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Registered number: 09112066









KOFISI HOSPITALITY GROUP LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
COMPANY INFORMATION


Directors
M Aldridge 
K Bolli-Thompson (appointed 8 April 2024)
P Ghose (appointed 12 January 2024)




Registered number
09112066



Registered office
Leytonstone House
3 Hanbury Drive

Leytonstone

E11 1GA




Independent auditors
Barnes Roffe LLP
Chartered Accountants

Leytonstone House

3 Hanbury Drive

Leytonstone

London

E11 1GA





 
KOFISI HOSPITALITY GROUP LIMITED
 

CONTENTS



Page
Group strategic report
 
1 - 8
Directors' report
 
9 - 10
Independent auditors' report
 
11 - 15
Consolidated statement of income and retained earnings
 
16
Consolidated balance sheet
 
17
Company balance sheet
 
18
Consolidated statement of cash flows
 
19
Consolidated analysis of net debt
 
20
Notes to the financial statements
 
21 - 44


 
KOFISI HOSPITALITY GROUP LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
KOFISI Hospitality Group Limited (the "Company"), including its subsidiary companies (the “Group”), is a provider of flexible offices and operations in multiple African locations, including Kenya, Tanzania, Nigeria and Morocco as well as in South Africa and Mauritius through our partner brand.  These services are provided via Service Centres that offer clients a choice of flexible private offices, desks or meeting rooms and facilities. The Group operates under the trading name of KOFISI. 

Strategy
 
We define our strategic objectives as:
We will grow across Africa with the ‘Land and Expand’ approach, establishing a strong presence in quality locations for enterprise-grade solutions
We will craft ‘Unforgettable Member Experiences’, consistently delivering exceptional service across diverse African landscapes, fostering enduring connections and loyalty
We will uphold high standards, training people to excel as ‘Professionals Serving Professionals’ in service, fostering employee engagement and satisfaction, and creating a positive and supportive work atmosphere.

Market Indicators for our Services
 
Workspace environments are evolving globally to meet the demands of a changing workforce due to technology and change in habits. From individuals to multinationals there is a growing trend to outsource workspace to experts so that businesses can focus on core activities as well as enjoying enhanced benefits from the variety of designed spaces which are available in a flexible workspace. This “space as a service” mode is particularly valuable in developing markets where there is a greater degree of uncertainty and replicating modern work environments is more difficult.
KOFISI products are different based on large spaces and customised design and hospitality.  We are a long-term contract business.
African demand remains buoyant as the product works well for emerging environments and companies wanting to expand.
We are a simple product that works well for the market - and is risk managed in approach.  We have 91% of our income in USD, and 100% of our clients on more than one-year contracts giving excellent visibility.
We continue to be the leader in the workspace industry for Africa, with innovation and quality as our standards for product growth. 

Performance (for the year ended 31 Dec 2023)
 
The Group made a profit in the year attributable owners of parent company resulting from some exceptional items of $16.3m (2022: $2.6m loss). Revenues for 2023 and as at the date of this report, on a run rate basis, are at a level capable of supporting the central overhead base, resulting in positive operating EBITDA. 
During the year the Group continued to rationalise and concentrate on its core service line, being Serviced Offices as well as growing its ancillary revenue lines in events. Revenues have increased year on year from $6.16m in 2022 to $8.25m in 2023.

Page 1

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Summary of activities
 
Occupancy across all Centres is over 89%, with some Centres at levels over 100%. During the year the Group opened 13,000 square feet of new spaces for a new major multinational client. In addition the Group grew its ancillary revenue business (meeting rooms, event space, and F&B) by a multiple of 6x on 2022.
KOFISI focuses on large scale spaces, as evidenced by KOFISI square that at 75,000 sqft,  one of the largest workspace Centres delivered in Sub Saharan Africa, with a sophisticated range of community facilities installed for members to use. The company has a pipeline 680k sqft of new spaces across multiple countries, with an associated client pipeline of over $1m in monthly revenue all of which is in discussion.
KOFISI currently operates 8 Centers, offering a total of 225,000 sqft of workspace. In Q2 2023, KOFISI Square was expanded through a landmark contract with Amazon. In December 2023, KOFISI signed a strategic partnership with Workshop17, creating Africa’s largest private workspace network with 22 locations and over 400,000 sqft of space. The group is in Heads of Terms for two new locations in Kigali and Casablanca, further cementing its footprint across the continent. Globally recognized for its award-winning design, KOFISI was named Operator of the Year, underscoring its leadership in the workspace sector.
The company during the period readied itself for the capital raise programme in 2024, including the rotation of the Board and the scoping of additional advisors for the growth programme.

Project RIP & Capital Raising

The Group has progressed a corporate restructuring called “Project RIP” in 2024, with final procedural steps in early 2025.
The resultant work leaves only the convertible shareholder loan of $4.5m on the company balance sheet. This convertible will be refinanced and converted during 2025. 
In tandem the company has raised over $2m of capital in 2024, significantly improving group pro-forma reserves. 
The company is pursuing an institutional funding round in 2025 for $30m with a global roadshow in 2024. Substantial interest has come from African funds and from Dubai and Abu Dhabi. Early plans have been formed to create a secondary market for existing shareholders.

Page 2

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal Risks

Our principal risks can be seen in broad terms to encompass Currency, Political, Commercial, Credit, Ability to Raise Finance, Health and Safety, Control Environment and Compliance Obligations.
Currency
The Group expects to operate and conduct its services in jurisdictions which could generate revenue, expenses and liabilities in currencies other than our functional currency which is the US Dollar.  As a result, we will be subject to the foreign currency risks. Where appropriate the Group will consider entering into forward contracts to limit the exposure.
Political
The Group is continuously monitoring the political environment in Africa. Although the Group does no work directly for the public sector, the sector agnostic requirement for workspace infers that this risk of political impact is materially mitigated. In regards other political risk such as terrorism and war, the Group ensures such political risks are covered within the insurance policy cover. 
Commercial
The Group commercial risks include, but are not limited to, customer and supplier due diligence, resource forecasting, and governance and control policies. The Group carries out checks on material customers and suppliers.  
Credit
The Group overall, will be exposed to the credit risk of clients related to the non-payment for services or non-reimbursement of costs incurred. The Group may also be subject to strict performance metrics that could increase its credit risk, requiring effort by management to retrieve payment for services. Failure by any clients to pay for services or reimburse costs may adversely increase the Group’s credit risk that could have an impact on its profitability.
Ability to raise finance
The Group has successfully raised finance through various forms including debt, equity and listed bonds since its formation. The working capital assumptions for the next twelve months assume this will continue as additional funding through debt and equity is required to support the growth in the business.  The inability to raise further finance to provide development capital to existing service lines and their capital expenditure pipeline will have a detrimental effect on the Group’s ability to achieve its growth goals. 
 
Page 3

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Compliance obligations
Owing to the breadth of countries in which the Group operates, working to compliance obligations is integral to our business. We continually work to ensure that we obtain and continue to comply with all necessary approvals, licenses or permits.
Health and Safety
The Group puts health and safety firmly at the top of the list for every single project it undertakes from construction services to running serviced commercial offices. Occupational Health and Safety directives are constantly assessed through robust management systems at a local and a global level. The Group ensures all sub-contractors adhere to equally high standards. 
Control Environment
The Group operates subsidiaries in West, East and South Africa where the control environment expectations are different to those in the United Kingdom. This increases the risk of a weaker control environment in our operating subsidiaries. Management work to the principal that the control environment will be maintained across the Group to the highest standard.

Page 4

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

ESG Status

Environmental
We are committed to operating in a way that minimises our impact on the environment and to continually look at ways in which KOFISI can improve and operate in a more sustainable way across all locations. We have a vision to install and help our Members consider more environmentally friendly solutions during their working day, which starts with providing workspaces from where they can operate in a more sustainable fashion. As an organisation, we understand our obligation to ensure the KOFISI community is making a positive contribution towards the fragile eco system here in Africa.
The company has delivered the following projects to date: 
• No single use plastic is used in the Centres
• All water is supplied in glass bottles, refilled from our purified tap filters 
• We prevent 10,000 plastic water bottles from going into African landfill sites every week 
• Over 3,400 kilos of coffee served in China mugs which are purchased and branded locally 
• Coffee is sourced from a local company supporting coffee farmers though impactful and ethical   practices
• 88% of fit-out, fixtures, fittings and furniture were made using local suppliers and craftspeople
Social
People are the heart of the KOFISI business. From improving and amplifying shared office and workplace standards, as well as service delivery in Africa, to supporting the development of people who work for us and providing productive and engaging places for clients to grow professionally - we are committed to programmes that support productivity in all our stakeholders. Our culture supports diversity and inclusion throughout the organisation.
We put people first. It doesn’t matter if they’re part of our team or our Member’s team. We believe in giving everyone the chance to grow, shine and excel in their role and to aspire to achieve their goals.
The company has delivered the following projects to date:
• Over 125 staff members recruited locally, earning a monthly salary, with benefits systems in place 
• Strong D&I with 54% women in the workforce 
• Individual personal development plans for all KOFISI staff with regular training using in-house developed training programmes
• Over 450 desks supplied to 9 local government run schools – providing a productive classroom environment for more than 4,000 pupils over 3 years
• Over 320 art pieces purchased from Uweza Art Gallery – supporting young artists and their families from Kibera, Africa’s largest informal settlement
• Delivered at least 3 Member Events a month focused on upskilling or training Members for their
personal development and for the benefit of their business
Governance
We have worked hard to install strong business conduct and implement ethical practices. Professional business operations and exemplary principles of behaviour are expected from every employee, manager and Director, and these high standards are applied throughout the organisation in all departments and across all operating structures.
The KOFISI Hospitality Group Ltd is a multi-jurisdictional business with live operations in 6 countries. These operations are carried out through locally registered subsidiaries. All accounting and corporate process is governed centrally under the same governed processes as the holding company. In order to open new buildings in incumbent countries, or when considering entry to a new jurisdictions, a formal risk approval process is deployed. This is a stringent documented process with obligations, milestones and approvals required before any
Page 5

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

commitments are granted. The risk committee process is managed by the Board.
Our Board provides oversight of, and strategic guidance to the KOFISI senior management. The Board has at least six regular meetings each year, and covers the roles of Audit, Compensation and Nomination requirements for the company.
 
• A Board of members 
• All with extensive experience in areas that impact the business. 
• Topco is The KOFISI Hospitality Group with UK ABC standards throughout
In 2023 we have shortlisted a Head of People and added the role of Managing Director to the Board.

The Year Ahead

KOFISI has made significant strides in its expansion efforts this year, with a 40,000 sqft space in Casablanca, Morocco (opened in January 2025) and a 60,000 sqft center in Kigali, Rwanda in process, and additional growth delivered in Nairobi.  Existing locations have seen a 30% increase in space, with KOFISI Square now at 85,000 sqft, and plans are underway for a new 100,000 sqft facility in Nairobi. These efforts are complemented by an impressive client pipeline, reflecting growing demand for our premium office solutions. To support our goal of rolling out four 78,000 sqft centers annually, a $30 million institutional funding round has been launched, targeting to complete in 2025.
In 2025 KOFISI will target market entry programmes for Addis (Ethiopia), Cairo (Egypt) and Accra (Ghana), to complete its suite of 10 country locations.
Key accomplishments include securing major client wins, notably the winning of TikTok and The Gates Foundation and successful renewals of key accounts, as well as launching the innovative Unikey product (continental sales programme) through our partnership with Workshop17. Our commitment to excellence was recognized with an international design award, underscoring our leadership in creating world-class design for office spaces. To stay ahead, we are making substantial investments in technology, branding, and wellness, ensuring our offerings meet the evolving needs of modern businesses. An ESG audit has further reinforced our dedication to sustainable growth and responsible operations.
The year (2024) also saw important leadership developments, including the appointment of Liz Robertson as Head of People and new members joining the Board. These additions strengthen our capacity to attract and retain top talent while driving strategic priorities. With a robust growth strategy, significant investments in innovation, and a focus on client satisfaction, KOFISI remains positioned as the leading provider of flexible office solutions in Africa.

Page 6

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Significant subsequent events

Since the date of the accounts the following key developments have occurred:
• The 40,000 sqft KOFISI Casablanca (Morocco) successfully opened in January 2025, housing TikTok with 30,000 sqft of space. 
• Construction of KOFISI Kigali (Rwanda) is underway by the developer partner, a purpose-built 60,000 sqft location with all fit out plans in progress 
• Existing locations have experienced a 30% increase in space, with KOFISI Square now at 85,000 sqft, and plans are in progress for a new 100,000 sqft facility in Nairobi.
• The Board approved a business plan to roll out four locations annually, each at 78,000 sqft.
• A $30 million institutional funding round was launched, with a shortlist of offers reviewed and completion targeted for 2025.
• Major client wins were secured, including TikTok, DHL and the Gates Foundation, and expansion of the GIZ contract, further reinforcing market leadership.
• Recognized for design excellence with an international design award, highlighting leadership in creating world-class office spaces.
• Winner of the Operator of the year Award for Workspace in 2024.
• An ESG audit in December 2024 reinforced the company’s commitment to sustainable growth and responsible operations.
• Appointment of Liz Robertson as Head of People, along with new members joining the Board.
• The W17 partnership was signed in December 2024, marking a year of successful collaboration and the potential to deepen the relationship further.
• Over $2 million capital was raised in 2024, with discussions ongoing for over $3 million in new investors for 2025.
• A term sheet for the refinance of the shareholder loan has been secured.
• The pipeline of new locations includes four identified opportunities, complemented by ongoing strategic development work.
• A three-year contract was signed with Montorosa in 2024 for growth consultancy and executive search.
• Key Board appointments include Graeme Pike (Former PWC Global Head of Corporate Finance) and Kelvin Thompson (Montorosa Founder), with advisory support from Humera Afza, Susan Githuku, Karim Shariff, and Vivek Ahuja.
This summary highlights significant achievements, strategic milestones, and ongoing efforts to sustain and expand the company’s leadership in the workspace sector.

Page 7

 
KOFISI HOSPITALITY GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


This report was approved by the board on 17 January 2025 and signed on its behalf.



M Aldridge
Director

Page 8

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to $16,278,713 (2022 - loss $2,642,979).



Directors

The directors who served during the year were:

M Aldridge 
M Insley (resigned 16 September 2024)
H Sheikh (resigned 31 July 2023)
W Sykes (resigned 17 May 2023)

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 9

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Post balance sheet events

Subsequent to the year end, the group successfully opened a new 40,000 sqft centre in Casablanca. The group has also undertaken construction of a new 60,000 sqft centre in Kigali.
In addition to the above, the group has also raised additional capital investment of $2 million subsequent to the year end.
Further operational matters which have been undertaken subsequent to the year end have been detailed within the group strategic report.

Auditors

The auditorsBarnes Roffe LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 17 January 2025 and signed on its behalf.
 





M Aldridge
Director

Page 10

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KOFISI HOSPITALITY GROUP LIMITED
 

Opinion


We have audited the financial statements of Kofisi Hospitality Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of income and retained earnings, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's profit 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.


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.


Material uncertainty related to going concern


We draw attention to note 2.4 in the financial statements, which indicates that the group's total liabilities exceeded its total assets by $7.06m. As stated in note 2.4, these events or conditions, along with the other matters as set forth in note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.


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.


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


Page 11

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KOFISI HOSPITALITY GROUP LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Page 12

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KOFISI HOSPITALITY GROUP LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 9, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 13

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KOFISI HOSPITALITY GROUP LIMITED (CONTINUED)


Auditors' 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 Auditors' 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 Group 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:

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 relevant sector;
- We focused on specific laws and regulations, which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and ISO standards;
- We assessed the extent of compliance with laws and regulations identified above through making enquires of management and inspecting legal correspondence and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- Making enquires 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.
.
To address the risk of fraud through management bias and override of controls, we:
- Performed analytical procedures to identify and unusual or unexpected relationships;
- Tested journal entries to identify unusual transactions;
- Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
 
- Investigated the rationale behind significant or unusual transactions.
 
Page 14

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KOFISI HOSPITALITY GROUP LIMITED (CONTINUED)



There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures 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 that those that arise from errors as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.





Simon Liggins (Senior statutory auditor)
for and on behalf of
Barnes Roffe LLP
Chartered Accountants
Leytonstone House
3 Hanbury Drive
Leytonstone
London
E11 1GA

17 January 2025
Page 15

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
                                                                                                             Note
$
$

  

Turnover
  
8,248,229
6,163,648

Cost of sales
  
(5,563,944)
(4,613,768)

Gross profit
  
2,684,285
1,549,880

Administrative expenses
  
(3,455,582)
(3,651,332)

Exceptional administrative expenses
 10 
17,329,016
-

Operating profit/(loss)
 5 
16,557,719
(2,101,452)

Interest payable and similar expenses
 8 
(156,606)
(471,618)

Profit/(loss) before tax
  
16,401,113
(2,573,070)

Tax on profit/(loss)
 9 
(122,400)
(69,909)

Profit/(loss) after tax
  
16,278,713
(2,642,979)

  

  

Retained earnings at the beginning of the year
  
(23,341,354)
(20,698,375)

  
(23,341,354)
(20,698,375)

Profit/(loss) for the year attributable to the owners of the parent
  
16,278,713
(2,642,979)

Retained earnings at the end of the year
  
(7,062,641)
(23,341,354)

The notes on pages 21 to 44 form part of these financial statements.

Page 16

 
KOFISI HOSPITALITY GROUP LIMITED
REGISTERED NUMBER: 09112066

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
                                                               Note
$
$

Fixed assets
  

Tangible assets
 13 
3,132,273
2,425,663

Share of net assets
 14 
252,584
-

  
3,384,857
2,425,663

Current assets
  

Debtors: amounts falling due within one year
 15 
2,747,787
2,565,373

Cash at bank and in hand
 16 
1,260,633
1,232,651

  
4,008,420
3,798,024

Creditors: amounts falling due within one year
 17 
(13,546,605)
(29,201,682)

Net current liabilities
  
 
 
(9,538,185)
 
 
(25,403,658)

Total assets less current liabilities
  
(6,153,328)
(22,977,995)

Provisions for liabilities
  

Other provisions
 18 
(909,177)
(363,259)

  
 
 
(909,177)
 
 
(363,259)

Net liabilities
  
(7,062,505)
(23,341,254)


Capital and reserves
  

Called up share capital 
 19 
136
100

Profit and loss account
 20 
(7,062,641)
(23,341,354)

Equity attributable to owners of the parent Company
  
(7,062,505)
(23,341,254)

  
(7,062,505)
(23,341,254)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 17 January 2025.




M Aldridge
Director

The notes on pages 21 to 44 form part of these financial statements.

Page 17

 
KOFISI HOSPITALITY GROUP LIMITED
REGISTERED NUMBER: 09112066

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
                                                                Note
$
$

Fixed assets
  

Investments
 14 
252,584
-

  
252,584
-

Current assets
  

Debtors: amounts falling due within one year
 15 
5,294
-

Cash at bank and in hand
 16 
159,068
42

  
164,362
42

Creditors: amounts falling due within one year
 17 
(5,100,677)
(12,295,366)

Net current liabilities
  
 
 
(4,936,315)
 
 
(12,295,324)

Total assets less current liabilities
  
(4,683,731)
(12,295,324)

  

  

Net liabilities
  
(4,683,731)
(12,295,324)


Capital and reserves
  

Called up share capital 
 19 
136
100

Profit and loss account brought forward
  
(12,295,423)
(12,322,145)

Profit for the year
  
7,611,556
26,721

Profit and loss account carried forward
  
(4,683,867)
(12,295,424)

  
(4,683,731)
(12,295,324)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 17 January 2025.


M Aldridge
Director

The notes on pages 21 to 44 form part of these financial statements.

Page 18

 
KOFISI HOSPITALITY GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
$
$

Cash flows from operating activities

Profit/(loss) for the financial year
16,278,713
(2,642,979)

Adjustments for:

Depreciation of tangible assets
1,017,101
792,252

Interest paid
156,606
471,618

Taxation charge
122,400
69,909

(Increase) in debtors
(182,414)
(506,331)

Increase in creditors
4,307,130
4,739,192

(Decrease)/increase in amounts owed to groups
(20,069,201)
-

Increase in provisions
545,918
-

Exchange differences
(15,406)
(30,086)

Net cash generated from operating activities

2,160,847
2,893,575


Cash flows from investing activities

Purchase of tangible fixed assets
(1,723,711)
(1,715,810)

Purchase of share in joint venture
(252,584)
-

Net cash from investing activities

(1,976,295)
(1,715,810)

Cash flows from financing activities

Issue of ordinary shares
36
-

Interest paid
(156,606)
(471,618)

Net cash used in financing activities
(156,570)
(471,618)

Net increase in cash and cash equivalents
27,982
706,147

Cash and cash equivalents at beginning of year
1,232,651
526,504

Cash and cash equivalents at the end of year
1,260,633
1,232,651


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,260,633
1,232,651

1,260,633
1,232,651


The notes on pages 21 to 44 form part of these financial statements.

Page 19

 
KOFISI HOSPITALITY GROUP LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
$

$

$

Cash at bank and in hand

1,232,651

27,982

1,260,633

Debt due within 1 year

-

-

-


1,232,651
27,982
1,260,633

The notes on pages 21 to 44 form part of these financial statements.

Page 20

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Kofisi Hospitality Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Leytonstone House, 3 Hanbury Drive, Leytonstone, England, E11 1GA.
The principal activity of the company continued to be the provision of integrated services to its subsidiaries and to act as a holding company. Integrated services includes the provision of risk management and financial direction, commercial management and support services including market elevation, marketing and branding assistance, sales and pipeline management, and assistance with material customer sales.
The principal activity of the group is the provision of serviced offices and facilities management in the East and South African regions as well as Nigeria.

2.Accounting policies

  
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of income and retained earnings in these financial statements.
The following principal accounting policies have been applied:

  
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS102 "The Financial Reporting Standard applicable in UK and Republic if Ireland":
- the requirements of Section 33 related Party Disclosures paragraph 33.7.
The information is included in the consolidated financial statements of Kofisi Hospitality Group Limited as at 31 December 2023 and these financial statements may be obtained from Companies House. 

Page 21

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.3

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In the consolidated financial statements investments in associates and joint ventures are accounted for as per note 2.9.

 
2.4

Going concern

The group has has net liabilities of $7.06m as at 31 December 2023. It is noted that the loan waiver referred to in note 10 has significantly improved the position in the current year.
Excluding the loan waiver, the group continues to make financial losses post year end and therefore there remains a material uncertainty that the group will have the ability to continue as a going concern.
Despite this uncertainty, the directors have a reasonable expectation that the group will be able to meet its liabilities as they fall due and therefore can continue as a going concern for at least 12 months from the date of signing the accounts. 
The financial statements have been prepared on that basis and do not include adjustments that would result if the group was unable to continue as a going concern.

  
2.5

Revenue

Revenue comprises the fair value of the consideration received and receivable by the group from the provision of its services. Those services include facilities management, construction services and the provision of serviced office workspaces.
Revenue is shown net of sales and value added taxes, returns, rebates and discounts.
The group recognises revenue when:
• The amount of revenue can be reliably measured;
• It is probable that future economic benefits will flow to the entity; and 
• Specific criteria have been met for each of the activities.

Page 22

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated statement of comprehensive income over its useful economic life.

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
At the balance sheet date goodwill and other intangible fixed assets have been fully impaired.

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 23

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.7
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold improvements
-
5 years straight line
Fixtures and fittings
-
3 years straight line
Office equipment
-
4 - 10 years straight line
Motor vehicles
-
3 years straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.8

Valuation of investments

In the individual company financial statements, investments in subsidiaries, associates and joint ventures are measured at cost less accumulated impairment.

At the balance sheet date investments in subsidiary undertakings have been fully impaired. 

 
2.9

Associates and joint ventures

An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.

An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
In the consolidated accounts, interests in associated undertakings and joint ventures are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated statement of income and retained earnings includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated balance sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.
Any premium on acquisition is dealt with in accordance with the goodwill policy.

 
2.10

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 24

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.11

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Given the jurisdictions in which the group operates it is noted that local banking protocols may restrict the free flow of funds within the group.  Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.12

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

  
2.13

Foreign currency translation

Functional and presentation currency
The Company's functional and presentational currency is USD.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
On consolidation, the results of overseas operations are translated into Dollars at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 25

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.14

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

  
2.15

Operating leases: the Group as lessor

Rental income from operating leases is credited to profit or loss on a straight line basis over the lease term.
Amounts paid and payable as an incentive to sign an operating lease are recognised as a reduction to income over the lease term on a straight line basis, unless another systematic basis is representative of the time pattern over which the lessor's benefit from the leased asset is diminished.

 
2.16

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

  
2.17

Pensions

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet.

Page 26

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.18

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


 
2.19

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
2.20

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 27

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.21

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 costs of inventories or non-current 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.
Retirement benefits
Payments to defined contribution retirement benefit schemes are charges as an expense as they fall due.

Page 28

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.22

Financial instruments

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a 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.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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
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 income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives. 
Equity instruments 
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis. Incremental costs of directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. 
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.
 
Page 29

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


Financial liabilities within the scope of IAS 39 are initially classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.
Subsequently, the measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are acquired for the purpose of repurchasing in the near term. Derivatives, including separately embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in profit or loss.
Interest bearing loans and borrowings
Obligations for loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at the fair value of consideration received less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in finance revenue and finance cost.
Derecognition of financial liabilities
A liability is derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such as an exchange or modification, this is treated as a derecognition of the original liability, such that the difference in the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss.

Page 30

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are require to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates are associated assumptions are based in 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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. 
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying value of assets and liabilities are outlined below.
Critical accounting estimates 
Impairment of debtors 
The group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Dilapidation provision 
The group makes an estimate in respect of its obligation to repair and reinstate the leased premises at the end of the lease period. The provision reflects management's best estimate of the expected costs.
Carrying value of goodwill 
In assessing impairment, management estimates the recoverable amount of each cash-generating unit based on discounted expected future cash flows, Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate. Full details are provided in Note 2.6.
Taxation
Corporate tax filings are under review in certain jurisdictions and the group is working with local advisors to resolve outstanding queries to the satisfaction of local tax authorities. A provision has been made following an assessment by management of the expected liabilities that may fall due in order to conclude these enquiries. Given that the dialogue with respective tax authorities is ongoing and the fact that certain assessments have been raised using estimated figures, the total liability and the timing thereof remains uncertain and accordingly has been treated as a provision in these financial statements. In some cases estimated assessments are in excess of the liability recognised in these financial statements but management believe they have adopted a prudent stance in calculating the provision required bearing in mind the outcome they believe will arise when estimated amounts are replaced by correct actual amounts.


4.


Turnover









Page 31

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2023
2022
$
$

Revenue analysed by class of business


Serviced offices
7,868,346
5,904,826

Facilities management
152,119
151,185

Construction services
227,764
71,205

Other revenue
-
36,432

8,248,229
6,163,648

2023
2022
$
$

Revenue by geographical locations


Kenya
5,860,136
4,044,948

Tanzania
587,012
557,901

South Africa
152,119
151,185

Nigeria
1,648,962
1,409,614

8,248,229
6,163,648


5.


Operating loss

The operating loss is stated after charging:

2023
2022
$
$

Depreciation of property, plant and equipment
1,017,110
792,252

Exchange differences
209,822
64,297

Page 32

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
$
$

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
63,000
63,000

Fees payable to the Company's auditors in respect of:

All other services
7,500
13,500


The fees payable to the auditors are split as follows. Fee for the company is $10,000 (2022 - $10,000) and for consolidation is $53,000 (2022 - $53,000).





7.


Employees

Staff costs were as follows:


Group
Group
2023
2022
$
$


Wages and salaries
1,089,133
983,276

Social security costs
8,049
14,065

Cost of defined contribution scheme
19,276
18,067

1,116,458
1,015,408


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Group employees
105
97

The Company has no employees other than the directors, who did not receive any remuneration (2022 - $NIL)
Page 33

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Interest payable and similar expenses

2023
2022
$
$


Other loan interest payable
156,606
471,618

156,606
471,618


9.


Taxation


2023
2022
$
$

Corporation tax


Current tax on profits for the year
-
69,909

Adjustments in respect of previous periods
122,400
-


122,400
69,909


Total current tax
122,400
69,909

Deferred tax

Total deferred tax
-
-


Tax on profit/(loss)
122,400
69,909
Page 34

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
$
$


Profit/(loss) on ordinary activities before tax
16,401,113
(2,573,070)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
3,854,262
(488,883)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
(4,200,609)
-

Adjustments to tax charge in respect of prior periods
122,400
-

Unrelieved tax losses carried forward
346,347
558,792

Total tax charge for the year
122,400
69,909


Factors that may affect future tax charges

The group has significant tax losses carried forward which may be offsetable against future profits. See also note 21.

Page 35

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Exceptional items

2023
2022
$
$


Loan waiver credit
17,874,934
-

Charge to the profit and loss in respect of dilapidation provision
(126,465)
-

Exceptional tax provision charge
(419,453)
-

17,329,016
-

During the year, the previous ultimate parent undertaking, Sunbird Business Services Limited,  was placed into members voluntary liquidation. The ultimate parent undertaking of the group is now Kofisi Hospitality Group Limited. As part of the restructuring, Sunbird Business Services Limited waived its intercompany loan balance due from Kofisi Hospitality Group Limited and subsidiaries of Kofisi Hospitality Group Limited.
The directors have reassessed the dilapidation provision in respect of new centres occupied in FY2023 and have subsequently increased the provision.
In respect of the exceptional tax provision charge refer to note 18 for further details.


11.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of income and retained earnings in these financial statements. The profit after tax of the parent Company for the year was $7,611,556 (2022 - $26,721).

Page 36

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Intangible assets

Group and Company 





Other intangible fixed assets
Goodwill
Total

$
$
$



Cost


At 1 January 2023
1,025,000
12,917,000
13,942,000



At 31 December 2023

1,025,000
12,917,000
13,942,000



Amortisation


At 1 January 2023
1,025,000
12,917,000
13,942,000



At 31 December 2023

1,025,000
12,917,000
13,942,000



Net book value



At 31 December 2023
-
-
-



At 31 December 2022
-
-
-

Other intangibles relate to Trade name and customer relationships acquired as part of the ESBC acquisition. Goodwill represents the excess of purchase price over the fair value of net assets acquired for ESBC. The carrying value of goodwill which is considered to have an indefinite life is allocated to the cash generating units (CGUs). The cash generating unit is considered to be the serviced offices core service line and the net book value attributable to the serviced offices core service line is $Nil (2022 - $Nil).
The group tests the carrying amount of goodwill annually for impairment, or more frequently if there are indicators that the carrying value might be impaired.
In earlier years, the directors considered impairment of the group's intangible fixed assets. As a result of the issues facing the shared office sector at present, resulting in lower valuations, the directors considered the intangible fixed assets of the group to be fully impaired. 



Page 37

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Tangible fixed assets

Group






Plant, equipment and leasehold improvements
Fixtures and fittings
Total

$
$
$



Cost or valuation


At 1 January 2023
5,355,698
1,102,751
6,458,449


Additions
1,699,018
24,693
1,723,711



At 31 December 2023

7,054,716
1,127,444
8,182,160



Depreciation


At 1 January 2023
3,341,862
690,924
4,032,786


Charge for the year on owned assets
928,792
88,309
1,017,101



At 31 December 2023

4,270,654
779,233
5,049,887



Net book value



At 31 December 2023
2,784,062
348,211
3,132,273



At 31 December 2022
2,013,836
411,827
2,425,663

Page 38

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments

Group





Investments in joint ventures

$



Cost or valuation


Additions
252,584



At 31 December 2023
252,584






Net book value



At 31 December 2023
252,584



At 31 December 2022
-

Page 39

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Company





Investments in subsidiary companies
Investments in joint ventures
Total

$
$
$



Cost or valuation


At 1 January 2023
9,980,624
-
9,980,624


Additions
-
252,584
252,584



At 31 December 2023

9,980,624
252,584
10,233,208



Impairment


At 1 January 2023
9,980,624
-
9,980,624



At 31 December 2023

9,980,624
-
9,980,624



Net book value



At 31 December 2023
-
252,584
252,584



At 31 December 2022
-
-
-

Page 40

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The following were subsidiary undertakings of the company:
Company - Country - Holding - Nature
Sunbird Business Services Botswana Ltd - Botswana - 100% - Dormant 
Sunbird Business Services Tanzania Ltd - Tanzania -100% - Property services 
Sunbird Business Services Kenya Ltd - Kenya - 100% - Property services 
Big Bird Holding Tanzania Ltd - Tanzania - 100% - Dormant
Sunbird Support Services Kenya Ltd - Kenya - 100% - Property services
Sunbird Support Services (Pty) Ltd - South Africa - 100% - Facilities management 
Sunbird Business Services South Africa (Pty) Ltd - South Africa - 100% - Property Services
Sunbird Business Services Nigeria Ltd - Nigeria - 100% - Property Services 
Kofisi Rwanda Limited - Rwanda - 100% - Dormant

Below are the registered offices in each country:
United Kingdom - Leytonstone House, 3 Hanbury Drive, Leytonstone, England, E11 1GA.
Tanzania - Kilwa House, Oysterbay, Dar Es Salaam, Tanzania.
Kenya - 4th floor, Eden Square Complex, Westlands Nairobi, Kenya.
South Africa - Westwood Building, 57 6th Rd Hyde Park, Johannesburg, South Africa.
Botswana - Acumen Park, Plot 50370, Fairground, Gaborone.
Nigeria - 9th Floor, St Nicholas House, Catholic Mission Street, Lagos, Lagos State 
The investment in joint venture represents a 47.5% interest in Kofisi Space One Limited a company registered in Morocco. The investment value represents the initial share of equity invested in the company. No material activity took place during the year.


15.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$


Trade debtors
954,294
774,990
-
-

Other debtors
1,287,635
1,323,647
5,294
-

Prepayments and accrued income
505,858
466,736
-
-

2,747,787
2,565,373
5,294
-



16.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Cash at bank and in hand
1,260,633
1,232,651
159,068
42

1,260,633
1,232,651
159,068
42


Page 41

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
$
$
$
$

Trade creditors
1,572,878
1,800,905
85,102
766

Convertible loan
4,492,289
-
4,492,289
-

Amounts owed to group undertakings
-
20,069,201
-
12,294,600

Corporation tax
540,451
433,457
-
-

Other taxation and social security
318,477
344,050
-
-

Other creditors
4,046,149
4,794,053
460,286
-

Accruals and deferred income
2,576,361
1,760,016
63,000
-

13,546,605
29,201,682
5,100,677
12,295,366



18.


Provisions


Dilapidation cost
The group has an obligation to repair and reinstate the leased premises at the end of the lease period. The recognised provision reflects management's best estimate of the expected cost.
Exceptional tax provision
Corporate tax filings are under review in certain jurisdictions and the group is working with local advisors to resolve outstanding queries to the satisfaction of local tax authorities. A provision has been made following an assessment by management of the expected liabilities that may fall due in order to conclude these enquiries. Given that the dialogue with respective tax authorities is ongoing and the fact that certain assessments have been raised using estimated figures, the total liability and the timing thereof remains uncertain and accordingly has been treated as a provision in these financial statements. In some cases estimated assessments are in excess of the liability recognised in these financial statements but management believe they have adopted a prudent stance in calculating the provision required bearing in mind the outcome they believe will arise when estimated amounts are replaced by correct actual amounts.



Group






Dilapidation cost
Exceptional tax provision
Total

$
$
$





At 1 January 2023
363,259
-
363,259


Charged to profit or loss
126,465
419,453
545,918



At 31 December 2023
489,724
419,453
909,177

Page 42

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Share capital

2023
2022
$
$
Allotted, called up and fully paid



136,256,616 (2022 - Nil) Ordinary A shares of $0.000001 each
136
-
Nil (2022 - 100) Ordinary shares of $1.000000 each
-
100

136

100


During the year, the company sub-divided its Ordinary shares of $1 each into Ordinary A shares of $0.000001 each. 
During the year the company issued 36,256,616 Ordinary A $0.000001 shares at nominal value. 


20.


Reserves

Profit and loss account

The profit and loss account represents cumulative distributable profit and losses net of dividends and other adjustments.


21.


Pension commitments

The Group operates a defined contributions pension scheme. The pension cost charge represents contributions payable by the Group to the fund and amounted to $19,276 (2022 - $18,067).


22.


Commitments under operating leases

At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
$
$

Not later than 1 year
4,231,382
4,007,035

Later than 1 year and not later than 5 years
15,132,577
7,486,201

Later than 5 years
4,845,948
5,512,839

24,209,907
17,006,075
The Company has no operating lease commitments.

Page 43

 
KOFISI HOSPITALITY GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Related party transactions

The Group has taken advantage of the exemption, under FRS 102 paragraph 1.1 and paragraph 33.1A, from disclosing transactions and balances with group companies that form part of these consolidated financial statements.
At 31 December 2023, Sunbird Business Services Limited, the previous ultimate parent undertaking, was owed $Nil (2022 - $20,069,201).
At 31 December 2023, Aldridge Capital Limited, a company, in which Mr M Aldridge is a director, was owed $4,492,289 (2022 - $1,886,975) by the group. 
At 31 December 2023, the company owed the directors and former directors $921,422 (2022 - $900,333). 
Remuneration of key management, which is defined as board directors and non-executive directors is set out below:-
Salaries - $525,943.


24.


Post balance sheet events

Subsequent to the year end, the group successfully opened a new 40,000 sqft centre in Casablanca. The group has also undertaken construction of a new 60,000 sqft centre in Kigali.
In addition to the above, the group has also raised additional capital investment of $2 million subsequent to the year end.
Further operational matters which have been undertaken subsequent to the year end have been detailed within the group strategic report.


25.


Controlling party

The company has no single controlling party.

Page 44