Company Registration No. 10533763 (England and Wales)
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
COMPANY INFORMATION
Directors
R Ashcroft
A Mikhail
V Mikhail
J H Gordon
G R G Wareham
Company number
10533763
Registered office
The Bold Hotel
583 Lord Street
Southport
PR9 0BE
Auditor
UHY Hacker Young Manchester LLP
St James Building
79 Oxford Street
Manchester
M1 6HT
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9 - 10
Company balance sheet
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 - 36
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Fair review of the business

The group’s core business continues to be within the hotel and leisure sector.

 

Group turnover increased year on year by £5,671,088 (2022: £2,945,320) which equated to an increase of 49.58% (2022: 34.68%). The increase is again due to more scope to trade during the year as well as more venues open fully.

 

 

2023

£

2022

£

Profit before taxation

806,073

839,720

Grants

-

(60,041)

Interest

283,021

192,545

Depreciation

1,460,073

1,116,993

Amortisation

32,611

27,115

Pre opening costs

-

176,233

 

 

 

Underlying E.B.I.T.D.A

2,581,778

2,292,115

 

Net assets increased by £315,263 (4%) to £7,581,424. At the balance sheet date the group had bank borrowing in place amounting to £4,852,393 (2022: £5,272,989). The directors are thankful of the continued support of the bank. At the balance sheet date the group owed directors £1,260,412 (2022: £1,339,755). The directors will continue to support the group.

Principal risks and uncertainties

The normal risks to the group are industry related, such as complying with alcohol licence and EHO regulations. Across the group we take the requirements of these authorities very seriously. We mitigate these risks by constantly investing in our management personnel whom attend external training courses in Food Hygiene and becoming Personal Licence Holders.

 

There is a high footfall throughout our facilities, we put customer experience at the forefront of everything we do. There is a reputational risk in the industry to some businesses that do not exceed in customer services due to increase in feedback obtained and publicly available on social media. We take all feedback given on board and strive to make any improvements necessary.

 

Increases in supplier prices and duty, the implementation of the national living wage and compliance with NEST add pressure to the Groups two largest areas of cost. The Directors and management continuously work towards improved staff efficiency and any stock wastage, and this had continued due to current economic factors.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Development and performance

The group will continue to expand and reinvest in our people, venues and systems. Our approach has not changed we will look to secure additional venues designed to deliver excellent customer experience.

Key performance indicators

There are a number of daily, weekly and month to date reporting tools available to our management team. They are implemented daily to ensure that set budgets are achieved within the operation. The key considerations are as follows:

 

On behalf of the board

R Ashcroft
Director
24 May 2024
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Principal activities

The principal activity of the company and group continued to be that of property management and rentals, the operation of a public house and restaurant and the operation of Bold Hotel.

Directors

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

R Ashcroft
A Mikhail
V Mikhail
S Sheldon
(Resigned 01 December 2023)
J Gordon
G R G Wareham
Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £83,917. The directors do not recommend payment of a further dividend.

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
R Ashcroft
Director
24 May 2024
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
- 5 -
Opinion

We have audited the financial statements of Mikhail Hotels & Leisure Holdings Limited (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 balance sheet, the company balance sheet, 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the 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.

Opinions on other matters prescribed by the Companies Act 2006

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

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
- 6 -
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.

Extent to which the audit was considered capable of detecting irregularities including fraud

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.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
- 7 -

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: fraudulent reporting and misappropriation of assets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks the group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.

 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group's ability to operate or to avoid a material penalty. These include regulations around Health and Safety.

 

Our procedures to respond to risks identified included the following:

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the group’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 group’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 group and the group’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Stephen Grayson ACA FCCA (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young Manchester LLP
24 May 2024
Chartered Accountants
Statutory Auditor
St James Building
79 Oxford Street
Manchester
M1 6HT
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
17,109,889
11,438,800
Cost of sales
(10,249,342)
(5,894,172)
Gross profit
6,860,547
5,544,628
Administrative expenses
(6,165,370)
(5,088,203)
Other operating income
393,917
575,390
Operating profit
4
1,089,094
1,031,815
Interest payable and similar expenses
7
(283,021)
(192,545)
Profit before taxation
806,073
839,270
Tax on profit
8
(318,616)
(71,468)
Profit for the financial year
27
487,457
767,802
Profit for the financial year is attributable to:
- Owners of the parent company
344,266
718,031
- Non-controlling interests
143,191
49,771
487,457
767,802
Total comprehensive income for the year is attributable to:
- Owners of the parent company
344,266
718,031
- Non-controlling interests
143,191
49,771
487,457
767,802
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
131,392
150,791
Other intangible assets
10
21,791
15,358
Total intangible assets
153,183
166,149
Tangible assets
11
14,957,070
15,397,845
Investments
13
115,645
115,644
15,225,898
15,679,638
Current assets
Stocks
17
359,071
195,612
Debtors
18
1,785,691
1,919,707
Cash at bank and in hand
1,326,479
1,636,962
3,471,241
3,752,281
Creditors: amounts falling due within one year
19
(3,917,147)
(4,402,444)
Net current liabilities
(445,906)
(650,163)
Total assets less current liabilities
14,779,992
15,029,475
Creditors: amounts falling due after more than one year
20
(6,083,218)
(6,971,582)
Provisions for liabilities
Provisions
23
10,000
10,000
Deferred tax liability
24
1,105,349
781,732
(1,115,349)
(791,732)
Net assets
7,581,425
7,266,161
Capital and reserves
Called up share capital
26
4,231,510
4,231,510
Other reserves
27
(2,659,084)
(2,659,084)
Profit and loss reserves
27
5,914,117
5,653,768
Equity attributable to owners of the parent company
7,486,543
7,226,194
Non-controlling interests
94,882
39,967
7,581,425
7,266,161

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

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
The financial statements were approved by the board of directors and authorised for issue on 24 May 2024 and are signed on its behalf by:
R Ashcroft
Director
Company registration number 10533763 (England and Wales)
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
2,300
1,500
Tangible assets
11
393,582
509,137
Investment property
12
11,698,402
11,373,427
Investments
13
3,431,094
3,431,094
15,525,378
15,315,158
Current assets
Debtors
18
2,330,334
2,067,955
Cash at bank and in hand
210,516
804,762
2,540,850
2,872,717
Creditors: amounts falling due within one year
19
(2,952,070)
(3,178,288)
Net current liabilities
(411,220)
(305,571)
Total assets less current liabilities
15,114,158
15,009,587
Creditors: amounts falling due after more than one year
20
(5,880,143)
(6,608,255)
Provisions for liabilities
Deferred tax liability
24
795,000
485,000
(795,000)
(485,000)
Net assets
8,439,015
7,916,332
Capital and reserves
Called up share capital
26
4,231,510
4,231,510
Profit and loss reserves
27
4,207,505
3,684,822
Total equity
8,439,015
7,916,332

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £606,599 (2022 - £1,136,950 profit).

The financial statements were approved by the board of directors and authorised for issue on 24 May 2024 and are signed on its behalf by:
R Ashcroft
Director
Company registration number 10533763 (England and Wales)
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Other reserves
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2022
4,231,510
(2,659,084)
4,988,661
6,561,087
(3,004)
6,558,083
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
718,031
718,031
49,771
767,802
Dividends
9
-
-
(52,924)
(52,924)
(6,800)
(59,724)
Balance at 31 December 2022
4,231,510
(2,659,084)
5,653,768
7,226,194
39,967
7,266,161
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
344,266
344,266
143,191
487,457
Dividends
9
-
-
(83,917)
(83,917)
(88,276)
(172,193)
Balance at 31 December 2023
4,231,510
(2,659,084)
5,914,117
7,486,543
94,882
7,581,425
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
4,231,510
2,600,796
6,832,306
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,136,950
1,136,950
Dividends
9
-
(52,924)
(52,924)
Balance at 31 December 2022
4,231,510
3,684,822
7,916,332
Year ended 31 December 2023:
Profit and total comprehensive income
-
606,600
606,600
Dividends
9
-
(83,917)
(83,917)
Balance at 31 December 2023
4,231,510
4,207,505
8,439,015
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
32
1,714,026
3,467,290
Interest paid
(283,021)
(192,545)
Income taxes paid
(8,315)
(6,839)
Net cash inflow from operating activities
1,422,690
3,267,906
Investing activities
Purchase of business
-
234,377
Purchase of intangible assets
(19,645)
(23,045)
Purchase of tangible fixed assets
(1,026,787)
(7,640,382)
Proceeds from disposal of tangible fixed assets
7,916
112,624
Proceeds from disposal of investments
-
(115,569)
Repayment of loans
(779)
-
Net cash used in investing activities
(1,039,295)
(7,431,995)
Financing activities
Repayment of borrowings
(45,100)
584,789
Repayment of bank loans
(420,596)
2,395,015
Payment of finance leases obligations
(55,989)
188,433
Dividends paid to equity shareholders
(83,917)
(52,924)
Dividends paid to non-controlling interests
(88,276)
(6,800)
Net cash (used in)/generated from financing activities
(693,878)
3,108,513
Net decrease in cash and cash equivalents
(310,483)
(1,055,576)
Cash and cash equivalents at beginning of year
1,636,962
2,692,538
Cash and cash equivalents at end of year
1,326,479
1,636,962
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Mikhail Hotels and Leisure Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Bold Hotel, 583 Lord Street, Southport, PR9 0BE.

 

The principal place of business for the parent company is Stanhope Street, Cains Brewery Village, Liverpool L8 5XJ.

There is no principal place of business for the group.

 

The group consists of Mikhail Hotels and Leisure Holdings Limited 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
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Mikhail Hotels & Leisure Holdings Limited 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.

1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

The pandemic Covid-19 has given rise to considerable volatility in the world economy. However Mikhail Hotel and Leisure Holdings Limited and subsidiary companies believes that it is in a strong financial position and has sufficient flexibility to navigate through the current difficulties.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rental income is recognised at the fair value of the rental amounts receivable, and is shown net of VAT and other sales related taxes.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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.

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
10% straight line
Logo and website
10% straight line
1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

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:

Freehold property
2% straight line
Leasehold land and buildings
25 years straight line
Leasehold property improvements
10% straight line
Plant and equipment
25% - 33% straight line
Fixtures and fittings
20% straight line
Cutlery, glassware, bedlinen & soft furnishings
50% straight line
Motor vehicles
20% 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 profit and loss account.

1.8
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

Property rented to a group entity is accounted for as tangible fixed assets.

1.9
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Transaction costs are expensed to profit or loss as incurred. Changes in fair value are recognised in other comprehensive income except to the extent that a gain reverses a loss previously recognised in profit or loss, or a loss exceeds the accumulated gains recognised in equity; such gains and loss are recognised in profit or loss.

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

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.10
Impairment of fixed 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.

1.11
Stocks

Stocks 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 stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
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.

1.13
Financial instruments

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

 

Financial instruments are recognised in the group's balance sheet 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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.

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 creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.14
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.

1.15
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 profit and loss account 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.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
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 profit and loss account, 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.

1.16
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.

1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.20
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Investment property values

The group makes estimates of the valuations of its investment properties. When assessing the valuation of certain properties, on a periodic basis management use independent valuers who are not connected to the group to value the property on the open market (fair value) basis by reference to market evidence of transaction prices for similar properties. Management utilises these valuations to value certain other properties within the group. The valuations in the current year have been performed by the directors on the basis of previous formal valuations.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Operation of hotels and public houses
12,143,389
9,473,644
Property management and rentals
1,083,004
1,239,518
Contract interiors
406,347
267,636
Solar and lighting equipment
3,455,172
433,064
Security services
21,977
24,938
17,109,889
11,438,800
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 22 -
2023
2022
£
£
Other revenue
Grants received
-
60,041

All turnover arose within the United Kingdom.

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(9,222)
14,541
Government grants
-
(60,041)
Fees payable to the group's auditor for the audit of the group's financial statements
15,000
15,000
Depreciation of owned tangible fixed assets
1,460,073
1,116,993
(Profit)/loss on disposal of tangible fixed assets
(427)
728
Amortisation of intangible assets
32,611
27,115
Operating lease charges
133,617
44,600
5
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
Management and operational
221
265
12
13

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
4,190,019
3,379,720
388,826
400,950
Social security costs
263,668
221,145
39,572
41,419
Pension costs
51,243
48,924
7,611
6,544
4,504,930
3,649,789
436,009
448,913
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
158,392
145,947
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
256,201
187,232
Interest on finance leases and hire purchase contracts
26,625
5,313
Other interest
195
-
Total finance costs
283,021
192,545
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
16,839
15,000
Adjustments in respect of prior periods
(21,912)
(59,687)
Total current tax
(5,073)
(44,687)
Deferred tax
Origination and reversal of timing differences
323,689
116,155
Total tax charge
318,616
71,468

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
806,073
839,270
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
189,588
159,461
Tax effect of expenses that are not deductible in determining taxable profit
863
600
Tax effect of utilisation of tax losses not previously recognised
(176,755)
(24,410)
Adjustments in respect of prior years
(21,912)
(59,687)
Tax at marginal rate
(542)
-
Fixed asset differences
327,374
(4,496)
Taxation charge
318,616
71,468
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
9
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
83,917
52,924
10
Intangible fixed assets
Group
Goodwill
Software
Logo and website
Total
£
£
£
£
Cost
At 1 January 2023
193,992
14,209
5,435
213,636
Additions
-
1,500
18,145
19,645
At 31 December 2023
193,992
15,709
23,580
233,281
Amortisation and impairment
At 1 January 2023
43,201
3,239
1,047
47,487
Amortisation charged for the year
19,399
2,836
10,376
32,611
At 31 December 2023
62,600
6,075
11,423
80,098
Carrying amount
At 31 December 2023
131,392
9,634
12,157
153,183
At 31 December 2022
150,791
10,970
4,388
166,149
Company
Logo and website
£
Cost
At 1 January 2023
1,500
Additions
800
At 31 December 2023
2,300
Amortisation and impairment
At 1 January 2023 and 31 December 2023
-
0
Carrying amount
At 31 December 2023
2,300
At 31 December 2022
1,500
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
11
Tangible fixed assets
Group
Freehold property
Leasehold land and buildings
Leasehold property improvements
Plant and equipment
Fixtures and fittings
Cutlery, glassware, bedlinen & soft furnishings
Motor vehicles
Total
£
£
£
£
£
£
£
£
Cost
At 1 January 2023
11,510,853
2,896,641
366,376
2,470,403
2,512,014
62,012
23,301
19,841,600
Additions
324,976
158,504
69,215
235,101
195,752
-
43,239
1,026,787
Disposals
-
(2,350)
-
(3,027)
(2,329)
-
-
(7,706)
At 31 December 2023
11,835,829
3,052,795
435,591
2,702,477
2,705,437
62,012
66,540
20,860,681
Depreciation and impairment
At 1 January 2023
943,409
641,390
125,391
1,220,691
1,442,903
62,012
7,959
4,443,755
Depreciation charged in the year
230,000
296,716
43,545
490,251
386,268
-
13,293
1,460,073
Eliminated in respect of disposals
-
-
-
(217)
-
-
-
(217)
At 31 December 2023
1,173,409
938,106
168,936
1,710,725
1,829,171
62,012
21,252
5,903,611
Carrying amount
At 31 December 2023
10,662,420
2,114,689
266,655
991,752
876,266
-
45,288
14,957,070
At 31 December 2022
10,567,444
2,255,251
240,985
1,249,712
1,069,111
-
15,342
15,397,845
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
Company
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
526,338
23,082
549,420
Additions
21,468
-
0
21,468
At 31 December 2023
547,806
23,082
570,888
Depreciation and impairment
At 1 January 2023
23,432
16,851
40,283
Depreciation charged in the year
132,406
4,617
137,023
At 31 December 2023
155,838
21,468
177,306
Carrying amount
At 31 December 2023
391,968
1,614
393,582
At 31 December 2022
502,906
6,231
509,137
12
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 January 2023
1
11,373,427
Additions through external acquisition
-
324,976
At 31 December 2023
1
11,698,403

The fair value of the investment property has been arrived at by the Directors, based on previous valuations carried out by independent valuers who are not connected with the company. The valuations were made on an open market value basis by reference to market evidence of transaction prices for similar properties.

13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
-
3,431,018
3,431,019
Investments in associates
15
25
25
25
25
Investments in joint ventures
16
51
50
51
50
Unlisted investments
115,569
115,569
-
0
-
0
115,645
115,644
3,431,094
3,431,094
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 27 -
Movements in fixed asset investments
Group
Shares in associates and joint ventures
Other investments
Total
£
£
£
Cost or valuation
At 1 January 2023
75
115,569
115,644
Additions
1
-
1
At 31 December 2023
76
115,569
115,645
Carrying amount
At 31 December 2023
76
115,569
115,645
At 31 December 2022
75
115,569
115,644
Movements in fixed asset investments
Company
Shares in subsidiaries, associates and joint ventures
£
Cost or valuation
At 1 January 2023 and 31 December 2023
3,431,094
Carrying amount
At 31 December 2023
3,431,094
At 31 December 2022
3,431,094
14
Subsidiaries

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

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Subsidiaries
(Continued)
- 28 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
A&V Mikhail Investments Limited
Unit 2, Solarcrown Commercial, Sandwash Business Park, Sandwash Close, St Helens, England, WA11 8LY
Ordinary
100.00
Maverciks Southport Limited
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
100.00
Cains Brewery Ltd
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
100.00
Mikhail Hotels Limited
583 The Bold Hotel, Lord Street, Southport, England, PR9 0BE
Ordinary
100.00
Punch Tarmeys Limited
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
100.00
The Cains Brewing Company Limited
Unit 1 Brewery Works Cains Brewery Village, Stanhope Street, Liverpool, Merseyside, England, L8 5XJ
Ordinary
100.00
Arcains Limited
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
100.00
David Davies Estate Agent Limited
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
60.00
Mikhail Contract Interiors Limited
Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
66.67
Lord Street Car Park Limited
Unit 2, Solarcrown Commercial, Sandwash Business Park, Sandwash Close, St Helens, England, WA11 8LY
Ordinary
100.00
Total Security North West Limited
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
100.00
Solarcrown Commercial Limited
Unit 2, Sandwash Business Park, Sandwash Close, St Helens, England, WA11 8LY
Ordinary
75.00
15
Associates

Details of associates at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
PB Manchester Limited
The Bold Hotel, 583 Lord Street, Southport, England, PR9 0BE
Ordinary
25
16
Joint ventures

Details of joint ventures at 31 December 2023 are as follows:

Name of undertaking
Registered office
Interest
% Held
held
Direct
AMM Leisure Limited
Unit 2, Solarcrown Commercial, Sandwash Business Park, Sandwash Close, St Helens, England, WA11 8LY
Ordinary
50.00
River Law Limited
Office F Brewery Works, Cains Brewery Village, Stanhope Street, Liverpool, United Kingdom, L8 5XJ
Ordinart
50.00
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
17
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
14,749
17,655
-
-
Finished goods and goods for resale
344,322
177,957
-
0
-
0
359,071
195,612
-
-
18
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
562,962
637,915
15,682
12,802
Amounts owed by group undertakings
-
-
1,998,329
1,542,092
Other debtors
631,236
787,985
203,313
422,051
Prepayments and accrued income
591,493
493,807
113,010
91,010
1,785,691
1,919,707
2,330,334
2,067,955
19
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
21
476,202
469,342
386,250
379,635
Obligations under finance leases
22
89,618
79,799
-
0
-
0
Other borrowings
21
30,000
30,000
30,000
30,000
Payments received on account
34,935
36,105
-
0
-
0
Trade creditors
1,377,845
1,128,603
106,280
98,857
Amounts owed to group undertakings
-
-
1,737,452
2,015,142
Corporation tax payable
16,435
29,751
-
0
-
0
Other taxation and social security
557,400
525,649
131,909
59,117
Other creditors
698,820
1,275,875
434,737
521,577
Accruals and deferred income
635,892
827,320
125,442
73,960
3,917,147
4,402,444
2,952,070
3,178,288
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
20
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
21
4,376,191
4,803,647
4,243,121
4,576,133
Obligations under finance leases
22
70,005
135,813
-
0
-
0
Other borrowings
21
1,287,022
1,332,122
1,287,022
1,332,122
Other creditors
350,000
700,000
350,000
700,000
6,083,218
6,971,582
5,880,143
6,608,255
Amounts included above which fall due after five years are as follows:
Payable by instalments
3,732,160
3,418,380
-
-
21
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
4,852,393
5,272,989
4,629,371
4,955,768
Other loans
1,317,022
1,362,122
1,317,022
1,362,122
6,169,415
6,635,111
5,946,393
6,317,890
Payable within one year
506,202
499,342
416,250
409,635
Payable after one year
5,663,213
6,135,769
5,530,143
5,908,255
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Loans and overdrafts
(Continued)
- 31 -

The first bank loan amounting to £3,729,834 (2022 - £4,003,612) is repayable over 12 years. The loan attracts interest at 4.595%.

 

The second bank loan amounting to £896,839 (2022 - £952,157) is repayable over 12 years. The loan attracts interest at 3.05%.

 

The third bank loan amounting to £32,387 (2022 - £43,887) relates to a government Bounce Bank Loan which is repayable over 6 years.

 

The fourth bank loan amounting to £193,333 (2022 - £273,333) is repayable over 5 years.

 

The bank loans are secured by an omnibus guarantee and set-off agreement with Mikhail Hotels and Leisure Holdings Limited, Mikhail Hotels Limited, Punch Tarmeys Limited, The Cains Brewing Company Limited, Arcains Limited, Mikhail Contract Interiors Limited, Lord Street Car Park Ltd, Total Securities North West Limited and Cains Brewery Ltd.

 

An unlimited debentures from Mikhail Hotels and Leisure Holdings Limited.

 

A first legal charge over the land and buildings at Pearsall House, The Ferry Landing, Far Sawrey, Ambleside, LA22 0LP.

 

A first legal charge over the land and buildings at Eccleston Arms, 158 Prescot Road, St Helens, WA10 3TU.

 

A first legal charge over the land and buildings at 52 Westfield Street, St Helens, WA10 1QJ.

 

A first legal charge over the land and buildings at 176-180 Lord Street and 2-6 Union Street, Southport, PR9 0QE.

 

A first legal charge over the land and buildings at The Bold Hotel, 583 Lord Street, Southport, PR9 0BE.

 

Included within other loans is an amount of £267,500 (2022 - £297,500). This loan is repayable over 10 years. The loan attracts interest at 4.15%.

 

The remaining other loan consists of amounts due to directors of the company.

 

22
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
89,618
79,799
-
0
-
0
In two to five years
70,005
135,813
-
0
-
0
159,623
215,612
-
-

Obligations under hire purchase agreements are secured over the assets to which they relate.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
23
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Warranty provision
10,000
10,000
-
-
Movements on provisions:
Warranty provision
Group
£
Acquired in business combination
10,000
At 31 December 2023
10,000
24
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
760,349
436,732
Capital gains
345,000
345,000
1,105,349
781,732
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
450,000
140,000
Capital gains
345,000
345,000
795,000
485,000
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Deferred taxation
(Continued)
- 33 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
781,732
485,000
Charge to profit or loss
323,617
310,000
Liability at 31 December 2023
1,105,349
795,000
25
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
51,243
15,319

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.

26
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
2,006,860
2,006,860
2,006,860
2,006,860
Ordinary B shares of £1 each
2,006,860
2,006,860
2,006,860
2,006,860
Ordinary C shares of £1 each
10
10
10
10
Ordinary D shares of £1 each
54,445
54,445
54,445
54,445
Ordinary E shares of £1 each
54,445
54,445
54,445
54,445
Ordinary F shares of £1 each
54,445
54,445
54,445
54,445
Ordinary G shares of £1 each
54,445
54,445
54,445
54,445
4,231,510
4,231,510
4,231,510
4,231,510
MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
26
Share capital
(Continued)
- 34 -

Ordinary A Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of capital on liquidation the assets of the company available for distributions shall be applied to the shares pro rata. The shares are non - redeemable.

 

Ordinary B Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of capital on liquidation the assets of the company available for distributions shall be applied to the shares pro rata.

 

Ordinary C Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of assets on liquidation of the company the following will be applied; up to £10,000,000 to the holders pro rata and any excess above £10,000,000 to be split between holders of the ordinary shares and C ordinary shares set out in the articles. The shares are non - redeemable.

 

Ordinary D Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of capital on liquidation the assets of the company available for distributions shall be applied to the shares pro rata.

 

Ordinary E Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of capital on liquidation the assets of the company available for distributions shall be applied to the shares pro rata.

 

Ordinary F Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of capital on liquidation the assets of the company available for distributions shall be applied to the shares pro rata.

 

Ordinary G Shares hold one vote on a poll vote and hold the right to receive dividends. On a return of capital on liquidation the assets of the company available for distributions shall be applied to the shares pro rata.

27
Reserves

This reserve relates to the application of merger accounting with regards to previous business acquisitions.

Profit and loss reserves

Cumulative profit and loss net of distribution to owners.

28
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
146,417
126,833
-
-
Between two and five years
363,167
482,583
-
-
In over five years
1,021,417
1,102,417
-
-
1,531,001
1,711,833
-
-

 

 

 

 

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
29
Related party transactions
Transactions with related parties

During the year the group entered into transactions for sales and purchases on an arms length basis with related parties who are under common control.

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Other related parties
252,018
540,693

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Other related parties
206,092
411,977
30
Controlling party

The group and company was under the control of Mr A Mikhail and Mrs V Mikhail who between them owned the majority of the company's issued share capital.

31
Directors' transactions

Included within short term other creditors is £210,890 (2022: £275,133) owed to the directors of the group. The movement relates mainly to additional capital introduced and expenses paid for by the group. No interest is payable on this balance.

 

Included within long term other creditors is £1,049,522 (2022: £1,064,622) owed to the directors of the group. The movement relates mainly to additional capital introduced and expenses paid for by the group. No interest is payable on this balance.

MIKHAIL HOTELS AND LEISURE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
32
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
487,457
767,802
Adjustments for:
Taxation charged
318,616
71,468
Finance costs
283,021
192,545
(Gain)/loss on disposal of tangible fixed assets
(427)
728
Amortisation and impairment of intangible assets
32,611
27,115
Depreciation and impairment of tangible fixed assets
1,460,073
1,116,993
Movements in working capital:
(Increase)/decrease in stocks
(163,458)
34,372
Decrease/(increase) in debtors
134,794
(12,982)
(Decrease)/increase in creditors
(838,661)
1,269,249
Cash generated from operations
1,714,026
3,467,290
33
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,636,962
(310,483)
1,326,479
Borrowings excluding overdrafts
(6,635,111)
465,696
(6,169,415)
Obligations under finance leases
(215,612)
55,989
(159,623)
(5,213,761)
211,202
(5,002,559)
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