Company registration number 07533321 (England and Wales)
CARBIS BAY HOTEL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
CARBIS BAY HOTEL LIMITED
COMPANY INFORMATION
Directors
SP Baker
TCG Baker
EJM Baker
(Appointed 17 May 2023)
Company number
07533321
Registered office
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
Auditor
RRL LLP
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
Business address
Carbis Bay Hotel
Carbis Bay
ST IVES
Cornwall
TR26 2NP
CARBIS BAY HOTEL LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
CARBIS BAY HOTEL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 1 -
The directors present their strategic report for the year ended 29 February 2024.
Principal Activity
Dating back to the 19th Century and overlooking its privately owned beach, Carbis Bay Hotel, Spa and Estate offers a luxurious holiday destination.
The Hotel and Estate comprise of 35 individually-furnished hotel bedrooms, 4 serviced cottages, 7 apartments, 8 beach suites, 2 beach houses and 8 beachside lodges.
Also part of the Estate is the Gannet Inn and neighbouring Gannet House situated close to the main Estate comprising of a further 28 bedrooms.
The Estate offers guests a choice of three restaurants: The Orangery, The Beach Club and Walters on the Beach and a Deli offering local produce and gifts.
The on-site Spa consists of 5 treatment rooms, a hydrotherapy pool, sauna, a fitness suite and yoga studio.
As a coastal resort in the heart of Cornwall, the Hotel prides itself on sourcing fresh produce from local suppliers and promoting Cornish independent businesses.
Review of the business
The hospitality industry continues to respond to the impact of the economy and climate.
Although room rates remained higher than pre-pandemic, booking patterns have continued to reflect a shorter lead time since COVID and based on the uncertainty of the English weather, accommodation was affected by reduced demand.
Labour costs for the year were impacted by both the increase in national minimum and living wage in April 2023 and the Brexit restrictions on overseas workers which forced the business to utilise agency staff during peak months.
An insurance claim totalling £600,000 was received in the year (2023: £Nil) following long drawn out negotiations with respect to the 2018 storms causing significant damage to the beach club restaurant which resulted in long closures while it was rebuilt.
The results for the year and the financial position at the year end as detailed later within this report are considered satisfactory by the directors.
CARBIS BAY HOTEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 2 -
Principal risks and uncertainties
Carbis Bay Estate is exposed to the same risks as all businesses in the hospitality sector.
Competition
Economic factors impacting on guests disposable income
Labour resource post Brexit
Rising costs of food, wages and utilities
Weather
The hotel has developed a strong reputation and with the exposure of the Estate during the G7 Summit the brand is now recognised both domestically and internationally.
From a brand perspective and, based on tariff and guest profile, the directors feel that the Estate has moved away from its historic competitor set and is keen to sustain its current position in the market place. Although the Senior Management Team are constantly reviewing market trends and availability both internally and with local competitors to ensure all revenues are maximised they would prefer to avoid significant rate erosion.
Directors and Senior Management monitor both financial and non-financial key performance indicators on a day by day basis and have the infrastructure in place to react quickly to any exceptional results.
Unfortunately, even the weather plays a role in the success of a coastal property for families, the hotel offers an extremely popular “kids club” over the holiday periods offering crafts, pizza making and film nights to entertain the children during a typical Cornish summer.
Key performance indicators
The company’s operating profit for the year was £1,280,252 (2023: £2,021,577).
The results for the year and the financial position at the year end are considered satisfactory by the directors.
Key Financial Performance and Other Indicators are as follows:
Other performance indicators
Accommodation revenue has been affected by lower visitor numbers.
Following the launch of the new Carbis Bay Spa in 2022, it continues to grow with revenues increased by 25% year on year.
The Estate continues to be a popular venue for Weddings and Events with an increase in related revenues year on year.
Key performance indicators also include customer satisfaction, occupancy rates, profitability and a number of other relevant factors.
CARBIS BAY HOTEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 3 -
SP Baker
Director
15 October 2024
CARBIS BAY HOTEL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 4 -
The directors present their annual report and financial statements for the year ended 29 February 2024.
Principal activities
The principal activity of the company continued to be a hotel encompassing self catering properties and beach facilities.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a 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:
MWG Baker
(Resigned 3 April 2023)
SP Baker
TCG Baker
EJM Baker
(Appointed 17 May 2023)
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Future developments
As discussed within the Strategic Report, the directors anticipate that the business environment will remain competitive. Identified risks will continue to be well managed and the directors have a clear strategy to continue to maintain the brand’s strong reputation. The company is in a good financial position and the directors are confident in the company’s ability to maintain and build on this position.
Auditor
RRL LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors 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 auditors are aware of that information.
CARBIS BAY HOTEL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 5 -
On behalf of the board
SP Baker
Director
15 October 2024
CARBIS BAY HOTEL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 6 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CARBIS BAY HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARBIS BAY HOTEL LIMITED
- 7 -
Opinion
We have audited the financial statements of Carbis Bay Hotel Limited (the 'company') for the year ended 29 February 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:
give a true and fair view of the state of the company's affairs as at 29 February 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
CARBIS BAY HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARBIS BAY HOTEL LIMITED
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
As part of our audit work, we obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the laws and regulations most significant to the company, as well as the laws and regulations that have a direct impact on the preparation of the financial statements are: Health & Safety regulations, employment legislation, General Data Protection Regulation, Food Safety & Hygiene regulations and compliance with the Companies Act 2006.
The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
• Discussion with management as to how compliance with these laws and regulations is monitored;
• Review of the disclosures in the financial statements and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
• Enquiries of management concerning actual and potential litigation and claims;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud;
• Reviewing correspondence with regulators;
• Performing audit work in connection with the risk of management override of controls, including testing
journal entries for reasonableness and evaluating the business rationale of significant transactions
outside the normal course of business.
We also communicate relevant identified laws and regulations and potential fraud risk to all engagement team members and remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
CARBIS BAY HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARBIS BAY HOTEL LIMITED
- 9 -
Our audit approach also considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud being in respect of cut off and completion risk around revenue recognition. Under ISA (UK) we are also required to undertake procedures to respond to the risk of management override of controls. Our procedures included the following:
Undertaking transactional testing on revenue
Performing reconciliation work from the booking system to the nominal ledger to prove income in total between the different operating systems
Performing cut off testing
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale for significant transactions outside the normal course of business
Reviewing estimates and judgements made in the accounts for any indication of bias and challenged assumptions used by management in making estimates.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Josh Stevens ACA
Senior Statutory Auditor
For and on behalf of RRL LLP
24 October 2024
Chartered Accountants
Statutory Auditor
Peat House
Newham Road
TRURO
Cornwall
TR1 2DP
CARBIS BAY HOTEL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
12,586,208
13,198,869
Cost of sales
(2,523,998)
(2,534,641)
Gross profit
10,062,210
10,664,228
Administrative expenses
(9,381,958)
(8,642,651)
Exceptional items
4
600,000
Operating profit
5
1,280,252
2,021,577
Interest receivable and similar income
7
83,582
17,473
Interest payable and similar expenses
8
(14,984)
(85,533)
Profit before taxation
1,348,850
1,953,517
Tax on profit
9
(343,609)
(861,629)
Profit for the financial year
1,005,241
1,091,888
CARBIS BAY HOTEL LIMITED
BALANCE SHEET
AS AT
29 FEBRUARY 2024
29 February 2024
- 11 -
29 February 2024
28 February 2023
Notes
£
£
£
£
Fixed assets
Intangible assets
11
1
1
Tangible assets
12
15,479,234
15,126,581
15,479,235
15,126,582
Current assets
Stocks
13
160,681
127,030
Debtors
14
4,470,063
3,957,669
Cash at bank and in hand
1,216,499
1,011,312
5,847,243
5,096,011
Creditors: amounts falling due within one year
15
(4,271,996)
(4,082,280)
Net current assets
1,575,247
1,013,731
Total assets less current liabilities
17,054,482
16,140,313
Creditors: amounts falling due after more than one year
16
(214,938)
(356,010)
Provisions for liabilities
Deferred tax liability
19
1,600,000
1,550,000
(1,600,000)
(1,550,000)
Net assets
15,239,544
14,234,303
Capital and reserves
Called up share capital
21
101
101
Profit and loss reserves
22
15,239,443
14,234,202
Total equity
15,239,544
14,234,303
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 15 October 2024 and are signed on its behalf by:
SP Baker
Director
Company registration number 07533321 (England and Wales)
CARBIS BAY HOTEL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 12 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 March 2022
101
1,206,552
12,585,762
13,792,415
Year ended 28 February 2023:
Profit and total comprehensive income
-
-
1,091,888
1,091,888
Dividends
10
-
-
(650,000)
(650,000)
Transfers
-
(1,206,552)
1,206,552
-
Balance at 28 February 2023
101
14,234,202
14,234,303
Year ended 29 February 2024:
Profit and total comprehensive income
-
-
1,005,241
1,005,241
Balance at 29 February 2024
101
15,239,443
15,239,544
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 13 -
1
Accounting policies
Company information
Carbis Bay Hotel Limited is a private company limited by shares incorporated in England and Wales. The registered office is Peat House, Newham Road, TRURO, Cornwall, TR1 2DP. The principal place of business is Carbis Bay Hotel, Carbis Bay, ST IVES, Cornwall, TR26 2NP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This 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:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Carbis Bay Holdings Limited. These consolidated financial statements are available from its registered office, Peat House, Newham Road, Truro, TR1 2DP.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover 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. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
The company has a number of revenue streams each of which has a specific revenue recognition policy. Turnover from services and goods provided by the hotel is recognised on a daily basis once the goods and services have been provided to the customer and the right to consideration has been earned. For accommodation, turnover is recognised daily from the day of arrival, for food and beverages this is when the goods have been provided and for events and room hire, turnover is recognised on the day of the event.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 14 -
Deposits received in advance of customer stays are treated as deferred income and recognised within creditors payable in less than one year.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Purchase of trade from Atlantic Bay Hotel Limited
Not amortised
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold property
2% staight line
Fixtures, fittings & equipment
20% - 50% straight line
Motor vehicles
20% straight line
No depreciation has been charged on freehold property on the basis that the residual values are in excess of the book amounts. Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 15 -
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 16 -
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial 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.
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.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company 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 company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Leases
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.
1.14
Amounts shown as an exceptional item include transactions that are presented separately due to their size or nature. See note 4.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 18 -
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 primary judgement is the decision by the directors to not depreciate the freehold property. The current value of freehold properties is considered annually by the directors. Depreciation is not provided for as the directors consider the market value, and therefore the residual value, of the property to exceed the book value of these properties recognised in the accounts.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Hotel
12,586,208
13,198,869
2024
2023
£
£
Turnover analysed by geographical market
UK
12,586,208
13,198,869
2024
2023
£
£
Other revenue
Interest income
83,582
17,473
4
Exceptional item
2024
2023
£
£
Income
Insurance claim regarding storm damage in 2018
600,000
-
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
18,750
21,000
Depreciation of owned tangible fixed assets
555,774
472,149
Profit on disposal of tangible fixed assets
-
(335,000)
(Profit)/loss on disposal of intangible assets
-
4,064
Operating lease charges
790,000
619,303
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 19 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Administration
3
3
Staff services are provided by Carbis Bay Hotel Hospitality Limited, another company within the Carbis Bay Group. The employees were transferred to Carbis Bay Hotel Limited on 29 February 2024 with a Transfer of Undertakings Protection of Employment rights .
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
42,829
Other interest income
40,753
17,473
Total income
83,582
17,473
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
-
63,818
Interest on finance leases and hire purchase contracts
14,984
21,715
14,984
85,533
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
272,368
285,244
Adjustments in respect of prior periods
(3,995)
1,385
Group tax relief
25,236
Total current tax
293,609
286,629
Deferred tax
Origination and reversal of timing differences
50,000
575,000
Total tax charge
343,609
861,629
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
9
Taxation
(Continued)
- 20 -
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:
2024
2023
£
£
Profit before taxation
1,348,850
1,953,517
Expected tax charge based on the standard rate of corporation tax in the UK of 24.49% (2023: 19.00%)
330,358
371,168
Tax effect of expenses that are not deductible in determining taxable profit
15,077
14,584
Adjustments in respect of prior years
(3,995)
1,385
Permanent capital allowances in excess of depreciation
(47,831)
(100,508)
Deferred tax
50,000
575,000
Taxation charge for the year
343,609
861,629
10
Dividends
2024
2023
£
£
Final paid
650,000
11
Intangible fixed assets
Purchase of trade from Atlantic Bay Hotel Limited
£
Cost
At 1 March 2023 and 29 February 2024
1
Amortisation and impairment
At 1 March 2023 and 29 February 2024
Carrying amount
At 29 February 2024
1
At 28 February 2023
1
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 21 -
12
Tangible fixed assets
Freehold property
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 March 2023
14,213,911
3,549,420
143,078
17,906,409
Additions
1,106,392
327,035
1,433,427
Disposals
(17,083)
(17,083)
Other changes
(525,000)
(525,000)
At 29 February 2024
14,795,303
3,876,455
125,995
18,797,753
Depreciation and impairment
At 1 March 2023
2,724,121
55,707
2,779,828
Depreciation charged in the year
530,575
25,199
555,774
Eliminated in respect of disposals
(17,083)
(17,083)
At 29 February 2024
3,254,696
63,823
3,318,519
Carrying amount
At 29 February 2024
14,795,303
621,759
62,172
15,479,234
At 28 February 2023
14,213,911
825,299
87,371
15,126,581
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Fixtures, fittings & equipment
220,697
441,674
Motor vehicles
47,105
65,174
267,802
506,848
Other changes relates to the release of a grant creditor.
13
Stocks
2024
2023
£
£
Raw materials and consumables
160,681
127,030
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 22 -
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
102,206
290,510
Corporation tax recoverable
383,305
94,154
Amounts owed by group undertakings
3,084,888
2,614,379
Other debtors
715,672
717,567
Prepayments and accrued income
183,992
241,059
4,470,063
3,957,669
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
18
127,524
287,092
Other borrowings
17
30,480
38,140
Trade creditors
516,852
439,243
Amounts owed to group undertakings
979,263
585,535
Corporation tax
135,425
77,436
Other taxation and social security
78,325
149,340
Deferred income
20
1,950,193
1,693,771
Other creditors
317,327
110,579
Accruals
136,607
701,144
4,271,996
4,082,280
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
18
83,377
196,152
Other borrowings
17
131,561
159,858
214,938
356,010
17
Loans and overdrafts
2024
2023
£
£
Other loans
162,041
197,998
Payable within one year
30,480
38,140
Payable after one year
131,561
159,858
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 23 -
18
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
127,524
310,712
In two to five years
83,377
172,532
210,901
483,244
Finance lease payments represent rentals payable by the company 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. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance leases are secured on the assets to which they relate.
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated Capital Allowances
1,620,184
1,550,044
Tax losses
(20,184)
(44)
1,600,000
1,550,000
2024
Movements in the year:
£
Liability at 1 March 2023
1,550,000
Charge to profit or loss
50,000
Liability at 29 February 2024
1,600,000
The expected net reversal of deferred tax assets and liabilities in 2025 is £40,000 being the expected movement in accelerated capital allowances.
20
Deferred income
2024
2023
£
£
Other deferred income
1,950,193
1,693,771
Deferred income consists of deposits received in advance.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 24 -
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'A' Ordinary shares of £1 each
67
67
67
67
'B' Ordinary shares of £1 each
13
13
13
13
'C' Ordinary shares of £1 each
20
20
20
20
'D' Ordinary shares of £1 each
1
1
1
1
101
101
101
101
A, B and C shares hold equal voting rights. The D shares have no voting rights but carry a right to a fixed income.
22
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
14,234,202
12,585,762
Profit for the year
1,005,241
1,091,888
Dividends declared and paid in the year
-
(650,000)
Transfer from revaluation reserve
1,206,552
At the end of the year
15,239,443
14,234,202
23
Financial commitments, guarantees and contingent liabilities
An omnibus guarantee, set off agreement and debenture is in place over assets within this company to secure the indebtedness of a fellow subsidiary, Atlantic Bay Hotel Limited. The contingent liability at 29 February 2024 is £11,886,225 (2023: £12,521,801).
24
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
200,000
327,699
Between two and five years
642,997
800,000
In over five years
42,997
842,997
1,170,696
25
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption from disclosing transactions with wholly owned group undertakings.
CARBIS BAY HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
25
Related party transactions
(Continued)
- 25 -
Other information
Entities with control, joint control or significant influence over the company:
On 5 August 2011 MWG Baker, director and owner of the freehold of the hotel site, granted a 999 year lease to SP Baker, as nominee for the company. SP Baker is therefore the legal tenant under the lease but the company has the beneficial interest in the tenancy. The freehold is now held by the estate of MWG Baker.
During the year properties owned by directors and close family members were rented to the hotel for staff accommodation. The rent paid by the hotel was £43,500 (2023: £29,000).
During the year, properties were purchased from the directors totalling £470,000 (2023: £nil), based on RICS red book valuations.
During the year properties owned by the directors were managed by the company. The directors paid £2,520 (2023: £2,520) in management charges to the company during the year for this service.
26
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
MWG Baker
2.25
65,792
27,586
807
(94,185)
-
SP Baker
2.25
61,807
402,403
24
(674,928)
(210,694)
TCG Baker
2.25
-
86,251
623
(30,292)
56,582
EJM Baker
2.25
-
86,251
624
(30,292)
56,583
127,599
602,491
2,078
(829,697)
(97,529)
27
Ultimate controlling party
The immediate parent company and largest group financial statements that consolidate this company is Carbis Bay Holdings Limited. These group accounts are available to the public from its registered office at Peat House, Newham Road, Truro, Cornwall, United Kingdom, TR1 2DP
The ultimate controlling party is Mr S P Baker, director.
28
Auditor's liability limitation agreement
For the year ended 29 February 2024, the company entered into a liability limitation agreement with its
auditors, the principal terms of which limit the liability of the auditors to £5,000,000 in relation to their
responsibilities as auditors of the company. The date this was agreed by the company was 15 May 2024.
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