Company registration number 08431516 (England and Wales)
EC4 HOTEL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
EC4 HOTEL LIMITED
COMPANY INFORMATION
Director
N K Nassar
Company number
08431516
Registered office
Sixth Floor
Capital Tower
91 Waterloo Road
London
SE1 8RT
Auditor
Arnold Hill & Co LLP
Sixth Floor
Capital Tower
91 Waterloo Road
London
SE1 8RT
Solicitors
Chris Allan
1 Cornhill
London
EC3V 3ND
Eric Gummers
Howard Kennedy
No. 1 London Bridge
London
SE1 9BG
EC4 HOTEL LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 4
Director's responsibilities statement
5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
EC4 HOTEL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The director presents the strategic report for the year ended 31 March 2024.

Review of the business

The company operates four full service, 100 bed-room plus hotels in Yorkshire, England. Its objective is to deliver excellent guest experiences, delivering value for money, whilst giving a fair return on investment for the Owner.

Principal risks and uncertainties

The principal risks and uncertainties faced by the company include Market Risk, Economic Environment Risk and Health & Safety Risk. An overview of these three risks and the measures implemented to mitigate them is detailed below:

Market Risk – loss of business to competitors

Sales & Marketing Strategy is devised at both Company and local hotel level. Market information is available to enable pricing and sales decisions to be made that will maintain or improve market position.

Economic Risk – Impact of economic factors that affect pricing & costs

The Company faces the same risks as the rest of the market with significant inflationary pressures as the market recovers from the Covid-19 Pandemic. Risks are mitigated through strong financial governance, through maintaining a client base from a diverse range of markets and booking channels and through our ability to be flexible with our customers and react swiftly to cost pressures.

Health & Safety Risk – Serious Injury because of Company Negligence

The Company engages a 3rd Party independent health & safety company to carry out regular site audits to ensure adherence with Company Policies & procedures.

Key performance indicators

The company monitors its performance against its strategic objectives by means of key performance indicators. The main KPIs used are oriented around turnover, profit and operating cashflow (see table below).

KPI

2024

2023

 

£

£

Turnover

17,649,481

15,118,082

Profit/ (Loss) for the year

824,936

(1,144,039)

Operating cashflow

94,281

4,279,728

The Directors were pleased with the company’s performance.

On behalf of the board

N K Nassar
Director
30 September 2024
EC4 HOTEL LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

The director presents her annual report and financial statements for the year ended 31 March 2024.

Principal activities

The company operates in the hotel and leisure industry.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

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

N K Nassar
Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The company uses interest rate derivatives to manage the mix of fixed and variable rate debt so as 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.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

 

There is no employee share scheme at present.

Auditor

In accordance with the company's articles, a resolution proposing that Arnold Hill & Co LLP be reappointed as auditor of the company will be put at a General Meeting.

EC4 HOTEL LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Energy and carbon report

The company presents its report on its emissions, energy consumption and energy efficiency activities.

2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
3,498,971
5,000,879
- Electricity purchased
2,800,741
3,256,118
- Fuel consumed for transport
14,511
16,276
6,314,223
8,273,273
2024
2023
Emissions of CO2 equivalent
Metric tonnes
Metric tonnes
Scope 1 - direct emissions
- Gas combustion
639.96
914.81
- Fuel consumed for owned transport
3.65
4.09
643.61
918.90
Scope 2 - indirect emissions
- Electricity purchased
579.89
674.26
Total gross emissions
1,223.50
1,593.16
Intensity ratio
Tonnes of CO2e per £m turnover
69.32
105.38
Quantification and reporting methodology

We have followed the GHG Reporting Protocol – Corporate Standard and have used the 2024 UK Government’s GHG Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m of turnover, the recommended ratio for the sector.

EC4 HOTEL LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Measures taken to improve energy efficiency

During the 23-24 Financial Year, further energy saving projects were carried out in the 4 Cedar Court Hotels which had been identified in the surveys carried out in the previous financial year. The energy saving measures taken in recent years have delivered a 14.5% reduction in Electricity usage and a 22.7% reduction in Gas usage in the current financial year when compared to prior year. Current year projects included:

 

 

In addition to the above projects, the Company has introduced a policy of utilising local suppliers wherever possible. Refurbishment works carried out in our Huddersfield Hotel were carried out by a company using contractors who live in neighbouring Halifax. Harrogate kitchen’s supplier of meat has been changed to the local Sykes House Farm in Wetherby.

 

Finally, an energy monitoring system was introduced into the Bradford Hotel and this sends regular alerts to staff whenever energy usage is above expectation. Staff have been trained to respond immediately to these alerts and to take corrective action if required. It is estimated that the system has generated savings of approximately 60,000 KwH.

 

 

 

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
N K Nassar
Director
30 September 2024
EC4 HOTEL LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

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

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is 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 director is required to:

 

 

The director is 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. She is 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.

EC4 HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF EC4 HOTEL LIMITED
- 6 -
Opinion

We have audited the financial statements of EC4 Hotel 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, the 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 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 director's 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 director 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 director is 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:

EC4 HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EC4 HOTEL LIMITED
- 7 -
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 director's 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 director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

 

EC4 HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EC4 HOTEL LIMITED
- 8 -

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

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

 

Our approach was as follows:

 

 

 

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

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 auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

EC4 HOTEL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF EC4 HOTEL LIMITED
- 9 -

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Dipesh Giri BSc(Hons) BFP ACA (Senior Statutory Auditor)
For and on behalf of Arnold Hill & Co LLP
1 October 2024
Chartered Accountants
Statutory Auditor
Sixth Floor
Capital Tower
91 Waterloo Road
London
SE1 8RT
EC4 HOTEL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
17,649,481
15,118,082
Cost of sales
(2,644,376)
(3,099,395)
Gross profit
15,005,105
12,018,687
Administrative expenses
(12,558,108)
(11,069,958)
Operating profit
4
2,446,997
948,729
Interest receivable and similar income
7
23,386
25,300
Interest payable and similar expenses
8
(1,107,283)
(695,122)
Profit before taxation
1,363,100
278,907
Tax on profit
9
(538,164)
(1,422,946)
Profit/(loss) for the financial year
824,936
(1,144,039)

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

EC4 HOTEL LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
31,619,127
30,468,346
Current assets
Stocks
11
70,933
60,852
Debtors
12
3,568,369
3,100,906
Cash at bank and in hand
1,419,901
5,190,589
5,059,203
8,352,347
Creditors: amounts falling due within one year
13
(4,139,329)
(6,469,792)
Net current assets
919,874
1,882,555
Total assets less current liabilities
32,539,001
32,350,901
Creditors: amounts falling due after more than one year
14
(31,550,000)
(32,725,000)
Provisions for liabilities
Deferred tax liability
16
5,400,114
4,861,950
(5,400,114)
(4,861,950)
Net liabilities
(4,411,113)
(5,236,049)
Capital and reserves
Called up share capital
18
1
1
Profit and loss reserves
(4,411,114)
(5,236,050)
Total equity
(4,411,113)
(5,236,049)

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

The financial statements were approved and signed by the director and authorised for issue on 30 September 2024
N K Nassar
Director
Company registration number 08431516 (England and Wales)
EC4 HOTEL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
1
(4,092,011)
(4,092,010)
Year ended 31 March 2023:
Loss and total comprehensive income
-
(1,144,039)
(1,144,039)
Balance at 31 March 2023
1
(5,236,050)
(5,236,049)
Year ended 31 March 2024:
Profit and total comprehensive income
-
824,936
824,936
Balance at 31 March 2024
1
(4,411,114)
(4,411,113)
EC4 HOTEL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
1,201,564
4,974,850
Interest paid
(1,107,283)
(695,122)
Net cash inflow from operating activities
94,281
4,279,728
Investing activities
Purchase of tangible fixed assets
(2,713,355)
(1,618,749)
Interest received
23,386
25,300
Net cash used in investing activities
(2,689,969)
(1,593,449)
Financing activities
Drawing/(repayment) of bank loans
(1,175,000)
(1,209,030)
Net cash used in financing activities
(1,175,000)
(1,209,030)
Net (decrease)/increase in cash and cash equivalents
(3,770,688)
1,477,249
Cash and cash equivalents at beginning of year
5,190,589
3,713,340
Cash and cash equivalents at end of year
1,419,901
5,190,589
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

EC4 Hotel Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sixth Floor, Capital Tower, 91 Waterloo Road, London, SE1 8RT.

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.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director has adopted the going concern basis in preparing the annual financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable in relation to the operation of the hotels including sales of accommodation, food and beverage, the provision of leisure facilities and room hire and other income provided in the normal course of business, and is shown net of discounts, VAT and other sales related taxes.

1.4
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
Land over 120 years and building over 30 years
Fixtures, fittings & equipment- hotel enhancements
over 5-10 years
Motor vehicles
over 10 years

Enhancements to the hotels' fixtures, fittings and equipment have not been depreciated where they are not yet ready for use.

 

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.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.6
Stocks

Stocks are stated at the lower of cost, being the purchase price of the stock item, and estimated selling price.

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.

1.7
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.

1.8
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.

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.

EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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 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. 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.

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.

1.9
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.

1.10
Taxation

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

EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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.

 

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.

1.11
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.

1.12
Retirement benefits

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

1.13
Leases

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

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is 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.

3
Turnover and other revenue

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

2024
2023
£
£
Turnover analysed by class of business
Turnover derived from hotel and leisure activities
17,649,481
15,118,082
2024
2023
£
£
Other revenue
Interest income
23,386
25,300
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
66,401
226,101
Depreciation of owned tangible fixed assets
1,562,574
1,284,007
Operating lease charges
14,408
21,654
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
33,800
32,200
For other services
Taxation compliance services
6,000
6,000
All other non-audit services
45,050
39,581
51,050
45,581
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
6
Employees

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

2024
2023
Number
Number
Guests Services
185
183
Kitchen
45
44
M&A
43
41
Maintenance
5
5
Total
278
273

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
5,306,093
5,217,487
Social security costs
440,068
382,599
Pension costs
88,150
70,254
5,834,311
5,670,340

 

The Director is considered to be the sole key management personnel of the company. She was not remunerated for her services as director during the current or prior year.

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
23,386
25,300
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
23,386
25,300
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,107,283
695,122
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
9
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
-
0
(20,150)
Deferred tax
Origination and reversal of timing differences
538,164
1,443,096
Total tax charge
538,164
1,422,946

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:

2024
2023
£
£
Profit before taxation
1,363,100
278,907
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
340,775
52,992
Tax effect of expenses that are not deductible in determining taxable profit
171,991
(96,743)
Unutilised tax losses carried forward
(318,128)
77,767
Permanent capital allowances in excess of depreciation
(194,638)
(34,016)
Under/(over) provided in prior years
-
0
(20,150)
Deferred taxation current year movement
538,164
1,443,096
Taxation charge for the year
538,164
1,422,946
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
10
Tangible fixed assets
Land and buildings
Fixtures, fittings & equipment- hotel enhancements
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
31,880,088
5,359,152
27,634
37,266,874
Additions
62,150
2,611,688
39,517
2,713,355
At 31 March 2024
31,942,238
7,970,840
67,151
39,980,229
Depreciation and impairment
At 1 April 2023
4,992,490
1,799,134
6,904
6,798,528
Depreciation charged in the year
927,054
629,997
5,523
1,562,574
At 31 March 2024
5,919,544
2,429,131
12,427
8,361,102
Carrying amount
At 31 March 2024
26,022,694
5,541,709
54,724
31,619,127
At 31 March 2023
26,887,598
3,560,018
20,730
30,468,346

On 1 November 2017, the company acquired the freehold interest of three hotels and the leasehold interest of a fourth, comprising the Cedar Court Hotels in Yorkshire. The purchase was undertaken with a view to carrying on the business of each hotel as a going concern.

 

Simultaneously with the agreed purchase on 1 November 2017, the company immediately entered into a sale and leaseback agreement for each hotel, transferring the freehold and leasehold interests out of the company whilst retaining the hotels' operating businesses. The sale and leaseback was completed at fair value.

11
Stocks
2024
2023
£
£
Finished goods and goods for resale
70,933
60,852
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
338,556
199,211
Other debtors
2,506,814
2,490,873
Prepayments and accrued income
722,999
410,822
3,568,369
3,100,906
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
15
1,200,000
1,200,000
Trade creditors
718,825
382,627
Taxation and social security
396,831
315,004
Other creditors
70,741
2,359,453
Accruals and deferred income
1,752,932
2,212,708
4,139,329
6,469,792
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
13,550,000
14,725,000
Other borrowings
15
18,000,000
18,000,000
31,550,000
32,725,000
15
Loans and overdrafts
2024
2023
£
£
Bank loans
14,750,000
15,925,000
Other loans
18,000,000
18,000,000
32,750,000
33,925,000
Payable within one year
1,200,000
1,200,000
Payable after one year
31,550,000
32,725,000
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
15
Loans and overdrafts
(Continued)
- 23 -

To partially fund the acquisition of hotels, the company entered into a five year loan agreement on 12 October 2017 for £18,000,000 with interest payable at 2% over LIBOR. On 23 October 2020, the loan agreement was amended to extend the termination date from 11 October 2022 to 1 November 2023. At 31 October 2023, the loan agreement was further amended to extend the termination date from 1 November 2023 to 1 November 2026 therefore, the loan has been classified as non-current. Interest is payable monthly and loan principal repayments have been due each quarter date falling on and after 31 December 2018 to the termination date. Bank borrowings are secured by way of first legal mortgages over each property and all fixtures on each property as well as first fixed and first floating charges on all assets of the company.

 

In 2021, the company agreed an amendment to the original facility with its bank as a result of disruption to its trading performance owing to the Coronavirus pandemic. This included a capital repayment holiday of 12 months. Furthermore, the company agreed a further borrowing facility of £1,500,000 under the Coronavirus Business Interruption Loan Scheme.

 

Other loans of £18,000,000 were received from a related party to fund the remaining hotel acquisition costs. This debt is subordinated to the loan facility detailed above.

 

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
5,400,114
4,861,950
2024
Movements in the year:
£
Liability at 1 April 2023
4,861,950
Charge to profit or loss
538,164
Liability at 31 March 2024
5,400,114

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
88,150
70,254

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.

EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
18
Share capital
2024
2023
Ordinary share capital
£
£
Issued and fully paid
1 ordinary share of £1 each
1
1
19
Operating lease commitments
Lessee

Under the sale and leaseback financing agreements entered into by the company, total yearly ground rent of £640,176 is payable by the company. The yearly rent payable under the leases is to be reviewed on each fifth anniversary, the next being in November 2027.

Separately from the above, 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
7,181
14,363
Between two and five years
-
0
7,181
7,181
21,544
20
Related party transactions
Transactions with related parties

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

Recharged income
Management fee costs
2024
2023
2024
2023
£
£
£
£
Entity under common control
181,265
188,719
181,151
184,727

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due from related parties
£
£
Entity under common control
1,801,443
1,801,984
EC4 HOTEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Related party transactions
(Continued)
- 25 -
Other information

The company was under the control of the director throughout the current and prior year as the ultimate beneficial owner. The parent company is EC4 Hospitality Limited, a private limited company, registered under Maltese company law.

 

The company has taken advantage of the exemption contained within Section 33 of FRS 102 from disclosing transactions entered into between two or more members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.

 

As at the balance sheet date, the company owed its director £720 (2023: £720) in relation to expenditure incurred personally on behalf of the company.

21
Cash generated from operations
2024
2023
£
£
Profit/(loss) for the year after tax
824,936
(1,144,039)
Adjustments for:
Taxation charged
538,164
1,422,946
Finance costs
1,107,283
695,122
Investment income
(23,386)
(25,300)
Depreciation and impairment of tangible fixed assets
1,562,574
1,284,007
Movements in working capital:
Increase in stocks
(10,081)
(1,885)
Increase in debtors
(467,463)
(222,316)
(Decrease)/increase in creditors
(2,330,463)
2,966,315
Cash generated from operations
1,201,564
4,974,850
22
Analysis of changes in net debt
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
5,190,589
(3,770,688)
1,419,901
Borrowings excluding overdrafts
(33,925,000)
1,175,000
(32,750,000)
(28,734,411)
(2,595,688)
(31,330,099)
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