Company registration number 02954321 (England and Wales)
ST GILES HOTEL LIMITED
GROUP REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ST GILES HOTEL LIMITED
COMPANY INFORMATION
Directors
Dato' Seri R C M Tan
Mr S Y Chua
Mr C B Oh
Ms A H X Tan
Secretary
Boodle Hatfield Secretarial Limited
Company number
02954321
Registered office
St Giles Hotel
12 Bedford Avenue
London
WC1B 3GH
Auditor
Silver Levene (UK) Limited
Chartered Certified Accountants
37 Warren Street
London
W1T 6AD
Business address
St Giles Hotel
12 Bedford Avenue
London
WC1B 3GH
ST GILES HOTEL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 33
ST GILES HOTEL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

Fair review of the business

The principal activity of the group during the year was hotel operation and management. The group made a net profit of £1.23m in 2022 compared to a loss of £3.54m in 2021.

 

It was the first full year of operations since the pandemic. High demand and a change in rate strategy resulted in strong financial performance at St Giles Hotel Limited.

 

The company's subsidiary, St. Giles Hotel, LLC, consists of two properties in New York, USA. One property was sold at the end of the year and the other was placed under a two-year lease agreement.

 

At year-end, the group had deficits in shareholders' funds of £14.50m compared to a deficit of £13.31m in 2021. £2.42m was lost due to currency translation of foreign subsidiary.

 

St Giles Hotel Limited

Q1 of 2022 started slowly with high cancellations, a carryover impact from the omicron variant of December 2021. However, by March 2022, the market recovered, with a strong leisure demand driving the recovery.

 

To maximise revenue, we targeted higher-quality rates to increase RevPAR, resulting in a historically high ADR. Additionally, we leveraged relationships with local councils to fulfil our commitment to positively impact our community by making available rooms accessible to people experiencing homelessness and displaced people due to the war in Ukraine while generating guaranteed revenue. We completed the renovation of 30% of the room inventory, offering our guests an upgraded stay with a modern design and increasing our inventory of higher-rate rooms from 14% to 40%.

 

FINANCIAL INDICATORS

2019

2020

2021

2022

Revenue

£21.45m

£4.04m

£4.93m

£21.10m

ADR

£82.56

£74.72

£79.19

£105.49

Occupancy

96.3%

22.7%

28.9%

79.1%

 

The table above shows the property’s financial progression pre, during and post pandemic.

 

Q1 2023 has surpassed Revenue and ADR targets. Ongoing industrial actions are impacting business, with January most affected due to high cancellations from the domestic market in response to train strikes. However, business rebounded, with February and March exceeding targets, and the rest of the year is pacing very strongly.

 

St Giles Hotel, LLC

The Tuscany and The Court hotels remained closed throughout 2022. At the end of the year, we completed the sale of The Court Hotel. The Tuscany is now under a two year lease from 15 September 2022 and extended to 28 February 2025 at a rent of USD1.5m per annum. At the expiration of this initial term, the lessee has the option to extend the term for a further two year term at a rent of USD2m per annum.

Principal risks and uncertainties

Uncertainties include ongoing industrial actions in the U.K., high inflation, increased utility bills and operation cost, and the cost-of-living crisis. We have seen an impact on Q1's performance with a downward trend from the domestic market, especially due to train strikes. However, King Charles III’s coronation in May this year has caused a surge in travel demand from the international markets with U.S., Canada and other source markets interested in British Royal heritage driving the demand.

ST GILES HOTEL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators

The management team regularly reviews and analyses a wide range of KPIs to assess the group's performance and financial position. The main indicators from the financial statements are turnover, gross profit and pre-tax profit. The improvement in all three indicators since the pandemic is outlined in the business review above.

On behalf of the board

Ms A H X Tan
Director
31 March 2023
ST GILES HOTEL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company and group continued to be that of hotels operator. The company's subsidiary, St. Giles Hotel, LLC operates two hotels in New York, "The Court" and "The Tuscany". In December 2022, the company disposed of "The Court" due to on-going loss making for a cash consideration of US$50 million. The Tuscany was temporarily closed since April 2020 and leased to a 3rd party not related to the company in July 2022 and commenced on 15 September 2022.

 

The current and potential future impacts are disclosed in the Strategic Report.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Dato' Seri R C M Tan
Mr S Y Chua
Mr C B Oh
Ms A H X Tan
Market value of land and buildings

In the opinion of the directors the current market value of the company's interests in land and buildings exceeds the book value by approximately £19 million.

Financial instruments
Treasury operations and financial instruments

The group operates a treasury function which is responsible for managing the liquidity and interest risks associated with the group activities.

 

The group's financial instruments comprise cash at bank, trade debtors and trade creditors that arise directly from operations and loans to and from group companies and banks. The financial risks affecting the group is monitored and reviewed by the directors on a regular basis.

Liquidity risk

Liquidity risk arises from the group’s management of working capital. It is the risk that the group will encounter difficulty in meeting its financial obligations as they fall due. The group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by mataching the maturity profiles of financial assets and liabilities.

Interest rate risk

The group is exposed to interest rate risk because the group borrows funds at both fixed and floating interests rates. The risk is managed by the group by maintaining an appropriate mix between fixed and floating rate borrowings.

Foreign currency risk

The group is exposed to the functional currency of its foreign subsidiary in the US. It is the policy of the group to enter into borrowings in the same currency of the country of its foreign operation to minimise the risk.

ST GILES HOTEL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Credit risk

The group's principal credit risk relates to the recovery of amounts owned by trade debtors. In order to manage the risk, limits are set for each client based upon a mixture of past payment history and third party credit references. These are regularly reviewed. Debts are actively chased by the credit control department and those over a certain size or age are reported to the board monthly.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

 

Auditor

In accordance with the company's articles, a resolution proposing that Silver Levene (UK) Limited be reappointed as auditor of the group will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

ST GILES HOTEL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
On behalf of the board
Ms A H X Tan
Director
31 March 2023
ST GILES HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ST GILES HOTEL LIMITED
- 6 -
Opinion

We have audited the financial statements of St Giles Hotel Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and 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 contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

ST GILES HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ST GILES HOTEL LIMITED
- 7 -
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 their 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:

 

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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

 

The following laws and regulations were identified as being of significance to the entity:

 

 

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

ST GILES HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ST GILES HOTEL LIMITED
- 8 -

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

Goh Yong Chong (Senior Statutory Auditor)
For and on behalf of Silver Levene (UK) Limited
Chartered Certified Accountants
Statutory Auditor
37 Warren Street
London
W1T 6AD
31 March 2023
ST GILES HOTEL LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
2
21,487,685
4,927,336
Cost of sales
(7,310,696)
(3,748,175)
Gross profit
14,176,989
1,179,161
Administrative expenses
(15,622,640)
(8,337,418)
Other operating income
1,981,671
4,556,153
Operating profit/(loss)
3
536,020
(2,602,104)
Interest receivable and similar income
6
50,081
32,441
Interest payable and similar expenses
7
3,767,057
(813,406)
Profit/(loss) on disposal of operations
8
(1,718,338)
-
Profit/(loss) before taxation
2,634,820
(3,383,069)
Tax on profit/(loss)
9
(1,400,180)
(151,933)
Profit/(loss) for the financial year
22
1,234,640
(3,535,002)
Other comprehensive income
Currency translation differences
(2,422,499)
(279,617)
Total comprehensive income for the year
(1,187,859)
(3,814,619)
Profit/(loss) for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
ST GILES HOTEL LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
10
14,555
78,043
Tangible assets
11
34,769,018
68,570,343
Investments
12
87,509
87,509
34,871,082
68,735,895
Current assets
Stocks
14
40,113
85,526
Debtors
15
42,270,912
4,929,451
Cash at bank and in hand
4,247,070
2,600,086
46,558,095
7,615,063
Creditors: amounts falling due within one year
16
(94,907,055)
(39,746,183)
Net current liabilities
(48,348,960)
(32,131,120)
Total assets less current liabilities
(13,477,878)
36,604,775
Creditors: amounts falling due after more than one year
17
(64,107)
(49,293,255)
Provisions for liabilities
Deferred tax liability
19
958,811
624,457
(958,811)
(624,457)
Net liabilities
(14,500,796)
(13,312,937)
Capital and reserves
Called up share capital
21
555,420
555,420
Share premium account
22
127,374
127,374
Capital redemption reserve
22
320,230
320,230
Profit and loss reserves
22
(15,503,820)
(14,315,961)
Total equity
(14,500,796)
(13,312,937)
The financial statements were approved by the board of directors and authorised for issue on 31 March 2023 and are signed on its behalf by:
31 March 2023
Ms A H X Tan
Director
Company registration number 02954321 (England and Wales)
ST GILES HOTEL LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
10
14,555
78,043
Tangible assets
11
5,022,565
4,910,488
Investments
12
8,073,509
21,325,109
13,110,629
26,313,640
Current assets
Stocks
14
40,113
17,135
Debtors
15
64,619,206
69,741,317
Cash at bank and in hand
3,822,190
2,450,398
68,481,509
72,208,850
Creditors: amounts falling due within one year
16
(85,444,206)
(31,040,912)
Net current (liabilities)/assets
(16,962,697)
41,167,938
Total assets less current liabilities
(3,852,068)
67,481,578
Creditors: amounts falling due after more than one year
17
-
(47,733,065)
Provisions for liabilities
Deferred tax liability
19
958,811
624,457
(958,811)
(624,457)
Net (liabilities)/assets
(4,810,879)
19,124,056
Capital and reserves
Called up share capital
21
555,420
555,420
Share premium account
22
127,374
127,374
Capital redemption reserve
22
320,230
320,230
Profit and loss reserves
22
(5,813,903)
18,121,032
Total equity
(4,810,879)
19,124,056

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £23,934,935 (2021 - £9,303,900 loss).

The financial statements were approved by the board of directors and authorised for issue on 31 March 2023 and are signed on its behalf by:
31 March 2023
Ms A H X Tan
Director
Company registration number 02954321 (England and Wales)
ST GILES HOTEL LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2021
555,420
127,374
320,230
(10,501,342)
(9,498,318)
Year ended 31 December 2021:
Loss for the year
-
-
-
(3,535,002)
(3,535,002)
Other comprehensive income:
Currency translation differences
-
-
-
(279,617)
(279,617)
Total comprehensive income for the year
-
-
-
(3,814,619)
(3,814,619)
Balance at 31 December 2021
555,420
127,374
320,230
(14,315,961)
(13,312,937)
Year ended 31 December 2022:
Profit for the year
-
-
-
1,234,640
1,234,640
Other comprehensive income:
Currency translation differences
-
-
-
(2,422,499)
(2,422,499)
Total comprehensive income for the year
-
-
-
(1,187,859)
(1,187,859)
Balance at 31 December 2022
555,420
127,374
320,230
(15,503,820)
(14,500,796)
ST GILES HOTEL LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2021
555,420
127,374
320,230
27,424,932
28,427,956
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(9,303,900)
(9,303,900)
Balance at 31 December 2021
555,420
127,374
320,230
18,121,032
19,124,056
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(23,934,935)
(23,934,935)
Balance at 31 December 2022
555,420
127,374
320,230
(5,813,903)
(4,810,879)
ST GILES HOTEL LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
8,050,839
1,303,798
Interest paid
(1,825,812)
(813,406)
Net cash inflow from operating activities
6,225,027
490,392
Investing activities
Purchase of intangible assets
-
(26,940)
Purchase of tangible fixed assets
(790,754)
(1,347,117)
Loans made
-
(4,075,968)
Interest received
50,081
32,441
Net cash used in investing activities
(740,673)
(5,417,584)
Financing activities
Proceeds from borrowings
-
6,280,264
Repayment of borrowings
(3,862,186)
-
Net cash (used in)/generated from financing activities
(3,862,186)
6,280,264
Net increase in cash and cash equivalents
1,622,168
1,353,072
Cash and cash equivalents at beginning of year
2,600,086
1,246,400
Effect of foreign exchange rates
24,816
614
Cash and cash equivalents at end of year
4,247,070
2,600,086
The company is a qualifying entity for the purposes of FRS 102 and has elected to take the exemption under paragraph 1.12(b) of FRS 102 not to present the company statement of cash flows.
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
1
Accounting policies
Company information

St Giles Hotel Limited is a private company limited by shares incorporated in England and Wales. The registered office is St Giles Hotel, 12 Bedford Avenue, London, WC1B 3GH.

 

The group consists of St Giles Hotel Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The individual financial information of each entity is measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the group are presented in Pound Sterling ("£"), which is the presentation currency for the consolidated financial statements. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company St Giles Hotel Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.3
Going concern

The financial statements have been prepared on a going concern basis which assumes that the group will continue in operational existence for the foreseeable future.

 

The validity of this assumption depends on the group being able to trade profitably in the future, and the continued support from the shareholders and the landlord who are connected to the group. The financial statements do not include any adjustments that would result if the group continued to make losses and such support were withdrawn. If the group was unable to continue to trade, adjustments would have to be made to reduce the value of assets to their recoverable amounts, provide for further liabilities that may arise and to reclassify fixed assets and long term liabilities as current assets and liabilities. The shareholders and the landlord have expressed their willingness to continue supporting the group for the foreseeable future and hence it is appropriate for the financial statements to be prepared on a going concern basis.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of sales related taxes.

Revenue derived from hire of rooms is recognised over the period of hiring.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
5 years straight line
Website costs
5 years straight line
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
Not depreciated
Leasehold improvements
Over the remaining life of the leasehold
Fixtures and fittings
5 to 10 years straight line
Motor vehicles
3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

Freehold land and buildings are stated at cost and building is not depreciated due to the company's nature of business. It is a departure from the general requirement of the Companies Act 2006 for all tangible assets to be depreciated over their useful life except land which generally has an unlimited useful life. In the opinion of the directors compliance with the standard is necessary for the financial statements to give a true and fair view. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount of this which might otherwise have been charged cannot be separately identified or quantified.

 

Assets in the course of construction are carried at cost, less any identified impairment loss. Depreciation commences when the assets are ready for their intended use.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Where a reasonable and consistent basis of allocation can be identified, assets are allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
1.17
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.18
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.

 

The trading results of group undertakings are translated into sterling at the average exchange rates for the year. The assets and liabilities of overseas undertakings, including goodwill and fair value adjustments arising on acquisition, are translated at the exchange rates ruling at the year-end. Exchange adjustments arising from the retranslation of opening net investments and from the translation of the profits or losses at average rates are recognised in ‘Other comprehensive income’.

2
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Room sales
20,052,693
4,652,830
Food and beverages
1,003,668
271,979
Others
431,324
2,527
21,487,685
4,927,336
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
21,081,559
4,927,336
Overseas
406,126
-
21,487,685
4,927,336
2022
2021
£
£
Other revenue
Interest income
50,081
32,441
UK Coronavirus Job Retention Scheme grant
-
2,291,184
Rental income
914,033
1,172,914
US PPP loan forgiveness grant
(225,208)
1,233,777
Insurance claims
1,159,179
1,012,440
Management cross charge
553,000
-
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
3
Operating profit/(loss)
2022
2021
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange losses/(gains)
459,410
(8,426)
Government grants
-
(2,291,184)
US PPP loan forgiveness grant
225,208
(1,233,777)
Depreciation of owned tangible fixed assets
1,674,671
1,620,001
Loss on disposal of tangible fixed assets
97,991
-
Amortisation of intangible assets
36,548
36,548
Operating lease charges
4,942,745
467,723
4
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Hotel staff
96
107
78
79
Administrative staff
32
32
29
29
Total
128
139
107
108

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
4,434,827
3,371,718
3,662,056
2,608,800
Social security costs
599,779
520,473
301,187
244,622
Pension costs
63,559
59,486
63,559
59,486
5,098,165
3,951,677
4,026,802
2,912,908
5
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
126,790
99,136
Company pension contributions to defined contribution schemes
5,750
5,750
132,540
104,886
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
6
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
16,369
98
Other interest income
33,712
32,343
Total income
50,081
32,441

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
16,369
98
7
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,811,422
964,908
Other interest on financial liabilities
729,513
462,489
2,540,935
1,427,397
Other finance costs:
Exchange differences on financing transactions
(6,322,382)
(613,991)
Other interest
14,390
-
Total finance costs
(3,767,057)
813,406
8
Profit/(loss) on disposal of operations

This was relating to the sale of a hotel in the US in December 2022.

9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
643,559
-
0
Adjustments in respect of prior periods
422,267
-
0
Total current tax
1,065,826
-
0
Deferred tax
Origination and reversal of timing differences
334,354
151,933
Total tax charge
1,400,180
151,933
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Taxation
(Continued)
- 23 -

The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Profit/(loss) before taxation
2,634,820
(3,383,069)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
500,616
(642,783)
Tax effect of expenses that are not deductible in determining taxable profit
139,273
87,874
Tax effect of utilisation of tax losses not previously recognised
(20,376)
-
0
Unutilised tax losses carried forward
-
0
42,266
Change in unrecognised deferred tax assets
-
0
151,933
Adjustments in respect of prior years
422,267
-
0
Permanent capital allowances in excess of depreciation
263,841
(229,376)
Depreciation on assets not qualifying for tax allowances
(9,357)
136,660
Losses on foreign subsidiaries not recognised
103,916
605,359
Taxation charge
1,400,180
151,933

The applicable rate of corporation tax is 19%. As set out in the Finane Act of 2021, the corporation tax rate will increase from current 19% to 25% starting from 1 April 2023. Therefore, the deferred tax balances have been restated to 25%.

10
Intangible fixed assets
Group
Software
Website costs
Total
£
£
£
Cost
At 1 January 2022
158,479
51,200
209,679
Additions
-
0
7,900
7,900
Transfers
-
0
(34,840)
(34,840)
At 31 December 2022
158,479
24,260
182,739
Amortisation and impairment
At 1 January 2022
126,784
4,852
131,636
Amortisation charged for the year
31,695
4,853
36,548
At 31 December 2022
158,479
9,705
168,184
Carrying amount
At 31 December 2022
-
0
14,555
14,555
At 31 December 2021
31,695
46,348
78,043
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Intangible fixed assets
(Continued)
- 24 -
Company
Software
Website costs
Total
£
£
£
Cost
At 1 January 2022
158,479
51,200
209,679
Additions
-
0
7,900
7,900
Transfers
-
0
(34,840)
(34,840)
At 31 December 2022
158,479
24,260
182,739
Amortisation and impairment
At 1 January 2022
126,784
4,852
131,636
Amortisation charged for the year
31,695
4,853
36,548
At 31 December 2022
158,479
9,705
168,184
Carrying amount
At 31 December 2022
-
0
14,555
14,555
At 31 December 2021
31,695
46,348
78,043
11
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2022
57,928,041
26,761,041
6,411,307
269,383
91,369,772
Additions
-
0
345,337
445,417
-
0
790,754
Disposals
(40,558,664)
(2,588,418)
(1,218,631)
(10,236)
(44,375,949)
Exchange adjustments
6,919,223
1,819,953
172,961
10,200
8,922,337
At 31 December 2022
24,288,600
26,337,913
5,811,054
269,347
56,706,914
Depreciation and impairment
At 1 January 2022
-
0
17,373,417
5,202,843
223,169
22,799,429
Depreciation charged in the year
-
0
1,386,994
263,070
24,607
1,674,671
Eliminated in respect of disposals
-
0
(2,643,968)
(1,200,478)
(10,236)
(3,854,682)
Exchange adjustments
-
0
1,151,139
157,139
10,200
1,318,478
At 31 December 2022
-
0
17,267,582
4,422,574
247,740
21,937,896
Carrying amount
At 31 December 2022
24,288,600
9,070,331
1,388,480
21,607
34,769,018
At 31 December 2021
57,928,041
9,387,624
1,208,464
46,214
68,570,343
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
11
Tangible fixed assets
(Continued)
- 25 -
Company
Leasehold improvements
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
11,524,318
4,963,261
183,980
16,671,559
Additions
323,695
445,417
-
0
769,112
Disposals
-
0
-
0
(10,236)
(10,236)
At 31 December 2022
11,848,013
5,408,678
173,744
17,430,435
Depreciation and impairment
At 1 January 2022
7,736,039
3,887,266
137,766
11,761,071
Depreciation charged in the year
396,795
235,633
24,607
657,035
Eliminated in respect of disposals
-
0
-
0
(10,236)
(10,236)
At 31 December 2022
8,132,834
4,122,899
152,137
12,407,870
Carrying amount
At 31 December 2022
3,715,179
1,285,779
21,607
5,022,565
At 31 December 2021
3,788,279
1,075,995
46,214
4,910,488

In December 2022, the group disposed of a hotel property in the US.

12
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
13
87,509
87,509
8,073,509
21,325,109
Movements in fixed asset investments
Group
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
87,509
Carrying amount
At 31 December 2022
87,509
At 31 December 2021
87,509
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
12
Fixed asset investments
(Continued)
- 26 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
21,325,109
Impairment
At 1 January 2022
-
Impairment losses
13,251,600
At 31 December 2022
13,251,600
Carrying amount
At 31 December 2022
8,073,509
At 31 December 2021
21,325,109
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
St. Giles Hotel, LLC
USA
Hotel operator
Ordinary unit
100.00
St. Giles Hotels, Inc (North America)
USA
Dormant holding company
Ordinary
100.00
14
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Finished goods and goods for resale
40,113
85,526
40,113
17,135
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
15
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
282,350
80,019
282,348
79,396
Corporation tax recoverable
-
0
498,461
-
0
498,461
Amounts owed by group undertakings
-
-
61,863,511
66,564,217
Other debtors
41,256,129
1,811,787
2,015,921
1,697,207
Prepayments and accrued income
732,433
1,789,184
457,426
152,036
42,270,912
4,179,451
64,619,206
68,991,317
Amounts falling due after more than one year:
Amount owed by related parties
-
0
750,000
-
0
750,000
Total debtors
42,270,912
4,929,451
64,619,206
69,741,317

Included in other debtors, approximate £38.6 million related to net sale proceeds from the disposal of a hotel in the US.

16
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans
18
51,278,220
-
0
51,278,220
-
0
Other borrowings
18
22,849,571
24,586,998
22,849,571
24,586,998
Trade creditors
2,115,819
1,611,417
1,042,207
809,125
Corporation tax payable
581,755
-
0
581,755
-
0
Other taxation and social security
1,080,803
287,225
1,080,803
186,562
Other creditors
9,303,596
8,334,454
981,476
632,904
Accruals and deferred income
7,697,291
4,926,089
7,630,174
4,825,323
94,907,055
39,746,183
85,444,206
31,040,912
17
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
18
64,107
49,293,255
-
0
47,733,065
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
18
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
51,342,327
49,293,255
51,278,220
47,733,065
Other loans
22,849,571
24,586,998
22,849,571
24,586,998
74,191,898
73,880,253
74,127,791
72,320,063
Payable within one year
74,127,791
24,586,998
74,127,791
24,586,998
Payable after one year
64,107
49,293,255
-
0
47,733,065

The bank loans are interest bearing which are expiring two years from 17 December 2021 with an option to extend. Interest is charged at an average rate of 1.7% - 2.5% (2021: 1.7% - 2.5%) above SONIA. Included in the bank loans, amount of £33.23 million was repaid in January 2023.

 

The loan is secured on:

 

UK Hotel Poperties ("the Properties")

1. 730-room St Giles Hotel located at Bedford Avenue, London, UK.

2. 411-room St Giles Hotel located at Hounslow Road, Feltham, Middlesex, UK.

 

Securities for the Facilities

Customary for financing of this nature, including but not limited to:

1. A First fixed legal mortgage over the UK Hotel Properties.

2. A first fixed charge over the UK Hotel Properties operating current and fixed deposit accounts.

3. A first assignment of the rights, title & interest in the property management agreement & proceeds & insurance policies in relation to the Properties.

4. A first fixed and floating charge over the assets of the Obligors in relation to the Properties, agreement and collateral.

5. A Debt Services Reserve Account (“DSRA”) with 4 months interest servicing of the Facilities is to be maintained at all times and pledged to the Bank and the next quarters interest is to be credited into the DSRA 2 weeks prior to the Interest Payment Date.

 

The loan payable after one year represent a loan from JP Morgan Chase Bank, pursuant to the Paycheck Protection Program ("PPP") under Division A, Title I of the CARES Act, which was enacted on 27 March 2020.

19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
958,811
624,457
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
19
Deferred taxation
(Continued)
- 29 -
Liabilities
Liabilities
2022
2021
Company
£
£
Accelerated capital allowances
958,811
624,457
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
624,457
624,457
Charge to profit or loss
334,354
334,354
Liability at 31 December 2022
958,811
958,811

The deferred tax liability set out above is expected to reverse after 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

Deferred tax is not recognised in respect of tax losses arose from its subsidairies as it is not probable that they will be recovered against the future taxable profits in the short term.

20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
63,559
59,486

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

21
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
555,420
555,420
555,420
555,420

The company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings of the company.

22
Reserves
Share premium

Consideration received for shares issued above their nominal value net of transactions costs.

Capital redemption reserve

The nominal value of shares repurchased and still held at the end of the reporting period.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
22
Reserves
(Continued)
- 30 -
Profit and loss reserves

Profit and loss reserves represent cumulative profit and loss net of distribution to owners. It includes translation reserve of 1,546,000 (2021: £876,499) arising from re-translation of foreign subsidiaries.

23
Operating lease commitments
Lessee

The operating lease represents lease of property from, a related party by virtue of common ownership. Rent reviews occur at the end of every 5th year of the lease. Additional contingent rents are also payable on the basis of 50% of the profit before taxation of the company for the accounting period less the basic rent. Contingent rents are excluded from the disclosure below.

 

The operating lease expired in 38 years from 5 October 1994.

 

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
4,763,500
4,760,000
4,763,500
4,760,000
Between two and five years
14,290,500
14,280,000
14,290,500
14,280,000
In over five years
30,738,771
35,434,167
30,738,771
35,434,167
49,792,771
54,474,167
49,792,771
54,474,167
Lessor

The operating leases represent:

 

a) Sub-leases to third parties. The leases are negotiated over terms of 3 - 25 years and rentals are fixed for 3 - 5 years. All leases include a provision for three to five-yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.

 

b) Lease of a US hotel to third party for two years from15 September 2022 and extended to 28 Febraury 2025. There is an option to extend or to purchase at the end of the initial lease term subject to all of the terms, covenants and conditions of the lease.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
2,040,950
923,333
795,000
923,333
Between two and five years
1,908,301
1,340,753
1,025,753
1,340,753
In over five years
562,521
-
562,521
-
4,511,772
2,264,086
2,383,274
2,264,086

Rent concession of £2,739,000 (2021: £4,032,000) was provided to the company during the year.

ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 31 -
24
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2022
2021
2022
2021
£
£
£
£
Acquisition of tangible fixed assets
104,300
10,098
104,300
10,098
25
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchases
Purchases
2022
2021
£
£
Company
Entities with substantially the same shareholders
33,712
32,343
2022
2021
2022
2021
£
£
£
£
Company
Entities with substantially the same shareholders
4,942,745
467,724
729,513
462,489

Other information

 

During the year, the company also received management cross charge of £553,000 (2021: £Nil) from a connected company, for services rendered.

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2022
2021
£
£
Group
Entities with substantially the same shareholders
36,973,532
35,676,379
Company
Entities with substantially the same shareholders
28,937,512
28,331,359
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
25
Related party transactions
(Continued)
- 32 -

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2022
2021
Balance
Balance
£
£
Group
Entities with substantially the same shareholders
91,495
1,650,442
Company
Entities with substantially the same shareholders
91,495
1,650,442
26
Controlling party

The company is owned by a number of private shareholders and companies, none of whom own more than 50% of the issued share capital of the company. Accordingly there is no parent entity nor ultimate controlling party.

27
Cash generated from group operations
2022
2021
£
£
Profit/(loss) for the year after tax
1,234,640
(3,535,002)
Adjustments for:
Taxation charged
1,400,180
151,933
Finance costs
(3,767,057)
813,406
Investment income
(50,081)
(32,441)
Non-operating income treated as investing activity
26,940
-
0
Loss on disposal of tangible fixed assets
97,992
1,899
Loss on disposal of business
1,718,338
-
Amortisation and impairment of intangible assets
36,548
36,548
Depreciation and impairment of tangible fixed assets
1,674,671
1,620,001
Foreign exchange
(10,100)
-
Movements in working capital:
Decrease in stocks
51,518
17,634
Decrease in debtors
994,311
7,663
Increase in creditors
4,642,939
2,222,157
Cash generated from operations
8,050,839
1,303,798
ST GILES HOTEL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
28
Analysis of changes in net debt - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
2,600,086
1,646,984
4,247,070
Borrowings excluding overdrafts
(73,880,253)
(311,645)
(74,191,898)
(71,280,167)
1,335,339
(69,944,828)
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