The director presents the strategic report for the year ended 31 December 2022.
The company was incorporated on 25 April 2019. New investments were carried out in 2022. Respectively 20 percent of Lycoocean One Ltd and SH Magic Ltd were acquired during that period. All other subsidiaries were incorporated or acquired into the group before of the period.
The entity acts as the holding company for the 'EliteClub' group. The principal activity of the company and group was that of the administration of a private members' club which connects people all across the globe where
members enjoy access to exclusive opportunities.
The main income streams of the Group are derived primarily from management fees receivable for the recharge of expenditure in respect of services provided by the group to related parties and the amounts received/ receivable in respect of flight, travel and transportation services provided to third parties. EliteClub group continues to show promising results by generating £5.9m in turnover in the year to 31 December 2022, with the number of memberships in 2022 reaching over 1,100. Overall the director is pleased with the performance of the Group. During the year significant investment was made into the company's EliteClub app and acquiring assets to be used by members resulting in a loss before tax of £6.4m and net assets of £4.1m.
Foreign exchange risk
The Group and Company have significant loans receivable and payable due from related parties and group companies. Volatility in exchange rates exposes the Company and its Group to reduced cash inflows and increased cash outflows. The risk is managed indirectly via natural hedges where receivables are offset against payables and by having receivables and payables denominated in a portfolio of different currencies for the purpose of reducing the exposure to any one single exchange rate pairing.
Credit risk
Client receivables are monitored to ensure credit risk is at manageable levels commensurate with our scale of operations.
Liquidity risk
As the Group that EliteClub Holdings Limited heads is loss making in the period, liquidity risk has been mitigated by support from the ultimate controlling party and related parties. The funds are used to service the Group’s operating activities and supplement internal cash generation to meet liquidity and working capital requirements. Levels of group borrowing, debt service cost and cashflow available for debt service are monitored periodically to ensure any liquidity risk is highlighted and addressed.
Management measures performance through a number of key performance indicators, namely:
The group is in the progress of restricting and reorientation to attract new collaborations.
Currently there are 3 main areas of future development for EliteClub:
Expansion of EliteClub assets and benefits
EliteClub is in the research phase to provide additional exclusive villas to the members, like the existing one in
Greece. In 2023 we will start a cooperation with third-party providers for three countries in Europe, where more villas will be exclusively available to our members. These have proven to be very popular among the members allowing them to spend some time with their families or use the facilities for team building.
Establishing connection with new business partners
EliteClub is constantly striving to provide new products and services to its members, valuing the variety and
versatility of benefits offered. As a result of this EliteClub is establishing more connections with innovative
partners and suppliers.
Connecting the members trough innovation
Currently EliteClub is developing an app which will enable our members to have an even closer connection
between each other and profit personally from established leaders in a variety of different business fields, all of
which can offer unique advice and support. Additionally to our own events all the members of the EliteClub are getting special offers and travel deals throu one of our partner companies. Furthermore we are working on an business platform witch will allow an excusive access to online seminares and events all over the world.
During the financial year the Company and of its subsidiaries continued to feel the impact of the Covid-19 pandemic. However, to date the Company has been successful in managing these risks and there was no particular disruption to operations. The personnel of the Company and its subsidiaries were effectively and safely able to continue to work remotely through use of technology. Alongside this the director took appropriate measures to control costs. As we exit the pandemic, the director continues to monitor the likely impact on operations going forward, and considers that it continues not to present a significant risk.
The Group has made a loss for the year of £6.4m and has net assets of £4.1m at the year end date. The loss for the year is stated net of an impairment to related party balances of £0.5m.
In her assessment of the basis of preparation of these financial statements the director has assessed the Company's projected business activities and available financial resources, together with appropriate cash forecasts. The Company is expected to trade profitably in the foreseeable future, and the cash flow forecasts of the Company and its subsidiary Group prepared by management show that the Group will generate significant cash surpluses in the forecasted period and beyond. The director therefore believes that the Company is well placed to manage its business risks successfully through any potential period of economic uncertainty in the wider global economy.
The Company has the support of its subsidiaries, and also the availability of financial support from related party companies should it be required. Similarly, the director has received assurances that amounts owed to these group and related parties will not be recalled for payment unless the company has the ability to repay. In view of the above the director considers that the Company has access to sufficient resources to meet its liabilities as they fall due, for at least twelve months from the date of approval.
On behalf of the board
The director presents her annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Details of events after the reporting date are dealt with in Note 27.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and financial risk management.
We have audited the financial statements of EliteClub Holdings 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).
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 director's 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 director with respect to going concern are described in the relevant sections of this report.
Other information
The director is responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. 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 the audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the director, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with director and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, 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.
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 parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
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 £1,431,513 (2021 - £2,949,708 profit).
EliteClub Holdings Limited (“the company”) is a private company limited by shares and is registered and incorporated in England and Wales. The registered office is 40 Basinghall Street, 9th Floor, Suite 9.10, London, England, EC2V 5DE.
The group consists of EliteClub Holdings Limited and all of its subsidiaries.
The company's and the group's principal activities and nature of its operations are disclosed in the Director's Report.
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 £.
The financial statements have been prepared under the historical cost convention, modified to include the investment properties at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 consolidated financial statements incorporate those of EliteClub Holdings Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
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.
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
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.
Turnover includes management fees receivable for the recharge of expenditure in respect of services
provided to related parties of the group, and amounts received/receivable in respect of flight, travel and transportation services provided to third parties. Revenue is recognised when the provision of the service is complete and obligations under contracts have been fulfilled.
For membership income from the use of amenities and facilities an annual subscription fee is charged to members in advance of service. Revenue is recognised equally over the period of membership.
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.
In the separate accounts of the company, interests in subsidiary 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 group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
Equity investments held by the group which are not publicly traded and whose fair value cannot otherwise be measured reliably, and are recognised at cost less impairment.
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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
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.
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method.
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.
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.
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, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
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.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.
In the application of the group’s accounting policies, the director is 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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Leases relating to three vessels held by the group have been classified as finance leases due to substantially all the risks and rewards of ownership are borne by the lessee. This has been determined by consideration of whether the lease term is for the major part of the economic life of the asset; at the inception of the lease, whether the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset; and, if the lessee is entitled to cancel the lease, whether the lessor's losses associated with the cancellation are borne by the lessee.
Additionally, certain leases have an option to purchase the asset at a price which is expected to be sufficiently lower than the fair value at the date the option becomes exercisable. At the inception of the lease it was reasonably certain that the option would be exercised.
The group tests annually whether goodwill have suffered any impairment. The recoverable amounts of cash generating units have been determined based on value-in-use calculations. These calculations require the use of estimates. No reasonably possible changes in assumptions would cause an impairment charge. During the year no impairment charge has been recognised.
No separately identifiable intangible fixed assets have been recognised on acquisition of the groups subsidiaries.
The group tests annually whether investments in subsidiaries have suffered any impairment where there is an indication of impairment. The recoverable amounts of cash generating units have been determined based on value-in-use calculations. These calculations require the use of estimates. No reasonably possible changes in assumptions would cause an impairment charge. During the year LycoAir GmbH suffered significant losses as a result an impairment review was performed and has been impaired to it's net asset value within the EliteClub Holdings Limited individual accounts.
Aircraft owned by the group are depreciated over their useful lives. Useful lives are based on management’s estimates of the periods that the assets will generate revenues, which are periodically reviewed for continued appropriateness. Changes to estimates can result in variations in the carrying values and amounts charged to the statement of comprehensive income in specific periods.
The director has reviewed the position with related parties under common control resulting from family relationships, including amounts paid and received since the year end and does not believe the amount were recoverable in full, as such the amounts owed to/from related parties was impaired as at 31 December 2021 and 31 December 2022.
In the prior year due to the post year end sale of the investment the director reversed the impairment of £2,799,949 for the year ended 31 December 2021.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the period no remuneration was paid to the director.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
In the budget on 3 March 2021, the UK government announced an increase in the main UK corporation tax from 19% to 25% with effect from 1 April 2023. The change in rate was substantively enacted on 24 May 2021.
In the opinion of the director, the fair value of the investment property has been estimated as the total consideration paid less specific impairment to account for the reduction in value of capitalised refurbishments. Other changes above relates to foreign exchange movement resulting from the revaluation of brought forward investment property at cost.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Registered office addresses:
EliteClub Global Limited is exempt from the requirements relating to the audit of its individual financial statements by virtue of the parent entity's guarantee under section 479A of the Companies Act 2006. The Company Registration Number of EliteClub Global Limited is 12263971.
Details of associates at 31 December 2022 are as follows:
1 136 St. Christopher Street, Valletta VLT 1463, Malta
The bank loan is repayable by instalments, has a remaining term of 4.6 years, carries an interest rate of 1.75% above Euribor and is not secured against any assets to the company or group.
Finance lease payments represent rentals payable by the company or group by the group of vessels. There are no restrictions placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The group's obligations under finance leases are secured by the lessor's charge over the leased vessels. The net book value of secured assets is £692,284 (2021 - £911,668)
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.
These shares have full rights regarding voting, payment of dividends and distributions.
Included within retained earnings of the Group is a foreign currency translation surplus of £2,540,628 (2021 - deficit of £1,165,776).
The net currency exchange difference arising on retranslation in the year was a gain of £3,706,404 (2021 - £137,459). The foreign currency translation reserve contains accumulated foreign currency translation differences from the translation of the subsidiary accounts into the Group's presentational currency.
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:
Related party transactions with members of the same wholly owned group are not disclosed, as permitted by FRS 102.
During the year the following trading transactions occurred between the group and entities related by virtue of common control resulting from family relationships:
Recharges to these related parties £780,183 (2021 - £5,182)
Purchases from these related parties £2,007,029 (2021 - £5,605,605)
As at 31 December 2022 the following amounts were owed by the group to entities related by virtue of common control resulting from family relationships:
An amount of £518,676 (2021- £951,246) which is repayable between December 2029 and June 2023. Interest accrues at 1.5%, during the year interest of £14,262 (2021 - £10,241) has been accrued.
An amount of £1,796,049 (2021- £1,419,167) which is repayable between January 2023 and September 2029. Interest accrues at 2.25%, during the year interest of £36,352 (2021 - £30,946) has been accrued.
An amount of £16,351,193 (2021 - £7,417,418) which is interest free and repayable on demand.
As at 31 December 2022 the following amounts were owed to the group by entities related by virtue of common control resulting from family relationships:
An amount of £8,289,587 (2021 - £7,106,744) which is repayable on demand. Interest accrues at 1.5% and during the year interest receivable of £892 (2021 - £45,926) was recognised.
An amount of £5,244,940 (2021 - £6,560,379) which is repayable on demand. Interest accrues at 2.25% and during the year interest receivable of £259,053 (2021 - £147,125) was recognised.
An amount of £24,122,650 (2021 - £19,932,082) which is interest free and repayable on demand.
Post year end some of these related party debts were consolidated in the subsidiary Elite CB International FZE. The net amount due from entities related by virtue of common control resulting from family relationships amounting to £21,252,499 (2021: £20,765,110) has been provided against in the group accounts as the director does not expect the amount to be recovered.
On 5 May 2022 the group acquired 240 ordinary shares, representing a 20% shareholding, in SH Magic Limited, a company registered in Malta, from a close family member of the director for €2,800,000. On 15 May 2022 the company acquired 240 ordinary shares, representing a 20% shareholding, in LycoOcean One Limited, a company registered in Malta, from the same close family member of the director for €240. Post year end both investments were sold to the close family member and a company controlled by him, for original cost. The investments are treated as associates and included within fixed asset investments, as at the year end it was the intention of the director to hold these investment for long term appreciation and investment income.
As at 31 December 2022 a balance of £9,199 (2021 - £Nil) was owed to the group from the director. The amount is unsecured, interest free and repayable on demand.
On 6 February 2023 the entire share capital of Elite CB International FZE was sold to a close family member of the director for €450,000.
In May 2023 the unlisted investment included in the group financial statements at cost of £2,779,949 was sold to a third party for $10,629,638.
In August 2023 the investment in the associate LycoOcean One Limited was sold to a company controlled by a close family member of the director for €240 being its original cost to the group.
In September 2023 the investment in the associate SH Magic Limited was sold to a close family member of the director for €2,800,000 being its original cost to the group.
The Group is owned and controlled by the director.