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COMPANY REGISTRATION NUMBER: 08680774
Ashley Hotels (Holdings) Limited
Financial Statements
For the year ended
31 December 2022
Ashley Hotels (Holdings) Limited
Financial Statements
Year ended 31 December 2022
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
6
Consolidated statement of comprehensive income
10
Consolidated statement of financial position
11
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the financial statements
18
Ashley Hotels (Holdings) Limited
Officers and Professional Advisers
The board of directors
A Hirji
K Hirji
N Hirji
Z Hirji
Registered office
65-67 Belgrave Road
London
SW1V 2BG
Auditor
Streets Audit LLP
Chartered accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
Ashley Hotels (Holdings) Limited
Strategic Report
Year ended 31 December 2022
Introduction The directors present their strategic report for Ashley Hotels (Holdings) Limited and its subsidiaries for the year ended 31 December 2022. Business review The Group continued its principal activities during the current year of managing hotels. Principal risks and uncertainties Management continually monitor the key risks facing the Group together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least annually. The principal risks and uncertainties facing the Group are as follows: Economic downturn - the Group acknowledges the importance of maintaining close relationships with its key corporate customers in order to be able to identify the early sign of potential financial difficulties. Whilst economic activity is strengthening and corporate travel is increasing, the directors do monitor corporate sales levels to enable early action to be taken in the event of sales declining. Exchange rate pressures - visitors to the UK, particularly from European countries may make decisions to travel based on exchange rate movements. Decreasing strength of the UK currency makes it less expensive for visitors, and as such can impact upon demand. The risk is managed by carefully monitoring and adjusting room rates based on demand. Competitor pressure - the risk of new hotels being developed in the markets in which the Group operates would result in sales being lost to new competition. This risk is managed by re-investment of income into the upkeep of the Group's property to ensure standards are maintained. In addition, the Group is service focused to encourage repeat business and assist customer satisfaction. Reliance on key suppliers - the Group's purchasing activities could expose it to over reliance on certain suppliers. The Group manages this risk by continually reviewing supplier pricing and maintaining relationships with potential alternative suppliers. Loss of key personnel - this would pose an operational challenge for the group. Management seeks to ensure that key personnel are appropriately remunerated to ensure that good performance is recognised. Key performance indicators The directors use a range of performance measures to monitor and manage the business. The performance measures are split into financial and non-financial key performance indicators as set out below. Financial performance during the year The key financial performance indicators which are constantly reviewed by the directors are: 2022 2021 £ £ Turnover 8.6m 4.8m Gross profit 5.2m 2.2m Operating profit/(loss) 3.0m 133k Financial position at the reporting date The balance sheet shows that the Group's net assets at the year end are at a healthy £11.1m (2021: £10.4m). Outlook The group continues to seek to grow by the continued investment in the hotels. The directors will continue to react to market conditions whilst managing the risk noted above. The impact of the COVID-19 pandemic is now fully behind the group however the cost of living crisis and high interest rates is causing wider economic disruption in the UK. The directors are monitoring this and potential consequences on the group. During the year, the group received insurance and contract settlements which have been included in the results for the year. The group also acquired a controlling interest in ZASZ Limited, a related company. During the year, certain shareholders settled some of their shareholding into a trust. There is no change to the control of the group. The company also converted the share premium to realised profit.
This report was approved by the board of directors on 30 September 2023 and signed on behalf of the board by:
Z Hirji
Director
Registered office:
65-67 Belgrave Road
London
SW1V 2BG
Ashley Hotels (Holdings) Limited
Directors' Report
Year ended 31 December 2022
The directors present their report and the financial statements of the group for the year ended 31 December 2022 .
Directors
The directors who served the company during the year were as follows:
A Hirji
K Hirji
N Hirji
Z Hirji
Dividends
Particulars of recommended dividends are detailed in note 14 to the financial statements.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' 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 group and the company and the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information. The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 30 September 2023 and signed on behalf of the board by:
Z Hirji
Director
Registered office:
65-67 Belgrave Road
London
SW1V 2BG
Ashley Hotels (Holdings) Limited
Independent Auditor's Report to the Members of Ashley Hotels (Holdings) Limited
Year ended 31 December 2022
Opinion
We have audited the financial statements of Ashley Hotels (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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 FRS 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 group's and of the parent company's affairs as at 31 December 2022 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's or the parent 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.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
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 group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company and sector in which it operates; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, employment, environmental and health and safety legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - reading the minutes of meetings of those charged with governance; - inquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to inquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 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 auditor’s report. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Day
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered accountants & statutory auditor
Enterprise House
38 Tyndall Court
Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
PE2 6LR
30 September 2023
Ashley Hotels (Holdings) Limited
Consolidated Statement of Comprehensive Income
Year ended 31 December 2022
2022
2021
Note
£
£
Turnover
4
8,641,527
4,772,691
Cost of sales
( 3,457,031)
( 2,568,913)
------------
------------
Gross profit
5,184,496
2,203,778
Administrative expenses
( 3,247,450)
( 2,283,393)
Other operating income
5
1,062,977
413,766
Exceptional other operating charges
( 201,000)
------------
------------
Operating profit
6
3,000,023
133,151
(Loss)/gain on financial assets at fair value through profit or loss
( 1,458,728)
798,873
Share of profit of associates
17
121,291
67,000
Income from other fixed asset investments
11
81,610
35,702
Other interest receivable and similar income
53,688
11,007
Interest payable and similar expenses
12
( 718,387)
( 551,373)
------------
------------
Profit before taxation
1,079,497
494,360
Tax on profit
13
( 66,835)
13,437
------------
---------
Profit for the financial year and total comprehensive income
1,012,662
507,797
------------
---------
Profit for the financial year attributable to:
The owners of the parent company
1,035,051
507,797
Non-controlling interests
( 22,389)
------------
---------
1,012,662
507,797
------------
---------
All the activities of the group are from continuing operations.
Ashley Hotels (Holdings) Limited
Consolidated Statement of Financial Position
31 December 2022
2022
2021
Note
£
£
Fixed assets
Intangible assets
15
18,750
23,750
Tangible assets
16
20,381,120
20,437,476
Investments:
17
Investments in associates
368,980
247,689
-------------
-------------
20,768,850
20,708,915
Current assets
Stocks
18
33,057
26,685
Debtors
19
4,453,229
1,463,076
Investments
20
6,639,010
8,186,592
Cash at bank and in hand
3,294,774
4,942,132
-------------
-------------
14,420,070
14,618,485
Creditors: amounts falling due within one year
21
6,613,012
6,421,652
-------------
-------------
Net current assets
7,807,058
8,196,833
-------------
-------------
Total assets less current liabilities
28,575,908
28,905,748
Creditors: amounts falling due after more than one year
22
17,886,685
18,552,809
Provisions
Taxation including deferred tax
24
( 448,577)
( 13,978)
-------------
-------------
Net assets
11,137,800
10,366,917
-------------
-------------
Capital and reserves
Called up share capital
28
100
100
Share premium account
29
9,811,963
Profit and loss account
29
11,160,089
554,854
-------------
-------------
Equity attributable to the owners of the parent company
11,160,189
10,366,917
Non-controlling interests
( 22,389)
-------------
-------------
11,137,800
10,366,917
-------------
-------------
Ashley Hotels (Holdings) Limited
Consolidated Statement of Financial Position (continued)
31 December 2022
These financial statements were approved by the board of directors and authorised for issue on 30 September 2023 , and are signed on behalf of the board by:
Z Hirji
Director
Company registration number: 08680774
Ashley Hotels (Holdings) Limited
Company Statement of Financial Position
31 December 2022
2022
2021
Note
£
£
Fixed assets
Tangible assets
16
185,028
121,564
Investments
17
4,545,931
4,545,851
------------
------------
4,730,959
4,667,415
Current assets
Debtors
19
3,597,130
2,460,239
Investments
20
6,639,010
8,186,592
Cash at bank and in hand
2,184,671
3,964,135
-------------
-------------
12,420,811
14,610,966
Creditors: amounts falling due within one year
21
10,270,415
9,925,419
-------------
-------------
Net current assets
2,150,396
4,685,547
------------
------------
Total assets less current liabilities
6,881,355
9,352,962
Creditors: amounts falling due after more than one year
22
19,231
33,243
Provisions
Taxation including deferred tax
24
( 318,425)
11,485
------------
------------
Net assets
7,180,549
9,308,234
------------
------------
Capital and reserves
Called up share capital
28
100
100
Share premium account
29
9,811,689
Profit and loss account
29
7,180,449
( 503,555)
------------
------------
Shareholders funds
7,180,549
9,308,234
------------
------------
The loss for the financial year of the parent company was £ 1,886,180 (2021: £ 50,457 profit).
These financial statements were approved by the board of directors and authorised for issue on 30 September 2023 , and are signed on behalf of the board by:
Z Hirji
Director
Company registration number: 08680774
Ashley Hotels (Holdings) Limited
Consolidated Statement of Changes in Equity
Year ended 31 December 2022
Called up share capital
Share premium account
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
£
At 1 January 2021
100
9,811,963
255,057
10,067,120
10,067,120
Profit for the year
507,797
507,797
507,797
----
------------
---------
-------------
----
-------------
Total comprehensive income for the year
507,797
507,797
507,797
Dividends paid and payable
14
( 208,000)
( 208,000)
( 208,000)
----
------------
---------
-------------
----
-------------
Total investments by and distributions to owners
( 208,000)
( 208,000)
( 208,000)
At 31 December 2021
100
9,811,963
554,854
10,366,917
10,366,917
Profit for the year
1,035,051
1,035,051
( 22,389)
1,012,662
----
------------
------------
-------------
--------
-------------
Total comprehensive income for the year
1,035,051
1,035,051
( 22,389)
1,012,662
Dividends paid and payable
14
( 241,505)
( 241,505)
( 241,505)
Redemption of shares
( 9,811,963)
9,811,689
( 274)
( 274)
----
------------
------------
---------
----
---------
Total investments by and distributions to owners
( 9,811,963)
9,570,184
( 241,779)
( 241,779)
----
------------
-------------
-------------
--------
-------------
At 31 December 2022
100
11,160,089
11,160,189
( 22,389)
11,137,800
----
------------
-------------
-------------
--------
-------------
Ashley Hotels (Holdings) Limited
Company Statement of Changes in Equity
Year ended 31 December 2022
Called up share capital
Share premium account
Profit and loss account
Total
£
£
£
£
At 1 January 2021
100
9,811,689
( 346,012)
9,465,777
Profit for the year
50,457
50,457
----
------------
---------
------------
Total comprehensive income for the year
50,457
50,457
Dividends paid and payable
14
( 208,000)
( 208,000)
----
------------
---------
------------
Total investments by and distributions to owners
( 208,000)
( 208,000)
At 31 December 2021
100
9,811,689
( 503,555)
9,308,234
Loss for the year
( 1,886,180)
( 1,886,180)
----
------------
------------
------------
Total comprehensive income for the year
( 1,886,180)
( 1,886,180)
Dividends paid and payable
14
( 241,505)
( 241,505)
Redemption of shares
( 9,811,689)
9,811,689
----
------------
------------
---------
Total investments by and distributions to owners
( 9,811,689)
9,570,184
( 241,505)
----
------------
------------
------------
At 31 December 2022
100
7,180,449
7,180,549
----
------------
------------
------------
Ashley Hotels (Holdings) Limited
Consolidated Statement of Cash Flows
Year ended 31 December 2022
2022
2021
£
£
Cash flows from operating activities
Profit for the financial year
1,012,662
507,797
Adjustments for:
Depreciation of tangible assets
819,859
835,780
Impairment of tangible assets
191,220
Amortisation of intangible assets
5,000
91,395
Government grant income
( 31,150)
( 344,483)
Loss/(gain) on financial assets at fair value through profit or loss
1,458,728
(798,873)
Share of profit of associates
( 121,291)
( 67,000)
Income from other fixed asset investments
( 81,610)
( 35,702)
Other interest receivable and similar income
( 53,688)
( 11,007)
Interest payable and similar expenses
718,387
551,373
Tax on (loss)/profit
66,835
( 13,437)
Changes in:
Stocks
( 6,372)
( 10,715)
Trade and other debtors
( 2,240,153)
296,496
Trade and other creditors
636,262
291,851
------------
------------
Cash generated from operations
2,374,689
1,293,475
Interest paid
( 718,387)
( 551,373)
Interest received
53,688
11,007
Tax paid
( 29,385)
( 21,629)
------------
------------
Net cash from operating activities
1,680,605
731,480
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 954,723)
( 192,160)
Purchase of intangible assets
( 25,000)
Cash advances and loans granted
( 750,000)
Purchases of other investments
( 4,040,728)
( 7,402,647)
Proceeds from sale of other investments
4,346,166
Fair value movement of investments
( 134,974)
834,575
------------
------------
Net cash used in investing activities
( 1,534,259)
( 6,785,232)
------------
------------
Cash flows from financing activities
Proceeds from borrowings
( 1,571,352)
4,663,188
Government grant income
31,150
344,483
Payments of finance lease liabilities
( 11,997)
43,225
Dividends paid
( 241,505)
( 208,000)
------------
------------
Net cash (used in)/from financing activities
( 1,793,704)
4,842,896
------------
------------
Ashley Hotels (Holdings) Limited
Consolidated Statement of Cash Flows (continued)
Year ended 31 December 2022
2022
2021
Note
£
£
Net decrease in cash and cash equivalents
( 1,647,358)
( 1,210,856)
Cash and cash equivalents at beginning of year
4,942,132
6,152,988
------------
------------
Cash and cash equivalents at end of year
3,294,774
4,942,132
------------
------------
Ashley Hotels (Holdings) Limited
Notes to the Financial Statements
Year ended 31 December 2022
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 65-67 Belgrave Road, London, SW1V 2BG.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Disclosure exemptions
No disclosure exemptions are available under FRS102.
Consolidation
The financial statements consolidate the financial statements of Ashley Hotels (Holdings) Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are disclosed in the accounting policies. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: 1 Depreciation charge The annual depreciation charge for each class of tangible fixed asset is based on an estimate of the useful economic life of the respective assets. This is reviewed periodically by the directors to ensure that they reflect both the external and internal factors. 2 Impairment of debtors The impairment is based on the directors opinion that the debts are not recoverable in full. This is reviewed periodically. 3 Cost of land The land has included at a cost estimated by the directors.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the provision of hotel accommodation and other associated income streams 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 it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
5 years
Licence
-
5 years
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property
-
2% straight line
Plant and machinery
-
15% straight line
Fixtures and fittings
-
15% straight line
Motor Vehicles
-
15% straight line
Equipment
-
15% straight line
Other fixed assets
-
15% straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Investments in associates
Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
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 the 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.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it it becomes receivable.
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 the provision as an expense.
Financial instruments
The company holds basic financial instruments as defined in FRS102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Defined contribution plans
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.
4. Turnover
Turnover arises from:
2022
2021
£
£
Rendering of services
8,641,527
4,772,691
------------
------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
2022
2021
£
£
Rental income
16,147
19,188
Government grant income
31,150
344,483
Other operating income
1,015,680
50,095
------------
---------
1,062,977
413,766
------------
---------
Other operating income The group received settlements of £945,692 (2021 £nil) for insurance claims made in the year, overage payments of £69,988 (2021 £nil) and switching incentives £nil (2021 £50,095).
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2022
2021
£
£
Amortisation of intangible assets
273,094
91,395
Depreciation of tangible assets
819,859
835,780
Impairment of tangible assets recognised in:
Administrative expenses
(9,780)
7. Auditor's remuneration
2022
2021
£
£
Fees payable for the audit of the financial statements
31,500
30,000
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2022
2021
No.
No.
Administrative staff
132
97
Directors
4
4
----
----
136
101
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2022
2021
£
£
Wages and salaries
2,029,321
1,508,190
Social security costs
141,484
102,720
Other pension costs
102,841
98,062
------------
------------
2,273,646
1,708,972
------------
------------
The average number of employees employed by undertakings that are proportionately consolidated was 12 (2021 - 8).
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2022
2021
£
£
Remuneration
43,200
37,200
Company contributions to defined contribution pension plans
80,000
80,000
---------
---------
123,200
117,200
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2022
2021
No.
No.
Defined contribution plans
2
2
----
----
The directors are considered to be key management.
10. Exceptional other operating charges
During the prior year the company impaired a loan balance in full for £201,000. During the current year this company was acquired by the group therefore this impairment has been eliminated on consolidation in the current year.
11. Income from other fixed asset investments
2022
2021
£
£
Dividends received from current asset investments
81,610
35,702
--------
--------
12. Interest payable and similar expenses
2022
2021
£
£
Interest on banks loans and overdrafts
718,387
551,373
---------
---------
13. Tax on (loss)/profit
Major components of tax (income)/expense
2022
2021
£
£
Current tax:
UK current tax expense
491,090
38,538
Foreign current tax expense
10,344
---------
--------
Total current tax
501,434
38,538
---------
--------
Deferred tax:
Origination and reversal of timing differences
( 434,599)
( 51,975)
---------
--------
Tax on (loss)/profit
66,835
( 13,437)
---------
--------
Reconciliation of tax expense/(income)
The tax assessed on the profit on ordinary activities for the year is lower than (2021: lower than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
2022
2021
£
£
Profit on ordinary activities before taxation
1,079,497
494,360
------------
---------
Profit on ordinary activities by rate of tax
205,104
88,417
Effect of expenses not deductible for tax purposes
30,530
Effect of capital allowances and depreciation
( 139,461)
Utilisation of tax losses
( 39,682)
( 101,854)
Foreign tax
10,344
------------
---------
Tax on (loss)/profit
66,835
( 13,437)
------------
---------
14. Dividends
2022
2021
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
241,505
208,000
---------
---------
15. Intangible assets
Group
Goodwill
Licence
Total
£
£
£
Cost
At 1 January 2022
1,004,829
25,000
1,029,829
Acquisitions through business combinations
268,094
268,094
------------
--------
------------
At 31 December 2022
1,272,923
25,000
1,297,923
------------
--------
------------
Amortisation
At 1 January 2022
1,004,829
1,250
1,006,079
Charge for the year
268,094
5,000
273,094
------------
--------
------------
At 31 December 2022
1,272,923
6,250
1,279,173
------------
--------
------------
Carrying amount
At 31 December 2022
18,750
18,750
------------
--------
------------
At 31 December 2021
23,750
23,750
------------
--------
------------
The company has no intangible assets.
16. Tangible assets
Group
Land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Other fixed assets
Total
£
£
£
£
£
£
Cost
At 1 Jan 2022
21,594,712
2,594,209
813,699
249,707
70,546
25,322,873
Additions
516,408
198,650
116,469
100,755
22,441
954,723
Disposals
( 240,761)
( 14,663)
( 46,224)
( 301,648)
-------------
------------
---------
---------
--------
-------------
At 31 Dec 2022
22,111,120
2,552,098
915,505
350,462
46,763
25,975,948
-------------
------------
---------
---------
--------
-------------
Depreciation
At 1 Jan 2022
2,435,999
1,748,725
536,735
104,436
59,502
4,885,397
Charge for the year
323,247
329,682
115,997
44,785
6,148
819,859
Disposals
( 240,761)
( 14,663)
( 46,224)
( 301,648)
Impairment losses
171,279
19,941
191,220
-------------
------------
---------
---------
--------
-------------
At 31 Dec 2022
2,759,246
2,008,925
638,069
149,221
39,367
5,594,828
-------------
------------
---------
---------
--------
-------------
Carrying amount
At 31 Dec 2022
19,351,874
543,173
277,436
201,241
7,396
20,381,120
-------------
------------
---------
---------
--------
-------------
At 31 Dec 2021
19,158,713
845,484
276,964
145,271
11,044
20,437,476
-------------
------------
---------
---------
--------
-------------
Company
Motor vehicles
Equipment
Total
£
£
£
Cost
At 1 January 2022
203,392
4,121
207,513
Additions
100,755
1,232
101,987
---------
-------
---------
At 31 December 2022
304,147
5,353
309,500
---------
-------
---------
Depreciation
At 1 January 2022
83,476
2,473
85,949
Charge for the year
37,838
685
38,523
---------
-------
---------
At 31 December 2022
121,314
3,158
124,472
---------
-------
---------
Carrying amount
At 31 December 2022
182,833
2,195
185,028
---------
-------
---------
At 31 December 2021
119,916
1,648
121,564
---------
-------
---------
Included in freehold property is freehold land at a cost of £6,976,712 (2021: 6,976,712) which is not depreciated. Land and buildings depreciation at 1 January 2022 includes impairment of £698,457.
17. Investments
Group
Interests in associates
£
Share of net assets/cost
At 1 January 2022
247,689
Share of profit or loss
121,291
---------
At 31 December 2022
368,980
---------
Impairment
At 1 January 2022 and 31 December 2022
---------
Carrying amount
At 31 December 2022
368,980
---------
At 31 December 2021
247,689
---------
Company
Shares in group undertakings
Shares in participating interests
Total
£
£
£
Cost
At 1 January 2022
5,528,089
51
5,528,140
Additions
80
80
------------
----
------------
At 31 December 2022
5,528,169
51
5,528,220
------------
----
------------
Impairment
At 1 January 2022 and 31 December 2022
982,289
982,289
------------
----
------------
Carrying amount
At 31 December 2022
4,545,880
51
4,545,931
------------
----
------------
At 31 December 2021
4,545,800
51
4,545,851
------------
----
------------
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Registered office
Class of share
Percentage of shares held
Subsidiary undertakings
Ashley Hotels Andover Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Hotels Rockingham Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Hotels Salisbury Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Hotels Southampton Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Hotels Victoria Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Serviced Offices Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Hotels SA Limited (Dormant)
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Ashley Hotels Manchester Limited (Dormant)
01 Oaklands Road, London, England, N20 8BD
Ordinary
100
White Hart Hotel Salisbury Limited (Dormant)
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
100
Zasz Limited
150 Headstone Lane, Harrow, England, HA2 6JT
Ordinary
80
Other significant holdings
Ashley Hotels Farnborough Limited
65-67 Belgrave Road, London, England, SW1V 2BG
Ordinary
50
80% of the share capital of Zasz Limited was acquired on 1 October 2022. The results of the company have been included in the financial statements from this date.
18. Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Raw materials and consumables
33,057
26,685
--------
--------
----
----
19. Debtors
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade debtors
1,399,387
96,452
Amounts owed by group undertakings
1,709,967
1,220,542
Amounts owed by undertakings in which the company has a participating interest
1,116,568
1,222,908
1,116,568
1,222,908
Prepayments and accrued income
1,109,638
117,836
Other debtors
827,636
25,880
770,595
16,789
------------
------------
------------
------------
4,453,229
1,463,076
3,597,130
2,460,239
------------
------------
------------
------------
The debtors above include the following amounts falling due after more than one year:
Group
Company
2022
2021
2022
2021
£
£
£
£
Other debtors
400,000
400,000
---------
----
---------
----
20. Investments
Group
Company
2022
2021
2022
2021
£
£
£
£
Other investments
6,639,010
8,186,592
6,639,010
8,186,592
------------
------------
------------
------------
21. Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans and overdrafts
4,317,679
5,319,260
3,544,350
4,530,663
Trade creditors
588,207
415,292
13,033
4,383
Amounts owed to group undertakings
6,592,484
5,231,268
Accruals and deferred income
434,647
250,675
56,000
38,000
Corporation tax
488,958
16,909
Social security and other taxes
522,413
138,861
28,545
65,031
Obligations under finance leases and hire purchase contracts
11,997
10,090
11,997
10,090
Director loan accounts
103,181
20,732
19,866
20,732
Other creditors
145,930
249,833
4,140
25,252
------------
------------
-------------
------------
6,613,012
6,421,652
10,270,415
9,925,419
------------
------------
-------------
------------
Bank loans are secured by way of a debenture over the freehold properties of the group and by way of a partial personal guarantee from the directors.
The hire purchase agreements are secured against the assets to which they relate.
22. Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans and overdrafts
17,867,454
18,519,674
108
Obligations under finance leases and hire purchase contracts
19,231
33,135
19,231
33,135
-------------
-------------
--------
--------
17,886,685
18,552,809
19,231
33,243
-------------
-------------
--------
--------
Bank loans are secured by way of a debenture over the freehold properties of the group and by way of a partial personal guarantee from the directors.
The hire purchase agreements are secured against the assets to which they relate.
Included within creditors: amounts falling due after more than one year is an amount of £370,640 (2021: £650,640) in respect of liabilities payable or repayable otherwise than by instalments which fall due for payment after more than five years from the reporting date.
Included within Bank loans is a loan of £800,000. The loan accrues interest on a monthly basis at LIBOR plus 2.96%. The loan is due for repayment in full in 2027.
23. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Not later than 1 year
11,997
10,090
11,997
10,090
Later than 1 year and not later than 5 years
19,231
33,135
19,231
33,135
--------
--------
--------
--------
31,228
43,225
31,228
43,225
--------
--------
--------
--------
24. Provisions
Group
Deferred tax (note 25)
£
At 1 January 2022
( 13,978)
Additions
( 434,599)
---------
At 31 December 2022
( 448,577)
---------
Company
Deferred tax (note 25)
£
At 1 January 2022
11,485
Additions
( 329,910)
---------
At 31 December 2022
( 318,425)
---------
25. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Included in provisions (note 24)
( 448,577)
( 13,978)
( 318,425)
11,485
---------
--------
---------
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2022
2021
2022
2021
£
£
£
£
Accelerated capital allowances
( 83,895)
( 13,978)
46,257
11,485
Fair value adjustment of financial assets
( 364,682)
( 364,682)
---------
--------
---------
--------
(448,577)
(13,978)
(318,425)
11,485
---------
--------
---------
--------
Deferred tax has been calculated at 25% (2021: 19%) on the basis that this is the rate of corporation tax for the foreseeable future. The amount of the net reversal of deferred tax expected to occur during the next 12 months is £83,800.
26. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 102,841 (2021: £ 98,062 ).
27. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
31,150
344,483
41,593
--------
---------
----
--------
28. Called up share capital
Issued, called up and fully paid
2022
2021
No.
£
No.
£
Ordinary shares of £ 1 each
100
100
100
100
----
----
----
----
29. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Profit and loss account - This reserve records retained earnings and accumulated losses.
30. Analysis of changes in net debt
At 1 Jan 2022
Cash flows
Acquisition and disposal of subsidairies
At 31 Dec 2022
£
£
£
£
Cash at bank and in hand
4,942,132
(1,647,358)
3,294,774
Debt due within one year
(5,350,082)
619,000
298,225
(4,432,857)
Debt due after one year
(18,552,809)
624,587
41,537
(17,886,685)
Current asset investments
8,186,592
(1,547,582)
6,639,010
-------------
------------
---------
-------------
( 10,774,167)
( 1,951,353)
339,762
( 12,385,758)
-------------
------------
---------
-------------
31. Directors' advances, credits and guarantees
The directors loan accounts remained in credit throughout the period. No interest is charged and these are repayable on demand.
32. Related party transactions
Group
The group has taken advantage of the exemptions available under FRS102 relating to the disclosure of related party transactions with other members of the Ashley Hotels (Holdings) Limited group. Other Related Party Transactions Included in note 18 - debtors, are amounts due from associated undertakings. This balance is unsecured, interest free and no fixed repayment terms. The key management are deemed to be the same as the directors, the remuneration is disclosed in note 9.