests on the carrying value of fixed assets are undertaken if there is any indication that the asset may be impaired.
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.
Works of art are not depreciated because the directors consider that the estimated residual value is not materially different from the net book value shown in the financial statements due to the current market conditions of the assets. As a result any depreciation charge required is not considered material.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities 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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, 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.
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.
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.
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, including 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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred 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.
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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The group provides contributions to the personal pension plans of certain senior employees. The amount charged to the statement of comprehensive income represents the contributions payable in the year.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Brought forward and current year trading losses are not recognised as an asset as there is significant uncertainty around the existence and level of future profits to offset these losses.
The golf club, including freehold land, buildings and course construction costs are considered for indicators of impairment at each reporting date. Factors taken into consideration in determining whether there are indicators of impairment include the current financial performance and forecast financial performance of the club, as well as valuation premiums applied by open market investors for trophy assets.
Determine whether leases entered into by the group are operating or finance leases. These decisions depend on an assessment on whether the risks and rewards of ownership have been transferred to the group on a lease by lease basis.
Turnover and results of the group are attributable to its principal business activity of operating a 36 hole golf club. All turnover is earned in the UK.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
No directors' emoluments were paid directly to M Galvin and K Nigra. Instead general management fees are paid to Morningstar Golf & Hospitality LLC, a related party (note 30).
No corporation tax charge arises on the profit before tax in either year.
The actual 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:
The following deferred tax assets have not been recognised as there is insufficient evidence that the asset will be recovered: depreciation in excess of capital allowances claimed of £97,344 (2023: £118,712), losses of £5,880,366 (2023: £5,819,434) and other short term timing differences of £2,660 (2023: £2,603).
The group has losses of approximately £23.5 million (2023: £23.2 million) available to be carried forward and set off against profits from the same trade, subject to agreement with HM Revenue and Customs.
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
Reversals of previous impairment losses have been recognised in profit or loss as follows:
Investment property in the parent company comprises the golf club, including freehold land, buildings and course construction costs. The fair value of the investment property has been arrived at on the basis of a valuation carried out as at 26 June 2024 by Savills (UK) Limited, Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
More information on impairment movements in the year is given in note 12.
Included within the building course construction costs and improvements of the group is cumulative interest capitalised of £993,321 (2023 - £993,321).
Land and buildings with a carrying amount of £17,500,000 were revalued as at 26 June 2024 by Savills (UK) Limited, Chartered Surveyors, not connected with the company, in accordance with the Royal Institute of Chartered Surveyors Statement of Asset Valuation Practice and Guidance Notes (January 2022) and on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The valuation is reflected in the impaired cost of freehold land and buildings of the group as well as the carrying value of the investment property in the financial statements of the parent company. The directors believe that the fair value of the land and buildings did not materially change since the prior year and remain appropriate.
Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts for the group would have been approximately £18,042,008 (2023 - £18,099,161), being cost £33,088,041 (2023 - £33,088,041) and depreciation £15,046,033 (2023 - £14,988,880).
The group and company owned shares in Real Golf de Bendinat SA at a cost of £62,485, which were disposed of during the year.
The company has two subsidiary undertakings, The London Golf Club PLC, South Ash Manor, Stansted Lane, Ash, Sevenoaks, Kent, TN15 7EN and London Golf (European Tour) Limited. The principal activity of the London Golf Club is the operation of a golf club. The company owns all of The London Golf Club PLC’s ordinary share capital carrying voting rights, and 82% (2023: 82%) of its issued non-voting share capital.
The London Golf Club PLC had a net deficit in shareholders’ funds of £1,583,379 (2023: £2,369,939) at 31 March 2024. In view of the uncertainty of recovering the cost of the investment the directors have maintained a full provision against this investment.
London Golf (European Tour) Limited is a non- trading entity.
Other debtors includes an amount of £26,333 (2023: £26,333) in respect of amounts owed by shareholders of The London Golf Club PLC, No interest was charged on the amount owed in either year.
The bank loan and overdraft are secured by a mortgage over the group’s freehold property and by a mortgage debenture over all of the group’s assets. In addition group borrowings from the bank, which are subject to a right of set off between the company and The London Golf Club PLC, are secured by an unlimited cross guarantee given by The London Golf Club Developments Limited. The total borrowings secured under this arrangement as at 31 March 2024 were £3,400,000 (2023: £3,500,000).
Obligations under finance lease contracts are secured on related assets.
The debentures issued by the subsidiary undertaking, The London Golf Club PLC, are unsecured and interest free with a nominal value of £1 each and confer rights of nomination for membership of the golf club with no fixed date of redemption. The earliest date of redemption, so long as the holder remains a member of the Club, was on expiration of seven years from the date of issue.
Accruals and deferred income for the company comprises deferred lease premium income arising from the lease premium paid by the subsidiary undertaking, The London Golf Club PLC.
The bank loans are due for repayment between one and five years.
The amount of £8,910,332 owed to the immediate parent undertaking, Balearic Holdings N.V., is unsecured and has a repayment date of 1 January 2030. Interest of 4% is payable on the balance owed from 1st January 2020.
Obligations under finance lease contracts are secured on related assets
Due to the COVID-19 pandemic, the group secured a ‘Coronavirus Business Interruption Loan’ ("CBIL") of £500,000 during 2021. The loan is repayable over six years from the draw-down date in quarterly instalments of £25,000, with interest charged at 4.50% above base rate, with the interest charge in year one covered by the UK Government. The loan is secured by way of the bank’s existing security held over the group's assets.
The remaining bank loan is repayable in full on 31 July 2028 and interest is charged at 3.25% per annum over Sterling Overnight Index Average.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations under finance lease contracts are secured on related assets. The finance lease contracts are held either in the name of The London Golf Club Developments Limited on behalf of the subsidiary company, or in the subsidiary company’s own name.
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.
The Group and Company’s reserves are as follows:
Called up share capital reserve represents the nominal value of the shares issued.
The share premium account includes the premium on issue of equity shares, net of any issue costs.
Other reserves comprise premiums arising on the issue of debentures.
Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.
In accordance with the terms of an ongoing commercial arrangement, certain liabilities arise on a change in the ownership or control of the Golf Club. Both the amount and timing of the potential liability on the company are uncertain, due to being based on an adjusted sales value of the Golf Club’s trade and assets. Therefore, no liability has been recorded in the financial statements. Given the nature of these uncertainties, the directors believe it to be impracticable to provide a reliable estimate of its financial effect.
Amounts contracted for but not provided in the financial statements:
On 7 August 2024 the group renewed its overdraft facility for a further 12 months, to be reviewed again on 31 July 2025.
The minority interest relates to the non-voting shares of The London Golf Club PLC. While the non voting shares of The London Golf Club PLC carry the right to participate equally with each other and with the ordinary shares held by The London Golf Club Development Limited in any dividends declared and paid by the company. These non-voting shares carry the right, on a return of capital on a winding-up, to repayment of the amount paid up thereon, including any premium, in priority to any payment in respect of the shares held by the The London Golf Club Development Limited but carry no right to participate in any surplus of The London Golf Club PLC.
On the expiration of seven years from the date of issue of a non-voting share of The London Golf Club PLC, the holder of the shares has the right, exercisable at any time, to relinquish their membership of the London Golf Club PLC, and to require the company to purchase the share at its issue price, including any premium. The company does not have any right to compel shareholders to sell their shares. Shareholder interest is represented by group minority interest of £2.34m (2023: £2.34m) which represents the maximum liability of the company.