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Registered number: 10092128









KE HOTELS (MANCHESTER) LTD









FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 31 DECEMBER 2022

 
KE HOTELS (MANCHESTER) LTD
REGISTERED NUMBER: 10092128

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible assets
 4 
24,314,049
24,734,921

  
24,314,049
24,734,921

Current assets
  

Stocks
  
4,932
6,985

Debtors: amounts falling due after more than one year
 5 
33,974
62,220

Debtors: amounts falling due within one year
 5 
171,529
139,144

Cash at bank and in hand
 6 
586,519
71,626

  
796,954
279,975

Creditors: amounts falling due within one year
 7 
(11,238,844)
(11,598,527)

Net current liabilities
  
 
 
(10,441,890)
 
 
(11,318,552)

Total assets less current liabilities
  
13,872,159
13,416,369

Creditors: amounts falling due after more than one year
 8 
(15,827,454)
(14,794,355)

  

Net liabilities
  
(1,955,295)
(1,377,986)


Capital and reserves
  

Called up share capital 
 11 
100
100

Profit and loss account
  
(1,955,395)
(1,378,086)

  
(1,955,295)
(1,377,986)


Page 1

 
KE HOTELS (MANCHESTER) LTD
REGISTERED NUMBER: 10092128
    
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 



................................................
A Khanna
Director

Date: 24 October 2023

The notes on pages 3 to 11 form part of these financial statements.

Page 2

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

KE Hotels (Manchester) Ltd is a private company limited by shares and is registered in England and Wales. The registered office is Aston House, Cornwall Avenue, London, N3 1LF. The registered number is 10092128. The principal activity continues to be that of construction and operation of a hotel.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies.

The financial statements are prepared in Pounds Sterling, rounded to the nearest £1.

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on a going concern basis which assumes that the Company will be able to continue trading for the foreseeable future. The Company has net liabilities of £1,955,295 (2021 - £1,377,986) at the balance sheet date. The main form of funding for the Company's operations is through loans from its group totalling £10,176,860 (2021 - £9,567,311) included in current liabilities. Had these loans been treated as equity, the Company would have net assets of £8,221,565 (2021 - £8,189,325). The Group has stated that it intends, without creating a contractual obligation, to provide such support as may be necessary to the Company, and confirmed the Group's commitment to provide funds to meet ongoing expenses for at least 12 months from the date of approval of the financial statements. 
The director is therefore satisfied that the going concern basis is appropriate for the preparation of these financial statements.

Page 3

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the company has transferred the significant risks and rewards of ownership to the buyer;
the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

 
2.5

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 4

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.7

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.8

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.

 
2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful economic lives. No depreciation is charged until the asset is brought into use. 

Depreciation is provided on the following basis:

Freehold property
-
2%
straight-line
Plant and machinery
-
20%
straight-line
Fixtures and fittings
-
20%
straight-line
Computer equipment
-
33%
straight-line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of comprehensive income.

Page 5

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.10

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.11

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.13

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.14

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the
Page 6

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.14
Financial instruments (continued)

asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.


3.


Employees

The average monthly number of employees, including directors, during the year was 31 (2021 - 4).

Page 7

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Tangible fixed assets





Freehold property
Plant and machinery
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2022
24,560,727
56,483
84,186
81,423
24,782,819


Additions
117,273
579
14,810
25,043
157,705


Disposals
-
-
-
(34,356)
(34,356)



At 31 December 2022

24,678,000
57,062
98,996
72,110
24,906,168



Depreciation


At 1 January 2022
33,640
2,648
3,304
8,306
47,898


Charge for the year on owned assets
501,230
8,475
19,014
17,261
545,980


Disposals
-
-
-
(1,759)
(1,759)



At 31 December 2022

534,870
11,123
22,318
23,808
592,119



Net book value



At 31 December 2022
24,143,130
45,939
76,678
48,302
24,314,049



At 31 December 2021
24,527,087
53,835
80,882
73,117
24,734,921

Page 8

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Debtors

2022
2021
£
£

Due after more than one year

Prepayments and accrued income
33,974
62,220

33,974
62,220


2022
2021
£
£

Due within one year

Other debtors
85,746
102,704

Prepayments and accrued income
85,783
36,440

171,529
139,144



6.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
586,519
71,626

586,519
71,626



7.


Creditors: Amounts falling due within one year

2022
2021
£
£

Bank loans
-
256,788

Trade creditors
159,574
539,206

Amounts owed to group undertakings
10,176,860
9,567,311

Other taxation and social security
188,418
10,764

Other creditors
420,533
329,153

Accruals and deferred income
293,459
895,305

11,238,844
11,598,527


At the balance sheet date, the company has a loan agreement with Clydesdale Bank Plc. Loans under this agreement are secured and guaranteed by way of fixed and floating charges over the assets of the company. 

Page 9

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Bank loans
15,420,121
14,794,355

Accruals and deferred income
407,333
-

15,827,454
14,794,355


The following liabilities were secured:

2022
2021
£
£


Bank loans
15,420,121
15,051,143

Details of security provided:

At the balance sheet date, the company has a loan agreement with Clydesdale Bank Plc. Loans under this agreement are secured and guaranteed by way of fixed and floating charges over the assets of the company. 


9.


Loans


Analysis of the maturity of loans is given below:


2022
2021
£
£

Amounts falling due within one year

Bank loans
-
256,788

Amounts falling due 1-2 years

Bank loans
539,987
630,000

Amounts falling due 2-5 years

Bank loans
14,880,134
14,164,355

15,420,121
15,051,143


Page 10

 
KE HOTELS (MANCHESTER) LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Deferred taxation


The company has losses of £8.5m which would generate a deferred tax asset but that the director does not see it prudent to recognise this as yet.


11.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



100 (2021 - 100) Ordinary shares of £1.00 each
100
100

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.



12.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company  in an independently administered fund. The pension cost charge represents contributions payable by the Company  to the fund and amounted to £10,417 (2021 - £167). Contributions totalling £2,429 (2021: £Nil) were payable to the fund either balance sheet date.


13.


Related party transactions

The company has taken advantage of the exemption contained in Section 33 of FRS 102 "Related Party Disclosures" from disclosing transaction with entities which are part of the group, since 100% of the voting rights in the company are controlled within the group. 


14.


Controlling party

The ultimate controlling party for the year ended 31 December 2022 was A Khanna, by virtue of his sole shareholding of the ultimate parent company, Khanna Enterprises (Holdings) Limited, a company incorporated in England and Wales. The accounts of the company are included in the consolidated financial statements of Khanna Enterprises (Holdings) Limited, copies of which can be obtained from Companies House.


15.


Auditors' information

The auditors' report on the financial statements for the year ended 31 December 2022 was unqualified.

The audit report was signed on 24 October 2023 by Alexander Chrysaphiades FCA (Senior statutory auditor) on behalf of Adler Shine LLP.

 
Page 11