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11 HOSPITALITY (BIRMINGHAM) LIMITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
COMPANY INFORMATION


Directors
Bhupendra S Kansagra 
Rajni S Kansagra 
Ramesh S Kansagra 




Registered number
04056337



Registered office
Portland House
69-71 Wembley Hill Road

Wembley

Middlesex

HA9 8BU




Independent auditors
Sopher + Co LLP
Chartered Accountants & Statutory Auditors

5 Elstree Gate

Elstree Way

Borehamwood

Hertfordshire

WD6 1JD





 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 3
Directors' report
 
4 - 5
Independent auditors' report
 
6 - 9
Statement of comprehensive income
 
10
Statement of financial position
 
11
Statement of changes in equity
 
12
Notes to the financial statements
 
13 - 24


 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal activity
 
The main activity of 11 Hospitality (Birmingham) Limited ("the Company) continues to be the ownership and operation of Holiday Inn Birmingham Airport Hotel, Birmingham, a four star hotel in the United Kingdom.

Business review
 
This period was fully operational compared with a restricted 2022 performance due to Covid. Any comparison between the two years has to be seen in this context.
The start of 2022 was adversely affected by the Omicron wave of the COVID-19 pandemic, which meant that for the early weeks of the year, activity within UK hospitality was impacted by the Government’s Plan B measures. This restricted the hotel’s ability to trade fully until the end of February. From March 2022 onwards, the sector began to bounce back very strongly and, this continued into 2023 leading to buoyant volumes at the hotel, strong occupancy and profitability.
Due to the continuing issue of labour shortages in the hospitality industry as a whole, combined with significant wage inflation, payroll and staffing levels in some departments continued to be a big issue during the year. Adjustments continue to be made to the way we do things to overcome this and to ensure that it does not restrict our continuous push for growth and improvement.
In 2023, the business saw an increase of 11.5% in revenues versus 2022, and 12.2% increase in gross profit. The hotel reported an operating profit of £1,188,503 (2022: £918,794) indicating a recovery of 29.4% in comparison to 2022. 
The following capital projects were completed or started in the period.
Digital Technology – In our ongoing commitment to providing an exceptional guest experience, we are enhancing the digital technology of our hotel. We are investing in state-of-the-art automation systems to enable in-room ordering and self-check-in capabilities. Additionally, we are upgrading our guest Wi-Fi to ensure fast and reliable connectivity, enabling seamless remote work and entertainment streaming.
Function Suite – An extensive refurbishment of our function suite, designed to elevate your event experience. Our commitment to excellence drives us to create a modern and stylish space that can accommodate a variety of occasions, from weddings to corporate gatherings. The upgraded suite will feature state-of-the-art audiovisual equipment, flexible seating arrangements, and a chic, contemporary design to ensure your event is truly exceptional.
The key indicators used to measure the performance of the hotel are RevPAR (rooms revenue per available room), total occupancy, and average room rate.

Page 1

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
The Company’s’ exposure to risk is monitored on an on-going basis by the Directors. The business environment in which we operate continues to be challenging as we are subject to consumer and business spending patterns.
Ongoing Economic Crisis
The impact of high-cost inflation on both variable and fixed costs, could have a potential negative effect on profitability. To mitigate this, the management of the business has a strict budgetary discipline in place including the development of collaborative working relationships with key suppliers. In addition, volatile costs such as energy and utilities, are fixed wherever possible.
Competition
The Company’s on-going success is partly dependant on the successful hosting of exhibitions and conferences held at NEC Birmingham and the Birmingham Airport. A risk that the Company faces is if visitors to the key events, corporate clients and travellers are lost to nearby competition the performance of the hotel operation may deteriorate. The Company mitigates this risk by actively seeking to enter into long term contracts with its key corporate customers and by continually improving the quality of its service to attract national and international “transient” travellers.
Credit Risk
The Company’s credit risk is primarily attributable to its trade debtors. Credit risk is mitigated by a stringent management of customer credit limits by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating.
Staffing
The challenge posed in retaining a high-quality team of senior managers where there is strong demand for their skills is considered to be significant. The Company has implemented appropriate incentive plans and a programme of training and development to identify, retain and motivate key staff.
Liquidity Risk
The Company’s policy is to ensure continuity of funding through maintaining significant levels of credit balance in bank accounts.
I
nterest rate cash flow risk
The Company has both interest-bearing assets and interest-bearing liabilities. Interest bearing assets include only cash balances, some of which earn interest at variable rates. Interest bearing liabilities relate to bank facilities and the Company is exposed to interest rate risk.
Legislative Risk
As an entity providing services to the general public, the directors and management of the Company are subject to legislative requirements that this entails. The Company addresses these issues, primarily through its hotel operator IHG, which has the systems, experience and industry knowledge to ensure correct procedures are in place. The Company ensures that it is covered by all necessary public liability and other insurances.

Page 2

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators
 
   2023  2022
Turnover   £7.8m  £7.0m
Gross profit   £4.5m  £4.0m (restated)
Operating profit  £1.2m  £0.9m
RevPAR   £58  £52
Total occupancy (%) 67%  69%
Average Room Rate £87  £75


This report was approved by the board on 18 September 2024 and signed on its behalf.



Bhupendra S Kansagra
Director

Page 3

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors

The directors who served during the year were:

Bhupendra S Kansagra 
Rajni S Kansagra 
Ramesh S Kansagra 

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Future developments

The Directors expect the activities of the Company to continue for the foreseeable future and will continue their efforts to integrate additional revenue steams and cost saving measures in its operations to maximise profitability.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Page 4

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Results and Dividends

The loss for the year, after taxation, amounted to £865,280 (2022: loss £86,708)

Auditors

Sopher + Co LLP were appointed as statutory auditors during the year. Under section 487(2) of the Companies Act 2006Sopher + Co LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board on 18 September 2024 and signed on its behalf.
 





Bhupendra S Kansagra
Director

Page 5

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF 11 HOSPITALITY (BIRMINGHAM) LIMITED
 

Opinion


We have audited the financial statements of 11 Hospitality (Birmingham) Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 loss 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.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


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


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Page 6

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF 11 HOSPITALITY (BIRMINGHAM) LIMITED (CONTINUED)

Other information


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 Auditors' 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 statementsour 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' 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 set out on page 4, 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.


Page 7

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF 11 HOSPITALITY (BIRMINGHAM) LIMITED (CONTINUED)

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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: 
 
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; 
we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the hospitality industry sector; 
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and 
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. 

We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: 
 
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; 
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and 
understanding the design of the Company’s remuneration policies. 

To address the risk of fraud through management bias and override of controls, we: 
 
performed analytical procedures to identify any unusual or unexpected relationships; 
tested journal entries to identify unusual transactions; 
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and 
investigated the rationale behind significant or unusual transactions. 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: 
 
agreeing financial statement disclosures to underlying supporting documentation; 
enquiring of management as to actual and potential litigation and claims; and 
reviewing correspondence with HMRC, relevant regulators and the Company’s legal advisors. 

There are inherent limitations in our audit procedures described above. The more removed that laws and
Page 8

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF 11 HOSPITALITY (BIRMINGHAM) LIMITED (CONTINUED)

regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. 
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


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 2006Our 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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Martyn Atkinson FCA (Senior statutory auditor)
  
for and on behalf of
Sopher + Co LLP
 
Chartered Accountants
Statutory Auditors
  
5 Elstree Gate
Elstree Way
Borehamwood
Hertfordshire
WD6 1JD

18 September 2024
Page 9

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

  

Turnover
 4 
7,808,454
7,005,000

Cost of sales
  
(3,281,798)
(2,969,158)

Gross profit
  
4,526,656
4,035,842

Selling expenses
  
(655,357)
(557,591)

Administrative expenses
  
(2,682,796)
(2,559,457)

Operating profit
 5 
1,188,503
918,794

Interest receivable and similar income
 8 
17,643
2,535

Interest payable and similar expenses
 9 
(1,456,169)
(777,154)

(Loss)/profit before tax
  
(250,023)
144,175

Tax on (loss)/profit
 10 
(615,257)
(230,883)

Loss for the financial year
  
(865,280)
(86,708)

Deficit on revaluation of freehold property
  
(10,535,000)
(376,444)

Deferred tax movement on revaluation of freehold property
  
1,528,157
277,236

Total comprehensive income for the year
  
(9,872,123)
(185,916)

The notes on pages 13 to 24 form part of these financial statements.

Page 10

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
REGISTERED NUMBER:04056337

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 11 
29,886,179
41,205,288

Current assets
  

Stocks
 12 
44,567
36,073

Debtors: amounts falling due within one year
 13 
830,198
605,966

Cash at bank and in hand
 14 
258,720
1,213,450

  
1,133,485
1,855,489

Current liabilities
  

Creditors: amounts falling due within one year
 15 
(12,297,710)
(2,080,249)

Net current liabilities
  
 
 
(11,164,225)
 
 
(224,760)

Total assets less current liabilities
  
18,721,954
40,980,528

Creditors: amounts falling due after more than one year
 16 
(10,459,482)
(21,925,548)

Provisions for liabilities
  

Deferred tax
 19 
(1,375,943)
(2,296,328)

Net assets
  
6,886,529
16,758,652


Capital and reserves
  

Called up share capital 
 20 
2
2

Share premium account
 21 
600,000
600,000

Revaluation reserve
 21 
5,390,313
14,628,087

Profit and loss account
 21 
896,214
1,530,563

  
6,886,529
16,758,652


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 18 September 2024.




Bhupendra S Kansagra
Director

The notes on pages 13 to 24 form part of these financial statements.

Page 11

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£
£


At 1 January 2022
2
600,000
14,927,045
1,417,521
16,944,568



Loss for the year
-
-
-
(86,708)
(86,708)

Deficit on revaluation of freehold property
-
-
(376,444)
-
(376,444)

Deferred tax movement on revaluation of freehold property
-
-
277,236
-
277,236

Difference between historical cost depreciation charge and the actual depreciation charge for the period calculated on the revalued amount
-
-
(199,750)
199,750
-



At 1 January 2023
2
600,000
14,628,087
1,530,563
16,758,652



Loss for the year
-
-
-
(865,280)
(865,280)

Deficit on revaluation of freehold property
-
-
(10,535,000)
-
(10,535,000)

Deferred tax movement on revaluation of freehold property
-
-
1,528,157
-
1,528,157

Difference between historical cost depreciation charge and the actual depreciation charge for the period calculated on the revalued amount
-
-
(191,431)
191,431
-

Transfer between reserves
-
-
(39,500)
39,500
-


At 31 December 2023
2
600,000
5,390,313
896,214
6,886,529


The notes on pages 13 to 24 form part of these financial statements.

Page 12

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

11 Hospitality (Birmingham) Limited is a private limited company registered in England and Wales. Its registered address is  Portland House, 69-71 Wembley Hill Road, Wembley, Middlesex, HA9 8BU.
The principal place of business of the Company is Holiday Inn Birmingham Airport - NEC, Coventry Road, West Midlands, Birmingham, B26 3QW.
The presentation currency of the financial statements is the Pound Sterling (£).

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Solai Holdings Ltd as at 31 December 2023 and these financial statements may be obtained from Companies House.

 
2.3

Going concern

The company made a loss for the year and at the reporting date has high net current liabilities due to the 5 year bank loan coming to the end of its term within the next 12 months. The company's directors are intending to renew the bank loan. In addition the company has obtained assurance from Solai Holdings Limited that it will make available sufficient funds to the company so that it will be able to carry on trading and meet its financial obligations as and when they fall due for at least twelve months from the date the accounts are approved. The accounts have therefore been prepared under the going concern basis.

Page 13

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover consists mainly of room rentals, event hire, and food & beverage sales.
Fees from room rentals are recognised when the rooms are occupied. Event hire fees are recognised when the event takes place. Food and beverage sales are recognised at the point of sale.

 
2.5

Interest income

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

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method.

 
2.7

Pensions

The Company contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 14

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Tangible fixed assets

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

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

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis.


Freehold property
-
2%
Straight line for the building. Freehold land is not depreciated.
Fixtures and fittings
-
25%
reducing balance or 33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.10

Revaluation of tangible fixed assets

Freehold properties are carried at fair value at the date of the last revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken either by the directors or by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.12

Basic financial instruments

The company only enters into transactions that result in basic financial instruments such as trade and
Page 15

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.12
Basic financial instruments (continued)

other debtors, trade and other creditors, cash at bank and in hand, and loans with related parties.
Trade debtors, other debtors and loans to related parties are recognised initially at the transaction price less attributable transaction costs. Trade creditors, other creditors and loans from related parties are recognised initially at transaction price plus attributable transaction costs. Subsequently they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade and other debtors, and loans to related parties.
Interest bearing borrowings classified as basic financial instruments are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, they are stated at amortised cost using the effective interest method.
Cash is represented by cash in hand and deposits with financial institutions.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, the directors have made the following judgments:
a) Freehold properties are carried at fair value at the date of the last revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date. Each year the directors exercise judgment to decide whether the property needs to be revalued.
In preparing these financial statements, the directors have considered the following key sources of estimation uncertainty:
a) In a year when the directors exercise their judgement to undertake a revaluation of the freehold property, the valuation is estimated by independent professional valuers and is derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset.
b) Tangible assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and estimated disposal values.


4.


Turnover

The whole of the turnover is attributable to the principal activity of the company, being that of hotel ownership and operation.

All turnover arose within the United Kingdom.

Page 16

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
1,074,109
1,092,367

Defined contribution pension costs
25,761
24,095

(1,099,870)
(1,116,462)


6.


Auditors' remuneration

2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
15,000
10,500


7.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
2,048,882
1,846,396

Social security costs
150,158
139,989

Cost of defined contribution scheme
25,761
24,095

2,224,801
2,010,480


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Administrative staff
107
105



Directors
3
3

110
108

The directors didn't receive any remuneration during the year (2022 - £nil).

Page 17

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Interest receivable

2023
2022
£
£


Bank interest receivable
17,643
2,535


9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
723,148
386,270

Loans from group undertakings
733,021
390,884

1,456,169
777,154


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
77,528

Adjustments in respect of previous periods
7,485
-


Deferred tax


Origination and reversal of timing differences
607,772
153,355


Tax on (loss)/profit
615,257
230,883
Page 18

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of19% (2022 -19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(250,022)
144,175


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
(47,504)
27,393

Effects of:


Expenses not deductible for tax purposes
33,794
-

Capital allowances for year in excess of depreciation
29,902
50,135

Revenue items for tax that are capitlised in the accounts
(627)
-

Adjustments to tax charge in respect of prior periods
7,485
-

Utilisation of tax losses
(15,565)
-

Deferred tax
607,772
153,355

Total tax charge for the year
615,257
230,883

During the year the company utilised £81,922 of its brought forward tax losses and surrendered all its remaining brought forward tax losses of £1,794,627 as group relief.


Factors that may affect future tax charges

From 1 April 2023 the rate of corporation tax will remain at 19% for companies with an annual profit of £50,000 or less, increase to 25% for companies with an annual profit of £250,000 or more, and increase to a marginal rate for companies with profits between £50,000 and £250,000. These thresholds are divided by the number of associated companies.

Page 19

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Tangible fixed assets





Freehold property
Fixtures and fittings
Total

£
£
£



Cost or valuation


At 1 January 2023
41,000,000
1,737,610
42,737,610


Additions
-
464,941
464,941


Disposals
-
(396,919)
(396,919)


Revaluations
(12,000,000)
-
(12,000,000)



At 31 December 2023

29,000,000
1,805,632
30,805,632



Depreciation


At 1 January 2023
732,500
799,822
1,532,322


Charge for the year on owned assets
732,500
341,609
1,074,109


Disposals
-
(221,978)
(221,978)


Revaluations
(1,465,000)
-
(1,465,000)



At 31 December 2023

-
919,453
919,453



Net book value



At 31 December 2023
29,000,000
886,179
29,886,179



At 31 December 2022
40,267,500
937,788
41,205,288

Included in freehold property is freehold land valued at £4,374,998 (2022: £4,374,998) which is not depreciated.
The 2023 valuations were determined by an independent professional valuation dated 15 July 2024. The directors consider this to be a good estimate of the valuation as at 31 December 2023.
The historical cost less depreciation of the freehold property would be £23,609,687 (2022 - £24,150,756) if the property had not been revalued.


12.


Stocks

2023
2022
£
£

Food, beverages and consumables
44,567
36,073


Page 20

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Debtors

2023
2022
£
£


Trade debtors
581,871
232,803

Other debtors
82,970
201,888

Prepayments and accrued income
165,357
171,275

830,198
605,966



14.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
258,720
1,213,450



15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
11,250,000
1,000,000

Trade creditors
246,101
348,703

Corporation tax
7,485
-

Other taxation and social security
389,064
324,982

Other creditors
290,644
208,244

Accruals and deferred income
114,416
198,320

12,297,710
2,080,249


The bank loan is provided by Barclays Bank PLC. The Company's bank loan is secured by way of fixed and floating charges over the property. The interest rate on this loan is at a margin of 1.45% over the Bank of England base rate. The term of the facility runs to September 2024.

Page 21

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
-
11,250,000

Amounts owed to group undertakings
10,459,482
10,675,548

10,459,482
21,925,548


Amounts owed to group undertakings comprise a loan from 11 Hospitality Limited, the company's parent undertaking. The loan is unsecured and bears interest at 2.25% above the Bank of England base rate. The loan doesn't have fixed repayment terms but the companies share common directors, who have confirmed it's unlikely the loan will be repaid within 5 years. The loan has therefore been classified as such in the financial statements.


17.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
11,250,000
1,000,000

Amounts falling due 1-2 years

Bank loans
-
11,250,000


Amounts falling due after more than 5 years

Amounts owed to group undertakings
10,459,482
10,675,548

21,709,482
22,925,548



18.


Financial instruments

The company only enters into transactions that result in the recognition of basic financial assets and basic financial liabilities. It does not have financial assets and liabilities measured at fair value.

Page 22

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Deferred taxation




2023


£






At beginning of year
2,296,328


Charged to profit or loss
(607,772)


Charged to other comprehensive income
1,528,157



At end of year
1,375,943

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
1,375,943
1,237,308

Property revaluation
-
1,528,157

Tax losses
-
(469,137)

1,375,943
2,296,328


20.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



2 Ordinary shares of £1.00 each
2
2



21.


Reserves

Share premium account

The share premium reserve represents the amount by which the amount received by the company for shares issued exceeds the par value.

Revaluation reserve

The revaluation reserve represents the cumulative balance of revaluation gains and losses on the investment properties, net of deferred tax, at the reporting date. It is a non-distributable reserve.

Profit and loss account

The profit and loss reserve contains the cumulative balance of retained profit and losses since the company started trading. It is a distributable reserve.

Page 23

 
11 HOSPITALITY (BIRMINGHAM) LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Prior year adjustment

In the year ended 31 December 2022 salary costs of £290,867 have been restated as administrative expenses instead of cost of sales. There is no change to net profit as a result of the restatement.


23.


Pension commitments

The company contributes to a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension charges  represent contributions payable to the fund and amounted to £25,762 (2021 - £24,095) during the year. 
Pension contributions due to the fund at the reporting date were £6,582 (2022 - £5,122).


24.


Related party transactions

The company has taken advantage of the exemption not to disclose transactions entered into between group entities where both entities are wholly owned within the group.


25.


Controlling party

The company's immediate parent undertaking is 11 Hospitality Limited, a company incorporated in England and Wales with its registered office address at Portland House, 69-71 Wembley Hill Road, Wembley, Middlesex, HA9 8BU.
The ultimate parent company is Matel Limited, a company incorporated in Jersey with its registered office address at Oriel House, York Lane, St Helier, Jersey, JE2 4YH.
The ultimate controlling party is The Pavel Trust.
Solai Holdings Limited is the largest and smallest group which includes the company and for which group accounts are prepared. The consolidated accounts are available from Companies House.

 
Page 24