The director presents the strategic report for the year ended 31 December 2023.
Against the backdrop of continued challenging conditions for the hospitality sector the company performance for the year was strong with a year-on-year turnover increase of 29% (2023 v. 2022) and an improvement in operating profit / (loss) following completion of refurbishment works during 2022. Food and Beverage revenues despite a slow Q1 finished the year 19% ahead of 2022.
Accommodation revenues were particularly strong overall (+45% v. 2022). The impact of refurbishment works in 2022 reduced room capacity but nonetheless comparable H2 performance saw strong improvement. Annual occupancy was below expectations offset by an increase in pricing.
Leisure as a segment is impacted by the cost of living crisis as discretionary spend diminishes. To mitigate this management developed other market segments and made operational changes to the business to accommodate corporate and social meetings and events with a particular focus on filling critical midweek periods.
Following a period of refurbishment the business has successfully re-built its standing as a local community venue of choice for social events such as weddings, special occasions and celebrations of life.
The business undertakes constant review and forecasting of its cost base. The primary costs of the business are payroll and food costs. Both of these have been impacted by inflation significantly. Underlying wage growth was driven by an increase in the national minimum wage and the availability of workforce. This increase was offset through restructuring the management team and improved controls the overall business wage growth and labour efficiency.
The business manages exposure to principal risks through its financial risk management objectives.
Revenue risk
Exposure to revenue risk is managed through financial risk management objectives which focus on optimizing the mix between price point and occupancy. Robust revenue management processes are adopted including daily competitor comparisons.
Food and beverage price risk arises from being unable to pass on inflationary rises in the cost of goods to the customer. This is mitigated through daily ordering of foodstuffs based on business levels to minimize waste and by implementing flexible menus.
Credit risk
The business has limited exposure to credit risk as the majority of its business is paid for in advance or at the time of service. Credit risk is managed by limiting customer credit facilities to those companies that meet credit requirements.
Cost base risk
The business is fully compliant with statutory minimum pay regulations and labour costs are managed through careful rota management. Food price inflation has impacted margins. Risk is managed through detailed costing of menus, minimising waste and sourcing the best value products without compromising on quality produce. Better pricing can be obtained from suppliers on advance purchase terms and the business balances the benefit of better pricing against cashflow needs of the time.
Energy cost is the largest non-direct cost. The timing of energy contract renewals is critical as favourable pricing often requires longer commitment periods to energy suppliers. The business closely monitors renewal dates and has set consumption targets and implemented best practice processes to reduce energy consumption.
Liquidity risk
Cashflow is carefully monitored weekly; revenues are received on a cash basis and can be relatively accurately forecasted to align with supplier payments and payroll requirements due.
The outlook for 2024 is optimistic but with persisting economic instability continuing to impact the business. Rooms revenues are anticipated to continue to grow as base volume corporate business allows management to seek revenue opportunities from the remaining room stock. The business is benefiting from positive impacts of the sales efforts in 2023 to drive more midweek corporate and weekend leisure business. The opening of a new Spa facility in H2 2024 will enhance the hotel’s offering and the opportunity to expand into the leisure market further.
Food price inflation reached a record high of 19.1% in March 2023 compared to 2022. During the remainder of 2023 food inflation remained high and contributed to rise albeit at a slower rate. Food inflation remains a factor in managing the cost base despite an easing in key staples.
Overall, the outlook remains challenging; the focus is on ensuring continuous control on the cost base whilst seeking out new and alternative revenue opportunities. Longer term as the leisure segment recovers the business should be well placed to maximise the opportunity and drive profitability.
THE COODEN BEACH HOTEL LIMITED
KPIs | 2023 | 2022 |
Gross profit margin | 10% | 2% |
Operating profit margin | (36%) | (52%) |
Accommodation revenue % Turnover | 41% | 37% |
Food and Beverage revenue % Turnover | 58% | 63% |
Administration expense % Turnover | 46% | 55% |
Employee expense % Turnover | 63% | 69% |
THE RELAIS COODEN BEACH HOLDING LIMITED
KPIs | 2023 | 2022 |
Gross profit margin | 10% | 2% |
Operating profit margin | (39%) | (55%) |
Accommodation revenue % Turnover | 41% | 37% |
Food and Beverage revenue % Turnover | 58% | 63% |
Administration expense % Turnover | 49% | 57% |
Employee expense % Turnover | 63% | 69% |
NOTE: differences in administrative expenses between entities
The business is committed to providing a quality hospitality experience for its guests and the local community by investing in its assets and the team. Opportunities to further promote the success of The Cooden Beach Hotel are assessed regularly and tailored to suit market demand. In particular, the business has invested in the development of a new Spa facility opening in 2024.
The director understands the business and the evolving environment in which the business operates. The management has long term experience in the industry. The strategy set by the board is intended to strengthen the group position and brand within the local markets.
The director recognises that The Cooden Beach Hotel Limited employees are fundamental to the business delivery and strategic ambitions. The sucess of the business is in part due to attracting, retaining and motivating employees. Ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the director factors the implications of decisions on employees and the wider workforce, where relevant and feasible.
Delivering the group strategy requires a strong relationship with members of our wider group, the group needs and support provided are factored into strategic decision making and targets.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 12.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Verallo were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
The Relais Cooden Beach Holdings Limited have an unsecured revolving facility held with The International Stock Exchange of £30million, which can be drawn upon to help fund the development of The Cooden Beach Hotel Limited. At 31 December 2022, the fund had been utilised to the value of £9.75million (2022 - £6.2million), and does not fall payable until 2046.
We have audited the financial statements of The Relais Cooden Beach Holding Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the companies have established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £847,270 (2022 - £547,436 loss).
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
The Relais Cooden Beach Holding Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales, company registration number 13292818. The registered office is Century House, Wargrave Road, Henley-on-Thames, England, RG9 2LT.
The group consists of The Relais Cooden Beach Holding Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel and disclosure of transactions between wholly owned members of the group have not been included.
The consolidated group financial statements consist of the financial statements of the parent company The Relais Cooden Beach Holding Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the balance sheet date the group and company's net current liabilities exceed its assets by £4,804,857 (2022 - £6,371,262) and £4,707,375 (2022 - £6,451,363) respectively and its total net liabilities equaled, £4,025,581 (2022 - £2,186,751) and £1,702,801 (2022 - £855,531) respectively. The director has prepared the financial statements on a going concern basis, which assumes the group and company will continue in operational existence, and will be able to meet its liabilities as they fall due, for a period of at least twelve months from the date of approval of the financial statements.
In reaching this conclusion, the director has reviewed the budgets and forecasts for the foreseeable future and have considered the support obtained from the group's parent company, that the £3,073,191 (2022 - £5,618,191) owed to the parent company, along with £1,617,486 accrued interest on the Eurobond balance, will not be recalled within the foreseeable future, to the detriment of the group and company's creditors. The parent company has further pledged to provide financial support to the group to enable it to meets its financial obligations for a period of 12 months from the approval of the financial statements.
The director continues to review the impact of the economy on the operations and financial position of the group.
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.
Sale of accommodation
The contract to provide accommodation is established when the customer books accommodation. The performance obligation is the right to use accommodation for a given number of nights, and the transaction price is the room rate for each night determined at the time of the booking. The performance obligation is met when the customer is given the right to use the accommodation, and so revenue is recognised for each night as it takes place, at the room rate for that night.
Customers may pay in advance for accommodation. In this case the company has received consideration for services not yet provided. This is treated as a contract liability until the performance obligation is met.
Sale of food and beverage
The contract is established when the customer orders the food or drink item and the performance obligation is the provision of food and drink by the outlet. The performance obligation is satisfied when the food and drink is delivered to the customer, and revenue is recognised at this point at the price for the items purchased.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 recognised in the profit and loss account.
Freehold land is not depreciated.
Assets under construction are not subject to depreciation.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The investments are valued by the directors, based upon financial projections over a period of 10 years. The key judgements in the projections are price, occupancy and cost base.
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.
Due to the scale of the fixed assets, depreciation is considered to be a key accounting estimate. The accounting estimates applied are based on years of use, and how often refurbishment will be required. As a result of the high levels of fixed assets a 1% change would impact the financial statements by £110k.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
All the interest received in the year relates to financial assets measured at amortised cost.
All the interest paid in the year relates to financial liabilities measured at amortised cost.
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
At 31 December 2023 the company had tax losses carried forwards amounting to £5,922,705 (2022 - £5,105,782). After accounting for the deferred tax liability on accelerated capital allowances, a balance of £2,416,141 (2022 - £1,504,046) remains available to be carried forward and offset against future trading profits.
At 31 December 2023 capital losses amounting to £5,410 (2022 - £5,410) available to be carried forward against future capital gains.
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19% as previously enacted). The Finance Bill 2021 had its third reading on 24 May 2021 and is now considered substantively enacted. This means that the 25% main rate of corporation tax and marginal relief will be relevant for any asset sales or timing differences expected to reverse on or after 1 April 2023.
The carrying value of land and buildings comprises of land valued at £240,000.
On 6 April 2021 the group acquired 100% of the issued capital of The Cooden Beach Hotel Limited.
The loans to subsidiaries are repayable on demand as the company has agreed to support for a period of 12 months, therefore it is shown as a non-current fixed asset investment. This has not been amortised as this is considered to be one year and one day.
Details of the company's subsidiaries at 31 December 2023 are as follows:
As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.
The long term creditor represents listed notes on The International Stock Exchange, to the value of £9,570,000 (2022 - £6,200,000). The loan notes of the Eurobond are held by a company related by mutual controlling parties. The Eurobond has an unsecured revolving facility of £30 million. The bond is not repayable until 2046 and is subject to interest at 9.5% per annum of the amount drawn.
The provision represents expected repairs and maintenance costs of the building to be settled within the next 12 months. The basis has been applied at 2% of turnover, which the directors believe represents the value to repair the property to its current condition.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The company has one class of ordinary shares which carry full voting rights.
During the year, a company related by mutual control was advanced £457,782 (2022 - £148,918) from The Cooden Beach Hotel Limited, and repayments totalling £66,576 were made to the company. At the year end, The Cooden Beach Hotel Limited was owed £238,473 (2022 - £278,766). Management charges totalled £22,399 (2022 - £12,449). The amounts advanced are interest-free, unsecured and repayable on demand.
At the year end the company owed HICO Holding Pte Limited, its immediate parent company £2,973,291 (2022 - £5,518,291). The balance is interest-free, unsecured and repayable on demand.
At the year end, the company under the control of a former director was owed £99,900 by the company (2022 - £99,900). The balance is interest-free, unsecured and repayable on demand.
During the year, The Cooden Beach Hotel Limited incurred management fees of £79,994 (2022 - £80,006) in respect of a former director. At the balance sheet date, the total owed amounted to £80,000 (2022 - £140,000) and is included within accruals.