Company registration number 04251750 (England and Wales)
LONDON INN HOTELS ( STRATFORD ) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
LONDON INN HOTELS ( STRATFORD ) LTD
COMPANY INFORMATION
Directors
Gagan Puri
Mr Paavan Popat
Secretary
Gagan Puri
Company number
04251750
Registered office
36 Railway Approach
Station Road
Harrow
Middlesex
HA3 5AA
Auditor
KLSA LLP
Kalamu House
11 Coldbath Square
London
EC1R 5HL
Bankers
HSBC Bank Plc
Canada Place
Canary Wharf
London
E14 5AH
LONDON INN HOTELS ( STRATFORD ) LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
LONDON INN HOTELS ( STRATFORD ) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -
The directors present the strategic report for the year ended 30 April 2024.
Review of the business
The results for the year and the financial position at the year end were considered satisfactory by the directors 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.
LONDON INN HOTELS ( STRATFORD ) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
Financial risk management
The company uses various financial instruments that include cash, trade debtors and creditors that arise from its operations. The company is exposed to a number of financial risks, which are described in more detail below.
Interest rate risk
The directors monitor the banking facilities and interest rates on a regular basis to make sure that the company is not exposed to material levels of interest rate risk.
Liquidity risk
The directors closely manage financial risk by ensuring sufficient liquidity is available to meet forseeable needs by monitoring the working capital requirements.
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 58% (2023: 58%).
The average occupancy rate during the year was 97% (2023: 96%). 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.
Results
The company turnover for the year was £7.02m (2023: £6.90m) which has increased by 1.76% comparing to prior year. The company made a profit after tax of £1.7k (2023: £473k). At the end of the year the company had net asset of £30.4m (2023: £23.9m).
Future developments
The directors aim to continue with the management policies which has resulted in the company's steady growth in recent years.
Mr Paavan Popat
Director
27 January 2025
LONDON INN HOTELS ( STRATFORD ) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company continued to be that of hotels and similar accommodation.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Gagan Puri
Mr Paavan Popat
Mr Shivaan Popat
(Resigned 10 October 2024)
Auditor
The auditor, KLSA LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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.
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.
LONDON INN HOTELS ( STRATFORD ) LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 4 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr Paavan Popat
Director
27 January 2025
LONDON INN HOTELS ( STRATFORD ) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LONDON INN HOTELS ( STRATFORD ) LTD
- 5 -
Opinion
We have audited the financial statements of London Inn Hotels ( Stratford ) Ltd (the 'company') for the year ended 30 April 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 30 April 2024 and of its 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.
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 a 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.
LONDON INN HOTELS ( STRATFORD ) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LONDON INN HOTELS ( STRATFORD ) LTD (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 and the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
LONDON INN HOTELS ( STRATFORD ) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LONDON INN HOTELS ( STRATFORD ) LTD (CONTINUED)
- 7 -
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.
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.
The comparative period was not subject to audit because the company took advantage of audit exemption by virtue of section 477 of Companies Act 2006 and members have not required the company to obtain an audit for the 12 months in question in accordance with section 476 of the companies Act 2006.
LONDON INN HOTELS ( STRATFORD ) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF LONDON INN HOTELS ( STRATFORD ) LTD (CONTINUED)
- 8 -
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Shilpa Chheda
Senior Statutory Auditor
For and on behalf of KLSA LLP
27 January 2025
Chartered Accountants
Statutory Auditor
Kalamu House
11 Coldbath Square
London
EC1R 5HL
LONDON INN HOTELS ( STRATFORD ) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
7,020,678
6,899,572
Cost of sales
(2,948,975)
(2,910,233)
Gross profit
4,071,703
3,989,339
Administrative expenses
(2,550,015)
(2,442,914)
Operating profit
1,521,688
1,546,425
Interest receivable and similar income
365
252
Interest payable and similar expenses
(1,317,045)
(886,777)
Profit before taxation
205,008
659,900
Tax on profit
5
(203,310)
(187,036)
Profit for the financial year
1,698
472,864
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LONDON INN HOTELS ( STRATFORD ) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
2024
2023
£
£
Profit for the year
1,698
472,864
Other comprehensive income
Revaluation of tangible fixed assets
8,311,715
Tax relating to other comprehensive income
(1,867,929)
(1,245,363)
Total other comprehensive income for the year
6,443,786
(1,245,363)
Total comprehensive income for the year
6,445,484
(772,499)
LONDON INN HOTELS ( STRATFORD ) LTD
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
6
41,000,000
33,222,902
Current assets
Stocks
7
12,106
11,187
Debtors
8
15,080,139
14,487,216
Cash at bank and in hand
261,142
370,462
15,353,387
14,868,865
Creditors: amounts falling due within one year
9
(2,393,307)
(1,909,733)
Net current assets
12,960,080
12,959,132
Total assets less current liabilities
53,960,080
46,182,034
Creditors: amounts falling due after more than one year
10
(15,354,400)
(15,894,400)
Provisions for liabilities
(8,232,711)
(6,360,149)
Net assets
30,372,969
23,927,485
Capital and reserves
Called up share capital
13
500,001
500,001
Share premium account
1,562,124
1,562,124
Revaluation reserve
26,311,193
20,182,930
Profit and loss reserves
1,999,651
1,682,430
Total equity
30,372,969
23,927,485
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 January 2025 and are signed on its behalf by:
Mr Paavan Popat
Director
Company registration number 04251750 (England and Wales)
LONDON INN HOTELS ( STRATFORD ) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 May 2022
500,001
1,562,124
21,743,816
894,043
24,699,984
Year ended 30 April 2023:
Profit
-
-
-
472,864
472,864
Other comprehensive income:
Tax relating to other comprehensive income
-
-
(1,245,363)
(1,245,363)
Total comprehensive income
-
-
(1,245,363)
472,864
(772,499)
Transfers
-
-
(315,523)
315,523
-
Balance at 30 April 2023
500,001
1,562,124
20,182,930
1,682,430
23,927,485
Year ended 30 April 2024:
Profit
-
-
-
1,698
1,698
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
8,311,715
-
8,311,715
Tax relating to other comprehensive income
-
-
(1,867,929)
(1,867,929)
Total comprehensive income
-
-
6,443,786
1,698
6,445,484
Transfers
-
-
(315,523)
315,523
-
Balance at 30 April 2024
500,001
1,562,124
26,311,193
1,999,651
30,372,969
LONDON INN HOTELS ( STRATFORD ) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
18
1,986,263
229,193
Interest paid
(1,317,045)
(886,777)
Income taxes (paid)/refunded
(164,154)
288,231
Net cash inflow/(outflow) from operating activities
505,064
(369,353)
Investing activities
Purchase of tangible fixed assets
(133,634)
(271,367)
Loans made to other entities
(58,184)
Repayment of loans
58,885
Interest received
365
252
Net cash used in investing activities
(74,384)
(329,299)
Financing activities
Repayment of bank loans
(540,000)
999,900
Net cash (used in)/generated from financing activities
(540,000)
999,900
Net (decrease)/increase in cash and cash equivalents
(109,320)
301,248
Cash and cash equivalents at beginning of year
370,462
69,214
Cash and cash equivalents at end of year
261,142
370,462
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 14 -
1
Accounting policies
Company information
London Inn Hotels ( Stratford ) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 36 Railway Approach, Station Road, Harrow, Middlesex, HA3 5AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold property at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
In accordance with there 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.
On the basis of this, these financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. Thus the directors have 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 ownership and operation of hotels 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:
Freehold buildings
Straight line over 50 years
Motor vehicles
15% Reducing balance method
Furniture, fixtures and equipment
15% Reducing balance method
Plant and machinery
15% Reducing balance method
Freehold land is not depreciated
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.
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
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.
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.
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, other short-term liquid investments with original maturities of three months or less, 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.
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.
Other finacial 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 charges in fair value are recognised in profit and loss, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
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.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
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 carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instruments.
1.15
There were no changes in comparative figures during the year.
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of debtors
The company reviews their portfolio of trade debtors on an annual basis. In determining whether trade debtors are impaired, the management makes judgement as to whether there is any evidence indicating that there is a measurable decrease in the estimated future cash flows expected.
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 on a regular basis. During the financial year, the directors determined no significant changes in the useful lives and residual values. The carrying amounts of tangible fixed assets is disclosed in note 6.
Valuation of investment properties
Freehold properties are carried at fair value based on valuations performed by external independent valuers or the directors. Fair value is ascertained through review of a number of factors and information flows, including market knowledge, recent market movements, recent sales of similar properties and historical experience. There is an inevitable degree of judgement involved and the value can only be reliably tested ultimately in the market itself.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Room revenue
6,301,096
6,166,191
Food and beverages revenue
499,357
490,036
Other revenues
220,225
243,345
7,020,678
6,899,572
2024
2023
£
£
Other revenue
Interest income
365
252
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
81
90
5
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
177,841
164,154
Adjustments in respect of prior periods
20,836
(288,211)
Total current tax
198,677
(124,057)
Deferred tax
Origination and reversal of timing differences
4,633
311,093
Total tax charge
203,310
187,036
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
205,008
659,900
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.50%)
51,252
128,681
Tax effect of expenses that are not deductible in determining taxable profit
12,027
(943)
Permanent capital allowances in excess of depreciation
114,562
57,668
Trading losses
(21,252)
Deferred tax
4,633
311,093
Prior year adjustments
20,836
(288,211)
Taxation charge for the year
203,310
187,036
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
5
Taxation
(Continued)
- 20 -
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2024
2023
£
£
Deferred tax arising on:
Revaluation of property
1,867,929
1,245,363
6
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost or valuation
At 1 May 2023
33,793,400
4,802,026
38,595,426
Additions
133,634
133,634
Revaluation
5,799,847
5,799,847
At 30 April 2024
39,593,247
4,935,660
44,528,907
Depreciation and impairment
At 1 May 2023
2,091,868
3,280,656
5,372,524
Depreciation charged in the year
420,000
248,251
668,251
Revaluation
(2,511,868)
(2,511,868)
At 30 April 2024
3,528,907
3,528,907
Carrying amount
At 30 April 2024
39,593,247
1,406,753
41,000,000
At 30 April 2023
31,701,532
1,521,370
33,222,902
The freehold land and building (including plant and machinery) were revalued at fair value in June 2024 by Colliers International Property Consultants Limited, an independent valuer not connected to the company. The valuations are based on an estimate of the maintainable level of trade and future profitability a component operator of a business conducted on the premises acting in an efficient manner would expect to achieve. As with all properties valued by reference to trading potential, valuations are vulnerable to external influences and the introduction of competition. The trading valuation is inextricably linked to the performance of the national economy.
In the director's opinion, the carrying value of the company's properties as at 30 April 2024 is not significantly different from the open market values of the properties as at that date.
All other tangible fixed assets are stated at historical costs.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
6
Tangible fixed assets
(Continued)
- 21 -
Land and buildings
2024
2023
£
£
Cost
8,406,234
8,406,234
Accumulated depreciation
(1,794,819)
(1,690,342)
Carrying value
6,611,415
6,715,892
7
Stocks
2024
2023
£
£
Stocks
12,106
11,187
8
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
150,515
96,867
Other debtors
14,725,241
14,202,664
Prepayments and accrued income
204,383
187,685
15,080,139
14,487,216
9
Creditors: amounts falling due within one year
2024
2023
£
£
Bank loans
540,000
540,000
Trade creditors
375,606
223,088
Corporation tax
177,841
143,318
Other taxation and social security
365,513
335,071
Other creditors
825,508
537,129
Accruals and deferred income
108,839
131,127
2,393,307
1,909,733
10
Creditors: amounts falling due after more than one year
2024
2023
£
£
Bank loans and overdrafts
15,354,400
15,894,400
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
10
Creditors: amounts falling due after more than one year
(Continued)
- 22 -
On May 2022, the company entered into a loan agreement of £16.4m and the interest on the loan is charged at market rate. The loan expires on May 2027. There is no further amendment to the terms and conditions of the loan during the year.
The bank loan is secured by the following:
(i) Composite Company Unlimited Multilateral Guarantee given by TLC (Radlett) Limited, London Inn Hotels (Stratford) Limited and Promede Limited.
(ii) First Legal Charge over Freehold Property.
(iii) Fixed floating charge over all the assets, which include all present and future freehold and leasehold property, book and other debt, chattels, goodwill and uncalled up capital, both present and future.
11
Deferred taxation
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
1,173,578
1,170,047
Short term timing differences
2,192
1,090
Revaluations
7,056,941
5,189,012
8,232,711
6,360,149
2024
Movements in the year:
£
Liability at 1 May 2023
6,360,149
Charge to profit or loss
4,633
Charge to other comprehensive income
1,867,929
Liability at 30 April 2024
8,232,711
12
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
19,378
19,694
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
13
Called up share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500,001
500,001
500,001
500,001
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 23 -
14
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
£
£
132,643
182,243
15
Financial commitments, guarantees and contingent liabilities
The company forms part of a cross company guarantee and unlimited multilateral guarantee securing the bank borrowings of London Inn Hotels (Stratford) Limited and TLC (Radlett) Limited. At 30 April 2024 the net borrowings of these companies amounted to £1,031,354 (2023: £1,086,227).
The company has also given a cross company guarantee to The Fellows House Limited, which is a company owned by P Popat, a director of the company, securing the bank borrowings. At 30 April 2024 the net borrowings of these companies amounted to £24,087,146 (2023: £26,225,002).
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 24 -
16
Related party transactions
The company has taken advantage of the exemption available in FRS 102 (s33 "Related Party Disclosure"), whereby it has not disclosed transactions with the parent company or any wholly owned subsidiary undertakings of the group.
During the year, the company was charged rent of £49,600 (2023: £48,000) for the use of a property owned by S D Popat, ultimate shareholder of the company and her husband D A Popat, A lease exists between S D Popat, D A Popat and the company for a period of 20 years from 1 September 2006.
During the year the company paid a salary of £15,000 (2023: £15,000) to D A Popat, the husband of the ultimate shareholder.
Included within other debtors are the following balances:
An amount of £4,420,470 (2023: £3,725,476) due from The Fellows House Limited which is a company owned by P Popat, a director of the company. The balance has arisen as a result of the company making interest free loans and paying expenses on behalf of The Fellows House Limited.
An amount of £881,808 (2023: £895,208) due from SPK Bushey Ltd which is a company owned by P Popat, a director of the company. The balance has arisen as a result of the company making interest free loans to SPK Bushey Ltd.
An amount of £4,829,086 (2023: £4,792,636) due from London Inn Hotels Cambridge Limited, a company controlled by P Popat. The balance has arisen as a result of interest free loans made to London Inn Hotels Cambridge Limited.
An amount of £4,524,503 (2023: £4,524,503) due from TLC Radlett Limited, a company under common control.
An amount of £2,000 (2023: £2,000) due from TLC Construction Limited, a company under common control.
An amount of £3,714 (2023: £3,714) due from SPK Group Limited, a company under the control of P Popat, a director of the company.
An amount of £1,924 (2023: £Nil) due from Karuna Manor Care Home Limited, a company under common control.
An amount of £Nil (2023: £54) due from Cherry Hinton Limited, a company under common control.
An amount of £Nil (2023: £27) due from Cooperscroft Care Homes Limited, a company under common control.
Included within other creditors are the following balances:
An amount of £Nil (2023: £10,000) due to Promede Limited, a company under common control.
An amount of £Nil (2023: £900) due to Cambridge Manor Limited, a company under common control.
17
Parent company
The immediate and ultimate controlling parent company is TLC Hospitality Group Limited, whose registerd office is 36 Railway Approach, Harrow, Middlesex, HA3 5AA. The group financial statements can be obtained from Registered Office.
The ultimate controlling party is S D Popat.
LONDON INN HOTELS ( STRATFORD ) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 25 -
18
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
1,698
472,864
Adjustments for:
Taxation charged
203,310
187,036
Finance costs
1,317,045
886,777
Investment income
(365)
(252)
Depreciation and impairment of tangible fixed assets
668,251
689,799
Movements in working capital:
Increase in stocks
(919)
(851)
Increase in debtors
(651,808)
(2,442,957)
Increase in creditors
449,051
436,777
Cash generated from operations
1,986,263
229,193
19
Analysis of changes in net debt
1 May 2023
Cash flows
30 April 2024
£
£
£
Cash at bank and in hand
370,462
(109,320)
261,142
Borrowings excluding overdrafts
(16,434,400)
540,000
(15,894,400)
(16,063,938)
430,680
(15,633,258)
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