Company registration number 06279516 (England and Wales)
FOCUS HOTELS MANAGEMENT LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
FOCUS HOTELS MANAGEMENT LTD.
COMPANY INFORMATION
Directors
Mr P Cashman
Mr A Edwards
Company number
06279516
Registered office
5th Floor
Watson House
54-60 Baker Street
London
United Kingdom
W1U 7BU
Auditor
King & King
5th Floor
Watson House
54-60 Baker Street
London
W1U 7BU
FOCUS HOTELS MANAGEMENT LTD.
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 32
FOCUS HOTELS MANAGEMENT LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report on the group for the year ended 31 December 2023.

 

The principal activity of the group during the period was that of the provision of management services to the hospitality sector which included the management of hotel properties and including its associated restaurants, meeting and conference rooms and health clubs, gym, swimming pool and spa facilities whilst also providing associated accountancy and marketing services.

Business Review

For 2023, the Directors are pleased to report group turnover of £18.87m (2022: £17.14m) and an operating profit of £ 184,131 (2022:£106,208) representing the core performance of the management company.

 

The directors would like to take this opportunity to once again thank all of the employees of the Group for their dedication and hard work in these most challenging of times.

 

Hatfield, Oxford and Cheshunt have continued to provide accommodation for asylum seekers on behalf of the home office which sees both hotels trade through the a fixed income (and therefore in effect almost guaranteed profit) for the trading period of 2023 and continues until the end of 2024.

 

The Hampton by Hilton Bristol contract was terminated on 31st of August 2023 management support continued until the 31st of December and has now finished.

 

Hotel Indigo Exeter entered the portfolio in November following the hotel opening for trade in March 2023.

 

The management agreement for The Bedford Hotel, Belfast was signed in December 2023 this is a new five star hotel in Northern Ireland due to open in the spring/summer of 2025.

 

The Polo Club hotel in Warwickshire has also been signed and will open early in 2025. A boutique hotel set in 200 acres countryside.

Principal risks and uncertainties

The use of exclusive use hotels has been “propping up” the UK hotels market which is positive as international travel has not yet returned to pre-covid levels. This impact is seen in all markets not just the airports. The return of travel from the US and the far east is expected to return fully by 2024 so if any drop of exclusive use demand does materialise then the international travel should replace this.

 

Foreign Exchange risk

The Company mostly deals in pound sterling and in the director’s opinion FOREX risk has no significant impact on operations of the business.

 

Liquidity risk

The group manages cash closely to ensure cash is available to run the day-to-day activities.

 

Going Concern

All of the hotels operated by the Company are all trading well, the strain of utilities disappeared from October 2023 with significant reduction in costs which will improve the performance of all hotels improving the profit and therefore the outlook of incentive fees for 2024 and beyond.

The forecasts have been prepared based on foreseeable assumptions and conclude that the group will be in a position to operate within its facilities for the foreseeable future, a period of not less than twelve months from the date of approval of these financial statements and accordingly these financial statements have been prepared on a ‘going concern’ basis.

FOCUS HOTELS MANAGEMENT LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key Performance Indicators

Management use key performance indicators, both financial and non-financial to assess and monitor the Company’s performance.

 

The combined occupancy % is recorded at 82.3% for 2023 compared to 69.4% in 2022 supported through 100% occupancy of the home office contracts, with an average room rate of £84.56 for 2023 from £85.03 in 2022, resulting in a significant increase of revenue per available room to £69.59 for 2023 compared to £59.01 for 2022.

Future developments

The Directors continue to seek profitable opportunities to expand operations and have the infrastructure in place to facilitate development opportunities to increase profitability in the coming years at minimal marginal cost. There are a number of proposals to run new hotels in the final stages of legal review with expectations to be engaged in 2024, and increased activity with many new hotels in the latter stages of negotiations for the future.

On behalf of the board

Mr A Edwards
Director
3 May 2024
FOCUS HOTELS MANAGEMENT LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and the audited financial statements of the group and company for the year ended 31 December 2023.

Results and dividends

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

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

Directors

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

Mr P Cashman
Mr A Edwards
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Auditor

The auditor, King & King, Chartered Accountants is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Strategic report

The truegroup 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 business review, future developments and going concern.

Statement of disclosure to auditor

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

 

 

On behalf of the board
Mr A Edwards
Director
3 May 2024
FOCUS HOTELS MANAGEMENT LTD.
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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

FOCUS HOTELS MANAGEMENT LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FOCUS HOTELS MANAGEMENT LTD.
- 5 -
Opinion

We have audited the financial statements of Focus Hotels Management Ltd. (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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.

 

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern,

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

 

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

FOCUS HOTELS MANAGEMENT LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOCUS HOTELS MANAGEMENT LTD.
- 6 -

With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

 

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters described below.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

FOCUS HOTELS MANAGEMENT LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOCUS HOTELS MANAGEMENT LTD.
- 7 -
Identifying and assessing potential risks related to irregularities

Irregularities, including fraud are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

 

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

 

However, it is the primary responsibility of management, with oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures, inspecting correspondence with local tax authorities and evaluating advice received from external tax advisors.

 

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health & safety, food hygiene and similar regulations. We performed audit procedures to inquire of management and those charged with governance whether the company is in compliance with these law and regulations.

 

The audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to any significant, unusual transactions and transactions entered into outside the normal course of business.

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.

 

 

 

 

 

 

 

FOCUS HOTELS MANAGEMENT LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FOCUS HOTELS MANAGEMENT LTD.
- 8 -

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

 

 

Milankumar Patel
Milankumar Patel (Senior Statutory Auditor)
For and on behalf of King & King
3 May 2024
Chartered Accountants
Statutory Auditor
5th Floor
Watson House
54-60 Baker Street
London
W1U 7BU
FOCUS HOTELS MANAGEMENT LTD.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Revenue
3
18,866,433
17,136,924
Cost of sales
(799,177)
(992,315)
Gross profit
18,067,256
16,144,609
Administrative expenses
(17,863,611)
(16,061,350)
Other operating income
-
22,949
Operating profit
4
203,645
106,208
Investment income
8
187,975
161,976
Finance costs
9
(296,304)
-
0
Profit before taxation
95,316
268,184
Tax on profit
10
(34,978)
(31,025)
Profit for the financial year
60,338
237,159
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
FOCUS HOTELS MANAGEMENT LTD.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
31 December 2023
29 December 2022
Notes
£
£
£
£
Non-current assets
Intangible assets
11
6,604
10,341
Property, plant and equipment
12
8,149
1,804
14,753
12,145
Current assets
Inventories
16
112,559
111,815
Trade and other receivables
17
5,467,892
6,284,179
Cash and cash equivalents
2,769,651
2,760,584
8,350,102
9,156,578
Current liabilities
18
(6,901,035)
(7,748,624)
Net current assets
1,449,067
1,407,954
Total assets less current liabilities
1,463,820
1,420,099
Non-current liabilities
19
(113,334)
(193,333)
Provisions for liabilities
Provisions
21
472,379
408,997
(472,379)
(408,997)
Net assets
878,107
817,769
Equity
Called up share capital
24
790
790
Retained earnings
877,317
816,979
Total equity
878,107
817,769

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 3 May 2024 and are signed on its behalf by:
03 May 2024
Mr A Edwards
Director
Company registration number 06279516 (England and Wales)
FOCUS HOTELS MANAGEMENT LTD.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
31 December 2023
29 December 2022
Notes
£
£
£
£
Non-current assets
Intangible assets
11
6,604
10,341
Property, plant and equipment
12
7,400
-
0
Investments
13
1
1
14,005
10,342
Current assets
Trade and other receivables
17
4,364,463
4,736,727
Cash and cash equivalents
667,483
1,278,205
5,031,946
6,014,932
Current liabilities
18
(3,211,064)
(4,313,444)
Net current assets
1,820,882
1,701,488
Total assets less current liabilities
1,834,887
1,711,830
Non-current liabilities
19
(113,334)
(193,333)
Net assets
1,721,553
1,518,497
Equity
Called up share capital
24
790
790
Retained earnings
1,720,763
1,517,707
Total equity
1,721,553
1,518,497

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £203,056 (2022 - £286,670 profit).

The financial statements were approved by the board of directors and authorised for issue on 3 May 2024 and are signed on its behalf by:
03 May 2024
Mr A Edwards
Director
Company registration number 06279516 (England and Wales)
FOCUS HOTELS MANAGEMENT LTD.
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Retained earnings
Total
£
£
£
Balance at 31 December 2021
790
995,458
996,248
Year ended 29 December 2022:
Profit and total comprehensive income
-
237,159
237,159
Other movements
-
(415,638)
(415,638)
Balance at 29 December 2022
790
816,979
817,769
Year ended 31 December 2023:
Profit and total comprehensive income
-
60,338
60,338
Balance at 31 December 2023
790
877,317
878,107
FOCUS HOTELS MANAGEMENT LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Retained earnings
Total
£
£
£
Balance at 31 December 2021
790
1,646,675
1,647,465
Year ended 29 December 2022:
Profit and total comprehensive income for the year
-
286,670
286,670
Other movements
-
(415,638)
(415,638)
Balance at 29 December 2022
790
1,517,707
1,518,497
Year ended 31 December 2023:
Profit and total comprehensive income
-
203,056
203,056
Balance at 31 December 2023
790
1,720,763
1,721,553
FOCUS HOTELS MANAGEMENT LTD.
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
30
67,125
(298,390)
Interest paid
(134,648)
-
0
Income taxes paid
(21,407)
-
0
Net cash outflow from operating activities
(88,930)
(298,390)
Investing activities
Purchase of intangible assets
(1,268)
-
Purchase of property, plant and equipment
(8,711)
(3,105)
Interest received
187,975
161,976
Net cash generated from investing activities
177,996
158,871
Financing activities
Repayment of bank loans
(79,999)
(80,000)
Net cash used in financing activities
(79,999)
(80,000)
Net increase/(decrease) in cash and cash equivalents
9,067
(219,519)
Cash and cash equivalents at beginning of year
2,760,584
2,980,103
Cash and cash equivalents at end of year
2,769,651
2,760,584
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Focus Hotels Management Ltd. (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 5th Floor, Watson House, 54-60 Baker Street, London, United Kingdom, W1U 7BU.

 

The group consists of Focus Hotels Management Ltd. and all of its subsidiaries.

1.1
Accounting convention

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

The 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. 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:

 

1.2
Business combinations

In the parent company financial statements, 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. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Focus Hotels Management Ltd. together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

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

1.4
Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future.

 

The directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements. In preparing these forecasts the directors have applied prudent estimates taking into account overall outlook of the hospitality sector.

 

The directors with reference to the forecasts and current trading levels believe it is appropriate to adopt the going concern accounting policy in preparing the financial statements. In making their assessment the directors have considered a period of at least 12 months from the date of approval of these financial statements.

1.5
Revenue

Management fees represent fees earned from hotels that managed under contracts with the property owner. Management fees usually include a base fee, which is generally a percentage of the hotel's gross revenue, and an incentive fee, which is typically based on a fixed or variable percentage of hotel operating profits. Management fees are recognised when earned in accordance with the terms of the management agreement.

 

Hotel revenues primarily consist of hotel room rentals, food and beverage sales and other ancillary goods and services related to leased properties. Revenues are recognised when rooms are occupied or goods and services have been delivered or rendered, respectively.

 

All turnover arose within the United Kingdom.

 

1.6
Intangible fixed assets other than goodwill

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

 

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

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

Software and website costs
10 years
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.7
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Leasehold improvements
25% straight line
Plant and equipment
25% straight line
Fixtures and fittings
25% straight line
Computers
25% straight line

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

1.8
Non-current investments

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

 

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

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

1.9
Impairment of non-current assets

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

 

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.

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

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.

1.10
Inventories

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

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories 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.

1.11
Cash and cash equivalents

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

1.12
Financial instruments

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

 

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

 

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

Basic financial assets

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

Impairment of financial assets

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

 

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

 

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

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including trade and other payables, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

1.13
Equity instruments

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

1.14
Taxation

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

Current tax

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

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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

1.15
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.16
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 non-current 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.

1.17
Retirement benefits

Defined contribution pension plan

 

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

 

The contributions are recognised as an expense in the Consolidated Statement of comprehensive income 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 Group in independently administered funds.

 

 

 

 

 

 

 

 

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.18
Leases

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

 

Operating lease rental payments are determined by the level of profit generated by each individual hotel with no minimum guarantee. The resulting profit or loss for the year is being absorbed by the ultimate parent company.

1.19

Accounting reference date

The Company changed its accounting reference period to end on 31 December with effect from 31 December 2023. However, the annual accounts up to 31 December 2022 were prepared as of the Thursday closest to 31 December each year. Consequently, the comparative period for the year ended 31 December 2023 has been reported as at 29 December 2022.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Going concern assessment

In order to assess whether it is appropriate for the group to be reported as a going concern, the Directors apply judgement, having undertaken appropriate enquiries and having considered the business activities and the group's principal risks and uncertainties, as disclosed in the Strategic Report.

 

In arriving at this judgement there are a large number of assumptions and estimates involved in calculating future cash projections. This includes management's expectations of revenue, EBITDA, timing and quantum of future capital expenditure and estimates and costs of future funding.

Key sources of estimation uncertainty

The estimates and assumptions which have a risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Bad debt provisioning

An allowance for doubtful accounts is maintained for potential credit losses based upon management's assessment of the expected collectability of all accounts receivable. The allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance.

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Marketing & Management fees
932,252
745,334
Room revenue
12,423,471
11,055,484
Other revenue
2,727,271
2,930,788
Rental Income
2,783,439
2,405,318
18,866,433
17,136,924
2023
2022
£
£
Other revenue
Interest income
187,975
161,976

The whole of the turnover is attributable to the principal activities of the group.

 

All turnover arose within the United Kingdom.

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Depreciation of owned property, plant and equipment
2,366
4,756
Amortisation of intangible assets
5,005
4,899
Operating lease charges
3,893,965
3,263,847
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
10,000
8,500
Audit of the financial statements of the company's subsidiaries
45,000
34,500
55,000
43,000
For other services
All other non-audit services
12,000
18,000
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Administrative staff
218
191
7
7

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
5,781,773
5,331,338
699,570
565,932
Social security costs
440,431
383,649
97,636
76,838
Pension costs
171,793
92,844
96,834
42,618
6,393,997
5,807,831
894,040
685,388
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
132,348
140,904
Company pension contributions to defined contribution schemes
45,677
42,618
178,025
183,522

 

8
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
1,771
320
Interest receivable from group companies
186,204
-
0
Other interest income
-
161,656
Total income
187,975
161,976
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
9
Finance costs
2023
2022
£
£
Interest on bank overdrafts and loans
19,514
-
Interest payable to group undertakings
276,790
-
0
Total finance costs
296,304
-
0
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
44,596
31,025
Adjustments in respect of prior periods
(9,618)
-
0
Total current tax
34,978
31,025

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
95,316
268,184
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
18,110
50,955
Tax effect of expenses that are not deductible in determining taxable profit
17,241
508
Tax effect of income not taxable in determining taxable profit
-
0
(20,438)
Adjustments in respect of prior years
(9,618)
-
0
Effect of change in corporation tax rate
14,745
-
Group relief
(4,286)
-
0
Permanent capital allowances in excess of depreciation
(562)
-
0
Marginal relief
(652)
-
0
Taxation charge
34,978
31,025
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
11
Intangible fixed assets
Group
Software and website costs
£
Cost
At 30 December 2022
128,154
Additions
1,268
At 31 December 2023
129,422
Amortisation and impairment
At 30 December 2022
117,813
Amortisation charged for the year
5,005
At 31 December 2023
122,818
Carrying amount
At 31 December 2023
6,604
At 29 December 2022
10,341
Company
Website costs
£
Cost
At 30 December 2022
48,984
Additions
1,268
At 31 December 2023
50,252
Amortisation and impairment
At 30 December 2022
38,643
Amortisation charged for the year
5,005
At 31 December 2023
43,648
Carrying amount
At 31 December 2023
6,604
At 29 December 2022
10,341
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
12
Property, plant and equipment
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 30 December 2022
39,608
8,668
4,790
59,015
112,081
Additions
-
0
-
0
-
0
8,711
8,711
At 31 December 2023
39,608
8,668
4,790
67,726
120,792
Depreciation and impairment
At 30 December 2022
39,608
8,668
4,580
57,421
110,277
Depreciation charged in the year
-
0
-
0
105
2,261
2,366
At 31 December 2023
39,608
8,668
4,685
59,682
112,643
Carrying amount
At 31 December 2023
-
0
-
0
105
8,044
8,149
At 29 December 2022
-
0
-
0
210
1,594
1,804
Company
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 30 December 2022
39,608
8,668
4,370
54,213
106,859
Additions
-
0
-
0
-
0
8,711
8,711
At 31 December 2023
39,608
8,668
4,370
62,924
115,570
Depreciation and impairment
At 30 December 2022
39,608
8,668
4,370
54,213
106,859
Depreciation charged in the year
-
0
-
0
-
0
1,311
1,311
At 31 December 2023
39,608
8,668
4,370
55,524
108,170
Carrying amount
At 31 December 2023
-
0
-
0
-
0
7,400
7,400
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
1
1
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 27 -
Movements in non-current investments
Company
Shares in subsidiaries
£
Cost or valuation
At 30 December 2022 and 31 December 2023
1
Carrying amount
At 31 December 2023
1
At 29 December 2022
1
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Focus Hotels Leasing Ltd
England
Holding company & management services
Ordinary
100.00
Focus Hotels Management (Bristol) Ltd*
England
Hoteliers
Ordinary
100.00
Focus Hotels Management (Hatfield) Ltd*
England
Hoteliers
Ordinary
100.00
Focus Hotels Management (Heathrow) Ltd*
England
Hoteliers
Ordinary
100.00
Focus Hotels Management (Cheshunt) Limited*
England
Hoteliers
Ordinary
100.00

* Held by Focus Hotels Leasing Ltd.

All subsidiaries have the same registered office as the company. All these subsidiaries are included in the consolidation. The company's investment in Focus Hotels Leasing Ltd is direct ownership, all other investments are indirect ownership.

16
Inventories
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
112,559
111,815
-
0
-
0
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
17
Trade and other receivables
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade receivables
2,752,767
2,158,165
1,881,525
1,205,609
Corporation tax recoverable
-
0
5,372
-
0
5,372
Other receivables
15,988
1,141,658
207
824,993
Prepayments and accrued income
436,149
547,726
219,743
269,495
3,204,904
3,852,921
2,101,475
2,305,469
Amounts falling due after more than one year:
Amount owed by related parties
2,262,988
2,431,258
2,262,988
2,431,258
Total debtors
5,467,892
6,284,179
4,364,463
4,736,727

Amounts owed by related party are unsecured, interest free and repayable on 31 March 2025.

18
Current liabilities
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
20
80,000
80,000
80,000
80,000
Trade payables
2,509,589
1,660,886
289,782
-
0
Amounts owed to group undertakings
-
0
-
0
2,190,856
2,963,562
Corporation tax payable
8,199
-
0
8,199
-
0
Other taxation and social security
424,972
1,396,274
200,084
152,579
Deferred income
22
-
0
82,052
-
0
-
0
Other payables
425,690
1,043,890
181,993
969,734
Accruals and deferred income
3,452,585
3,485,522
260,150
147,569
6,901,035
7,748,624
3,211,064
4,313,444

There is an intercompany guarantee in place with NatWest bank in relation to the Group's planned overdraft between Focus Hotels Management Limited and the following subsidiaries: Focus Hotels Management (Hatfield) Limited, Focus Hotels Management (Heathrow) Limited, Focus Hotels Management (Bristol) Limited and Focus Hotels Leasing Limited and it is secured by means of fixed and floating charge over all the assets of the group.

Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are payable on demand.

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
19
Non-current liabilities
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
113,334
193,333
113,334
193,333
20
Borrowings
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
193,334
273,333
193,334
273,333
Payable within one year
80,000
80,000
80,000
80,000
Payable after one year
113,334
193,333
113,334
193,333

Interest on bank loan (CBIL) is charged at 3% per annum over base rate. The term of the loan is for 72 months, expiring in 2027.

21
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
FFE charge
472,379
408,997
-
-

Provision relates to aggregate amount for commitments towards capital improvements as per the lease agreement dated 7th October 2011, related to Focus Hotels Management (Bristol) limited.

22
Deferred income
Group
Company
2023
2022
2023
2022
£
£
£
£
Other deferred income
-
82,052
-
-
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
171,793
92,844

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.

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary Shares of 10p each
7,895
7,895
790
790

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

25
Related party transactions

During the period, the group was billed £35,100 (2022: £35,100) in respect of consultancy services by Cashman Hospitality Limited, a company controlled by Peter Cashman. At the period end £Nil (2021: £Nil ) was due to the group.

 

Management fees of £80,000 (2022: £95,000) were recognised during the year from Ampthill Investments Limited ('Ampthill'), a company under the significant influence of Peter Cashman. Expenses were also paid by the company on behalf of Ampthill, and the amount outstanding due to Ampthill at the period end is £ 417,200 (2022: £596).

 

Management fees of £ 80,000 (2022: £95,000) were recognised during the year from A H Hotel & Spa Limited, a company under the significant influence of Peter Cashman. Expenses were also paid by the company on behalf of AH Hotel & Spa Limited, and the amount outstanding at the period end and included in creditors is £32,449 (2022: £24,680).

 

Focus Hotels Management Limited advanced amounts of £ 2,846,896 in 2022 to Hatfield Hotels Limited, a company under common control. As this amount has been advanced on non-commercial terms a notional discount has been calculated using the effective interest rate method using an interest rate of 7% and treated as a investment. The discount recognised on the loan was £415,638 in 2022 and the amount unwound during the period was £186,204 (2022: £ Nil). The amount outstanding as at period end is £ 2,262,988 (2022: £2,431,258).

 

Management fees of £ Nil (2022: £36,000) were recognised during the year from Hotel Colessio (Castle) limited a company under the significant influence of Peter Cashman. Expenses were also paid by the company on behalf of Hotel Colessio (Holdings) Limited, and the amount outstanding at the period end and included in creditors is £469,568 (2022: £152,565).

26
Financial commitments, guarantees and contingent liabilities

The group has guaranteed loans on behalf of Hatfield Hotels Limited, a company under common control. The level of security is £4.6m.

FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
27
Operating lease commitments

Focus Hotels Management (Hatfield) Limited, are committed to paying rent to the Landlord of each hotel each year in accordance with the formula set out in the Finance Agreement dated 21 August 2009 which expires on 21 February 2041.

Focus Hotels Management (Heathrow) Limited is committed to paying rent to the Landlord of its hotel each year in accordance with the formula set out in the Lease dated 14 October 2008 (assigned to Focus Hotels Management (Heathrow) Limited on 5 October 2011) which expires on 13 October 2043.

 

Focus Hotels Management (Bristol) Limited is committed to paying rent to the Landlord of its hotel each year in accordance with the formula set out in the Lease dated 30 July 1999 (assigned to Focus Hotels Management (Bristol) Limited on 7 October 2011) which expires on 29 July 2033.

 

Operating lease rental payments are determined by the level of profit generated by each individual hotel with no minimum guarantee. The resulting profit or loss for the year is being absorbed by the ultimate parent company.

28
Controlling party

In the opinion of the directors, there is no ultimate controlling party.

29
Events after reporting period

There have been no material events occurring after the reporting date that require adjustments or disclosures in the financial statements.

30
Cash generated from/(absorbed by) group operations
2023
2022
£
£
Profit for the year after tax
60,338
237,159
Adjustments for:
Taxation charged
34,978
31,025
Finance costs
296,304
-
0
Investment income
(187,975)
(161,976)
Amortisation and impairment of intangible assets
5,005
4,899
Depreciation and impairment of property, plant and equipment
2,366
4,756
Increase/(decrease) in provisions
63,382
(8,035)
Movements in working capital:
Increase in inventories
(744)
(4,378)
Decrease/(increase) in trade and other receivables
625,996
(2,460,054)
(Decrease)/increase in trade and other payables
(750,473)
2,019,372
(Decrease)/increase in deferred income
(82,052)
38,842
Cash generated from/(absorbed by) operations
67,125
(298,390)
FOCUS HOTELS MANAGEMENT LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
31
Analysis of changes in net funds - group
30 December 2022
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
2,760,584
9,067
2,769,651
Borrowings excluding overdrafts
(273,333)
79,999
(193,334)
2,487,251
89,066
2,576,317
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