ACCOUNTS - Final Accounts

An analysis of turnover by class of business is as follows:

ABBEY HOTEL (BATH) LIMITED - Company Information

Caseware UK (AP4) 2020.0.247 2020.0.247 2020-12-312020-12-31truetruetruetruetrueNo description of principal activity422020-01-01false58truefalse 02361773 2020-01-01 2020-12-31 02361773 2019-01-01 2019-12-31 02361773 2020-12-31 02361773 2019-12-31 02361773 2019-01-01 02361773 1 2020-01-01 2020-12-31 02361773 1 2019-01-01 2019-12-31 02361773 6 2020-01-01 2020-12-31 02361773 6 2019-01-01 2019-12-31 02361773 d:Director1 2020-01-01 2020-12-31 02361773 d:RegisteredOffice 2020-01-01 2020-12-31 02361773 e:Buildings 2020-01-01 2020-12-31 02361773 e:Buildings 2020-12-31 02361773 e:Buildings 2019-12-31 02361773 e:Buildings e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 02361773 e:PlantMachinery 2020-01-01 2020-12-31 02361773 e:PlantMachinery 2020-12-31 02361773 e:PlantMachinery 2019-12-31 02361773 e:PlantMachinery e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 02361773 e:FurnitureFittings 2020-01-01 2020-12-31 02361773 e:FurnitureFittings 2020-12-31 02361773 e:FurnitureFittings 2019-12-31 02361773 e:FurnitureFittings e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 02361773 e:OtherPropertyPlantEquipment 2020-01-01 2020-12-31 02361773 e:OtherPropertyPlantEquipment 2020-12-31 02361773 e:OtherPropertyPlantEquipment 2019-12-31 02361773 e:OtherPropertyPlantEquipment e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 02361773 e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 02361773 e:CopyrightsPatentsTrademarksServiceOperatingRights 2020-01-01 2020-12-31 02361773 e:CopyrightsPatentsTrademarksServiceOperatingRights 2020-12-31 02361773 e:CopyrightsPatentsTrademarksServiceOperatingRights 2019-12-31 02361773 e:CurrentFinancialInstruments 2020-12-31 02361773 e:CurrentFinancialInstruments 2019-12-31 02361773 e:Non-currentFinancialInstruments 2020-12-31 02361773 e:Non-currentFinancialInstruments 2019-12-31 02361773 e:CurrentFinancialInstruments e:WithinOneYear 2020-12-31 02361773 e:CurrentFinancialInstruments e:WithinOneYear 2019-12-31 02361773 e:Non-currentFinancialInstruments e:AfterOneYear 2020-12-31 02361773 e:Non-currentFinancialInstruments e:AfterOneYear 2019-12-31 02361773 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2020-12-31 02361773 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2019-12-31 02361773 e:Non-currentFinancialInstruments e:BetweenTwoFiveYears 2020-12-31 02361773 e:Non-currentFinancialInstruments e:BetweenTwoFiveYears 2019-12-31 02361773 e:ReportableOperatingSegment1 2020-01-01 2020-12-31 02361773 e:ReportableOperatingSegment1 2019-01-01 2019-12-31 02361773 e:ReportableOperatingSegment2 2020-01-01 2020-12-31 02361773 e:ReportableOperatingSegment2 2019-01-01 2019-12-31 02361773 e:ReportableOperatingSegment3 2020-01-01 2020-12-31 02361773 e:ReportableOperatingSegment3 2019-01-01 2019-12-31 02361773 e:ReportableOperatingSegment4 2020-01-01 2020-12-31 02361773 e:ReportableOperatingSegment4 2019-01-01 2019-12-31 02361773 e:ReportableOperatingSegment5 2020-01-01 2020-12-31 02361773 e:ReportableOperatingSegment5 2019-01-01 2019-12-31 02361773 e:ReportableOperatingSegment6 2020-01-01 2020-12-31 02361773 e:ReportableOperatingSegment6 2019-01-01 2019-12-31 02361773 e:ShareCapital 2020-12-31 02361773 e:ShareCapital 2019-12-31 02361773 e:ShareCapital 2019-01-01 02361773 e:RetainedEarningsAccumulatedLosses 2020-01-01 2020-12-31 02361773 e:RetainedEarningsAccumulatedLosses 2020-12-31 02361773 e:RetainedEarningsAccumulatedLosses 2019-01-01 2019-12-31 02361773 e:RetainedEarningsAccumulatedLosses 2019-12-31 02361773 e:RetainedEarningsAccumulatedLosses 2019-01-01 02361773 d:OrdinaryShareClass1 2020-01-01 2020-12-31 02361773 d:OrdinaryShareClass1 2020-12-31 02361773 d:OrdinaryShareClass1 2019-12-31 02361773 d:OrdinaryShareClass2 2020-01-01 2020-12-31 02361773 d:OrdinaryShareClass2 2020-12-31 02361773 d:OrdinaryShareClass2 2019-12-31 02361773 d:FRS102 2020-01-01 2020-12-31 02361773 d:Audited 2020-01-01 2020-12-31 02361773 d:FullAccounts 2020-01-01 2020-12-31 02361773 d:PrivateLimitedCompanyLtd 2020-01-01 2020-12-31 02361773 e:AcceleratedTaxDepreciationDeferredTax 2020-12-31 02361773 e:AcceleratedTaxDepreciationDeferredTax 2019-12-31 02361773 2 2020-01-01 2020-12-31 02361773 6 2020-01-01 2020-12-31 02361773 7 2020-01-01 2020-12-31 02361773 e:CopyrightsPatentsTrademarksServiceOperatingRights e:OwnedIntangibleAssets 2020-01-01 2020-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 02361773

ABBEY HOTEL (BATH) LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

ABBEY HOTEL (BATH) LIMITED

COMPANY INFORMATION

Director	A Khanna


Registered number	02361773


Registered office	Aston House
	Cornwall Avenue
	London
	N3 1LF


Independent auditor	Adler Shine LLP
	Chartered Accountants and Statutory Auditor
	Aston House
	Cornwall Avenue
	London
	N3 1LF

ABBEY HOTEL (BATH) LIMITED

CONTENTS

	Page
Strategic report	1 - 2
Director's report	3 - 4
Independent auditors' report	5 - 8
Statement of comprehensive income	9
Balance sheet	10
Statement of changes in equity	11
Notes to the financial statements	12 - 28

ABBEY HOTEL (BATH) LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

Introduction

The principal activity of the company continued to be that of the operation of hotels.

Business review

During the year the company was significantly impacted by Covid-19, significant periods of closure and reduced trading meant turnover fell by 67% versus 2019. Inspite of the challenges, the business obtained support from their parent company, whom in turn received support from their primary lenders to provide sufficient working capital to offset the losses incurred in the period.
Despite Covid-19, the company also managed to complete a room and public area refurbishment program to rebrand the hotel to a Tribute by Marriot brand, the works were completed in August 2020.

Principal risks and uncertainties

Liquidity risk
Liquidity risk is the risk that the company will have difficulty raising funds to meet its short-term financial demands. The company limits its liquidity risk by ensuring that working capital remains in excess of expected requirements.
Employee turnover
The success of the business is partly dependent on key members of staff and failure to retain key personnel could impact the quality of service. The company limits this risk by implementing appropriate performance management rewards and incentives, and through offering comprehensive training programmes.
Competition Risk
The success of the business will be impacted by the arrival of new competitors serving the same market, such as the opening of the city's second largest hotel, The Z Hotel, in August 2018. The company has mitigated this risk through reducing their average room rates, refurbishing its rooms, and branding the hotel with Marriot, a strong international brand.
Coronavirus
The company has obtained CBILS funding to alleviate the risks presented by Coronavirus, but it remains a significant risk to the business as it is still not clear how the UK hospitality sector will perform in future and whether further government measures may be introduced in the fourth quarter of 2021.

Page 1

ABBEY HOTEL (BATH) LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Financial key performance indicators

The director is of the opinion that the financial key performance indicators for assessing the company are average day rates (ADR), revenue per available room (RevPAR) and occupancy levels. [2020 adjusted for complete months of trade]
ADR £117 (2019: £117)
RevPAR £74 (2019: £97)
Occupancy 63% (2019: 82%)
As set out in the business review above, whilst the metrics for the hotel when it was open remained positive against the rest of the market, which is reflected in the financial KPIs above, the significant periods of closure in the year had a large impact on revenues. Under the circumstances, the Director is satisfied with the results and KPIs for the year under review.

Other key performance indicators

The director is of the opinion that other key performance indicators for assessing the company are customer satisfaction levels.

This report was approved by the board and signed on its behalf.

................................................

A Khanna

Director

Date: 29 September 2021

Page 2

ABBEY HOTEL (BATH) LIMITED

DIRECTOR'S REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

The director presents his report and the financial statements for the year ended 31 December 2020.

Director's responsibilities statement

The director is responsible for preparing the Strategic report, the Director's 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements and then apply them consistently;

∙make judgments 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;

∙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 to enable him 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.

Results and dividends

The loss for the year, after taxation, amounted to loss £900,913 (2019 - profit £185,030).

No dividends were paid during the year ended 31 December 2020 (31 December 2019: £Nil).

Director

The director who served during the year was:

A Khanna

Page 3

ABBEY HOTEL (BATH) LIMITED

DIRECTOR'S REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Future developments

During the financial year ended 31 December 2020, the hotel has undergone a refurbishment programme to public areas and 24 bedrooms. Planning consent has been obtained for the refurbishment of the outstanding 38 bedrooms, conversion of meeting and back-of-house office spaces into additional bedrooms and significant upgrades to integral features and public spaces throughout the Abbey Bath hotel.

Disclosure of information to auditors

The director at the time when this Director's report is approved has confirmed that:

∙so far as he is aware, there is no relevant audit information of which the company's auditors are unaware, and

∙he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Post balance sheet events

The director has evaluated the impact to the company in respect of the COVID-19 (Coronavirus) pandemic ongoing at the time of approving these financial statements. Whilst the Abbey Hotel was closed during the lockdown period, the company has sought support under CBILS and is confident that such support will be sufficient to offset any losses incurred as a result of COVID-19. As a result, the director does not consider there to be a material uncertainty to the company’s ability to continue as a going concern as a result of COVID-19.

Auditors

The auditors, Adler Shine LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.

................................................

A Khanna

Director

Date: 29 September 2021

Page 4

ABBEY HOTEL (BATH) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABBEY HOTEL (BATH) LIMITED

Opinion

We have audited the financial statements of Abbey Hotel (Bath) Limited (the 'company') for the year ended 31 December 2020, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the company's affairs as at 31 December 2020 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 opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 United Kingdom, including the Financial Reporting Council'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.

Page 5

ABBEY HOTEL (BATH) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABBEY HOTEL (BATH) LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the 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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report 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.

Responsibilities of directors

As explained more fully in the Director's responsibilities statement set out on page 3, 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 have no realistic alternative but to do so.

Page 6

ABBEY HOTEL (BATH) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABBEY HOTEL (BATH) LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have:

∙considered the nature of the industry and sectors, control environment and business performance;

∙made enquires of management about their own identification and assessment of the risk of irregularities;

∙performed audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;

∙undertaken appropriate sample based testing of bank transactions;

∙identified and evaluated compliance with relevant laws and regulations and made enquiries of any instances of non-compliance;

∙discussed matters among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.

Page 7

ABBEY HOTEL (BATH) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABBEY HOTEL (BATH) LIMITED (CONTINUED)

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 Auditors' 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.

Alexander Chrysaphiades FCA (Senior statutory auditor)

for and on behalf of

Adler Shine LLP

Chartered Accountants and Statutory Auditor

Aston House

Cornwall Avenue

London

N3 1LF

29 September 2021

Page 8

ABBEY HOTEL (BATH) LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

	2020	2019
Note	£	£


Turnover	4	1,148,159	3,509,131
Cost of sales		(1,224,346)	(2,057,284)
Gross (loss)/profit		(76,187)	1,451,847
Administrative expenses		(860,829)	(1,017,549)
Other operating income	5	404,400	50,000
Operating (loss)/profit	6	(532,616)	484,298
Interest receivable and similar income	9	1,713	4,336
Interest payable and similar expenses	10	(370,010)	(356,775)
(Loss)/profit before tax		(900,913)	131,859
Tax on (loss)/profit	11	-	53,171
(Loss)/profit for the financial year		(900,913)	185,030

There were no recognised gains and losses for 2020 or 2019 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2020 (2019: £NIL).

The notes on pages 12 to 28 form part of these financial statements.

Page 9

ABBEY HOTEL (BATH) LIMITED

REGISTERED NUMBER: 02361773

BALANCE SHEET

AS AT 31 DECEMBER 2020

		2020		2019
Note		£		£

Fixed assets
Intangible assets	12		-		50,500
Tangible assets	13		8,527,926		7,015,988
			8,527,926		7,066,488
Current assets
Stocks	14	6,896		29,015
Debtors: amounts falling due after more than one year	15	-		122,240
Debtors: amounts falling due within one year	15	113,635		127,606
Cash at bank and in hand	16	214,148		1,160,927
		334,679		1,439,788
Creditors: amounts falling due within one year	17	(2,873,102)		(2,209,536)
Net current liabilities			(2,538,423)		(769,748)
Total assets less current liabilities			5,989,503		6,296,740
Creditors: amounts falling due after more than one year	18		(641,676)		(48,000)

Net assets			5,347,827		6,248,740

Capital and reserves
Called up share capital	21	4,500,000	4,500,000
Profit and loss account	22	847,827	1,748,740
		5,347,827	6,248,740

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

................................................

A Khanna

Director

Date: 29 September 2021

The notes on pages 12 to 28 form part of these financial statements.

Page 10

ABBEY HOTEL (BATH) LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 January 2019	4,500,000	1,563,710	6,063,710
Comprehensive income for the year
Profit for the financial year	-	185,030	185,030

At 31 December 2019 and 1 January 2020	4,500,000	1,748,740	6,248,740
Comprehensive income for the year
Profit for the financial year	-	(900,913)	(900,913)
At 31 December 2020	4,500,000	847,827	5,347,827

Page 11

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1.	General information

Abbey Hotel (Bath) Limited is a private company limited by shares and is registered in England and Wales, its company number is 02361773. Its registered office is Aston House, Cornwall Avenue, London, N3 1LF. Its principal place of business is 1-3 North Parade, Bath, BA1 1LF. The principal activity of the company is that of operating a hotel.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Financial reporting standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

∙the requirements of Section 7 Statement of Cash Flows;

∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);

∙the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;

∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Khanna Enterprises Holdings Limited as at 31 December 2020 and these financial statements may be obtained from the Companies House website.

2.3

Going concern

The financial statements have been prepared on a going concern basis which assumes that the company will be able to continue trading for the foreseeable future. The company has net assets of £5,347,827 and net current liabilities of £2,538,423 at the balance sheet date. The main form of funding for the company’s operations is through loans from its group totalling £2,508,576 included in current liabilities. Had these loans been treated as equity, the company would have net current liabilities of £29,847. The group has stated that it intends, without creating a contractual obligation, to provide such support as may be necessary to the company, and confirmed the group’s commitment to provide funds to meet ongoing expenses for at least 12 months from the date of approval of the financial statements.

Page 12

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.3

Going concern (continued)

The director has evaluated the impact to the company in respect of the COVID-19 (Coronavirus) pandemic ongoing at the time of approving these financial statements. Whilst the Abbey Hotel was closed during the lockdown period, the company has obtained support under CBILS and is confident that such support will be sufficient to offset any losses incurred as a result of COVID-19. As a result, the director does not consider there to be a material uncertainty to the company’s ability to continue as a going concern as a result of COVID-19.
The director is therefore satisfied that the going concern basis is appropriate for the preparation of these financial statements.

2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

∙the company has transferred the significant risks and rewards of ownership to the buyer;

∙the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the company will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of revenue can be measured reliably;

∙it is probable that the company will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.5

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 13

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.6

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

2.7

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

2.8

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 14

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.9

Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, .

Depreciation is provided on the following basis:

Freehold property	-	2%	Straight line
Plant and machinery	-	20%	reducing balance
Fixtures and fittings	-	20%	reducing balance

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Other fixed assets are made up of a capitalised option purchased to acquire additional freehold property. No depreciation is charged until the asset is brought into use.

2.10

Valuation of investments

Investments are measured at cost less accumulated impairment.

2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.12

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

2.14

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 15

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.15

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance sheet date.

2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

2.17

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.

Page 16

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.18

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

2.19

Interest income

Interest income is recognised in profit or loss using the effective interest method.

2.20

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.

2.21

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 17

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements in conformity with FRS 102 requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on managements' best knowledge of the amounts, events or actions, actual results ultimately may differ from these estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant items subject to such estimates include:
Stocks
The company carries significant levels of stock and key judgements are made by management in estimating the level of provisioning required for slow moving inventory. In arriving at its conclusion, the director considers stock ageing and stock turn analysis.
Intangible and tangible fixed assets
Key judgements include the lives of intangible and tangible fixed assets, in particular the useful economic life and the residual value of the assets.

Rooms	729,238	2,150,780
Food	197,664	627,251
Beverages	167,904	440,850
Ski bar	-	118,940
Igloo	9,520	71,008
Other	43,834	100,302
	1,148,160	3,509,131

All turnover arose within the United Kingdom.

Page 18

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

5.	Other operating income
		2020	2019
		£	£

Management fees	50,000	50,000
Grants receivable	347,733	-
Fees receivable	6,667	-

Depreciation	274,578	313,533
Amortisation	6,000	9,500
Other operating lease rentals	48,000	24,000
Auditors remuneration	10,000	10,000
Pensions	783	730
Government grants receivable	(347,733)	-

7.	Auditors' remuneration
		2020	2019
		£	£

Fees payable to the company's auditor and its associates for the audit of the company's annual financial statements

10,000

The company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of the parent company.

Page 19

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Wages and salaries	813,656	1,197,285
Social security costs	50,088	75,836
Cost of defined contribution scheme	18,322	19,348
	882,066	1,292,469

The average monthly number of employees, including the director, during the year was as follows:

	2020	2019
	No.	No.

Front of house	7	10
Administrative	5	7
Food and beverage	29	40
Director	1	1

	42	58

9.	Interest receivable
		2020	2019
		£	£

Bank interest receivable

1,713

4,336

10.	Interest payable and similar expenses
		2020	2019
		£	£

	Loans from group undertakings	370,010	356,775
		370,010	356,775

Page 20

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020



Total current tax	-	-

	Deferred tax
	Origination and reversal of timing differences	-	(53,171)


	Taxation on profit/(loss) on ordinary activities	-	(53,171)

(Loss)/profit on ordinary activities before tax

(900,913)

131,859

(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)	(171,173)	25,053
Effects of:
Capital allowances for year in excess of depreciation	(20,573)	(105,757)
Other timing differences leading to an increase (decrease) in taxation	-	(53,171)
Unrelieved tax losses carried forward	191,746	104,853
Other differences leading to an increase (decrease) in the tax charge	-	(24,149)
Total tax charge for the year	-	(53,171)

Page 21

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

12.	Intangible assets

		Trademark and licences
		£

	At 1 January 2020	60,000
	Disposals	(60,000)
	At 31 December 2020	-

	At 1 January 2020	9,500
	Charge for the year on owned assets	6,000
	On disposals	(15,500)
	At 31 December 2020	-
	Net book value
	At 31 December 2020	-
	At 31 December 2019	50,500

Page 22

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

13.	Tangible fixed assets

	Freehold property	Plant and machinery	Fixtures and fittings	Other fixed assets	Total
	£	£	£	£	£
Cost or valuation
At 1 January 2020	6,259,903	733,028	3,453,342	42,306	10,488,579
Additions	1,322,966	-	423,036	40,515	1,786,517
At 31 December 2020	7,582,869	733,028	3,876,378	82,821	12,275,096
Depreciation
At 1 January 2020	242,419	549,955	2,680,218	-	3,472,592
Charge for the year on owned assets	149,594	36,615	88,369	-	274,578
At 31 December 2020	392,013	586,570	2,768,587	-	3,747,170
Net book value
At 31 December 2020	7,190,856	146,458	1,107,791	82,821	8,527,926
At 31 December 2019	6,017,484	183,073	773,125	42,306	7,015,988

14.	Stocks
		2020	2019
		£	£

	Food and beverages	6,896	29,015

Stock recognised in cost of sales during the year as an expense was £97,257 (2019 - £270,545).

Page 23

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

15.	Debtors
		2020	2019
		£	£

Due after more than one year
Other debtors	-	122,240

					2020	2019
					£	£

Due within one year
Trade debtors	1,237	67,802
Other debtors	88,814	-
Prepayments and accrued income	11,335	47,555
Deferred taxation	12,249	12,249
	113,635	127,606

16.	Cash and cash equivalents
		2020	2019
		£	£

	Cash at bank and in hand	214,148	1,160,927

17.	Creditors: Amounts falling due within one year
		2020	2019
		£	£

Bank loans	38,324	-
Trade creditors	161,416	369,231
Amounts owed to group undertakings	2,508,576	1,484,634
Other taxation and social security	12,345	146,008
Other creditors	50,288	56,209
Accruals and deferred income	102,153	153,454
	2,873,102	2,209,536

Page 24

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

18.	Creditors: Amounts falling due after more than one year
		2020	2019
		£	£

Bank loans	461,676	-
Other creditors	-	48,000
Accruals and deferred income	180,000	-

The aggregate amount of liabilities repayable wholly or in part more than five years after the balance sheet date is:
	2020	2019
	£	£

	Repayable by instalments	461,676	-
		461,676	-

The company borrowed £500,000 during the year under the Coronavirus Business Interuption Loan
Scheme (CBILS). This loan is repayable within 60 months, with interest of 3.99% above the base rate.

Page 25

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Amounts falling due within one year
Bank loans	38,324	-
	38,324	-
Amounts falling due 1-2 years
Bank loans	94,354	-
	94,354	-
Amounts falling due 2-5 years
Bank loans	367,322	-
	367,322	-

	500,000	-

20.	Deferred taxation

	2020	2019
	£	£

At beginning of year	12,249	(40,922)
Charged to profit or loss	-	53,171
At end of year	12,249	12,249

The deferred tax asset is made up as follows:
	2020	2019
	£	£

Accelerated capital allowances

12,249

Page 26

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

21.	Share capital
		2020	2019
		£	£

Allotted, called up and fully paid

3,600,000 (2019 - 3,600,000) Ordinary A shares of £1.00 each	3,600,000	3,600,000
900,000 (2019 - 900,000) Ordinary B shares of £1.00 each	900,000	900,000

	4,500,000	4,500,000

There are two classes of ordinary shares, they rank pari passu. There are no restrictions on the distribution of dividends and the repayment of capital.

22.

Reserves

Profit and loss account

The profit and loss account represents cumulative net gains and losses less distributions made.

23.	Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £18,322 (2019: £19,348). Contributions totalling £Nil (2019: £Nil) were payable to the fund at the balance sheet date.

24.Other financial commitments

The company is party to the group’s loan agreement with Metro bank plc. Bank loans included in the financial statements of the parent company, KE Hotels (Bath) Limited, the principal borrower, is secured and guaranteed by way of fixed and floating charges over the assets of the company. Interest charged on the loan is recharged to the company from the parent company. As a result, interest of £370,010 (2019: £356,775) was recognised in the company.

25.	Other commitments

At the balance sheet date, the company had entered into an option agreement to acquire additional property for £3,000,000. The option expires on 31 December 2022. A non-refundable option payment is included in other debtors due greater than one year.

26.	Related party transactions
	The company has taken advantage of the exemption contained in Section 33 of FRS 102 "Related Party Disclosures" from disclosing transactions with entities which are part of the group, since 100% of the voting rights in the company are controlled within the group.

Page 27

ABBEY HOTEL (BATH) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

27.	Controlling party

The ultimate controlling party for the year ended 31 December 2020 was A Khanna, by virtue of his sole shareholding of the ultimate parent company, Khanna Enterprises (Holding) Limited which owns 100% of the shares in Abbey Hotel (Bath) Limited, a company incorporated in England and Wales. The accounts of the company are included in the consolidated financial statements of Khanna Enterprises (Holdings) Limited, copies of which can be obtained from Companies House.

Page 28