The director presents the strategic report for the year ended 31 December 2024.

The hotel posted a growth in its total turnover for 2024 of £38,741,275, which was a growth of 5.5% on 2023 result. This increase reflected the continued increase in more volume in 2024 with higher occupancy in the Rooms off-setting a slight drop in the average room rate. Footfall in the Food & Beverage venues continued with a growth in income of 6.68%. The performance was achieved despite the challenges of some key new openings from the competition in London, such as The Mandarin Oriental, Mayfair, The Emory, Art'otel London, Hoxton and Park Hyatt, London.

Despite this, the outlook for the future remains positive, with further opportunities in other markets and in growing the hotels suite business to deliver growths in 2025.

Energy costs, interest rates and the cost-of-living increases remain a risk in impacting the hotels operating profitability. The continued conflict in Gaza is also giving a lot of uncertainty in travel from the Middle East region, whilst the newly appointed President of the United States is likely to generate potential disruption from new trade policies likely to impact the world economy and geopolitics bringing uncertainty in travel from the United States. Regardless, the management still believes there will be growth in 2025 as London remains a key destination for both business and leisure travellers worldwide.

The company monitors its performance primarily based on financial performers of turnover, operating profit/loss levels occupancy percents and average room rates. Monthly management reports are employed to assist in monitoring its performance.

Section 172 requires that a director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

The likely consequences of any decision in the long term

The management of the company ensures that all decisions are taken for the long term, and collectively and individually aims to always uphold the highest standard of conduct.

The board of directors believes that a long-term success and growth of the company is strongly correlated to a positive interaction with all of its stakeholders. Effective engagement allows the board to understand relevant stakeholder views on issues which may impact the business and helps to inform the board's decision making. Stakeholder engagement is ultimately managed by the Board of Directors but also takes place at all levels within the organisation.

The interests of the group's employees

The directors understand that the company’s employees are fundamental and core to its business and delivery of its strategic ambitions. The success of the business depends on attracting, retaining and motivating employees. From ensuring that the company remains a responsible employer, from pay and benefits to our health, safety and workplace environment, the directors consider the implications of decisions on employees where relevant and feasible.

The need to foster the company's business relationships with suppliers, customers and others

The implementation of the company's strategy requires strong mutually beneficial relationships with suppliers, customers and other business partners.

The company aims to act responsibly and fairly in its engagement with suppliers since they are integral to the success of the business. The company pro-actively seeks feedback from its suppliers and build strong working relationships to ensure quality and eliminate supply risks. Standard operating procedures are designed in a way that ensure the company's adherence to any and all regulations that impact it.

The board supports the business by engaging with its future, new and existing customers. It strives to develop enduring partnerships with customers and drive continuous improvements and innovations into its operations and physical investment within the hotel itself in order to build long-term relationships.

The impact of the group's operations on the community and the environment

The directors recognise the company has an important role to play in its local community and acknowledge the impact of the business on the wider society.

The company has a strong focus on sustainable business practices and is focused on trying to reduce negative impacts on the environment. It encourages different initiatives such as limited working from home, interactive meetings and less travelling which reduces the negative environmental impact.

The desirability of the company in maintaining a reputation for high standards of business conduct

The directors aim to achieve the company’s business targets in ways which are economically, environmentally and socially responsible.

The board recognises that culture, values and standards are key contributors to how a company creates and sustains value over the longer term, and to enable it to maintain a reputation for high standards of business conduct. High standards of business conduct guide and support the decision-making of the board of and thus contribute to the success of it.

The need to act fairly as between members of the group

Management of the company is directed from the ultimate parent undertaking. This ensures the goals and objectives of the company are aligned with those of the shareholders.

The directors, together with management, set the agenda for all meetings to ensure that requirements of section 172 are always met and considered through a combination of the following:

• Standing agenda points are presented at each meeting, for example; Financial management present the financial overview, cash position and progress against budget. Operational management present detail on the health and safety performance as well as progress against operational objectives.

• An annual budgeting exercise is completed at which time the board considers the strategic direction of the business and how this fulfils our long term objectives.

On behalf of the board

The director presents his annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company in the year under review was that of the operation of the Cafe Royal Hotel.

The results for the year are set out on page 11.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

The director who held office during the year and up to the date of signature of the financial statements was as follows:

The company’s principal financial instruments are inter-company borrowings from its immediate parent company and a fellow subsidiary undertaking. The company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. The ultimate parent company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the all subsidiary activities.

The company manages its cash and borrowing requirements through daily monitoring of its cash position including indebtedness and free cash available. The annual budgeting and interim forecasting exercises in conjunction with reporting to its immediate parent company allow for a forward looking cash view and to plan appropriately, thus maximising interest income and minimising interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

The company's short term borrowing from its immediate and its ultimate parent company is based on variable rates as set by its ultimate parent company and is based on market rates at which the group as a whole is able to borrow.

The long term loan from the ultimate parent company is interest free but has been discounted to produce a fixed rate of 3.487% which was determined by prevailing market rates at the time of drawdown.

The company requests deposits from its customers when pre-booking accommodation and function events. Trade debtors arise where customers are invoiced for the balance of their stay or function when not settled on departure and are monitored on an ongoing basis. Provision is made for doubtful debts where necessary and are insignificant in the main.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees at meetings matters likely to affect employees' interests.

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

In July 2025 the company received a balancing invoice from its landlord The Crown Estate, for energy used between December 2022 and March 2025. This amounted to a rebate of £511,731 being received due to new meters installed during an estate wide sub-metering and data logging improvement programme during this time.

The estimated accrual in the financial statements within current liabilities and the costs within administration expenses are therefore over estimated by £875,693 as at 31 December 2024. However, this uplift in operating profit would have given rise to additional group charges of £744,339 representing 85% of this uplift and would have increased management charges and other borrowings within current liabilities by this amount, thereby countering the impact of the light and heat rebate had it been adjusted for in these accounts.

With new openings of hotels in London, the company and management continue to be dynamic to attract clients to the hotel through different channels and markets. The focus is to ensure the hotel delivers consistently the high level of service through its employment of high calibre staff and keep re-inventing its offering to attract clients and guests from across the world.

Sears Morgan Accountancy Limited were appointed auditor to the company 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 UK Government's Streamlined Energy and Carbon Reporting (SECR) policy was implemented on 1 April 2019. The table below represents the company's energy use and associated greenhouse gas (GHG) emissions from electricity and fuel in the UK for the year ended 31 December 2024.

The company has followed the 2019 HM Government Environmental Reporting Guidelines. The company has also used the GHG Reporting Protocol – Corporate Standard and have used the 2024 UK Government’s Conversion Factors for Company Reporting.

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.

The company carries out internal quality assurance processes in order to identify areas where emissions can be reduced.

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.

This can be found within the Strategic Report under the S172 Companies Act commentary.

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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. He is 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.

Qualified opinion on financial statements

We have audited the financial statements of Cafe Royal Management Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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, except for the effects of the matter described in the basis for qualified opinion paragraph, the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

The company's accruals and deferred income on 31 December 2024 include an amount of £1,701,025 in relationship to estimated accruals for electricity for the period December 2022 to December 2024. Subsequent to the reporting date, on 15 July 2025 invoices for the same period were received totalling £825,382. This event provides further evidence of conditions that existed at the balance sheet date, specifically regarding the value of the liability.

The estimated accrual in the financial statements within current liabilities and the costs within administration expenses are therefore overstated by £875,693 as at 31 December 2024.

The uplift in operating profit had it been adjusted for, would have also given rise to an increase in group charges totalling £744,339 representing 85% of this uplift. This would have increased other borrowings within current liabilities and costs within management charges by this amount. This has not been adjusted either. Therefore this balance and cost is understated as at 31 December 2024.

The effects of the unadjusted errors are the operating profit is understated by £875,693 and the management charge understated by £744,339. The net effect is the loss for the financial year to 31 December 2024 is overstated by £131,354 and current liabilities are overstated by £131,354.

The director has not adjusted the financial statements as required by FRS 102 and the financial statements are therefore materially misstated because of this non-adjustment.

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 director's 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 director with respect to going concern are described in the relevant sections of this report.

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, except for the matters described under basis for qualified 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 company and its 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, 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 director's 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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The extent to which the audit was considered capable of detecting irregularities, including fraud

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:

• ensuring the engagement team collectively had the appropriate experience, competence, and skills to be able to detect irregularities, including fraud;

• obtaining an understanding of the legal and regulatory frameworks applicable to the company and the sector in which it operates and determining the following laws and regulations were most significant: UK Accounting Standards, including FRS102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, The Companies Act 2006, UK GAAP, Employment and UK corporate tax laws.

• obtaining an understanding of how the company are complying with those legal and regulatory frameworks and made enquiries to the management of known or suspected instances of fraud and non-compliance with laws and regulations.

• considering the areas and transactions which may carry a higher level of susceptibility to fraud.

Audit response to risk identified

In response to the risk of irregularities, including fraud, and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• identifying and assessing the design effectiveness of key controls that management has in place to prevent and detect fraud

• enquiring of management as to actual and potential litigation and claims;

• reviewing correspondence with HMRC,

• reviewing legal and regulatory costs;

• considering audit evidence obtained in other testing areas to see if they gave rise to any indicators of non-compliance with relevant laws and regulations,

• challenging assumptions and judgements made by management in its significant accounting estimates and judgements, in particular in relation to depreciation, validity of inter-group balances, stock valuation, debtor recoverability, tax calculation, accruals and going concern.

• making enquiries with directors and management of any known or alleged instances of fraud or non-compliance of specific laws and regulations, including industry laws; and

• auditing the risk of management override of controls or other inappropriate influences over the financial reporting process, including the existence of monthly management accounts review process and through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

• testing revenue recognition to ensure it was recognised in the correct accounting period with deposits and pre-paid bookings received in advance being correctly allocated as advanced income.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve collusion, deliberate concealment, forgery or intentional misrepresentations.

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 income statement has been prepared on the basis that all operations are continuing operations.

Cafe Royal Management Limited is a private company limited by shares incorporated in England and Wales. The registered office is 68 Regent Street, London, W1B 4DY.

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.

This 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:

• Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;

• 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’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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.

The financial statements have been prepared on the going concern basis notwithstanding the trading losses and net current liabilities at the financial year end. The directors believe this to be appropriate, as, until the hotel is generating sufficient income to cover its costs the day to day working capital requirements of the company are provided by the immediate parent and fellow subsidiary undertakings, Locka Holdings B.V. and Barco Investments B.V. and the ultimate parent company Alrov Properties and Lodgings Limited. The directors of these companies have indicated to the directors of Cafe Royal Management Limited that they will continue to provide such funds as are necessary to enable it to continue to trade and meet it's liabilities as they fall due and that they will not seek repayment of the amounts currently made available unless the company is in a financial position to do so and not to the detriment of other creditors. As with any company placing reliance on other group companies for financial support, the directors acknowledge that there can be no certainty that this support will continue although at the date of approval of these financial statements they have no reason to believe they will not do so. true

Based upon the undertaking of financial support outlined above, at the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Revenue 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.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date.

Property, plant and equipment 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:

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.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

Consumable inventories comprises food, beverages and well being products.

Non-consumable inventories comprises staff uniform, linen, kitchen utensils, china, glass and silverware.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also 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 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 statement of financial position 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, which include trade and other receivables 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, 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.

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 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.

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, including trade and other payables, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

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 income statement 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 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 income statement, 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.

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 non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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 company’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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The determination of depreciation methodologies requires an estimation of useful lives in order to determine the deprecation rate to apply. The accounting polices set out the deprecation rates used and note 12 details the deprecation charge for the year.

Included within non-consumable inventories in Note 13 is an estimated value for kitchen and operating supplies totalling £278,303 (2023: £278,303). This represents the cost in 2020 for kitchen utensils and other small equipment used in the preparation food previously held in another group undertaking. Due to the feasibility cost involved, stock counts are not performed with the company instead expensing all replacements that would otherwise arise representing an average of approximately 18% of the initial investment per annum.

Due to the timing of when invoices for light and heat costs, waste collection and service charges are issued by the property management company (which can be up to twelve months in arrears), the company must make an estimated accrual for these costs not invoiced.

The basis for light and heat estimation is based on a mixture of actual monthly meter readings where the company has direct access to its own meters and an estimated amount for the primary meter, the hotel main incomer meter, which it does not have direct access to, and which accounts for almost all the electricity used by the hotel. This meter is managed by an energy management consulting company, who advises the property management company in deciding the levels of interim estimated payment on account invoices, based on an historical average of actual kilowatt-hours used and an estimated unit cost per kilowatt-hour based on previous recent final invoices unit rates (adjusted for any significant market changes).

Waste collection and service charges are based on the property managing agent’s indicative estimates.

The accrual provision for these costs as at the balance sheet date was £2,185,075 (2023: £61 debit).

Provisions for current and deferred tax carry an element of uncertainty as various components in the computations are subject to being accepted by authorities at a date after the balance sheet date. Additionally, deferred tax computations contain an estimation of assessed likelihood of company losses being utilised in the future. Note 11 to the financial statements outlines taxation provisions made and Note 18 outlines details of the company's unutilised losses.

An analysis of the company's revenue is as follows:

Other services are for the preparation of corporation tax computations and accounting services.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The above aggregate remuneration recharged represents total employee costs in the year recharged to a group company £1,431,579 (2023: £916,978) and costs capitalised within plant and machinery £481,059 (2023: £nil).

No directors were remunerated through this company in the current or prior year.

The actual 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:

The director considers that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

The director considers that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

Other borrowings in current liabilities represent loans from group undertakings, Alrov Properties & Lodgings Ltd, the ultimate parent company, Locka Holdings B.V. the immediate parent company and Barco Investments B.V. a fellow group undertaking. These are unsecured, repayable on demand and attract a variable rate of interest charged between 7.36% and 7.5512% in the year (2023: 6.263% and 7.694%) except the loan from Barco Investments B.V. which is interest free.

Other borrowings in non-current liabilities represents a loan from the ultimate parent company. This loan is interest free, repayable within 5 years other than by instalments and unsecured. Its maturity date is automatically extended by 1 year at each anniversary. The balance has been discounted such that a fixed annual interest rate of 3.487% per annum is chargeable and applied to the loan balance.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

FRS 102 requires deferred tax assets (including those arising from tax losses) to be recognised to the extent that they are regarded as recoverable. Because of the uncertainty of foreseeable future taxable profits becoming available to utilise the company's pre-2017 losses no provision for a deferred tax asset has been made in this regard.

A deferred tax asset has not been provided totalling £5,713,718 (2023: £5,819,242) computed at an estimated tax rate of 25% (2023: 25%). This is based on the company's current year tax losses totalling £632,975 and pre-2017 losses of £22,221,895.

Accelerated capital allowances in excess of depreciation totalled £1,352,297 (2023: £925,623). This would have given rise to a deferred tax liability totalling £338,074 (2023: £231,406) at an estimated tax rate of 25%. This has not been provided for on the basis the deferred tax asset above would have negated this.

The capital contribution arising from a loan from the parent company at below market rate of interest totalling £3,187,080 would have given rise to a deferred tax liability totalling £796,770 at an estimated tax rate of 25%. This was not provided at the time on the basis a similar amount from the unprovided deferred tax asset above would have been recognised to off-set this. The unprovided deferred tax liability (had it been unwinding) at the balance sheet date, would have totalled £335,391. The deferred tax asset shown above reflects the unwinding of the deferred tax that occurred in the prior year.

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. At the balance sheet date £64,567 (2023: £55,209) is payable to the scheme and is included within other payables.

The company has one class of ordinary shares which carry full voting, dividend and capital distribution rights including on winding up and do not confer any rights of redemption.

The capital contribution reserve represents a capital contribution arising on a loan received from the ultimate parent company at a below-market rate of interest net of deferred tax.

Massachusetts mutual life insurance company, pursuant to a debenture dated 21 December 2017, has been granted a first fixed charge over all the company's bank accounts. In addition, pursuant to a legal mortgage over the shares in the company dated 21 December 2017, the bank has been granted a mortgage by Locka Holdings B.V over all Locka Holdings B.V's shareholding in the company.

As noted in note 2 to the accounts, judgements and key sources of estimation uncertainty, accrual provision, Café Royal Management Limited will accrue for light and heat costs based on an average of historical meter readings invoiced and an estimated unit cost based on previously recent actual invoices unit rates.

In 2023 the Crown Estate instigated an estate wide sub-metering and data logger improvement programme, which impacted several meters on its properties. One of the meters was the Hotel Main Incomer Meter which was connected to other parts of the building (the Quadrant) and received heating and cooling from other parts of the estate. As part of this programme, recharges were placed on hold, the last invoices raised based on actual meter readings being issued October and November 2022. No further readings were taken until the meter was replaced as part of this upgrade in October 2024 and recharges have been calculated on usage from that point onwards.

Post upgrade meter readings were taken in December 2024 and a further reading in April 2025. To estimate electricity usage between December 2022 and April 2025 the energy management consulting company undertook the following steps:

• Used the December 2024 and April 2025 readings.

• Compared with historical data.

• Calculated the average daily usage.

• Applied this daily usage to each month in the period.

The unit price per kilowatt-hour was based on the average price the Crown Estate paid for its energy during this period (which was subject to market fluctuations) and the contracts it had in place during this time. This created an average unit rate which was applied to the average kilowatt hours calculated above for the period.

The approach implemented adhered to the RICs compliance regulation.

The end result was in July 2025 Café Royal Management Limited received an energy rebate of £511,731 (net) for the period December 2022 to March 2025. This demonstrated the estimated accruals in the financial statements within current liabilities and administration costs to December 2024 to be over overestimated by £875,693.

This 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 to disclose compensation for key management personnel on the basis they are disclosed in that company.

During the year under review the company had the following transactions with its ultimate parent company Alrov Properties and Lodgings Ltd and fellow group undertakings not wholly owned by its immediate parent company Locka Holdings B.V.

Locka Holdings B.V. entered an agreement whereby part of its loan balance due from Cafe Royal Management Limited was novated to Alrov Properties & Lodgings Ltd totalling £nil (2023: £1,028,564). In addition Cafe Royal Management Limited received £400,000 (2023: £945,000) from Alrov Properties & Lodgings Limited. At the year end £2,749,354 (2023: £1,998,490) was owed to the ultimate parent company and is included within other borrowings, amounts due within 1 year. The movement on this balance being the advance noted above, cross charges totalling £156,769 (2023: £nil) and interest £194,095 (2023: £24,926). Included within other borrowings, amounts due greater than one year is a loan from Alrov Properties & Lodgings Ltd totalling £18,658,437 (2023: £18,022,088) which is to be repaid no earlier than December 2026 upon which the term can be extended automatically by 1 year until one or the other party chooses otherwise. The movement on this balance being notional interest charged in the year totalling £636,349 (2023: £615,225).

Other transactions with group members outside of its immediate group who are included within trade and other receivables included repayment of balances totalling £86,106 (2023: £335,273), recharges of costs from Café Royal Management Limited totalling £2,547,436 (2023: £2,549,923), sales to Cafe Royal Management Limited totalling £708,722 (2023: £879,435) and group tax reliefs to Cafe Royal Management Limited totalling £152,324 (2023: £1,505).

Other transactions with group members outside of its immediate group who are included within current liabilities included receiving recharges of costs totalled £907,158 (2023: £411,335) and repayment of balances to them totalling £740,757 (2023: £nil).

At the balance sheet date these companies owed Café Royal Management Limited £5,257,858 (2023: £3,494,671) and are included within trade and other receivables, amounts owed by group undertakings. Amounts owed to group undertakings are included within current liabilities and total £577,736 (2023: £441,335). These balances are unsecured, interest free and repayable on demand.

The immediate parent undertaking is Locka Holdings B.V. a company incorporated in Holland.

The ultimate parent undertaking is Alrov Properties & Lodgings Limited, a company incorporated in Israel.

Consolidated accounts are produced by Alrov Properties & Lodgings Limited, and copies are available to the public by downloading from their website at alrov.co.il or at its registered address at; The Alrov Tower, 46 Rothschild Blvd, 66883 Tel-Aviv, Israel.