Company registration number 01658122 (England and Wales)
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
COMPANY INFORMATION
Directors
A J Schreier
C Dudley-Scales
Secretary
E Lewis
Company number
01658122
Registered office
CP House
Otterspool Way
Watford
Hertfordshire
WD25 8JJ
Auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Profit and loss account
10
Balance sheet
11
Notes to the financial statements
12 - 19
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

Introduction

The directors present their strategic report on Economic Enterprises (Developments) Limited (“the company”) for the year ended 31 December 2023.

The business activity of the company during the year continued to be that of an investment company.

Business Review

The company continues to hold investments in Sharon Hotels Limited and M.N.S.R Hotels Limited, both of which operate hotels in Israel.

The first three quarters of 2023 saw a pickup in demand in the hotel and leisure sector in Israel compared to 2022. Unfortunately, due to the tragic events of 7 October 2023 and subsequent Israel- Gaza conflict quarter four performance was significantly below that achieved in 2022 for those businesses in which the company invests.

The refurbishment program planed for the hotel operated by Sharon Hotels Limited has been delayed as a result of the Israeli- Gaza conflict, and continues to trade as provider of short-term holiday apartment rentals during the year.

During the year the company received an amount of £787,998 (2022: £1,234,283) from M.N.S.R Hotels Limited in relation to the outstanding loan balances.

A review was carried out of the investments to consider if there was any indication of impairment, and it was concluded that in 2023 there was a reversal of £767,141 (2022: reversal of provision £1,173,506).

Principal risks and uncertainties

The company’s principal financial risk is the recoverability of its investments in its subsidiary and joint venture undertakings, including the related long-term intercompany loans. A further escalation in the Israel-Gaza conflict to other areas of Israel or the Middle East could also impact the recoverability of these investments. The directors regularly review the carrying value of the company’s investments and provisions are made where considered necessary.

Strategic Report - S172(1) Statement

The CP Holdings Group (the “group”) consisting of CP Holdings Limited, and its key operating subsidiaries including Economic Enterprises (Developments) Limited recognises the importance of delivering effective corporate governance in supporting the long-term success and sustainability of its business and operates under high standards of corporate governance.

The directors are collectively responsible for ensuring that they operate in a manner that best promotes the interests of the group with consideration to its wider group of stakeholders. Underlying this responsibility is an appropriate Corporate Governance framework. The group has decided not to follow a specific code and continues to develop and implement its own corporate governance framework (the “framework”). This framework will ensure that robust corporate governance procedures are in place to regulate the behaviour and activities of the boards and supports the application of Section 172 throughout the group.

Issues, Factors and Stakeholders

When making decisions, the directors of the company consult, where appropriate, with their finance, tax and legal teams, other third parties and stakeholders.

The directors are responsible for the corporate governance framework, including the likely long term consequences and the general conduct of the company’s affairs. The directors are continually reviewing their internal processes to strengthen the governance and compliance controls of the company enabling the sustainable growth of the business.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Strategy – Opportunities and risk


The company operates a framework which defines how risks and opportunities are reviewed and decisions are made. This framework adapts as risks and opportunities evolve. A periodic review is undertaken of the risks of the investments held by the company by its senior management, this is communicated with the company’s shareholder.

 

The directors have pursued a Strategy aimed at maximising the return on investments and ensuring the long term viability of the business of the investments in a period of instability and uncertainty, labour shortages, and rising interest rates.

The principal risks associated with Economic Enterprises (Developments) are detailed in the Strategic Report above. The board consider principal risks to be those that could cause the greatest damage if not effectively evaluated, understood and managed.

Information

Economic Enterprises (Developments) is a subsidiary of a diverse holding company. Economic Enterprises (Developments) is an investment holding company details of its performance can be found above in the Strategic Report.

The directors currently review financial and operational information when making their decisions. The governance process is constantly under review, processes are assessed for appropriateness and amended if deemed applicable.

Governance Policies and Process

Group-wide governance policies and processes are designed to complement and promote the group strategy. Policies are reviewed on an annual basis and updated as appropriate by the group board, all company directors are informed of any amendments. This is an iterative process, allowing for the policies to be adapted as the business grows and changes.

Principal Decisions

Generally, the principal decisions that the directors would consider are dividends, divestment or acquisition activity, significant capital investments, impairment of investments, capital gains and board composition. A principal decision tends to be one that is material to the company and those that are significant to any of the key stakeholder groups.

Following the terrorist events on 7th October 2023, in conjunction with the Ministry of Tourism a decision was made to offer out vacant rooms at the Israeli Hotels, to employees and their families that needed to relocate as a result of the war.

On the 20th April 2023, Yuval Nativ was appointed to the Board of Directors for The Sharon Hotel. The appointment to the board was to provide additional project management experience.

Engagement of Stakeholders

The company is proud to be part of a private, family-owned group, which is fully committed to maintaining its values and its relationships with its investments and shareholders. The company works with its stakeholders in an honest, respectful and responsible way and seeks to work with others who share the company’s commitments to safety, ethics and compliance.

The directors consider that the table below lays out the relationships with the key stakeholders :-

 

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

 

Who ?

Stakeholder group

Why?

Why is it important to engage

How ?

How management and/or directors engaged

What ?

What were the key topics of engagement

Outcomes and actions

What was the impact of the engagement including any actions taken

Regulators

Compliance with regulatory requirements is essential for the long term benefit of the group

Being open and transparent in any dealings with regulators

Generation of carbon risk registers and energy usage collation by local company representatives

 

Compliance record and impact on local community

 

Carbon reporting and energy utilisation

Improvements to processes and procedures

 

Appointment of designated individuals in the operating companies and training of these appointed individuals

Shareholders

Engagement is essential for the owners to understand the state of the business and to ratify principal decisions

Provision of information for CP monthly board meetings

Monthly Accounts, budget, cashflows and risk registers

Monthly rolling cashflows and quarterly review of budgets

Joint Venture Partners

Engagement is essential so everyone understands the long term plans for the property

Regular communication by senior management

Business matters, financial and property matters including proposed capex

Assessment of the impact on the stakeholders and continuous engagement

 

Investments

To understand how the investments are performing and the key decisions that they are making

Discussions with the boards of directors of the investments

Trading conditions and funding

Assessment of working capital requirements and capital expenditure

 

The directors engage with its stakeholders on material issues relating to their business, taking into consideration current and future events, including its principal decisions. The engagement supports the directors to understand the impact of their decisions and identify any material issues. This aligns with the company’s purpose and strategy.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

On behalf of the board

C Dudley-Scales
Director
25 September 2024
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

Principal activity

The principal activity of the company during the year continued to be that of an investment company.

Directors

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

A J Schreier
C Dudley-Scales
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.

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.

On behalf of the board
C Dudley-Scales
Director
25 September 2024
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

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.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
- 7 -
Opinion

We have audited the financial statements of Economic Enterprises (Developments) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet 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 United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

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 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:

 

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
- 8 -
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 and 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.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
- 9 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

To address the risk of fraud through management bias and override of controls, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities 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.

Christopher Shepherd (Senior Statutory Auditor)
For and on behalf of Blick Rothenberg Audit LLP
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
25 September 2024
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Administration expenses
-
(49)
Operating profit
-
(49)
Net reversal of impairment of investments
767,141
1,173,506
Other interest receivable and similar income
5
20,857
60,777
Profit before taxation
787,998
1,234,234
Tax on profit
6
-
0
(90,323)
Profit for the financial year
787,998
1,143,911

There are no items of comprehensive income for either the year or the prior year other than the profit for the year. Accordingly, no statement of other comprehensive income has been presented.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
7
60,862
60,862
Current assets
-
-
Creditors: amounts falling due within one year
9
(4,434,619)
(5,222,617)
Net current liabilities
(4,434,619)
(5,222,617)
Net liabilities
(4,373,757)
(5,161,755)
Capital and reserves
Called up share capital
10
100
100
Profit and loss reserves
11
(4,373,857)
(5,161,855)
Total equity
(4,373,757)
(5,161,755)
The notes on pages 12 to 19 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
C Dudley-Scales
Director
Company Registration No. 01658122
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Economic Enterprises (Developments) Limited is a private company limited by shares incorporated in England and Wales. The registered office is CP House, Otterspool Way, Watford, Hertfordshire, WD25 8JJ.

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 preparation of financial statements in compliance with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 2).

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Economic Enterprises (Developments) Limited is a wholly owned subsidiary of CP Holdings Limited and the results of Economic Enterprises (Developments) Limited are included in the consolidated financial statements of CP Holdings Limited which are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

1.2
Going concern

The financial statement have been prepared on a going concern basis notwithstanding the fact that the company has a deficiency on total equity at the end of the year. The directors consider the basis to be appropriate as the company has received a letter of support from its parent company confirming its intention and ability to provide continued financial assistance for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved.true

1.3
Fixed asset investments

Investments in subsidiaries and joint ventures are measured at cost less accumulated impairment.

 

Loans to joint ventures are included in investments due to their long-term nature.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
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 for a similar debt instrument. Financial assets classified as receivable within one year are not amortised. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

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 objective indicators of impairment at each reporting end date. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

 

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date. The impairment loss is recognised in profit or loss.

 

For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

 

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.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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 and loans from fellow group companies, 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 for a similar debt instrument. Financial liabilities classified as payable within one year are not amortised. Financing transactions are those in which payment is deferred beyond normal payment terms or is financed at a rate of interest that is not a market rate.

 

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

Other financial liabilities

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

 

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

Derecognition of financial liabilities

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

1.5
Equity instruments

Ordinary shares are classified as equity.

1.6
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.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 when the company has 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.

1.7

Interest income

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

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

The following is the critical judgement and estimation that the directors have made in the process of applying the company's accounting policies and that have the most significant affect on the amounts recognised in the financial statements.

Impairment of investments in subsidiary and joint venture undertakings

The carrying amounts of the company's investment in subsidiaries and joint ventures, including related long term intercompany loans, are reviewed at each balance sheet date to determine whether there is any indication of impairment as required by FRS 102 Section 27 Impairment of Assets. if any such indication exists, the recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of the investment exceeds its recoverable amount. Refer to note 5 for further details.

3
Auditor's remuneration

The auditors renumeration is borne by the parent undertaking, CP Holdings Limited.

4
Employees

The company has no employees other than the directors, who were remunerated by the parent undertaking, CP Holdings Limited.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Interest receivable and similar income
2023
2022
£
£
Other interest receivable and similar income
20,857
60,777
6
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
59,137
Withholding tax
-
0
31,186
Total current tax
-
0
90,323

Factors that may affect future tax charges

 

From 1 April 2023 the corporation tax rate increased to 25%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
7
Fixed asset investments

 

Movements in fixed asset investments
Investments in joint ventures
Loans to joint ventures
Investment in subsidiaries
Total
£
£
£
£
Cost or valuation
At 1 January 2023
772,130
-
478,959
1,251,089
Additions
-
20,857
-
20,857
Valuation changes
-
5,507,602
-
5,507,602
Repayment
-
(787,998)
-
(787,998)
Transfers
1,525,116
(1,525,116)
-
-
At 31 December 2023
2,297,246
3,215,345
478,959
5,991,550
Impairment
At 1 January 2023
711,268
-
478,959
1,190,227
Valuation changes
-
5,507,602
-
5,507,602
Impairment reversal
-
(767,141)
-
(767,141)
Transfers
1,585,978
(1,585,978)
-
-
At 31 December 2023
2,297,246
3,154,483
478,959
5,930,688
Carrying amount
At 31 December 2023
-
60,862
-
60,862
At 31 December 2022
60,862
-
-
0
60,862

In 2023 Investments in Joint Venture and Loans to Joint Ventures have been disclosed separately. In calculating separate opening balances it was highlighted that the analysis was incorrectly reported in prior years.

8
Subsidiaries
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Sharon Hotels Company Limited
4 Ramat Yam St, 4685104, Herzlia, Israel
Hotel management
Ordinary
85.00
M.N.S.R Hotels Limited
Neve Zohar 8691000 - Oasis Hotel, Israel
Hotel management
Ordinary
50.00

Loans to joint ventures represent quasi equity investments in the company's joint venture undertaking and included amounts previously provided against, amounting to £5,507,602, which were reclassified to fixed asset investments during 2008 reflecting their long term nature. In 2023, following a review of the investments, it was concluded that an impairment loss of £767,141 should be reversed.

ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Creditors: amounts falling due within one year
2023
2022
£
£
Amounts owed to group undertakings
4,434,619
5,222,617
10
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100

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

11
Reserves

Profit and loss account

 

The profit and loss account includes all current and prior period retained profits and losses.

12
Related party transactions
Transactions with related parties

The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.

 

During the year the company entered into the following transactions with related parties:

Loan repayments
Interest receivable
2023
2022
2023
2022
£
£
£
£
M.N.S.R Hotels Limited (joint venture)
787,998
1,234,283
20,857
60,777
ECONOMIC ENTERPRISES (DEVELOPMENTS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Related party transactions
(Continued)
- 19 -
2023
Balance
Provision
Net
Amounts due from related parties
£
£
£
M.N.S.R Hotels Limited (joint venture)
3,215,347
3,154,485
60,862
2022
Balance
Provision
Net
Amounts due in previous period
£
£
£
M.N.S.R Hotels Limited (joint venture)
772,130
711,268
60,862
13
Ultimate controlling party

The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and of which the company is a member is CP Holdings Limited whose registered office is CP House, Otterspool Way, Watford, Hertfordshire, WD25 8JJ. Copies of these group financial statements are available to the public from Companies House , Crown Way, Cardiff, CF14 3UZ.

 

The immediate controlling party is CP Holding Limited.

 

The ultimate controlling parties are the Gibbor and Schreier families.

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