Introduction
The directors present their strategic report on Economic Enterprises (Development) Limited (“the company”) for the year ended 31 December 2025.
The business activity of the company during the year continued to be that of an investment company.
The company continues to hold investments in Sharon Hotels Limited, but during the year it disposed of its shareholding in M.N.S.R Hotels Limited at a profit of £18,186,322.
The ongoing geo-political situation in the region has created uncertainty and impacted the hospitality business in Israel suppressing demand in the period. The majority of the demand for the Israeli hotels is generated from domestic travel and the hotels reported lower occupancy rates which also impacted profitability. The initial feasibility and design work has begun on the refurbishment program plan for the hotel operated by Sharon Hotels Limited. In the interim it continued to trade as provider of short-term holiday apartment rentals during the year.
Prior to its sale the company received an amount of £2,115,610 (2024: £621,247) from M.N.S.R Hotels Limited in relation to the outstanding loan balances and a dividend of £2,342,469 (2024: £nil). The company used the funds it received from the repayment of loans by M.N.S.R Hotels Limited to repay the intercompany loans due to Group.
At the balance sheet date the funds generated from the disposal and Dividends were held in escrow pending clearance from the Israeli tax authorities for withholding taxes.
The company’s principal financial risk is the recoverability of its investments in its subsidiary undertakings and the funds held in escrow, including the related long-term intercompany loans. Any further / future escalation in the Israel-Gaza conflict to other areas of Israel or the Middle East could also impact the recoverability of these investments. The directors regularly review the carrying value of the company’s investments and provisions are made where considered necessary.
The CP Holdings Group (the “group”) consisting of CP Holdings Limited, and its key operating subsidiaries including Economic Enterprises (Development) Limited recognises the importance of delivering effective corporate governance in supporting the long-term success and sustainability of its business and operates under high standards of corporate governance.
The directors are collectively responsible for ensuring that they operate in a manner that best promotes the interests of the group with consideration to its wider group of stakeholders. Underlying this responsibility is an appropriate Corporate Governance framework. The group has decided not to follow a specific code and has implemented its own corporate governance framework (the “framework”), which is continually reviewed and enhanced to meet evolving legal and regulatory requirements. This Framework ensures that robust corporate governance procedures are in place to regulate the behaviour and activities of the boards and supports the application of Section 172(1) throughout the group.
Issues, Factors and Stakeholders
When making decisions, the directors of the company consult, where appropriate, with their finance, tax and legal teams, other third parties and stakeholders.
The directors are responsible for the corporate governance framework, including the likely long term consequences and the general conduct of the company’s affairs. The directors are continually reviewing their internal processes to strengthen the governance and compliance controls of the company enabling the sustainable growth of the business.
Strategy - Opportunities and risk
The company operates a framework which defines how risks and opportunities are reviewed and decisions are made. This framework adapts as risks and opportunities evolve. A periodic review is undertaken of the risks of the investments held by the company by its senior management, this is communicated with the company’s shareholder.
The directors have pursued a Strategy aimed at maximising the return on investments and ensuring the long term viability of the business of the investments in a period of instability and uncertainty, labour shortages, relatively high interest rates and potential tax increases.
The principal risks associated with Economic Enterprises (Development) are detailed in the Strategic Report above. The board consider principal risks to be those that could cause the greatest damage if not effectively evaluated, understood and managed.
Information
Economic Enterprises (Development) is a subsidiary of a diverse holding company. Economic Enterprises (Development) is an investment holding company details of its performance can be found above in the Strategic Report.
The directors currently review financial and operational information when making their decisions. The governance process is constantly under review, processes are assessed for appropriateness and amended if deemed applicable.
Governance Policies and Process
Group-wide governance policies and processes are designed to complement and promote the group strategy. Policies are reviewed on an annual basis and updated as appropriate by the group board, all company directors are informed of any amendments. This is an iterative process, allowing for the policies to be adapted as the business grows and changes.
Principal Decisions
Generally, the principal decisions that the directors would consider are dividends, divestment or acquisition activity, significant capital investments, impairment of investments, capital gains and board composition. A principal decision tends to be one that is material to the company and those that are significant to any of the key stakeholder groups.
During the year there were a number of capital decisions made, which included -
Refrubsihment of rooms in Nove Lazne Smrdáky; and
Infrastructure projects in Piestany including main drain pipe work
Engagement of Stakeholders
The company is proud to be part of a private, family-owned group, which is fully committed to maintaining its values and its relationships with its investments and shareholders. The company works with its stakeholders in an honest, respectful and responsible way and seeks to work with others who share the company’s commitments to safety, ethics and compliance.
The directors consider that the table below lays out the relationships with the key stakeholders :-
Who ? Stakeholder group | Why? Why is it important to engage | How ? How management and / or directors engaged | What ? What were the key topics of engagement | Outcomes and actions What was the impact of the engagement including any actions taken |
Regulators | Compliance with regulatory requirements such as tax compliance, health and safety and TCFD, is essential for the long term benefit of the Group
| Being open and transparent in any dealings with regulators
Generation of carbon risk registers and energy usage collation by local company representatives
| Compliance record and impact on local community
Carbon reporting and energy utilisation
Tax compliance over the proceeds of sale
| Improvements to processes and procedures
|
Shareholders | Engagement is essential for the owners to understand the state of the business and to ratify principal decisions | Provision of information for CP monthly board meetings | Monthly Accounts, budget, cashflows, ESG and risk registers
Discussions on risk around the Group resulting in the decision to form an Audit Committee
| Monthly rolling cashflows and quarterly review of budgets
Annual review of risk registers
Establishment of an Audit Committee
|
Investments | To understand how the investment is performing and the key decisions that they are making | Discussions with the boards of directors of the investment | Trading conditions and funding | Assessment of working capital requirements and capital expenditure |
Economic Enterprises (Developments) engages with its stakeholders on material issues relating to their business, taking into consideration current and future events, including its principal decisions. The engagement supports the directors to understand the impact of their decisions and identify any material issues. This aligns with the company’s purpose and strategy.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2025.
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, RSM UK Audit LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of Economic Enterprises (Developments) Limited (the 'company') for the year ended 31 December 2025 which comprise the profit and loss account, the balance sheet, 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk 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, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company is complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures, we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures and inspecting tax computations.
The audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing a sample of journal entries and other adjustments utilising data analytics techniques, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities 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.
There are no items of comprehensive income for either the year or the prior year other than the profit for the year. Accordingly, no statement of other comprehensive income has been presented.
The notes on pages 13 to 20 form part of these financial statements.
The notes on pages 13 to 20 form part of these financial statements.
Economic Enterprises (Developments) Limited is a private company limited by shares incorporated in England and Wales. The registered office is CP House, Otterspool Way, Watford, Hertfordshire, WD25 8JJ.
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 preparation of financial statements in compliance with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 2).
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 3 Financial Statement Presentation paragraph 3.17(d) (inclusion of statement of cash flows):
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.
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 for a similar debt instrument. Financial assets classified as receivable within one year are not amortised. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
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 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 creditors, bank loans 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 for a similar debt instrument. Financial liabilities classified as payable within one year are not amortised. Financing transactions are those in which payment is deferred beyond normal payment terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate 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 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, expires or cancelled.
Ordinary shares are classified as equity.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
Interest income
Interest income is recognised in the profit and loss account using the effective interest method.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following is the critical judgement and estimation that the directors have made in the process of applying the company's accounting policies and that have the most significant affect on the amounts recognised in the financial statements.
The carrying amounts of the company’s investments in subsidiaries and joint ventures, including related long-term intercompany loans, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.
The provision for taxation is calculated based on the maximum tax that may be payable in Israel on the disposal of its Joint venture interests. We are working with the Israel tax authorities to understand how best to apply the legislation around capital gains on the trading element of that business.
The auditors remuneration is borne by the parent undertaking, CP Holdings Limited.
Foreign current tax relates to withholding tax on dividend income and gain on disposal of the shareholding in the joint venture.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
During the year the investment held in the M.N.S.R Hotels Limited (joint venture) was disposed of.
Details of the company's subsidiaries and joint ventures at 31 December 2025 are as follows:
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.
During the year the company entered into the following transactions with related parties: