Company registration number 00596786 (England and Wales)
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
COMPANY INFORMATION
Directors
R Chiu
E Soukiassian
Company number
00596786
Registered office
22-24 Basil Street
London
SW3 1AT
Auditor
Glazers
843 Finchley Road
London
NW11 8NA
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The turnover for the hotel in 2023 was £7.19m (2022: £6.68m).
The directors have received assurances from group undertakings that they will provide the necessary financial support to enable the Company to meet its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements.
On this basis, and having considered trading forecasts and cash flow requirements for a period of at least 12 months from the date of approval of these financial statements, the directors have concluded that it is appropriate to prepare the financial statements on the going concern basis.
The profit for the year, after taxation, amounted to £1.61m (2022: £219k).
The directors do not recommend the payment of a dividend (2022: £Nil).
Principal risks and uncertainties
Not all potential risks are listed but those that represent those risks that in the opinion of the Board could
have a material effect on revenues, profits, net assets and financial resources.
Events that adversely impact domestic or international travel
The ability to sustain given levels of occupancy and room rates can be adversely affected by events that
reduce domestic or international travel. Such events may include acts of terrorism, war or perceived
increased risk of armed conflict, epidemics, natural disasters, increased cost of travel and industrial action.
The company has in place a contingency and recovery plan to enable it to respond to major incidents.
Key personnel
Implementation of the company's strategy depends on its ability to attract, develop and retain employees
with the appropriate skills, experience and aptitude. Implementation and development of company
induction schemes as well as ongoing training and development combined with attractive compensation,
benefits and incentive schemes all help to minimise this risk.
Information technology systems and infrastructure
The company invests in systems that are appropriate to the business so as to maximise client relationship
management, provide effective communication internally and externally and provide comprehensive
reporting capability. The monitoring and development of such systems are out-sourced to provide
continuity and a cost-effective solution.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Development and performance
Litigation
The company may be at risk of litigation from various parties with which it interacts either through direct
contractual arrangements, the provision of services or the failure to comply with regulatory requirements or
legal obligations to third parties. The board ensures that key personnel are aware of such risks so as to
minimise likely exposure whilst ensuring with particular regard to public liability that adequate insurance
is in place.
Insurance
The company maintains insurance cover appropriate to its risk profile but not all risks are insured either
because the cover is not available in the market or is not commercially viable. The Board believes it has
assessed the material insurable risks and it ensures that these are properly covered and reviewed on a
regular basis.
Political and economic developments
Major events affecting either economic or political stability represent an exposure to company revenues
and profitability. These are assessed on a regular basis and modes of operation adapted accordingly.
The hotel industry supply and demand cycle
The hotel industry operates in an inherently cyclical market place. Awakening in demand or an increase in
market supply may lead to downward pressure on room rates and/or occupancies. The company has
systems in place that are designed to minimise the impact of such fluctuations as far as possible to optimise
operating profits.
The ability to borrow and satisfy debt covenants
The company utilises facilities provided by group undertakings to fund its operational and refurbishment
programmes. The provision of such funds is dependent upon the availability of banking facilities in the
market place and the perception of the Group's ability to service such facilities. The directors are confident
that they will continue to be able to secure these funds when required.
Recent events
Since the financial year end the hotel business has picked up with levels of occupancy and rates increasing. The outlook for the UK has been improving steadily month by month.
The Company’s key priority is to cautiously and proactively optimise the operations to respond to the demand of the market for both domestic and international travel.
Key performance indicators
Financial performance for the company has been analysed as follows:
Turnover: £7,187,459 (2022: £6,675,781)
Profit for the year: £1,605,100 (2022: £219,312)
Occupancy: 78.66% (2022: 76.62%)
Average Rooms Rate: £296.60 (2022: £290.35)
Revenue per Available Rooms: £233.29 (2022: £222.47)
.............................................
R Chiu
Director
Date: .............................................
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the operation of a hotel in Knightsbridge, London.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Chiu
E Soukiassian
Auditor
Glazers 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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
R Chiu
Director
5 April 2024
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 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.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
- 5 -
Opinion
We have audited the financial statements of Capital Hotels (Knightsbridge) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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.
Material uncertainty 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 directors are 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.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
- 6 -
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.
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, enquiries with management and enquiries of legal counsel. 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. 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.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
- 7 -
Benjamin Allen ACCA
Senior Statutory Auditor
For and on behalf of Glazers
17 April 2024
Chartered Accountants
Statutory Auditor
843 Finchley Road
London
NW11 8NA
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
7,187,459
6,675,781
Cost of sales
(3,284,329)
(3,277,575)
Gross profit
3,903,130
3,398,206
Administrative expenses
(2,298,030)
(3,184,894)
Other operating income
6,000
Profit before taxation
1,605,100
219,312
Tax on profit
7
Profit for the financial year
1,605,100
219,312
Other comprehensive income
Revaluation of tangible fixed assets
12,769,823
Tax relating to other comprehensive income
(3,192,456)
(2,384,763)
Total comprehensive income for the year
11,182,467
(2,165,451)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
48,057,600
34,464,354
Current assets
Stocks
9
69,728
58,729
Debtors
10
3,517,089
3,169,071
Cash at bank and in hand
392,848
110,810
3,979,665
3,338,610
Creditors: amounts falling due within one year
11
(8,863,039)
(9,003,661)
Net current liabilities
(4,883,374)
(5,665,051)
Total assets less current liabilities
43,174,226
28,799,303
Provisions for liabilities
Deferred tax liability
12
10,178,541
6,986,085
(10,178,541)
(6,986,085)
Net assets
32,995,685
21,813,218
Capital and reserves
Called up share capital
14
100,000
100,000
Revaluation reserve
15
30,489,503
20,912,136
Profit and loss reserves
2,406,182
801,082
Total equity
32,995,685
21,813,218
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 5 April 2024 and are signed on its behalf by:
R Chiu
Director
Company registration number 00596786 (England and Wales)
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
100,000
23,296,899
581,770
23,978,669
Year ended 31 December 2022:
Profit
-
-
219,312
219,312
Other comprehensive income:
Tax relating to other comprehensive income
-
(2,384,763)
(2,384,763)
Total comprehensive income
-
(2,384,763)
219,312
(2,165,451)
Balance at 31 December 2022
100,000
20,912,136
801,082
21,813,218
Year ended 31 December 2023:
Profit
-
-
1,605,100
1,605,100
Other comprehensive income:
Revaluation of tangible fixed assets
-
12,769,823
-
12,769,823
Tax relating to other comprehensive income
-
(3,192,456)
(3,192,456)
Total comprehensive income
-
9,577,367
1,605,100
11,182,467
Balance at 31 December 2023
100,000
30,489,503
2,406,182
32,995,685
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
1,752,017
276,415
Investing activities
Purchase of tangible fixed assets
(1,469,979)
(358,828)
Net cash used in investing activities
(1,469,979)
(358,828)
Net increase/(decrease) in cash and cash equivalents
282,038
(82,413)
Cash and cash equivalents at beginning of year
110,810
193,223
Cash and cash equivalents at end of year
392,848
110,810
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Capital Hotels (Knightsbridge) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 22-24 Basil Street, London, SW3 1AT.
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 £.
The financial statements have been prepared under the historical cost convention modified to include the revaluation of leasehold properties. 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 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: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Warwick Hotel Cambridge Limited. These consolidated financial statements are available from The Companies House website.
1.2
Going concern
The truecompany has obtained confirmation from Warwick Amusement Corporation (a US parent company) that it will continue to provide such financial support as the company requires for its continued operations for a period of not less than one year from the issuance and signing of these financial statements.
Based on the foregoing, the Board believes that the business has the ability to remain trading for a period of at least 12 months from the date of signing of these financial statements. Based on these indications the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.
1.3
Turnover
Turnover represents revenue in respect of the provision of hotel and restaurant services rendered
during the year stated net of value added tax. Revenue is recognised when the services are provided to
the customer.
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.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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:
Long term leasehold property
Not depreciated
Leasehold improvements
30 years or lease term if shorter
Fixtures and fittings
3-8 years on a straight line basis
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
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have
ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or
cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of
an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks and work in progress are valued at the lower of cost and net realisable value.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of
stocks over its estimated selling price less costs to complete and sell is recognised as an impairment
loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
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.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company 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 company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Accommodation
6,187,572
5,955,017
Restaurant
999,887
720,764
7,187,459
6,675,781
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
7,187,459
6,675,781
2023
2022
£
£
Other revenue
Grants received
-
6,000
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
5,667
1,644
Government grants
-
(6,000)
Depreciation of owned tangible fixed assets
646,556
628,797
5
Auditor's remuneration
The auditor's remuneration has been borne by the parent company, The Capital Group Limited.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Staff and management
61
51
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,043,439
1,912,040
Social security costs
186,162
183,733
Pension costs
35,808
20,771
2,265,409
2,116,544
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Taxation
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:
2023
2022
£
£
Profit before taxation
1,605,100
219,312
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
377,199
41,669
Tax effect of expenses that are not deductible in determining taxable profit
4,073
204,714
Tax effect of income not taxable in determining taxable profit
(10,536)
Tax effect of utilisation of tax losses not previously recognised
(88,117)
(273,396)
Group relief
(273,813)
Permanent capital allowances in excess of depreciation
(27,404)
27,013
Depreciation on assets not qualifying for tax allowances
18,598
-
Taxation charge for the year
-
-
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2023
2022
£
£
Deferred tax arising on:
Revaluation of property
3,192,456
2,384,763
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Tangible fixed assets
Long term leasehold property
Fixtures and fittings
Total
£
£
£
Cost or valuation
At 1 January 2023
36,120,510
4,328,870
40,449,380
Additions
918,484
551,495
1,469,979
Revaluation
9,711,006
9,711,006
At 31 December 2023
46,750,000
4,880,365
51,630,365
Depreciation and impairment
At 1 January 2023
2,924,233
3,060,793
5,985,026
Depreciation charged in the year
134,584
511,972
646,556
Revaluation
(3,058,817)
(3,058,817)
At 31 December 2023
3,572,765
3,572,765
Carrying amount
At 31 December 2023
46,750,000
1,307,600
48,057,600
At 31 December 2022
33,196,277
1,268,077
34,464,354
Land and buildings with a carrying amount of £46,750,000 (2022: £33,196,277) have been pledged to secure borrowings of the parent company, Warwick Hotel Cambridge Limited. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
Long leasehold properties were valued in 2023 by a qualified independent external valuer registered with the Royal Institute of Chartered Surveyors. The properties were valued on an existing use open market basis in the sum of £46,750,000 in accordance with the current editions of RICS Valuation - Global Standards, which incorporate the International Valuation Standards, and the RICS UK National Supplement, using discounted cash flow and comparative methods. Valuations are carried out periodically, not exceeding every five years, and are reviewed annually to determine whether the market value continues to be appropriate.
2023
2022
£
£
Long leasehold
7,326,860
7,326,860
9
Stocks
2023
2022
£
£
Finished goods and goods for resale
69,728
58,729
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
88,887
155,246
Amounts owed by group undertakings
3,045,406
2,495,979
Other debtors
189,170
240,738
Prepayments and accrued income
193,626
277,108
3,517,089
3,169,071
11
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
324,324
228,583
Amounts owed to group undertakings
8,167,900
8,344,420
Taxation and social security
80,784
70,457
Other creditors
80,731
69,688
Accruals and deferred income
209,300
290,513
8,863,039
9,003,661
12
Deferred taxation
Liabilities
Liabilities
2023
2022
Balances:
£
£
Revaluations
10,178,541
6,986,085
2023
Movements in the year:
£
Liability at 1 January 2023
6,986,085
Charge to other comprehensive income
3,192,456
Liability at 31 December 2023
10,178,541
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,808
20,771
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
15
Revaluation reserve
Revaluation reserve - represents all revaluation gains recognised net of the corresponding deferred tax
liability at the applicable rates.
16
Financial commitments, guarantees and contingent liabilities
Commitments
The company has a contingent liability in respect of a Group registration for VAT which at 31 December 2023 amounted to £233,569 (2022: £326,739).
17
Operating lease commitments
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:
2023
2022
£
£
Within one year
26,000
26,000
Between two and five years
104,000
104,000
In over five years
3,063,441
3,089,441
3,193,441
3,219,441
18
Profit and loss reserve
Profit and loss account includes all current and prior period retained profits and losses.
19
Related party transactions
Transactions with related parties
The company is a wholly owned subsidiary of Warwick Hotel Cambridge Limited and as such has taken advantage of the exemption available under FRS 102 not to disclose related party transactions with entities that are part of the group.
CAPITAL HOTELS (KNIGHTSBRIDGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Controlling party
The immediate parent undertaking is The Capital Group Limited, a company incorporated in England
and Wales.
The ultimate parent undertaking is Warwick Holdings S.A. a company incorporated in Luxembourg.
The smallest group in which the results of the company are consolidated is Warwick Hotel Cambridge
Limited. Copies of the financial statements of Warwick Hotel Cambridge Limited are available from
Companies House.
The directors consider Richard Chiu to be the ultimate controlling party.
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,605,100
219,312
Adjustments for:
Depreciation and impairment of tangible fixed assets
646,556
628,797
Movements in working capital:
(Increase)/decrease in stocks
(10,999)
16,896
Increase in debtors
(348,018)
(812,526)
(Decrease)/increase in creditors
(140,622)
223,936
Cash generated from operations
1,752,017
276,415
22
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
110,810
282,038
392,848
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