Company Registration No. 01561540 (England and Wales)
REVIEW HOTELS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2024
31 March 2024
REVIEW HOTELS LIMITED
COMPANY INFORMATION
Directors
MPR Kean
NG Byrne
RG Kean
Company number
01561540
Registered office
Fairacres
Stock Lane
Ingatestone
Essex
CM4 9QL
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
Business address
Bedford Lodge Hotel
Bury Road
Newmarket
Suffolk
CB8 7BX
Bankers
Handelsbanken
Greenwood House
91-99 New London Road
Chelmsford
Essex
CM2 0PP
REVIEW HOTELS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
REVIEW HOTELS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Review of the business

Prior to the pandemic a "normal" trading year would usually see turnover in excess of £7m. Following some difficult trading periods during the pandemic and during the aftermath of this, the company returned to a trading level not dissimilar to those pre-pandemic levels in 2022/23, with income of £6.8m. The twelve months to 31 March 2024 saw similar trading activity, however, the business has had to weather the impact of the cost of living crisis in the UK, as well as seeing the "levelling off" of demand for UK breaks post pandemic. Alongside the stalling of growth in demand, the business has had to absorb certain aspects of cost increases seen across the industry and indeed the wider economy, being particularly impacted by both wage inflation and food cost inflation.

 

The company's main trading site, The Bedford Lodge Hotel, continues to trade positively despite the challenges noted and has generated a positive EBITDA for the period. The company's second site, The Rutland Arms Hotel has continued to remain closed for the entire period and has therefore not generated any income, whilst continuing to give rise to some underlying costs. This second site has been transferred to stock in the current accounting period as it is now held for sale and is considered likely to be sold in the post balance sheet period.

 

The directors have continued to manage operations in an efficient manner, to mitigate costs without undermining the service offered to customers and will continue to manage the challenges that the trading outlook presents.

Principal risks and uncertainties

The key business risk affecting the company is considered to be the current economic outlook for businesses in the hospitality and leisure sector and the wider economy. The directors are mitigating the impact of this to the greatest extent possible through careful management of business operations and ensuring that spending within the business is carefully managed.

 

The management of the business is subject to a number of other risks, these are reviewed by the board and appropriate processes put in place to monitor and mitigate them.

Development and performance

Following a difficult few trading years the directors feel that they have done everything possible to mitigate the impact on the business. The trading results of The Bedford Lodge Hotel are positive and the overall loss presented is largely driven by underlying impairment adjustments to the carrying value of the two hotels and continued depreciation of assets.

 

The directors are confident that there remains consumer demand which will result in continued positive trading and that the offering the hotel presents ensures the business is best placed in the local market. It is hoped that the business will be able to manage current cost challenges, and so long as consumer confidence remains and people retain an acceptable level of disposal income the business will continue to improve trading performance. The primary focus for the business over the coming year will be to ensure that The Bedford Lodge Hotel delivers an excellent service to its customers and the company is able to deliver positive trading results. The intended disposal of the company's second site, The Rutland Arms Hotel, will ensure that the business mitigates any further associated costs and can continue to focus on its primary focus.

REVIEW HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Key performance indicators

The directors monitor progress on overall strategy by reference to two key performance indicators.

 

Performance during the period is set out below:

 

Bedford Lodge room occupancy 56.7% (2023: 61.7%)

 

Rutland Arms room occupancy Nil% (2023: Nil)

 

Gross margin 41.3% (2023: 43.7%). Alongside a drop in occupancy rate, the company has had to deal with increased costs through both wage inflation and food and drink cost increases and not all of these have been able to be passed on through increased pricing. As a result the gross profit margin for the year has dropped by 2.4% which is not unexpected in the current trading conditions.

On behalf of the board

MPR Kean
Director
28 August 2024
REVIEW HOTELS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their forty first annual report and the audited financial statements of the company for the year ended 31 March 2024.

Principal activities

The principal activity of the company during the period continued to be that of an hotelier.

Results and dividends

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

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

Directors
MPR Kean
NG Byrne
RG Kean
Directors' insurance

A directors' indemnity insurance policy exists in the form of a combined insurance policy across the group.

Financial instruments
Liquidity risk

The company has an overdraft facility with Svenska Handelsbanken AB which is guaranteed by all other group companies through the inter company cross guarantee structure. The company is satisfied that it can operate within that facility. The net overdraft indebtedness of the group companies at the year end was £Nil (2023: £Nil).

Interest rate risk

The company is exposed to cash flow interest rate risk on its bank overdraft. The company has an overdraft agreement in place to reduce its exposure to changes in interest rates.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

REVIEW HOTELS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Statement of directors' responsibilities

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

 

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

 

 

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

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.

Statement of disclosure to auditor

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

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
MPR Kean
Director
28 August 2024
REVIEW HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REVIEW HOTELS LIMITED
- 5 -
Opinion

We have audited the financial statements of Review Hotels Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty relating to going concern

We draw attention to note 1.2 in the financial statements, which indicates that the company's liabilities exceeded its total assets by £9,928,775 as at 31 March 2024. As stated in note 1.2, this position, along with other conditions set out therein, indicate that a material uncertainty exists that may cast doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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:

REVIEW HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REVIEW HOTELS LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

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.

Capability of the audit in detecting irregularity, including fraud

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.

We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; trade legislation including alcohol licensing; data protection legislation and anti-bribery and corruption legislation.

REVIEW HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REVIEW HOTELS LIMITED (CONTINUED)
- 7 -

ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance which laws and regulations that could have a material impact on the financial statements.

In relation to fraud, we performed the following specific procedures in addition to those already noted:

These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.

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

Use of our report

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

Michael Breame
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
28 August 2024
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
REVIEW HOTELS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
6,486,213
6,780,390
Cost of sales
(3,810,920)
(3,818,718)
Gross profit
2,675,293
2,961,672
Administrative expenses
(2,988,488)
(3,017,827)
Other operating income
338
242
Impairment of intangible and tangible fixed assets
4
(277,844)
-
0
Operating loss
5
(590,701)
(55,913)
Interest payable and similar expenses
7
(3,405)
-
0
Loss before taxation
(594,106)
(55,913)
Tax on loss
9
(104,602)
(115,754)
Loss for the financial year
(698,708)
(171,667)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

REVIEW HOTELS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
11,484,559
13,776,594
Current assets
Stocks
12
2,064,482
185,388
Debtors
13
469,373
446,461
Cash at bank and in hand
7,606
4,174
2,541,461
636,023
Creditors: amounts falling due within one year
14
(22,698,716)
(22,424,605)
Net current liabilities
(20,157,255)
(21,788,582)
Total assets less current liabilities
(8,672,696)
(8,011,988)
Provisions for liabilities
Deferred tax liability
16
988,000
950,000
(988,000)
(950,000)
Net liabilities
(9,660,696)
(8,961,988)
Capital and reserves
Called up share capital
17
2
2
Profit and loss reserves
(9,660,698)
(8,961,990)
Total equity
(9,660,696)
(8,961,988)

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

The financial statements were approved by the board of directors and authorised for issue on 28 August 2024 and are signed on its behalf by:
MPR Kean
Director
Company registration number 01561540 (England and Wales)
REVIEW HOTELS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
2
(8,790,323)
(8,790,321)
Year ended 31 March 2023:
Loss and total comprehensive income
-
(171,667)
(171,667)
Balance at 31 March 2023
2
(8,961,990)
(8,961,988)
Year ended 31 March 2024:
Loss and total comprehensive income
-
(698,708)
(698,708)
Balance at 31 March 2024
2
(9,660,698)
(9,660,696)
REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information

Review Hotels Limited is a private company limited by shares incorporated in England and Wales. The registered office is Fairacres, Stock Lane, Ingatestone, Essex, CM4 9QL.

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 have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.

The company is a wholly owned subsidiary of Fairacres Group Limited, a company registered in England. Details of the group and consolidated financial statements can be found at Companies House.

1.2
Going concern

These financial statements are prepared on the going concern basis. However, the directors are aware of certain material uncertainties which may cause doubt over the company's ability to continue as a going concern. The company made a loss after tax for the year ended 31 March 2024 of £698,708 and at that date it's liabilities exceeded its assets by £9,660,696. The company has the support of it's parent company, and has demonstrated a positive level of trading activity post pandemic. Due to the impact of rising costs across the industry there remains wider economic uncertainty and the company is therefore exposed to the impact of any reduction in customers' discretionary spending. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future.

1.3
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 and settlement discounts.

Revenue from the sale of goods is recognised at the point of delivery of those goods to the customer, and in respect of food and drink sales at the point of consumption. Room rental is recognised at the point of occupation. All income is derived within the UK.

1.4
Intangible fixed assets - goodwill
Acquired goodwill is written off in equal annual instalments over its estimated useful economic life which the directors believe to be 10 years.
1.5
Intangible fixed assets other than goodwill

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

 

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

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

Product branding
50% straight line
REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.6
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.

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:

Land and buildings Freehold
1% straight line on buildings
Plant, machinery & equipment
10% straight line
Fixtures & fittings
10% 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 credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company 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.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

 

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

At each reporting date, an assessment is made for impairment.

1.9
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.

1.10
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

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.

REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

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

1.12
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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.

1.13
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.

1.14
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.15

Reduced Reporting Framework

The company is a qualifying entity under the reduced reporting framework set out in FRS 102 and as such has taken advantage of the exemptions included therein. This includes the exclusion from the financial statements of a statement of cash flows.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements
Impairment of tangible fixed assets

Tangible fixed assets are depreciated over their useful economic lives and are reviewed for indicators of impairment at each balance sheet date. The directors' have considered such indicators present at previous balance sheet dates, largely based on trading results. The Rutland Arms Hotel site is now up for sale and the directors therefore had to consider the recoverable amounts of this site in its existing condition, resulting in a further impairment of the cost, prior to the transfer of this asset to stock at its fair value.

 

The directors have assessed the carrying value of tangible fixed assets in the Bedford Lodge Hotel in light of the current conditions and with the comparison to a previous professional valuation. They have concluded that £Nil of the impairment previously recognised can be reversed and that taking into account current year movements, including depreciation, the carrying value at the balance sheet date remains appropriate on that basis.

 

This assessment assumes that the Bedford Lodge Hotel is able to continue to trade positively over the coming years, whilst mindful that the 2024/25 trading year may still be challenging for wider economic reasons.

3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Services
4,146,723
4,403,856
Goods
2,339,490
2,376,534
6,486,213
6,780,390
4
Exceptional item
2024
2023
£
£
Expenditure
Impairment of tangible fixed assets
277,844
-
REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
4
Exceptional item
(Continued)
- 16 -

The directors have made necessary impairment adjustments to tangible fixed assets in the year in respect of a trading property, which has subsequently been reclassified to stock held for sale.

5
Operating loss
2024
2023
Operating loss for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,950
15,436
Depreciation of owned tangible fixed assets
319,344
344,565
Impairment of owned tangible fixed assets
277,844
300,000
Reversal of past impairment of tangible fixed assets
-
0
(300,000)
6
Employees

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

2024
2023
Number
Number
Administrative (including maintenance)
17
18
Direct labour
140
159
Total
157
177

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
3,076,137
3,096,041
Social security costs
256,443
268,212
Pension costs
67,630
65,324
3,400,210
3,429,577
7
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
3,405
-
0
REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
8
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
186,366
180,150

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
-
0
10,754
Adjustments in respect of prior periods
60,824
-
0
Group tax relief
5,778
-
0
Total current tax
66,602
10,754
Deferred tax
Origination and reversal of timing differences
38,000
105,000
Total tax charge
104,602
115,754

On the 1st of April 2023 the rate of corporation tax in the UK increased to 25% (2023:19%).

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Loss before taxation
(594,106)
(55,913)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(148,527)
(10,623)
Tax effect of expenses that are not deductible in determining taxable profit
8,334
6,499
Change in unrecognised deferred tax assets
70,768
4,343
Permanent capital allowances in excess of depreciation
(1,392)
(1,392)
Depreciation on assets not qualifying for tax allowances
39,356
30,023
Change in deferred tax rate
-
0
86,904
Adjustments in respect of previous periods
60,824
-
0
Reversal of impairment not taxable
-
0
(57,000)
Impairment not taxable
69,461
57,000
Payments in respect of group relief
5,778
-
0
Taxation charge for the year
104,602
115,754
REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
10
Intangible fixed assets
Goodwill
Product branding
Total
£
£
£
Cost
At 1 April 2023 and 31 March 2024
1,300,000
10,365
1,310,365
Amortisation and impairment
At 1 April 2023 and 31 March 2024
1,300,000
10,365
1,310,365
Carrying amount
At 31 March 2024
-
0
-
0
-
0
At 31 March 2023
-
0
-
0
-
0
11
Tangible fixed assets
Land and buildings Freehold
Plant, machinery & equipment
Fixtures & fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
22,180,963
1,998,153
63,303
44,702
24,287,121
Additions
18,174
136,979
-
0
-
0
155,153
Transfers
(3,862,581)
-
0
-
0
-
0
(3,862,581)
At 31 March 2024
18,336,556
2,135,132
63,303
44,702
20,579,693
Depreciation and impairment
At 1 April 2023
8,761,968
1,703,857
-
0
44,702
10,510,527
Depreciation charged in the year
221,356
97,988
-
0
-
0
319,344
Impairment losses
277,844
-
0
-
0
-
0
277,844
Transfers
(2,012,581)
-
0
-
0
-
0
(2,012,581)
At 31 March 2024
7,248,587
1,801,845
-
0
44,702
9,095,134
Carrying amount
At 31 March 2024
11,087,969
333,287
63,303
-
0
11,484,559
At 31 March 2023
13,418,995
294,296
63,303
-
0
13,776,594

More information on impairment movements in the year is given in note 4.

REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
2,064,482
185,388

The carrying amount of stock includes £1,850,000 (2023:£Nil) of property classified as held for sale. This relates to the Rutland Arms Hotel.

13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
271,705
244,459
Other debtors
508
508
Prepayments and accrued income
197,160
201,494
469,373
446,461
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
12,491,355
12,250,072
Trade creditors
252,476
252,048
Amounts owed to group undertakings
9,200,000
9,200,000
Corporation tax
98
10,754
Other taxation and social security
131,179
106,628
Other creditors
492,502
485,187
Accruals and deferred income
131,106
119,916
22,698,716
22,424,605

The bank overdraft is secured by a debenture over the freehold land and buildings and a fixed and floating charge over all assets of the company.

 

A loan due to the parent company of £9.2 million (2023: £9.2 million) is repayable on demand and as such is shown due within one year.

REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
15
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
12,491,355
12,250,072
Payable within one year
12,491,355
12,250,072

 

16
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
988,000
950,000
2024
Movements in the year:
£
Liability at 1 April 2023
950,000
Charge to profit or loss
38,000
Liability at 31 March 2024
988,000

The closing deferred tax balance is based on a substantively enacted rate of 25% (2023: 25%).

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
67,630
65,324

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

REVIEW HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
19
Financial commitments, guarantees and contingent liabilities

The company, together with four other group companies, has entered a composite guarantee in respect of bank overdrafts of those companies. There is a right of set-off incorporated within the cross guarantee. The net overdraft less cash at bank indebtedness of the group companies to the bank at the year end was £nil (2023: £nil).

 

At the balance sheet date Silvermist Properties (Chelmsford) Limited, a subsidiary company of Fairacres Group Limited has bank loans totalling £8,000,000 that are secured on all group assets, including the assets of Review Hotels Limited.

20
Operating lease commitments

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

2024
2023
£
£
Within one year
11,793
16,848
Between two and five years
9,566
21,359
21,359
38,207
21
Ultimate controlling party

The company is a wholly owned subsidiary of Fairacres Group Limited, a company registered in England. Details of the group and consolidated financial statements can be found at Companies House.

22
Related party transactions

The company has taken advantage of the exemption in the Financial Reporting Standard applicable in the UK and Republic of Ireland (“FRS 102”) to disclose transactions with group companies on the grounds that it is a subsidiary that is wholly owned.

 

At the year end the company owed its parent company £9,200,000 (2023: £9,200,000).

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