BGAM Hotels (MK) Ltd - Limited company accounts 20.1

BGAM HOTELS (MK) LTD - Company Information

IRIS Accounts Production v21.3.0.583 11821713 Board of Directors 31.12.20 1.1.20 31.12.20 31.12.20 hotels and similar accommodation. true true true false true true false false false false true false Ordinary 0.01000 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pure118217132019-12-31118217132020-12-31118217132020-01-012020-12-31118217132019-02-11118217132019-02-122019-12-31118217132019-12-3111821713ns16:EnglandWales2020-01-012020-12-3111821713ns15:PoundSterling2020-01-012020-12-3111821713ns11:Director12020-01-012020-12-3111821713ns11:Consolidated2020-12-3111821713ns11:ConsolidatedGroupCompanyAccounts2020-01-012020-12-3111821713ns11:PrivateLimitedCompanyLtd2020-01-012020-12-3111821713ns11:FRS102ns11:Consolidated2020-01-012020-12-3111821713ns11:Consolidatedns11:Audited2020-01-012020-12-3111821713ns11:LargeMedium-sizedCompaniesRegimeForDirectorsReport2020-01-012020-12-3111821713ns11:LargeMedium-sizedCompaniesRegimeForAccounts2020-01-012020-12-3111821713ns11:Consolidatedns11:LargeMedium-sizedCompaniesRegimeForDirectorsReport2020-01-012020-12-3111821713ns11:LargeMedium-sizedCompaniesRegimeForAccountsns11:Consolidated2020-01-012020-12-3111821713ns11:FullAccounts2020-01-012020-12-3111821713ns6:Subsidiary12020-01-012020-12-311182171312020-01-012020-12-3111821713ns11:OrdinaryShareClass22020-01-012020-12-3111821713ns11:Consolidated2020-01-012020-12-3111821713ns11:Director22020-01-012020-12-3111821713ns11:Director32020-01-012020-12-3111821713ns11:Director42020-01-012020-12-3111821713ns11:Director52020-01-012020-12-3111821713ns11:RegisteredOffice2020-01-012020-12-3111821713ns11:Consolidated2019-02-122019-12-3111821713ns6:CurrentFinancialInstruments2020-12-3111821713ns6:CurrentFinancialInstruments2019-12-3111821713ns6:ShareCapital2020-12-3111821713ns6:ShareCapital2019-12-3111821713ns6:RetainedEarningsAccumulatedLosses2020-12-3111821713ns6:RetainedEarningsAccumulatedLosses2019-12-3111821713ns6:ShareCapital2019-02-122019-12-3111821713ns6:RetainedEarningsAccumulatedLosses2019-02-122019-12-3111821713ns6:RetainedEarningsAccumulatedLosses2020-01-012020-12-3111821713ns6:NetGoodwill2020-01-012020-12-3111821713ns6:IntangibleAssetsOtherThanGoodwill2020-01-012020-12-3111821713ns6:LandBuildingsns6:LongLeaseholdAssets2020-01-012020-12-3111821713ns6:FurnitureFittings2020-01-012020-12-3111821713ns6:CostValuation2019-12-3111821713ns6:AdditionsToInvestments2020-12-3111821713ns6:CostValuation2020-12-31118217131ns6:Subsidiary12020-01-012020-12-3111821713ns6:CurrentFinancialInstrumentsns6:WithinOneYear2020-12-3111821713ns6:CurrentFinancialInstrumentsns6:WithinOneYear2019-12-3111821713ns6:Secured2020-12-3111821713ns6:Secured2019-12-3111821713ns11:OrdinaryShareClass22020-12-3111821713ns6:RetainedEarningsAccumulatedLosses2019-12-31

REGISTERED NUMBER: 11821713 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR

BGAM HOTELS (MK) LTD

Page

Company Information

Group Strategic Report

Report of the Directors

Report of the Independent Auditors

Consolidated Income Statement

Consolidated Other Comprehensive Income

Consolidated Balance Sheet

Company Balance Sheet

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Consolidated Cash Flow Statement

Notes to the Consolidated Financial Statements

DIRECTORS:

L M Becker

J D Levy

J P Levy

M D Rubin

N S Rubin

REGISTERED OFFICE:

Greenhill House

90/93 Cowcross Street

London

EC1M 6BF

REGISTERED NUMBER:

11821713 (England and Wales)

AUDITORS:

Goldwyns Limited

Statutory Auditors and Chartered Accountants

Rutland House

90-92 Baxter Avenue

Southend on Sea

Essex

SS2 6HZ

The directors present their strategic report of the company and the group for the year ended 31 December 2020.

REVIEW OF BUSINESS

The results for the year show revenues generated of £1,146,027 (2019 - £1,962,581) and a loss before tax of £1,960,721 (2019 - £930,298). Full details of the group's financial performance can be found in the annexed financial statements.

During March 2020 the spread of Covid-19 (Coronavirus) led to a period of national and local lockdowns, restrictions on the free movement of individuals and enforced closures of premises such as the group's. These restrictions continued throughout the reminder of the year, and into the subsequent year ended 31 December 2021. The effects on the group's business were, of course, severe.

Whilst the directors acted quickly to mitigate the damage, the group (and the country) faced unprecedented difficulties. No business can be expected to survive over nine months of disruption, enforced closures and loss of trade without huge losses of revenue, profitability and hence net reserves.

Government support was utilised and helped the group maintain some of its workforce in the interim, through the Coronavirus Job Retention Scheme. Reliefs from rates, one of the group's biggest single expenses, was also invaluable and again continues into 2021. However, the directors are also appreciative for the plentiful support they received from their staff, suppliers and financiers without whom navigating the pandemic would have been impossible.

Travel was one of the worst affected industries and will be one of the slowest to recover, fully, in due course. The advances in vaccinations, the Government's "Roadmap out of lockdown" (published in February 2021), and the resultant gradual relaxation of restrictions into Summer 2021 have remained encouraging. Trade (both leisure and business) has begun to return and advance bookings have picked up substantially. International travel remains severely affected although that may present further domestic opportunities for the group's business, depending on how the market reacts and how the pandemic continues.

Having navigated an extremely difficult 18 months already, the directors remain hopeful of overcoming the final challenges and returning to normal trading, and profitability, as soon as the business can. The directors therefore consider the group remains a going concern - further details on which can be found in the notes to the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risk to the business in inadequate occupancy of its available rooms and therefore an inability to generate sufficient revenues to service operations. The directors closely monitor the group's performance against similar businesses operating in comparable markets and respond accordingly.

The group is also susceptible to any loss in key members of operational staff and therefore operates a number of performance reward and incentive programmes to mitigate these risks.

As covered above, during the course of the year the group (and the wider economy) was severely affected by the spread of Covid-19 (Coronavirus) and the resultant Government restrictions on the travel industry and the free movement of individuals. This had severely hampered the group's ability to maintain occupancy and resultant revenues, which continued into 2021. The group therefore remains at risk of further restrictions, loss of trade and / or the return of the travel industry.

SECTION 172(1) STATEMENT

Stakeholder engagement

The board of directors have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, in good faith, would be most likely to promote the group's success for the benefit of its members as a whole, and to have regard to the long-term effect of our decisions on the group and its stakeholders. This statement addresses the ways in which we as a board handle this responsibility.

Decision making

Regular operational and strategic meetings are held by the directors and general managers. This ensures the board has access to the key factors affecting all areas of the business' decision making, shorter term or longer.

Furthermore, the group is in constant communication with Marriott and various industry specific news sources. This enables the directors to keep abreast of, and address, all longer-term shifts in the group's operating markets.

Employee engagement

The subsidiary maintains a diverse workforce of local employees spanning all aspects of the hotel delivery, supplemented by outsourced staff and suppliers where necessary. Staff are rewarded in line with comparable local markets, provided with specific training relevant to their needs and have access to wider industry opportunities as a result of the same.

Business relationships

The group actively maintains strong relationships with its key suppliers and support functions, to ensure it has access to the resources it needs to operate effectively.

Community and environmental impact

The directors remain ever conscious of the impact their business has on the local community and environment.

Business conduct

The directors closely monitor the group's service delivery to ensure at all times the business is honest, fair and professional in its conduct with all stakeholders.

Shareholder engagement

The group is actively managed by its ultimate shareholders, who are all represented on the board of directors.

ON BEHALF OF THE BOARD:

J D Levy - Director

21 December 2021

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2020.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2020.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report.

L M Becker

J D Levy

J P Levy

M D Rubin

N S Rubin

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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 the group and of the profit or loss of the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Goldwyns Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J D Levy - Director

21 December 2021

Opinion

We have audited the financial statements of BGAM Hotels (MK) Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2020 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, 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 group's and of the parent company affairs as at 31 December 2020 and of the group's 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 group 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.

Material uncertainties relating to going concern

We draw attention to note 24 in the financial statements, which details the uncertainties arising that may cast doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are 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 directors determine 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 directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

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 a Report of the Auditors 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. In order to address the risks of misstatements in respect of irregularities, including fraud, we have:

obtained an understanding of the key laws and regulations applicable to the company, including the
Companies Act 2006, and applicable taxation legislation;

assessed the company's own internal controls and systems for the prevention and detection of
irregularities and particularly the control environment within which they operate;

determined a materiality level and audit approach sufficient to identify most irregularities, including
fraud, that may occur;

considered our own involvement in the preparation of the company's statutory financial statements and
taxation returns;

conducted audit verification work, on a sample basis, on the key audit areas and risks we have
identified; and

reflected on the outcome of our work, and the likelihood that conclusions drawn may be indicative of
other areas of potential irregularity.

We therefore consider our audit approach has been sufficient to detect material irregularities, including fraud.

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 Report of the Auditors.

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 a Report of the Auditors 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.

S T Blundell ACA (Senior Statutory Auditor)

for and on behalf of Goldwyns Limited

Statutory Auditors and Chartered Accountants

Rutland House

90-92 Baxter Avenue

Southend on Sea

Essex

SS2 6HZ

22 December 2021

BGAM HOTELS (MK) LTD (REGISTERED NUMBER: 11821713)

CONSOLIDATED

INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Notes

TURNOVER

1,146,027

1,962,581

Cost of sales

1,131,282

1,361,338

GROSS PROFIT

14,745

601,243

Administrative expenses

1,281,394

826,900

(1,266,649

)

(225,657

)

Other operating income

258,100

OPERATING LOSS

(1,008,549

)

(225,657

)

Interest payable and similar expenses

952,172

704,641

LOSS BEFORE TAXATION

(1,960,721

)

(930,298

)

Tax on loss

(275,700

)

(463,702

)

LOSS FOR THE FINANCIAL YEAR

(1,685,021

)

(466,596

)

Loss attributable to:

Owners of the parent

(1,685,021

)

(466,596

)

BGAM HOTELS (MK) LTD (REGISTERED NUMBER: 11821713)

CONSOLIDATED

OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Notes

LOSS FOR THE YEAR

(1,685,021

)

(466,596

)

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

(1,685,021

)

(466,596

)

Total comprehensive income attributable to:

Owners of the parent

(1,685,021

)

(466,596

)

FIXED ASSETS

Intangible assets

4,867,574

5,365,257

Tangible assets

11,206,828

11,390,287

Investments

16,074,402

16,755,544

CURRENT ASSETS

Stocks

3,442

10,614

Debtors

735,809

829,509

Cash at bank and in hand

418

81,167

739,669

921,290

CREDITORS

Amounts falling due within one year

7,878,652

7,027,333

NET CURRENT LIABILITIES

(7,138,983

)

(6,106,043

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

8,935,419

10,649,501

CREDITORS

Amounts falling due after more than one
year

(11,087,026

)

(10,840,387

)

PROVISIONS FOR LIABILITIES

(275,700

)

NET LIABILITIES

(2,151,607

)

(466,586

)

CAPITAL AND RESERVES

Called up share capital

Retained earnings

(2,151,617

)

(466,596

)

SHAREHOLDERS' FUNDS

(2,151,607

)

(466,586

)

The financial statements were approved by the Board of Directors and authorised for issue on 21 December 2021 and were signed on its behalf by:

J D Levy - Director

FIXED ASSETS

Intangible assets

Tangible assets

Investments

6,731,299

6,716,299

6,731,299

6,716,299

CURRENT ASSETS

Debtors

598,327

711,987

Cash at bank and in hand

1,398

598,337

713,385

CREDITORS

Amounts falling due within one year

8,532,621

7,938,153

NET CURRENT LIABILITIES

(7,934,284

)

(7,224,768

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

(1,202,985

)

(508,469

)

CAPITAL AND RESERVES

Called up share capital

Retained earnings

(1,202,995

)

(508,479

)

SHAREHOLDERS' FUNDS

(1,202,985

)

(508,469

)

Company's loss for the financial year

(694,516

)

(508,479

)

The financial statements were approved by the Board of Directors and authorised for issue on 21 December 2021 and were signed on its behalf by:

J D Levy - Director

Called up

Retained

Total

capital

earnings

equity

Changes in equity

Issue of share capital

Total comprehensive income

(466,596

)

(466,596

)

Balance at 31 December 2019

(466,596

)

(466,586

)

Changes in equity

Total comprehensive income

(1,685,021

)

(1,685,021

)

Balance at 31 December 2020

(2,151,617

)

(2,151,607

)

Called up

Retained

Total

capital

earnings

equity

Changes in equity

Issue of share capital

Total comprehensive income

(508,479

)

(508,479

)

Balance at 31 December 2019

(508,479

)

(508,469

)

Changes in equity

Total comprehensive income

(694,516

)

(694,516

)

Balance at 31 December 2020

(1,202,995

)

(1,202,985

)

BGAM HOTELS (MK) LTD (REGISTERED NUMBER: 11821713)

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2020

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Notes

Cash flows from operating activities

Cash generated from operations

(96,483

)

(122,409

)

Interest paid

(952,172

)

(704,641

)

Net cash from operating activities

(1,048,655

)

(827,050

)

Cash flows from investing activities

Purchase of tangible fixed assets

(55,215

)

(11,494,878

)

Sale of tangible fixed assets

5,250,000

Impairment of net assets acquired

(15,000

)

Net cash from investing activities

(70,215

)

(6,244,878

)

Cash flows from financing activities

Finance lease advances

10,840,387

Other loan advances

711,843

5,894,899

Share issue

Acquisition of shares

(6,716,299

)

Debt settled on acquisition

(2,874,437

)

Cash acquired

8,535

Government grants

258,100

Net cash from financing activities

969,943

7,153,095

(Decrease)/increase in cash and cash equivalents

(148,927

)

81,167

Cash and cash equivalents at
beginning of year

81,167

Cash and cash equivalents at end of
year

(67,760

)

81,167

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Loss before taxation

(1,960,721

)

(930,298

)

Depreciation charges

751,357

477,774

Government grants

(258,100

)

Finance costs

952,172

704,641

(515,292

)

252,117

Decrease in stocks

7,172

5,984

Decrease/(increase) in trade and other debtors

93,700

(500,200

)

Increase in trade and other creditors

317,937

119,690

Cash generated from operations

(96,483

)

(122,409

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2020

31/12/20

1/1/20

Cash and cash equivalents

418

81,167

Bank overdrafts

(68,178

)

(67,760

)

81,167

Period ended 31 December 2019

31/12/19

12/2/19

Cash and cash equivalents

81,167

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/1/20

Cash flow

At 31/12/20

Net cash

Cash at bank and in hand

81,167

(80,749

)

418

Bank overdrafts

(68,178

)

(68,178

)

81,167

(148,927

)

(67,760

)

Debt

Finance leases

(10,840,387

)

(246,639

)

(11,087,026

)

Debts falling due within 1 year

(5,894,899

)

(465,204

)

(6,360,103

)

(16,735,286

)

(711,843

)

(17,447,129

)

Total

(16,654,119

)

(860,770

)

(17,514,889

)

1.	STATUTORY INFORMATION

BGAM Hotels (MK) Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The group trades from its property in Milton Keynes, Buckinghamshire.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The group accounts consolidated the affairs of BGAM Hotels (MK) Limited and all its subsidiary undertakings drawn to 31 December. The subsidiary accounts have been included in the group figures under the acquisition method of accounting.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover represents the income receivable by the group from its trading activities as a hotel. Sales encompass room hire, food and beverage income and all other associated ancillary hotel and guest services. Turnover is recognised in the period in which physical goods are sold, as services are performed or otherwise as entitlement accrues to the group.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2019, is being amortised evenly over its estimated useful life of five years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at coss less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Long leasehold

over a period of 75 years

Fixtures and fittings

33% on cost and 20% on cost

3.	EMPLOYEES AND DIRECTORS

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Wages and salaries

779,535

742,325

Social security costs

50,446

40,132

Other pension costs

10,233

8,138

840,214

790,595

The average number of employees during the year was as follows:

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Hotel staff

Directors

The average number of employees by undertakings that were proportionately consolidated during the year was 57 (2019 - 56 ) .

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Directors' remuneration

4.	OPERATING LOSS

The operating loss is stated after charging:

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Hire of plant and machinery

14,087

3,463

Depreciation - owned assets

176,960

58,305

Depreciation - assets on finance leases

61,714

46,286

Goodwill amortisation

493,918

359,110

Other intangibles amortisation

18,765

14,074

Auditors' remuneration

2,500

3,000

Auditors remuneration -

subsidiary

10,000

9,500

Auditors' remuneration for non audit work

15,646

INTEREST PAYABLE AND SIMILAR EXPENSES

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Loan interest payable

691,968

505,368

Other interest

1,085

9,724

Leasing interest

259,119

189,549

952,172

704,641

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Deferred tax

(275,700

)

(463,702

)

Tax on loss

(275,700

)

(463,702

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

PERIOD

12/2/19

YEAR ENDED

31/12/20

31/12/19

Loss before tax

(1,960,721

)

(930,298

)

Loss multiplied by the standard rate of corporation tax in the UK of
19 % (2019 - 19 %)

(372,537

)

(176,757

)

Effects of:

Expenses not deductible for tax purposes

96,837

(286,945

)

Total tax credit

(275,700

)

(463,702

)

7.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

8.	GOVERNMENT GRANTS

During the year, the company was in receipt of government support, specifically in relation to the Covid-19 pandemic. Within other operating income is £258,100 (2019 - £nil) in respect of Coronavirus Job Retention Scheme.

9.	INTANGIBLE FIXED ASSETS

Group

Other

Goodwill

intangibles

Totals

COST

At 1 January 2020

2,454,591

3,283,850

5,738,441

Additions

15,000

At 31 December 2020

2,469,591

3,283,850

5,753,441

AMORTISATION

At 1 January 2020

359,110

14,074

373,184

Amortisation for year

493,918

18,765

512,683

At 31 December 2020

853,028

32,839

885,867

NET BOOK VALUE

At 31 December 2020

1,616,563

3,251,011

4,867,574

At 31 December 2019

2,095,481

3,269,776

5,365,257

10.	TANGIBLE FIXED ASSETS

Group

Fixtures

Long

and

leasehold

fittings

Totals

COST

At 1 January 2020

10,800,000

694,878

11,494,878

Additions

55,215

At 31 December 2020

10,800,000

750,093

11,550,093

DEPRECIATION

At 1 January 2020

46,286

58,305

104,591

Charge for year

61,714

176,960

238,674

At 31 December 2020

108,000

235,265

343,265

NET BOOK VALUE

At 31 December 2020

10,692,000

514,828

11,206,828

At 31 December 2019

10,753,714

636,573

11,390,287

The group's bankers hold legal charges over all of the group's property in support of the group's financing facilities.

On 8 April 2019 the group entered into agreement to sell and then leaseback the property from which it trades, over a period of 175 years. This lease substantially amounts to a financing lease, as the group will derive benefit from the property throughout a major part of its useful life, and has been recognised accordingly.

The disposal event created an accounting loss which has been recognised as an intangible fixed asset (above) and is being written down over the same period as the property.

Fixed assets, included in the above, which are held under finance leases are as follows:

Long

leasehold

COST

At 1 January 2020

and 31 December 2020

10,800,000

DEPRECIATION

At 1 January 2020

46,286

Charge for year

61,714

At 31 December 2020

108,000

NET BOOK VALUE

At 31 December 2020

10,692,000

At 31 December 2019

10,753,714

11.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

COST

At 1 January 2020

6,716,299

Additions

15,000

At 31 December 2020

6,731,299

NET BOOK VALUE

At 31 December 2020

6,731,299

At 31 December 2019

6,716,299

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiary

Dragonglass Milton Keynes Limited

Registered office: Greenhill House, 90/93 Cowcross Street, London EC1M 6BF

Nature of business: Hotel

Class of shares:

holding

Ordinary

100.00

12.

STOCKS

Group

2020

2019

Stocks

3,442

10,614

13.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2020

2019

2020

2019

Trade debtors

40,206

52,019

Other debtors

665,915

714,844

598,327

711,987

VAT

6,333

Prepayments and accrued income

29,688

56,313

735,809

829,509

598,327

711,987

14.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2020

2019

2020

2019

Bank loans and overdrafts (see note 16)

68,178

Other loans (see note 16)

6,360,103

5,894,899

6,360,103

5,894,899

Trade creditors

550,247

440,245

Amounts owed to group undertakings

2,120,889

2,040,254

Social security and other taxes

109,051

18,145

VAT

5,813

Other creditors

664,979

617,953

Accrued expenses

120,281

56,091

51,629

3,000

7,878,652

7,027,333

8,532,621

7,938,153

15.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group

2020

2019

Finance leases (see note 17)

11,087,026

10,840,387

16.

LOANS

An analysis of the maturity of loans is given below:

Group

Company

2020

2019

2020

2019

Amounts falling due within one year or

on demand:

Bank overdrafts

68,178

Other loans

6,360,103

5,894,899

6,360,103

5,894,899

6,428,281

5,894,899

6,360,103

5,894,899

17.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Finance leases

2020

2019

Gross obligations repayable:

Within one year

265,015

259,119

Between one and five years

1,083,656

1,057,497

In more than five years

85,712,284

75,973,470

87,060,955

77,290,086

Finance charges repayable:

Within one year

265,015

259,119

Between one and five years

1,083,656

1,057,497

In more than five years

74,625,258

65,133,083

75,973,929

66,449,699

Net obligations repayable:

In more than five years

11,087,026

10,840,387

Group

Non-cancellable

operating leases

2020

2019

Within one year

28,174

Between one and five years

51,652

79,826

On 8 April 2019 the group entered into an agreement to lease the property from which it trades for a period of 175 years. This transaction amounts to a finance lease and has been recognised accordingly. The group is liable for an annual rent of £168,210, adjusted for changes in the retail price index but subject to a minimum of 1% and a maximum of 4% increase per year.

Throughout the initial period of the lease the annual interest arising will exceed the rental payments due and therefore the group's recognised finance liability will continue to increase.

18.	SECURED DEBTS

The following secured debts are included within creditors:

Group

Company

2020

2019

2020

2019

Other loans

6,360,103

5,894,899

6,360,103

5,894,899

Finance leases

11,087,026

10,840,387

17,447,129

16,735,286

6,360,103

5,894,899

The group's bank loan is secured by fixed and floating charge over the group's property and equipment and all assets

Finance lease liabilities are secured on the assets to which they relate.

19.	PROVISIONS FOR LIABILITIES

Group

2020

2019

Deferred tax

275,700

Group

Deferred

tax

Balance at 1 January 2020

275,700

Accelerated capital allowances

Balance at 31 December 2020

275,700

20.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2019

value:

1,000

Ordinary

21.

RESERVES

Group

Retained

earnings

At 1 January 2020

(466,596

)

Deficit for the year

(1,685,021

)

At 31 December 2020

(2,151,617

)

Company

Retained

earnings

At 1 January 2020

(508,479

)

Deficit for the year

(694,516

)

At 31 December 2020

(1,202,995

)

22.	PENSION COMMITMENTS

The group operates a defined contribution scheme in respect of its eligible employees. During the year, total contributions to this scheme amounted to £10,233 (2019 - £8,138) There was a contribution of £5,805 (2019 - £3,388) outstanding at the balance sheet date.

23.	RELATED PARTY DISCLOSURES

The group works closely with a portfolio of four other hotels and their respective companies, all under similar (but not identical) control. Further, the whole portfolio is managed by BGAM Limited, a hotel management enterprise, again with ownership similarities and common directors. These close working relationships enables all businesses to access necessary trading expertise when needed, negotiate beneficial relationships with suppliers and leverage various economies of scale for mutual benefit.

During the course of the year, the group incurred management costs totalling £60,904 (2019 - £22,144) to BGAM Limited.

In aggregate at the balance sheet date, the group was owed £648,327 by, and owed £648,167 to, these associated companies (2019 - £569,987 and £605,000 respectively).

24.	GOING CONCERN

As discussed in the strategic report, the Covid-19 pandemic has had a substantial adverse effect on the group's trade and profitability for the year ended 31 December 2020. The group's core reserves have been hard hit by such an extended period of very low trading capacity.

Restrictions on opening, loss of travel (particularly internationally) and consumer confidence remained factors into 2021. Conversely, the gradual relaxation of restrictions through Summer 2021 have been encouraging, as have the advances in the national vaccination programme and the continuing support of both the group's suppliers and ongoing Government packages.

However, the directors cannot ignore the operational challenges to be overcome given the group's current financial situation, and the inherent uncertainties of the ongoing pandemic. Together these represent material uncertainties that may cast significant doubt on the group's ability to continue as a going concern in the coming year. Regardless, there are currently no intentions of ceasing trading activities and the directors anticipate the challenges remain navigable.

These financial statements are therefore still prepared on a going concern basis.