Queensferry Hotels Limited - Limited company accounts 18.2

REGISTERED NUMBER: SC108130 (Scotland)

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 30 April 2018

for

Queensferry Hotels Limited

Page

Strategic Report

1

Report of the Directors

2

Report of the Independent Auditors

3

Statement of Comprehensive Income

5

Statement of Financial Position

6

Statement of Changes in Equity

7

Statement of Cash Flows

8

Notes to the Statement of Cash Flows

9

Notes to the Financial Statements

10

The directors present their strategic report for the year ended 30 April 2018.

REVIEW OF BUSINESS

Introduction

In a year of challenging market conditions, Queensferry Hotels Limited enjoyed another successful year although

revenue decreased from £2,865,062 in 2017 to £2,812,442 in 2018. EBITDA decreased from £303,063 in 2017 to

£222,630 in 2018 and net profit decreased from £107,466 in 2017 to £75,711 in 2018.

EBITDA and net profit decreased as a result of reduced revenue whilst at the same time maintaining necessary property

repairs and improvements to sustain quality and standards. The Cash position was an outflow of £74,598. The company

incurred capital expenditure of £224,076 as a result of building a new restaurant at Keavil House Hotel. At the year end

the company had shareholder funds of £5,921,160, an increase of 1.01% on 2017.

Prospects

Over the past year the economic conditions in the local area, UK and Euro zone have not improved to create a buoyant

environment for trading. The company is trading in an environment of reduced demand and weaker prospects for

accommodation revenue although demand for banqueting business remains strong and both restaurant and leisure club

revenues are steady. However, together, these conditions prevented revenue and profit growth. With the maintenance of

investment in the quality of Keavil House Hotel and with the competitive advantage of the strength of the global Best

Western Hotels brand, which provides advantages in both market positioning and distribution of hotel bedrooms, the

directors are confident of a successful trading year ahead.

Operational costs continue to rise and it is an increasing challenge to limit payroll and pension costs, food and beverage

costs and administration costs in areas such as business rates. These cost increases have a negative effect on profits as

selling prices and revenue cannot be increased in tandem due to competitive and market pressures.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors have assessed the principal risks facing the company, which are:

Economic Conditions

A buoyant and stable economic environment is important for both corporate and consumer spending. The local, national

and international economic environment remains uncertain however the directors and management continually review

economic conditions and trading and have procedures in place to adjust marketing, pricing and operational costs to

mitigate the effect of any downturn in revenues, should they occur, to enable the company to remain profitable.

Competition

At a time when demand locally for accommodation has decreased, the supply of hotel bedrooms has increased. This has

a negative effect on prices and requires the maintenance of standards and quality and effective marketing to remain

competitive. The directors have assessed the competitive environment and have plans in place to ensure that Keavil

House Hotel remains an attractive choice for customers.

ON BEHALF OF THE BOARD:

Mrs C A Gwyn - Director

23 July 2018

The directors present their report with the financial statements of the company for the year ended 30 April 2018.

PRINCIPAL ACTIVITY

The principal activity of the company during the year continued to be the trade of hotel, hospitality and leisure

management.

DIVIDENDS

No dividends will be distributed for the year ended 30 April 2018.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 May 2017 to the date of this report.

Mrs C A Gwyn

Mr R H Imrie

Mr P H R Gwyn

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), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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

Drummond Laurie CA are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Mrs C A Gwyn - Director

23 July 2018

Opinion

We have audited the financial statements of Queensferry Hotels Limited (the 'company') for the year ended

30 April 2018 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of

Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 April 2018 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 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, 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.

Opinion 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 two, 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 Wheeler (Senior Statutory Auditor)

for and on behalf of Drummond Laurie CA

Statutory Auditor

Unit 5

Gateway Business Park

Beancross Road

Grangemouth

FK3 8WX

8 August 2018

TURNOVER

3

2,812,442

2,865,062

Cost of sales

(502,013

)

(486,146

)

GROSS PROFIT

2,310,429

2,378,916

Administrative expenses

(2,314,637

)

(2,327,173

)

(4,208

)

51,743

Other operating income

217,000

217,000

OPERATING PROFIT

5

212,792

268,743

Interest payable and similar expenses

6

(135,920

)

(129,530

)

PROFIT BEFORE TAXATION

76,872

139,213

Tax on profit

7

(1,161

)

(31,747

)

PROFIT FOR THE FINANCIAL YEAR

75,711

107,466

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

75,711

107,466

FIXED ASSETS

Tangible assets

8

8,332,604

8,077,086

CURRENT ASSETS

Stocks

9

19,858

17,471

Debtors

10

182,296

870,863

Cash in hand

10,665

31,391

212,819

919,725

CREDITORS

Amounts falling due within one year

11

(898,779

)

(919,522

)

NET CURRENT (LIABILITIES)/ASSETS

(685,960

)

203

TOTAL ASSETS LESS CURRENT LIABILITIES

7,646,644

8,077,289

CREDITORS

Amounts falling due after more than one year

12

(1,725,484

)

(2,231,840

)

NET ASSETS

5,921,160

5,845,449

CAPITAL AND RESERVES

Called up share capital

16

1,150,499

1,150,499

Retained earnings

17

4,770,661

4,694,950

SHAREHOLDERS' FUNDS

5,921,160

5,845,449

The financial statements were approved by the Board of Directors on 23 July 2018 and were signed on its behalf by:

Mrs C A Gwyn - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 May 2016

1,150,499

4,587,484

5,737,983

Changes in equity

Total comprehensive income

-

107,466

107,466

Balance at 30 April 2017

1,150,499

4,694,950

5,845,449

Changes in equity

Total comprehensive income

-

75,711

75,711

Balance at 30 April 2018

1,150,499

4,770,661

5,921,160

Cash flows from operating activities

Cash generated from operations

1

890,028

187,785

Interest paid

(134,096

)

(125,440

)

Interest element of hire purchase payments paid

(1,824

)

(4,090

)

Tax paid

(31,759

)

(49,618

)

Net cash from operating activities

722,349

8,637

Cash flows from investing activities

Purchase of tangible fixed assets

(265,356

)

-

Sale of tangible fixed assets

-

2,000

Net cash from investing activities

(265,356

)

2,000

Cash flows from financing activities

Loan repayments in year

(525,445

)

(164,828

)

Capital repayments of hire purchase

(6,146

)

(14,750

)

Net cash from financing activities

(531,591

)

(179,578

)

Decrease in cash and cash equivalents

(74,598

)

(168,941

)

Cash and cash equivalents at beginning of year

2

(110,742

)

58,199

Cash and cash equivalents at end of year

2

(185,340

)

(110,742

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

30.4.18

30.4.17

£

£

Profit before taxation

76,872

139,213

Depreciation charges

9,838

34,320

Profit on disposal of fixed assets

-

(2,000

)

Finance costs

135,920

129,530

222,630

301,063

(Increase)/decrease in stocks

(2,387

)

1,116

Decrease/(increase) in trade and other debtors

688,567

(101,537

)

Decrease in trade and other creditors

(18,782

)

(12,857

)

Cash generated from operations

890,028

187,785

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of

these Statement of Financial Position amounts:

Year ended 30 April 2018

30.4.18

1.5.17

£

£

Cash and cash equivalents

10,665

31,391

Bank overdrafts

(196,005

)

(142,133

)

(185,340

)

(110,742

)

Year ended 30 April 2017

30.4.17

1.5.16

£

£

Cash and cash equivalents

31,391

58,199

Bank overdrafts

(142,133

)

-

(110,742

)

58,199

1.	STATUTORY INFORMATION

Queensferry Hotels Limited is a private company, limited by shares, domiciled in Scotland, registration number

SC108130. The registered office is 69 Bruntsfield Place, Edinburgh, Midlothian, EH10 4HH.

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.

Turnover

The turnover shown in the profit and loss account represents the value of all hotel, hospitality and leisure

management services delivered during the year, at selling price exclusive of Value Added Tax. Sales are

recognised at the point at which the company has fulfilled its contractual obligations to the customer.

Tangible fixed assets and depreciation

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

not provided

Leisure equipment

-

20% on cost

Fittings and equipment

-

15% on cost

General and computer equipment

-

20% on cost

Tangible fixed assets are stated at cost less depreciation. Cost represent purchase price together with any

incidental costs of acquisition.

It is the directors' belief that the residual value of the property is at least equal to the book values. Therefore it is

considered that the depreciation of any such property as required by the Companies Act 2006 and FRS 102

would not be material. Accordingly, where any impairment arises the value of the asset in the financial

statements will be reduced to the impaired value.

The directors do not believe that any other assets have residual value and are depreciated to £nil.

Stocks

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

moving items. Cost is represented by purchase price.

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 statement of financial position date.

Deferred tax

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

statement of financial position 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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held

under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases

are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element

of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

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.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement,

as either financial assets, financial assets, financial liabilities or equity instruments. An equity instrument is any

contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Provisions

Provisions are recognised when the company has a legal or constructive obligation as a result of a past event, it is

probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably

estimated. Provisions are not recognised for future operating losses. Provisions are discounted where the time

value of money is material.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is

determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of

an outflow with respect to any one item included in the same class of obligations may be small.

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand and highly liquid interest-bearing securities with

maturities of three months or less. In the cash-flow statement, cash and cash equivalents are shown net of bank

overdrafts, which are included as current borrowings in liabilities on the balance sheet.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

30.4.18

30.4.17

£

£

United Kingdom

2,812,442

2,865,062

2,812,442

2,865,062

4.	EMPLOYEES AND DIRECTORS

30.4.18

30.4.17

£

£

Wages and salaries

1,310,845

1,252,828

Social security costs

88,868

85,343

Other pension costs

21,699

19,672

1,421,412

1,357,843

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

30.4.18

30.4.17

Number of administrative staff

68

68

Number of management staff

4

4

72

72

30.4.18

30.4.17

£

£

Directors' remuneration

199,122

196,129

Directors' pension contributions to money purchase schemes

14,450

13,416

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

Money purchase schemes

1

1

5.	OPERATING PROFIT

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

30.4.18

30.4.17

£

£

Hire of plant and machinery

33,455

23,167

Depreciation - owned assets

3,664

19,501

Depreciation - assets on hire purchase contracts

6,174

14,818

Profit on disposal of fixed assets

-

(2,000

)

Auditors' remuneration

4,200

4,500

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

30.4.18

30.4.17

£

£

Bank interest

134,096

125,440

Hire purchase

1,824

4,090

135,920

129,530

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

30.4.18

30.4.17

£

£

Current tax:

UK corporation tax

1,161

31,759

Over/under provision

-

(12

)

Tax on profit

1,161

31,747

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

30.4.18

30.4.17

£

£

Profit before tax

76,872

139,213

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19.918%)

14,606

27,728

Effects of:

Income not taxable for tax purposes

-

(398

)

Capital allowances in excess of depreciation

(13,445

)

-

Depreciation in excess of capital allowances

-

4,429

Adjustments to tax charge in respect of previous periods

-

(12

)

Total tax charge

1,161

31,747

8.	TANGIBLE FIXED ASSETS

General

Fittings

and

Freehold

Leisure

and

computer

property

equipment

equipment

equipment

Totals

£

£

£

£

£

COST

At 1 May 2017

8,069,375

191,669

878,458

337,266

9,476,768

Additions

224,076

-

29,498

11,782

265,356

At 30 April 2018

8,293,451

191,669

907,956

349,048

9,742,124

DEPRECIATION

At 1 May 2017

-

185,495

876,921

337,266

1,399,682

Charge for year

-

6,174

2,682

982

9,838

At 30 April 2018

-

191,669

879,603

338,248

1,409,520

NET BOOK VALUE

At 30 April 2018

8,293,451

-

28,353

10,800

8,332,604

At 30 April 2017

8,069,375

6,174

1,537

-

8,077,086

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Leisure

equipment

£

COST

At 1 May 2017

74,093

Transfer to ownership

(74,093

)

At 30 April 2018

-

DEPRECIATION

At 1 May 2017

67,919

Charge for year

6,174

Transfer to ownership

(74,093

)

At 30 April 2018

-

NET BOOK VALUE

At 30 April 2018

-

At 30 April 2017

6,174

9.

STOCKS

30.4.18

30.4.17

£

£

Finished goods

19,858

17,471