Consolidated Soho LLP is a limited liability partnership incorporated in England and Wales. The registered office is 3rd Floor, 114a Cromwell Road, London, SW7 4AG.
The limited liability partnership's principal activities are disclosed in the Members' Report.
These accounts cover the period from incorporation on12 February 2024 to 31 December 2024.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. 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 investment properties at fair value. The principal accounting policies adopted are set out below
During the year the limited liability partnership incurred a loss of £7,587,732. At the reporting date, the limited liability partnership had cash reserves of £7,538, and net liabilities of £7,586,731.
The limited liability partnership continues to meet its working capital requirements through the ongoing financial support of its shareholder and fellow group undertakings. However, prevailing economic conditions introduce a degree of uncertainty regarding the continued availability of such support.
At the reporting date, the limited liability partnership owed £3,385,710 to Consolidated Hotels Limited, a company registered in England and Wales and a designated member of the limited liability partnership. This balance is repayable on demand and therefore presents a material uncertainty regarding the limited liability partnership’s ability to continue as a going concern. However, the limited liability partnership has obtained a letter of support from this related party confirming its commitment to provide financial assistance for at least 12 months from the date of approval of these financial statements. Furthermore, the related party has confirmed that it will not seek repayment of the loan until the limited liability partnership is in a position to do so.
In addition, the members are actively looking to generate additional operating cash from the sale of assets within other areas of the group. The members are confident that future asset realisations will allow the limited liability partnership to trade.
Having considered these factors, the members have a reasonable expectation that the limited liability partnership possesses adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
Turnover, which is stated net of value added tax, represents rents receivable from operating leases.
For operating leases, rental income is recognised on a straight line basis over the term of the lease. The amount of the difference between rental revenue recognised and cash received is included in trade receivables, accrued income or other assets, or in the event it is a liability, in trade payables, deferred income and other liabilities.
Lease agreements where rent is based on floating interest rates are included in minimum lease payments based on the assumed rental amount in the lease. Increases or decreases in lease payments that result from changes in the floating interest rate are recorded as increases or decreases in lease revenue in the year of the interest rate change.
Lease contracts requires rental payments in advance. Rental payments received but unearned are recorded as deferred income in the Balance Sheet.
The turnover was derived from the limited liability partnership's principal activity which was carried out wholly in the United Kingdom.
Members' participation rights are the rights of a member against the limited liability partnership that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the limited liability partnership are analysed between those that are, from the limited liability partnership's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the limited liability partnership has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the limited liability partnership has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The limited liability partnership 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 limited liability partnership's statement of financial position when the limited liability partnership 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 assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership 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.
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 limited liability partnership after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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 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.
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
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 limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Amounts due from lessees under finance leases are recognised as receivables at the amount of the limited liability partnership’s net investment in the leases. The net investment in the lease is the present value of minimum future lease payments, discounted at the rate implicit in the lease, or if that cannot be readily determined, at the lessor's incremental borrowing rate specific to the term and start date of the lease, and any unguaranteed residual value. Expected unguaranteed residual values are based on the limited liability partnership's assessment of the value of the investment property and, if applicable, the estimated end of lease payments expected at the expiration of the lease.
Finance lease income is recognised using the effective interest method to produce a constant yield over the life of the lease and is included in the profit and loss as interest income. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the limited liability partnership’s net investment outstanding in respect of leases.
Sale and leaseback transactions
The limited liability partnership purchased an investment property and immediately leased back the freehold interest to the former owner. At the start of the lease, the limited liability partnership reviewed all necessary terms and criteria to determine the appropriate lease classification. The lease met specific classification criteria where the lease of the freehold interest will be treated as a finance lease and the lease of the land interest will be treated as an operating lease. The freehold interest was derecognised from the balance sheet and a finance lease asset was recognised. The treatment of finance leases as a lessor is set out above.
The average number of persons (excluding members) employed by the partnership during the period was:
During the year the limited liability partnership acquired an investment property and subsequently leased it back to the former owner under a 70 year lease. The fair value of the investment property has been arrived at by the members.
The bank loan is secured by fixed charges over the investment property.
The bank loan is secured by fixed charges over the investment property.
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
The operating lease represents the ground rents receivable under a sale and leaseback transaction. The lease is over 70 years and represents a proportion of the annual rent.
At the reporting end date the limited liability partnership had contracted with tenants for the following minimum lease receivables:
The limited liability partnership is controlled by Consolidated Hotels Limited, a company registered in England and Wales.
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006.
The auditor's report is unqualified and includes the following: