Company registration number 07415019 (England and Wales)
MONTCALM HOTELS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
MONTCALM HOTELS LIMITED
COMPANY INFORMATION
Directors
S Menon
D Bakhai
C Glass
N Lalji Verjee
Secretary
S Menon
Company number
07415019
Registered office
27 Devonshire Terrace
London
W2 3DP
Auditor
KLSA LLP
Kalamu House
11 Coldbath Square
London
EC1R 5HL
Bankers
HSBC Bank Plc
Canada Place
Canary Wharf
London
E14 5AH
MONTCALM HOTELS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 21
MONTCALM 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
During the year ended on 31 March 2024, the total turnover of the company was £20.8m (2023: £19.8m). Although sales were higher than previous year, the company generated a loss before tax amounting to £3m (2023: £2.6m).
The directors consider the results at the year end to be satisfactory and intend to pursue strategies that would enhance the growth of the company and result in improved performance.
Principal risks and uncertainties
The company faces a number of operating risks and uncertainties. There are a small number of risks that could impact the company's long term performance and steps are taken to understand and evaluate these in order to achieve our objective of sustainable growth.
The management have a risk management process in place, which is designed to identify, manage and mitigate business risk.
The most fundamental business risks faced by the company are:
Economic risk
Sustained levels of occupancy and room rates can be adversely affected by events that reduce domestic or international travel. Such events may include acts of terrorism, war or perceived increased risk or armed conflict, epidemics, natural disasters, increased cost of travel and industrial action. The hotel industry operates in an inherently cyclical market. A weakening of demand, or an increase in market room supply, may lead to downward pressure on room rates which in turn would lead to a negative effect on operating performance.
The management has in place systems designed to create flexibility in the operating cost base so as to optimise operating profits in volatile trading conditions.
Quality of service
We compete based on a number of factors, including quality and customer satisfaction. Lack of innovation and design in plant and furnishing could have a significant impact on the revenues that the hotel could earn.
At property level, we have regular and scheduled preventive maintenance programs. At management level; asset enhancements, technological advancements, and system upgrades are undertaken on a frequent and when in need basis.
Compliance and litigation
The company is exposed to the risk of non-compliance with increasingly complex statutory and regulatory requirements, including competition law, anti-bribery and corruption and data privacy compliance regimes.
The company continues to monitor changes in the regulatory environment in which it operates, identify its compliance obligations and has in place comprehensive policies for ethics and business conduct, anti-corruption and bribery, gifts and hospitality.
Health and safety
The company is exposed to a wide range of regulatory requirements and obligations concerning health and safety of employees, visitors and guests. Failure to maintain and implement sufficient controls regarding health and safety could expose the company to significant sanctions, fines and penalties and reputational damage.
By working to British standards, the Company is committed to working to the highest standards of health and safety and to an internationally accredited system.
Financial risk management
The company manages its credit, liquidity and interest rate risks through various measures. The Board monitors the net debt, banking facilities and cashflows on a regular basis and adequate working capital facilities are in place.
MONTCALM HOTELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Key performance indicators
In the opinion of the directors, key performance indicators of the company includes gross profit margin and occupancy rate, which are closely monitored by the directors.
During the year, the company achieved gross profit of 76.39% (2023: 76.36%).
The average occupancy rate during the year was 85.5% (2023: 84.9%). The current occupancy levels are in line with the directors' expectations in the current climate.
The key non financial performance indicators is the quality of service provided to hotel guests.
The directors are of the belief that the monitoring of the above-mentioned indicators is an effective aspect of business performance review.
Going concern
The directors with its parent company’s support, have a reasonable expectation that the company has adequate resources to continue improving its operation and financial results for the foreseeable future and therefore to continue preparing these financial statements on the going concern basis.
S Menon
Secretary
27 September 2024
MONTCALM HOTELS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of the operation of Montcalm East.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S Menon
D Bakhai
C Glass
N Lalji Verjee
Auditor
The auditor, KLSA LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
By order of the board
S Menon
Secretary
27 September 2024
MONTCALM HOTELS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
MONTCALM HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MONTCALM HOTELS LIMITED
- 5 -
Opinion
We have audited the financial statements of Montcalm Hotels Limited for the year ended 31 March 2024 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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. However, because not all future events or conditions can be predicted, this statement is not guarantee as to the company's ability to continue as a going concern.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
MONTCALM HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MONTCALM 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector; and
we focused on specific laws and regulations which we considered may have a direct material effect on the operations of the company financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
MONTCALM HOTELS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MONTCALM HOTELS LIMITED (CONTINUED)
- 7 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
To address the risk of non-compliance with laws and regulations, we communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. 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 financial reporting legislation (including related companies legislation) and taxation legislation (including payroll taxes) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statements items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Company’s license to operate. We identified the Health and Safety legislation regulations as the area most likely to have such an effect. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
We communicated identified fraud risks and non-compliance with laws and regulations with those charged with governance, throughout the audit team and remained alert to any indications throughout the audit.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Shilpa Chheda
Senior Statutory Auditor
For and on behalf of KLSA LLP
27 September 2024
Chartered Accountants
Statutory Auditor
Kalamu House
11 Coldbath Square
London
EC1R 5HL
MONTCALM HOTELS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
20,779,590
19,841,131
Cost of sales
(4,913,195)
(4,683,806)
Gross profit
15,866,395
15,157,325
Administrative expenses
(18,982,518)
(17,759,874)
Other operating income
73,452
Loss before taxation
(3,042,671)
(2,602,549)
Tax on loss
5
Loss for the financial year
(3,042,671)
(2,602,549)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MONTCALM HOTELS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
£
£
Loss for the year
(3,042,671)
(2,602,549)
Other comprehensive income
-
-
Total comprehensive income for the year
(3,042,671)
(2,602,549)
MONTCALM HOTELS LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
6
223,939
603,260
Current assets
Stocks
7
-
27,641
Debtors
8
185,659
283,157
Cash at bank and in hand
1,196,555
863,326
1,382,214
1,174,124
Creditors: amounts falling due within one year
9
(39,029,455)
(36,089,834)
Net current liabilities
(37,647,241)
(34,915,710)
Total assets less current liabilities
(37,423,302)
(34,312,450)
Creditors: amounts falling due after more than one year
10
(1,102,256)
(1,170,437)
Net liabilities
(38,525,558)
(35,482,887)
Capital and reserves
Called up share capital
11
1
1
Profit and loss reserves
(38,525,559)
(35,482,888)
Total equity
(38,525,558)
(35,482,887)
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 27 September 2024 and are signed on its behalf by:
D Bakhai
Director
Company registration number 07415019 (England and Wales)
MONTCALM HOTELS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
1
(32,880,339)
(32,880,338)
Year ended 31 March 2023:
Loss and total comprehensive income
-
(2,602,549)
(2,602,549)
Balance at 31 March 2023
1
(35,482,888)
(35,482,887)
Year ended 31 March 2024:
Loss and total comprehensive income
-
(3,042,671)
(3,042,671)
Balance at 31 March 2024
1
(38,525,559)
(38,525,558)
MONTCALM HOTELS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
16
770,620
(773,811)
Investing activities
Purchase of tangible fixed assets
(437,391)
(374,795)
Net cash used in investing activities
(437,391)
(374,795)
Net increase/(decrease) in cash and cash equivalents
333,229
(1,148,606)
Cash and cash equivalents at beginning of year
863,326
2,011,932
Cash and cash equivalents at end of year
1,196,555
863,326
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information
Montcalm Hotels Limited is a private company limited by shares incorporated in England and Wales. The registered office is 27 Devonshire Terrace, London, W2 3DP.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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
At the time of approving the financial statements, the company made a loss of £3,042,671 (2023: £true2,602,549). At the year end, the company has a net current liabilities of £37,647,241 (2023: £34,915,710) and net liabilities of £38,525,558 (2023: £35,482,887).
The company acknowledges the net liability position. Notwithstanding, the parent company has committed to provide support to meet the company's regular operational liabilities as they fall due, for at least twelve months from the date of signing these financial statements.
In accordance with their responsibilities, the directors have considered the appropriateness of the going concern basis for the preparation of the financial statements. For this basis they have reviewed the financial and cash flow projections for the next 12 months from the date of the approval of the financial statements. Based on this, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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, settlement discounts and volume rebates.
Turnover represents amounts receivable from room revenue and income from food and beverage, net of VAT.
Income from the operation of the hotel is recognised at the point at which the accommodation and related services are provided.
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:
Plant and equipment
15% per annum, 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.
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks comprise consumables and are stated at their purchase cost.
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 and bank overdrafts.
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.
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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
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.
1.10
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.
1.11
There were no changes in comparative figures during the year.
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.
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful lives, depreciation methods and residual values of tangible fixed assets
Management reviews the useful lives, depreciation methods and residual values of the items of tangible fixed assets and on a regular basis. During the year, the directors determined no significant changes in the useful lives and residual values. The carrying amounts of tangible fixed assets are disclosed in note 6.
Recoverablility of Trade and intercompany receivables
Trade and intercompany receivables are stated at their recoverable amount less any necessary provision. Recoverability of trade and intercompany receivables is assessed annually and a provision is recognised if any indications exist that the receivables are not considered recoverable.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Room revenue
18,580,622
17,858,828
Food and beverages revenue
1,430,578
1,215,331
Other revenue
768,390
766,972
20,779,590
19,841,131
All turnover arose within the United Kingdom.
4
Employees
The average monthly number of persons employed by the company during the year was:
2024
2023
Number
Number
Total
73
62
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
5
Taxation
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
(3,042,671)
(2,602,549)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(760,668)
(494,484)
Tax effect of expenses that are not deductible in determining taxable profit
3,232
17,280
Group relief
9,801
Permanent capital allowances in excess of depreciation
65,961
45,488
Trading loss for the period
691,475
421,915
Taxation charge for the year
-
-
6
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 April 2023
2,528,803
Additions
437,391
At 31 March 2024
2,966,194
Depreciation and impairment
At 1 April 2023
1,925,543
Depreciation charged in the year
816,712
At 31 March 2024
2,742,255
Carrying amount
At 31 March 2024
223,939
At 31 March 2023
603,260
7
Stocks
2024
2023
£
£
Food, drink and consumables
-
27,641
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
8
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
50,307
130,146
Amounts owed by group undertakings
3,635
2,345
Other debtors
17,318
Prepayments and accrued income
114,399
150,666
185,659
283,157
9
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
1,138,248
1,163,334
Amounts owed to group undertakings
36,748,487
34,136,029
Taxation and social security
189,592
186,455
Other creditors
73,941
51,408
Accruals and deferred income
879,187
552,608
39,029,455
36,089,834
10
Creditors: amounts falling due after more than one year
2024
2023
£
£
Deferred income
1,102,256
1,170,437
11
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share capital issued and fully paid of £1 each
1
1
1
1
12
Financial commitments, guarantees and contingent liabilities
The company has issued cross guarantee to its related parties.
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
13
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2024
2023
£
£
Within five years
31,000,000
38,750,000
14
Related party transactions
The directors of the company are also directors or officers of other companies within the group, and did not receive any remuneration in relation to their services for the company.
The company paid rent expenses to fellow subsidiary amounting to £7,750,000 (2023: £7,750,000). The company is connected to by virtue of common control.
The company paid management fees to fellow subsidiary amounting to £40,394 (2023: £25,940). The company is connected by virtue of common control.
Included under amounts due from fellow group undertakings is a balance of £3,635 (2023: £2,345). The companies are connected by virtue of common control.
Included under amounts due to fellow group undertakings is a balance of £36,748,487 (2023: £34,136,029). The companies are connected by virtue of common control.
15
Parent company
The immediate parent company is Precis Investments Limited, a company registered in UK. The ultimate parent company is Oakdene Finance Limited, a company registered in the British Virgin Islands.
16
Cash generated from/(absorbed by) operations
2024
2023
£
£
Loss for the year after tax
(3,042,671)
(2,602,549)
Adjustments for:
Depreciation and impairment of tangible fixed assets
816,712
379,320
Movements in working capital:
Decrease/(increase) in stocks
27,641
(15,996)
Decrease in debtors
97,498
392,655
Increase in creditors
2,939,621
1,140,958
Decrease in deferred income
(68,181)
(68,199)
Cash generated from/(absorbed by) operations
770,620
(773,811)
MONTCALM HOTELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
17
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
863,326
333,229
1,196,555
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