Southrop Estates Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04391888 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2019

FOR

SOUTHROP ESTATES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

M M Bertioli

Mrs C M Hibbert

A O Colburn

Mrs L J Holmes

A H Lane

C Hibbert

SECRETARY:

Miss J Jakeman

REGISTERED OFFICE:

Crickley Barrow

Northleach

Cheltenham

Gloucestershire

GL54 3QA

REGISTERED NUMBER:

04391888 (England and Wales)

AUDITORS:

Martin and Company Audit Limited

Chartered Accountants

and Statutory Auditors

25 St Thomas Street

Winchester

Hampshire

SO23 9HJ

The directors present their strategic report for the year ended 30 September 2019.

Review of the business

The principal activity of the company continues to be that of running a hotel.

This year there has been considerable investment and growth of the hotel business.

Turnover has increased from £1,955,205 in 2018 to £3,614,157 in 2019.

The profit before taxation is £2,166,051 in 2019 compared to a loss of £1,812,228 in 2018 and includes a property

impairment of £9,444,488 in 2019 as well as an intercompany loan write off resulting in income to the company of

£12,564,851.

Shareholders funds as at 30th September 2019 are £3,275,252 (2018: £1,109,201).

At the year end the company has a contingent liability involving a former building contractor, which is described in note

17 to the accounts.

At the time of approving the accounts the country is in the midst of the COVID 19 outbreak as described in business

continuity below and note 19 to the accounts.

Discontinued or new business areas

There have been no changes to the principal activities of the company.

Capital investments

The company continues to invest in the hotel through capital improvements.

Funding

The company receives support in the form of loans from the directors and from a fellow subsidiary company, Ropsley

Farms Limited. The company has obtained confirmation that support will continue for at least 12 months from the date

of approval of the financial statements.

People

The company employs 92 staff, all are critical to the success of the business.

Health and safety

The company recognises that health and safety in the work place is paramount and it is therefore taken very seriously.

The directors believe that they have all the necessary policies in place to safeguard the welfare of the staff.

Business continuity

At the time of approving the accounts the country is in the midst of the COVID 19 outbreak and the hotel operated by

Southrop Estates Limited is closed and a number of staff have been furloughed under the government scheme. As

described in the accounting policies under going concern, the company has obtained confirmation that the directors will

continue to provide support through loans and support will also continue from Ropsley Farms Limited through an

intercompany loan. As such, the company's ability to continue as a going concern is not considered to be affected and

the hotel will be ready to reopen to supply it's customers when it is allowed to do so under government regulations.

Financial risk management objectives and policies

The directors aim to minimise the financial risk to the group and manage this as follows:

Interest rate risk

The company does not have a significant interest rate exposure.

Credit risk

The company does not extend long credit terms to its customers, who are mainly hotel guests and therefore credit risk

from customers is considered to be low. The directors consider that this policy meets the objective of managing and

minimising exposure to credit risk.

Liquidity risk

The company controls cashflow by careful budgeting which ensures liquidity is maintained.

Currency risk

The company does not have a significant currency risk exposure

ON BEHALF OF THE BOARD:

A H Lane - Director

5 June 2020

The directors present their report with the financial statements of the company for the year ended 30 September 2019.

DIVIDENDS

No dividends will be distributed for the year ended 30 September 2019.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2018 to the date of this

report.

M M Bertioli

Mrs C M Hibbert

A O Colburn

Mrs L J Holmes

A H Lane

C Hibbert

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have

taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the

company's auditors are aware of that information.

AUDITORS

The auditors, Martin and Company Audit Limited, will be proposed for re-appointment at the forthcoming Annual

General Meeting.

ON BEHALF OF THE BOARD:

A H Lane - Director

5 June 2020

Opinion

We have audited the financial statements of Southrop Estates Limited (the 'company') for the year ended

30 September 2019 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in

Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial

reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting

Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and

Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 September 2019 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.

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 Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise

explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. If, based on the work we have performed, we conclude

that there is a material misstatement of this other information, we are required to report that fact. We have nothing to

report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept, 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 directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' 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 a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs

(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

David Barr FCA (Senior Statutory Auditor)

for and on behalf of Martin and Company Audit Limited

Chartered Accountants

and Statutory Auditors

25 St Thomas Street

Winchester

Hampshire

SO23 9HJ

12 June 2020

TURNOVER

3,614,157

1,955,205

Cost of sales

2,126,122

1,237,008

GROSS PROFIT

1,488,035

718,197

Administrative expenses

2,471,800

2,132,960

(983,765

)

(1,414,763

)

Other operating income

38,677

10,415

OPERATING LOSS

4

(945,088

)

(1,404,348

)

Interest receivable and similar income

12,564,851

88

11,619,763

(1,404,260

)

Gain/loss on revaluation of tangible assets

(9,444,488

)

-

2,175,275

(1,404,260

)

Interest payable and similar expenses

6

9,224

407,968

PROFIT/(LOSS) BEFORE TAXATION

2,166,051

(1,812,228

)

Tax on profit/(loss)

7

-

-

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

2,166,051

(1,812,228

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,166,051

(1,812,228

)

FIXED ASSETS

Intangible assets

8

17,111

-

Tangible assets

9

13,639,867

20,045,795

13,656,978

20,045,795

CURRENT ASSETS

Stocks

10

118,543

30,050

Debtors

11

761,601

834,809

Cash at bank

280,621

97,399

1,160,765

962,258

CREDITORS

Amounts falling due within one year

12

1,480,310

745,624

NET CURRENT (LIABILITIES)/ASSETS

(319,545

)

216,634

TOTAL ASSETS LESS CURRENT LIABILITIES

13,337,433

20,262,429

CREDITORS

Amounts falling due after more than one year

13

10,062,181

19,153,228

NET ASSETS

3,275,252

1,109,201

CAPITAL AND RESERVES

Called up share capital

15

1,842,004

1,842,004

Retained earnings

16

1,433,248

(732,803

)

SHAREHOLDERS' FUNDS

3,275,252

1,109,201

The financial statements were approved by the Board of Directors and authorised for issue on 5 June 2020 and were signed on its behalf by:

A H Lane - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2017

1,842,004

1,079,425

2,921,429

Changes in equity

Total comprehensive income

-

(1,812,228

)

(1,812,228

)

Balance at 30 September 2018

1,842,004

(732,803

)

1,109,201

Changes in equity

Total comprehensive income

-

2,166,051

2,166,051

Balance at 30 September 2019

1,842,004

1,433,248

3,275,252

1.	STATUTORY INFORMATION

Southrop Estates Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of

Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

Preparation of consolidated financial statements

Ropsley Holdings Limited is the company's ultimate parent undertaking, which prepares consolidated accounts.

The registered office and principal place of business is as detailed on page 1.

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Turnover

The company derives income from hotel accommodation, bar/food sales, spa treatments and retail sales.

All sales are recognised when the goods and services are provided. Turnover is measured at the fair value of the

consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Intangible assets

Intangible assets represent trademarks and amortisation is provided at 10% of cost to reflect the useful economic

life of 10 years.

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

20% on cost

Fixtures and fittings

-

10% on cost

Motor vehicles

-

20% on cost

Computer equipment

-

33% on cost and 20% on cost

Freehold property is not depreciated on the grounds that depreciation would be immaterial.

The depreciation policy for fixtures and fittings was changed during the year from 20% to 10% straight line as

the directors feel this more accurately reflects the useful estimated life of the assets held.

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and

accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of

operating as intended.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present

location and condition.

Financial instruments

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.

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.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Hire purchase and leasing commitments

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the

lease term.

Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of

the asset have passed to the company, are capitalised in the balance sheet as tangible fixed assets and are

depreciated over the shorter of the lease term and their useful lives. The capital elements of future obligations

under the leases are included as liabilities in the balance sheet. The interest element of the rental obligation is

charged to the profit and loss account over the period of the lease and represents a constant proportion of the

balance of capital repayments outstanding.

Going concern

The accounts have been prepared on the going concern basis and the directors confirm that they are satisfied that

the company has adequate resources to continue as a going concern for the foreseeable future. This has been

determined by review of cash flow forecasts of at least 12 months from the date of approval of the financial

statements. The company has obtained confirmation that the directors will continue to provide support through

directors loans and support will also continue from Ropsley Farms Limited through an intercompany loan.

3.	EMPLOYEES AND DIRECTORS

30.9.19

30.9.18

£

£

Wages and salaries

2,198,853

1,501,030

The average number of employees during the year was as follows:

30.9.19

30.9.18

Administration

5

5

General

87

70

92

75

30.9.19

30.9.18

£

£

Directors' remuneration

125,000

102,172

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

3

4.	OPERATING LOSS

The operating loss is stated after charging/(crediting):

30.9.19

30.9.18

£

£

Depreciation - owned assets

331,387

417,510

Profit on disposal of fixed assets

(172

)

-

Trademarks amortisation

1,901

-

Auditors' remuneration

5,500

5,500

5.	EXCEPTIONAL ITEMS

30.9.19

30.9.18

£

£

Intercompany loan write off

12,564,851

-

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

30.9.19

30.9.18

£

£

Mortgage

2,687

3,395

RFL loan interest

-

395,600

Leasing

6,537

8,973

9,224

407,968

7.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 30 September 2019 nor for the year ended

30 September 2018.

8.	INTANGIBLE FIXED ASSETS

Trademarks

£

COST

Additions

19,012

At 30 September 2019

19,012

AMORTISATION

Amortisation for year

1,901

At 30 September 2019

1,901

NET BOOK VALUE

At 30 September 2019

17,111

9.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Plant and

and

property

machinery

fittings

£

£

£

COST

At 1 October 2018

19,275,050

326,691

1,364,926

Additions

3,243,743

18,355

198,301

Disposals

(17,598

)

-

(120,972

)

At 30 September 2019

22,501,195

345,046

1,442,255

DEPRECIATION

At 1 October 2018

126,099

237,665

633,020

Charge for year

181,048

26,594

89,941

Eliminated on disposal

(440

)

-

(24,825

)

Impairments

9,444,488

-

-

At 30 September 2019

9,751,195

264,259

698,136

NET BOOK VALUE

At 30 September 2019

12,750,000

80,787

744,119

At 30 September 2018

19,148,951

89,026

731,906

Motor

Computer

vehicles

equipment

Totals

£

£

£

COST

At 1 October 2018

43,388

101,578

21,111,633

Additions

-

22,853

3,483,252

Disposals

-

-

(138,570

)

At 30 September 2019

43,388

124,431

24,456,315

DEPRECIATION

At 1 October 2018

9,663

59,391

1,065,838

Charge for year

8,208

25,596

331,387

Eliminated on disposal

-

-

(25,265

)

Impairments

-

-

9,444,488

At 30 September 2019

17,871

84,987

10,816,448

NET BOOK VALUE

At 30 September 2019

25,517

39,444

13,639,867

At 30 September 2018

33,725

42,187

20,045,795

Included within the net book value of tangible fixed assets is £nil (2018: £4,952) in respect of assets held under

finance leases and similar hire purchase contracts. Depreciation for the period on these assets was £nil (2018:

£2,732).

10.

STOCKS

30.9.19

30.9.18

£

£

Stocks

118,543

30,050

11.

DEBTORS

30.9.19

30.9.18

£

£

Amounts falling due within one year:

Trade debtors

24,370

17,613

Other debtors

292,677

49,109

VAT

559

434,390

Prepayments and accrued income

69,976

64,571

387,582

565,683

Amounts falling due after more than one year:

Other debtors

374,019

269,126

Aggregate amounts

761,601

834,809