Jesmond Dene House Limited - Period Ending 2021-12-31

Jesmond Dene House Limited

Contents

Company Information	1
Statement of Financial Position	2
Notes to the Financial Statements	3 to 12

Jesmond Dene House Limited

Company Information

Directors

Mr T Bayliff Mr P J Morrissey Mr P A Ganley Mr P H Candler

Registered office

Jesmond Dene House Jesmond Dene Road Newcastle upon Tyne NE2 2EY

Solicitors

Archers Law LLP Lakeside House Kingfisher Way Stockton-On-Tees TS18 3NB

Auditor

Azets Audit Services Chartered Accountants & Statutory Auditor Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS

Jesmond Dene House Limited

(Registration number: 05175461)
Statement of Financial Position as at 31 December 2021

	Note	2021 £	2020 £
Fixed assets
Intangible assets	7	1,108	2,249
Tangible assets	8	484,913	484,223
		486,021	486,472
Current assets
Stocks	9	43,362	27,618
Debtors	10	43,207	60,679
Cash at bank and in hand		351,583	1,730
		438,152	90,027
Creditors: Amounts falling due within one year	11	(3,439,350)	(2,731,244)
Net current liabilities		(3,001,198)	(2,641,217)
Total assets less current liabilities		(2,515,177)	(2,154,745)
Creditors: Amounts falling due after more than one year	11	(44,118)	(62,340)
Net liabilities		(2,559,295)	(2,217,085)
Capital and reserves
Called up share capital		1	1
Profit and loss account		(2,559,296)	(2,217,086)
Total equity		(2,559,295)	(2,217,085)

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Income Statement has been taken.

Approved and authorised for issue by the Board on 23 September 2022 and signed on its behalf by:
 

......................................... Mr T Bayliff Director

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021

1	General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is Jesmond Dene House, Jesmond Dene Road, Newcastle upon Tyne, NE2 2EY.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention.

These financial statements are prepared in sterling which is the functional currency of the entity.

Going concern

The financial statements have been prepared on a going concern basis.

Notwithstanding net liabilities of £2,559,295 and net current liabilities of £3,001,198 as at 31 December 2021, the financial statements have been prepared on a going concern basis.

The company meets its day to day working capital requirements via cash generated from operations and related party/shareholder borrowings. The related parties and shareholders have confirmed that they will continue to provide support to the group for the foreseeable future.

The company relies on the parent company and as was reported in the financial statements for the year ended 31 December 2020, the group was in breach of the financial covenant agreed with its bankers. As expected the group is in breach of its loan covenants at 31 December 2021 and expects to continue to be in breach for the following 12 months. The bank have acknowledged the breach at 31 December 2021 but have not waived the breach and have reserved any right or remedy that they have now, or in the future, in connection with, or arising from, the covenant breach. The directors are in regular communication with the group’s bankers with an annual review meeting due to take place in November 2022 where the bank will consider the 2022 performance to date and the prospects for 2023 with review or amendments of the loan covenants also to be discussed. Following on from the last update meeting with the bank in August 2022 the directors have at present no reason to believe the bank would take any action to demand immediate repayment of the loan within 12 months of the approval of these financial statements.

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2	Accounting policies (continued)

The directors have prepared cash flow forecasts which cover at least 12 months from the date of approval of these financial statements which indicate that the company should have sufficient funds, through its operating cash flows and existing cash balances, to meet its liabilities as they fall due for that period, subject to the ongoing support of the related parties and shareholders.

The first half of the year was impacted by the COVID pandemic; however, the directors are pleased to report the return to profitability and positive cash flows in the later part of 2021 once the government eased restrictions.

During the coronavirus pandemic the company made use of the government support in the form of the coronavirus job retention scheme to retain the employment of our key staff, along with the use of the deferral of VAT payments and PAYE time to pay arrangements. In addition, the group has taken advantage of loan repayment holidays and received a £50,000 bounce back loan along with the benefit of business rates relief.

At the time of approval of these financial statements, there is once again uncertainty due to the current economic situation with regard to inflation and the energy crisis. The directors have therefore considered a severe but plausible downside trading scenario, which reflects the potential economic impacts on trading performance. Under the severe, but plausible downside scenario, the group would experience pressure on liquidity, but the directors are confident that there is sufficient cash flow to trade through.

The company relies on the ongoing support of its parent company. The parent company in offering support is assuming the bank do not demand immediate repayment of their loan facilities.

Although the forecast prepared taking account of the matters above, support the ability of the company to be remain a going concern and to be able to trade and meet its debts as they fall due, the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.

Based on the factors set out above the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. However, as the parent company has not had a formal waiver of the loan covenant breaches which have occurred at and after 31 December 2021 and are forecasting to continue to breach the covenants in the next 12 months, this represents a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern and therefore to continue realising its assets and discharging its liabilities in the normal course of business. These financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Revenue recognition

Turnover represents the value of goods sold and services provided during the year net of discounts, returns and Value Added Tax. Turnover is recognised at the point of sale and to the extent that and when there is a right to consideration.

Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable.

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2	Accounting policies (continued)

Government grants

Government grants received relating to costs incurred by the company are recognised in the income and expenditure account over the period necessary to match them with the costs that they are intended to compensate. Government grants are presented separately and disclosed in other income.

Other income includes UK Government assistance provided through the Coronavirus Job Retention Scheme and rates relief.

Foreign currency transactions and balances

Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.

Exceptional items

Exceptional items are disclosed separately in the financial statements in order to provide further understanding of the financial performance of the entity. They are material items of income or expense that have been shown separately because of their nature or amount.

Tax

The tax expense for the period comprises the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or less, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
 

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2	Accounting policies (continued)

	Asset class	Depreciation method and rate
	Plant and machinery	15% reducing balance
	Fixtures and fittings	15% reducing balance
	Equipment	33% straight line

Intangible assets

Intangible assets are initially recognised as an asset at cost and are subsequently measured at cost less accumulated amortisation.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class	Amortisation method and rate
Goodwill	20% straight line
Website development	20% straight line

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to sell. Cost includes all costs of purchase and other costs incurred in bringing the stock to its present location.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months are the reporting date, the are presented as non-current liabilities.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2	Accounting policies (continued)

Leases

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset.

Lease payments are apportioned between the finance charges and reduction of outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Defined contribution pension obligation

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of provision as an expense.

Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset.

3	Staff numbers

The average number of persons employed by the company (including directors) during the year, was 92 (2020 - 71).

4	Auditors' remuneration

	2021 £	2020 £
Audit of the financial statements	4,465	2,750
Other fees to auditors
Taxation compliance services	1,135	1,080

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

5	Loss before tax

Arrived at after charging/(crediting)

	2021 £	2020 £
Depreciation expense	79,597	92,441
Amortisation expense	1,141	4,442

The company has received government assistance via the Coronavirus Job Retention Scheme of £125,214 (2020 - £615,926). This was claimed against the staff costs of the company.

The company benefited from additional support during the year via rates relief from the local authority.

6	Exceptional items

	2019 £	2018 £
Exceptional administrative expenses	-	(104,042)

The exceptional administrative expenses of £nil (2020 - £(104,042)) relate to doubtful debt provisions and current year reversal made against related party loan balances following an assessment of recoverability by management.

7	Intangible assets

	Goodwill  £	Website development costs £	Total £
Cost or valuation
At 1 January 2021	16,800	62,786	79,586
At 31 December 2021	16,800	62,786	79,586
Amortisation
At 1 January 2021	16,800	60,537	77,337
Amortisation charge	-	1,141	1,141
At 31 December 2021	16,800	61,678	78,478
Carrying amount
At 31 December 2021	-	1,108	1,108
At 31 December 2020	-	2,249	2,249

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

8	Tangible assets

	Fixtures and fittings £	Plant and machinery £	Equipment £	Total £
Cost or valuation
At 1 January 2021	596,296	174,248	127,232	897,776
Additions	41,878	26,214	12,195	80,287
At 31 December 2021	638,174	200,462	139,427	978,063
Depreciation
At 1 January 2021	177,739	118,219	117,595	413,553
Charge for the year	62,783	9,929	6,885	79,597
At 31 December 2021	240,522	128,148	124,480	493,150
Carrying amount
At 31 December 2021	397,652	72,314	14,947	484,913
At 31 December 2020	418,557	56,029	9,637	484,223

9

Stocks

	2021 £	2020 £
Stock	43,362	27,618

10

Debtors

	2021 £	2020 £
Trade debtors	3,789	33,331
Prepayments	19,030	6,335
Other debtors	20,189	21,013
Corporation tax asset	199	-
	43,207	60,679

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

11

Creditors

Creditors: amounts falling due within one year

	Note	2021 £	2020 £
Due within one year
Loans and borrowings	12	18,249	185,689
Trade creditors		181,491	72,564
Amounts owed to group undertakings	14	1,279,112	721,209
Taxation and social security		296,116	209,909
Accruals and deferred income		243,314	221,709
Other creditors		1,421,068	1,320,164
		3,439,350	2,731,244

Creditors include net obligations under finance lease and hire purchase contracts which are secured of £12,367 (2020 - £26,975).

Creditors: amounts falling due after more than one year

	Note	2021 £	2020 £
Due after one year
Loans and borrowings	12	44,118	62,340

Creditors include net obligations under finance lease and hire purchase contracts which are secured of £nil (2020 - £12,340).

12	Loans and borrowings

	2021 £	2020 £
Current loans and borrowings
Bank borrowings	5,882	-
Bank overdrafts	-	158,714
Hire purchase liabilities	12,367	26,975
	18,249	185,689

	2021 £	2020 £
Non-current loans and borrowings
Bank borrowings	44,118	50,000
Hire purchase liabilities	-	12,340
	44,118	62,340

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

12	Loans and borrowings (continued)

Bank borrowings

The Bounce Back Loan is denominated in sterling with a nominal interest rate of 2.50%, and the final instalment is due on 1 May 2030. The carrying amount at year end is £50,000 (2020 - £50,000). In line with Government support, the first 12 months are repayment free and any interest charge is borne by the Government. The loan is unsecured.

The bank overdraft is secured by way of a fixed first legal charge over the freehold land and buildings of the group as well as a fixed charge over book and all other debts.

13	Financial commitments, guarantees and contingencies

Amounts not provided for in the statement of financial position

Guarantees

The company has entered into an omnibus guarantee and set-off agreement in favour of Lloyds Bank plc in respect of the liabilities due to Lloyds Bank plc by Hotel Operations Limited. This agreement has been secured by an all asset debenture in favour of Lloyds Bank plc.

Amounts disclosed in the statement of financial position

Included in the statement of financial position are pension contributions payable of £8,458 (2020 - £4,607).

14	Related party transactions

Transactions with directors

2020	At 1 January 2020 £	Advances to director £	Repayments by director £	At 31 December 2020 £
Mr P A Ganley
Interest free loan	17,754	-	(2,456)	15,298

2021	At 1 January 2021 £	Advances to director £	Repayments by director £	At 31 December 2021 £
Mr P A Ganley
Interest free loan	15,298	-	-	15,298

Jesmond Dene House Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

14	Related party transactions (continued)

Summary of transactions with other related parties

The company has chosen not to disclose related party transactions with group companies in accordance with Section 33.1A of FRS 102.

The company is related to Rivergreen Developments Plc by virtue of common directors. During the year the company made sales totalling £nil (2020 - £43,440) to Rivergreen Developments Plc. During the year the company received loan advances totalling £nil (2020 - £nil) from Rivergreen Developments Plc and made repayments to Rivergreen Developments Plc totalling £nil (2020 - £20,000). During the year, the company made purchases from Rivergreen Developments Plc totalling £70,909 (2020 - £nil). Included within other creditors at the year end is a balance of £1,315,983 (2020 - £1,225,347) owed to Rivergreen Developments Plc.

 The company was related to St Mary's Inn Limited by virtue of common directors until it entered into administration 30 November 2020. During the year, the company made sales to St Mary's Inn Limited of £nil (2020 - £3,125). During the year, the company advanced St Mary's Inn Limited £nil (2020 - £nil) and received repayments of £nil (2020 - £nil). During the year, the company made purchases totalling £nil (2020 - £nil) from St Mary's Inn Limited and incurred expenditure on behalf of St Mary's Inn Limited of £nil (2020 - £nil) and received refunds of expenditure incurred totalling £nil (2020 - £nil). Also during the year St Mary's Inn Limited incurred expenditure on behalf of Jesmond Dene House Limited of £nil (2020 - £nil). During the year a provision for doubtful debts of £nil (2020 - £(104,042)) was made against the loan balance.

15	Parent and ultimate parent undertaking

The company's ultimate parent is Hotel Operations Limited, incorporated in England.

 The most senior parent entity producing publicly available financial statements is Hotel Operations Limited. These financial statements are available upon request from Jesmond Dene House, Jesmond Dene Road, Newcastle upon Tyne, NE2 2EY.

16	Audit report

The Independent Auditor's Report was unqualified. Material uncertainty relating to going concern
We draw attention to note 2 in the financial statements which indicates that the directors have prepared forecasts based on their assessment of current and predicted operating conditions. The assumptions used in forecasting are extremely judgmental and difficult to predict and could be subject to significant variations. These factors indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

The name of the Senior Statutory Auditor who signed the audit report on 27 September 2022 was Brian Laidlaw BA CA, who signed for and on behalf of Azets Audit Services.

Azets Audit Services is a trading name of Azets Audit Services Limited