Company registration number 02848403 (England and Wales)
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
COMPANY INFORMATION
Directors
D Shamoon
S Leleu
J S Shamoon Arazi
R Hyde
Secretary
L Tilley
Company number
02848403
Registered office
7 Howick Place
London
SW1P 1BB
Auditor
Perrys Audit Limited
Chartered Accountants
4th Floor
399-401 Strand
London
WC2R 0LT
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
The directors present their strategic report for Small Luxury Hotels of the World Management Limited (the Company) for the year ended 31 December 2022.
The Company is engaged in the business of managing and promoting Small Luxury Hotels of the World Limited (“SLH”), which is a leading hotel marketing and reservations company providing services to luxury hotels aspiring to the highest levels of quality. The Company provides the services to SLH under a Management Services Agreement which is in place until 2040.
In July 2021 the Company purchased the balance of SLH from SLH Holdings LLP and now holds 100% of the shares.
The financial statements for 2022 are based on a 12 month period.
The results of the company show a turnover of £4.5m (2021: £5.5m) with a profit before tax for the financial year of £980k (2021: £2.27m).
As at 31st December 2022 the Company had net assets of £8.17m (2021: £7.44m). In the opinion of the directors both the level of business and the year end financial position were satisfactory. Any identified risks or uncertainties have been considered when producing the budget for 2023.
Principal risks and uncertainties
The main risks to the Company are economic collapse, major natural disaster, Pandemic or terrorist act that affects peoples travelling behaviour. As at 31 December 2022 the Company had net assets of £8.24m. In the opinion of the directors both the level of business and the year-end financial position were satisfactory. Any identified risks or uncertainties have been considered when producing the budget for 2023.
Development and performance
As the company now controls 100% of the shares of SLH Ltd, the Management Services Agreement was restructured so that all staff are recharged at 5% mark-up of actual employee costs rather than employee costs plus on-costs such as rent, light, heat, computer equipment, telephone etc, plus 20% mark-up. Additionally, SLH Mgmt Ltd no longer take a 50% share of SLH Ltd’s reservation profits. As budgeted in 2022 the industry began to bounce back following the Covid pandemic and we have budgeted for continued bounce back in 2023.
Key performance indicators
Given the straightforward nature of the business, the Company’s directors are of the opinion that analysis using KPI’s is not necessary for an understanding of the development, performance or position of the business.
The Company had 45 employees at the end of the financial year.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
S Leleu
Director
2 October 2023
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT 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 in the year under review was that of reservation services for hotels around the world.
Results and dividends
The results for the year are set out on page 5.
Ordinary dividends were paid amounting to £165,561. 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:
D Shamoon
S Leleu
J S Shamoon Arazi
R Hyde
Auditor
Perrys Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
S Leleu
Director
2 October 2023
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
2022
2021
Notes
£
£
Turnover
3
4,472,469
5,518,834
Cost of sales
(1,969,960)
(1,555,315)
Gross profit
2,502,509
3,963,519
Administrative expenses
(1,588,591)
(1,963,679)
Other operating income
50,000
250,150
Operating profit
4
963,918
2,249,990
Interest receivable and similar income
7
1,459
62
Amounts written off investments
8
14,928
22,734
Profit before taxation
980,305
2,272,786
Tax on profit
9
(86,325)
(87,022)
Profit for the financial year
893,980
2,185,764
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED (REGISTERED NUMBER: 02848403)
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 6 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
11
138,530
252,609
Investments
12
10,633,029
9,342,349
10,771,559
9,594,958
Current assets
Debtors
16
3,628,065
1,715,833
Investments
17
174,403
159,474
Cash at bank and in hand
992,637
470,483
4,795,105
2,345,790
Creditors: amounts falling due within one year
18
(7,354,342)
(4,467,252)
Net current liabilities
(2,559,237)
(2,121,462)
Total assets less current liabilities
8,212,322
7,473,496
Provisions for liabilities
Deferred tax liability
19
46,562
36,155
(46,562)
(36,155)
Net assets
8,165,760
7,437,341
Capital and reserves
Called up share capital
21
40,100
40,100
Share premium account
143,856
143,856
Capital redemption reserve
60,000
60,000
Profit and loss reserves
7,921,804
7,193,385
Total equity
8,165,760
7,437,341
The financial statements were approved by the board of directors and authorised for issue on 2 October 2023 and are signed on its behalf by:
S Leleu
Director
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2021
40,100
143,856
60,000
5,913,538
6,157,494
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
2,185,764
2,185,764
Dividends
10
-
-
-
(905,917)
(905,917)
Balance at 31 December 2021
40,100
143,856
60,000
7,193,385
7,437,341
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
893,980
893,980
Dividends
10
-
-
-
(165,561)
(165,561)
Balance at 31 December 2022
40,100
143,856
60,000
7,921,804
8,165,760
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
1
Accounting policies
Company information
Small Luxury Hotels of The World Management Limited is a private company limited by shares incorporated in England and Wales. The registered office is , 7 Howick Place, London, SW1P 1BB.
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 financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Small Luxury Hotels of The World Management Limited is a wholly owned subsidiary of Hotel Investment Partners Limited and the results of Small Luxury Hotels of The World Management Limited are included in the consolidated financial statements of Hotel Investment Partners Limited. The registered office address of the parent company is 2nd floor, 7 Howick Place, London SW1P 1BB.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 9 -
1.2
Going concern
The company has been affected by the Covid-19 global pandemic and its economic impact. The company has reviewed its results from 1 January 2023 to date, and its forecasts for 2024 and beyond.true
The company still provides services to hotels around the world and will continue to rigorously monitor its costs and cashflows accordingly.
Furthermore, the parent company has received an injection of capital amounting to £13.7m in 2022.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
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 VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
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:
Leasehold improvements
Over 5 years
Fixtures, fittings & equipment
25% on cost
Computer equipment
50% on cost and 25% on cost
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 credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 10 -
1.7
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
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 company 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 company after deducting all of its liabilities.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 11 -
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 company’s contractual obligations expire or are discharged or cancelled.
1.8
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 profit and loss account 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 company’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 profit and loss account, 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 when the company has 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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.9
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.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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 leases asset are consumed.
1.12
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.
1.13
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 in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Depreciation is provided for at the rates disclosed above in note 1.4.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Provision of reservation services
4,472,469
5,518,834
2022
2021
£
£
Other revenue
Interest income
1,459
62
Grants received
-
200,150
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(18,194)
(32,300)
Government grants
-
(200,150)
Fees payable to the company's auditor for the audit of the company's financial statements
10,000
9,650
Depreciation of owned tangible fixed assets
147,265
37,366
Operating lease charges
213,715
279,244
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
45
43
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
465,459
795,170
Social security costs
72,311
114,483
Pension costs
101,210
81,436
638,980
991,089
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
436,178
370,089
Company pension contributions to defined contribution schemes
7,887
10,513
444,065
380,602
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
239,000
190,000
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
1,459
60
Other interest income
2
Total income
1,459
62
8
Amounts written off investments
current asset investments
2022
2021
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
14,928
22,734
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
75,918
87,227
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Taxation
2022
2021
£
£
(Continued)
- 15 -
Deferred tax
Origination and reversal of timing differences
10,407
(205)
Total tax charge
86,325
87,022
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
980,305
2,272,786
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
186,258
431,829
Tax effect of expenses that are not deductible in determining taxable profit
(2,401)
15,893
Group relief
(127,008)
(330,743)
Permanent capital allowances in excess of depreciation
19,069
2,020
Effect of revaluations of investments
(4,319)
Deferred tax
10,407
205
Tax relief in respect of prior year adjustments
(27,863)
Taxation charge for the year
86,325
87,022
10
Dividends
2022
2021
£
£
Final paid
165,561
905,917
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2022
219,889
108,628
273,065
601,582
Additions
1,313
31,873
33,186
At 31 December 2022
219,889
109,941
304,938
634,768
Depreciation and impairment
At 1 January 2022
51,759
43,462
253,752
348,973
Depreciation charged in the year
76,617
48,592
22,056
147,265
At 31 December 2022
128,376
92,054
275,808
496,238
Carrying amount
At 31 December 2022
91,513
17,887
29,130
138,530
At 31 December 2021
168,130
65,166
19,313
252,609
12
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
13
9,342,349
9,342,349
Investments in associates
14
1,290,680
10,633,029
9,342,349
Movements in fixed asset investments
Shares in subsidiaries and associates
£
Cost or valuation
At 1 January 2022
9,342,349
Additions
1,290,680
At 31 December 2022
10,633,029
Carrying amount
At 31 December 2022
10,633,029
At 31 December 2021
9,342,349
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Small Luxury Hotels of the World Limited
7 Howick Place, London SW1P 1BB
Ordinary
100.00
Luxury Hotel Partners Limited
7 Howick Place, London SW1P 1BB
Ordinary
100.00
14
Associates
Details of the company's associates at 31 December 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Small Luxury Hotels of the World Management PTE Limited
60 Paya Lebar Road, #04-03 Paya Lebar Square, Singapore 409051
Ordinary
50.00
15
Financial instruments
2022
2021
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
174,403
159,474
16
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
2,857,180
1,231,540
Corporation tax recoverable
15,372
91,290
Other debtors
654,696
281,618
Prepayments and accrued income
100,817
111,385
3,628,065
1,715,833
17
Current asset investments
2022
2021
£
£
Unlisted investments
174,403
159,474
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
18
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
937,277
2,989,273
Amounts owed to group undertakings
5,280,000
Taxation and social security
710,515
662,359
Other creditors
240,715
616,921
Accruals and deferred income
185,835
198,699
7,354,342
4,467,252
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
46,562
36,155
2022
Movements in the year:
£
Liability at 1 January 2022
36,155
Charge to profit or loss
10,407
Liability at 31 December 2022
46,562
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
101,210
81,436
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
21
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
40,000
40,000
40,000
40,000
Ordinary A shares of £1 each
100
100
100
100
40,100
40,100
40,100
40,100
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
244,710
244,710
Between two and five years
216,552
461,262
461,262
705,972
23
Related party transactions
Included in debtors is a balance owed by the parent company totalling £40,758 (2021: £4,758). During the year, the company charged the parent company £30,000 (2021: £Nil).
During the year the company charged a fellow group company fees totalling £28,810 (2021: £562,521). During the year the company was charged fees by the fellow group company totalling £344,816 (2021: £1,280,413). The balance owed to the fellow group company was £413,331 (2021: £355,973).
During the year the company charged, a wholly-owned subsidiary fees of £354,890 (2021: £75,137) for administrative services. The balance owed from this company amounted to £765,696 (2021: £295,818).
During the year the company charged fees totalling £6,649,571 (2021: £6,183,145) to a subsidiary company. The company was owed £2,633,646 (2021: £48,421) from the subsidiary company.
During the year, the company charged fees totalling £12,314 (2021: £19,486) to an associated company. During the year, the company incurred charges totalling £473,172 (2021: £489,818) from the associated company. The company owed the associated company £304,623 (2021: £1,627,468).
During the year, the company charged fees amounting to £35,299 (2021: £Nil) to a company with common directors. The company was owed £35,299 (2021: £Nil) from the company with common directors.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
24
Ultimate controlling party
The ultimate parent company is Hotel Investment Partners Limited.
The ultimate controlling party is the Imperial Kensington Trust.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
- 21 -
Opinion
We have audited the financial statements of Small Luxury Hotels of The World Management Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
- 22 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
- 23 -
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.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.
We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
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.
Declan McCusker
Senior Statutory Auditor
For and on behalf of Perrys Audit Limited
Chartered Accountants
Statutory Auditor
4th Floor
399-401 Strand
London
WC2R 0LT
3 October 2023
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