Company Registration No. 02848403 (England and Wales)
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
COMPANY INFORMATION
Directors
D Shamoon
S Leleu
J S Shamoon Arazi
R Hyde
(Appointed 31 July 2020)
Secretary
L Tilley
Company number
02848403
Registered office
7 Howick Place
2nd Floor
London
SW1P 1BB
Auditor
Perrys Accountants Limited
Chartered Accountants
First Floor
12 Old Bond Street
London
W1S 4PW
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
The directors present their strategic report for Small Luxury Hotels of the World Management Limited (the Company) for the year ended 31 December 2019.
The Company is engaged in the business of managing and promoting Small Luxury Hotels of the World Limited (“SLH”), which is a leading hotel marketing and reservations company providing services to luxury hotels aspiring to the highest levels of quality. The Company provides the services to SLH under a Management Services Agreement which is in place until 2040.
In May 2016 the Company purchased a 37% (now increased to 48.3%) share in SLH for £6 million and committed to spend a further £6 million over a 5 year period, on marketing activity to promote the brand of which £4.9 million had been spent up to year ended 31 December 2019.
The financial statements for 2019 are based on a 12 month period.
The results of the company show a turnover of £8.7m (2018: £8.3m) with a profit before tax for the financial year of £1.9m (2018: £2.1m).
As at 31st December 2019 the Company had net assets of £6.1m (2018: £5.3m). In the opinion of the directors both the level of business and the year end financial position were satisfactory. Any identified risks or uncertainties have been considered when producing the budget for 2020.
Principal risks and uncertainties
The main risks to the Company are economic collapse, major natural disaster, Pandemic or terrorist act that affects peoples travelling behaviour. As at 31 December 2019 the Company had net assets of £6.1m. In the opinion of the directors both the level of business and the year end financial position were satisfactory. Any identified risks or uncertainties have been considered when producing the budget for 2020.
Development and performance
The development and performance of the business has been impacted following the outbreak of COVID-19 at the beginning of 2020. To minimise long term risk to the business and protect cashflow, all staff have been affected either by being placed on furlough, working for reduced pay or short time working and/or flexi-furlough between 20% - 80% of the normal work pattern. Additionally, just before the UK lockdown in March two new joiners job offers were retracted by the company, throughout the year five employees have resigned and we do not plan to replace them in the next 12 months and nine employees have been made redundant or let go. The majority of staff have worked remotely from home since March and travel and expenses have been kept to a minimum. We are budgeting in 2021 for the industry to begin to bounce back from late Spring 2021.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Key performance indicators
Given the straightforward nature of the business, the Company’s directors are of the opinion that analysis using KPI’s is not necessary for an understanding of the development, performance or position of the business.
The Company had 60 employees at the end of the financial year.
S Leleu
Director
22 December 2020
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company in the year under review was that of reservation services for hotels around the world.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D Shamoon
S Leleu
J S Shamoon Arazi
J Ferret
(Resigned 31 July 2020)
R Hyde
(Appointed 31 July 2020)
Results and dividends
The results for the year are set out on page 5.
Ordinary dividends were paid amounting to £792,748. The directors do not recommend payment of a further dividend.
Auditor
Perrys Accountants Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
S Leleu
Director
22 December 2020
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
The directors are responsible for preparing the annual report 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 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;
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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 5 -
2019
2018
Notes
£
£
Turnover
8,750,401
8,267,412
Cost of sales
(2,744,179)
(2,347,964)
Gross profit
6,006,222
5,919,448
Administrative expenses
(4,181,710)
(3,902,143)
Other operating income
50,000
50,000
Operating profit
3
1,874,512
2,067,305
Interest receivable and similar income
6
1,259
1,682
Interest payable and similar expenses
7
(302)
-
Amounts written off investments
8
16,626
3,978
Profit before taxation
1,892,095
2,072,965
Tax on profit
9
(244,800)
(300,716)
Profit for the financial year
1,647,295
1,772,249
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED (REGISTERED NUMBER: 02848403)
BALANCE SHEET
AS AT
31 DECEMBER 2019
31 December 2019
- 6 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
11
109,096
39,548
Investments
12
7,071,949
7,071,949
7,181,045
7,111,497
Current assets
Debtors
16
3,103,196
3,414,319
Investments
17
126,095
109,469
Cash at bank and in hand
725,079
453,424
3,954,370
3,977,212
Creditors: amounts falling due within one year
18
(4,283,761)
(3,591,602)
Net current (liabilities)/assets
(329,391)
385,610
Total assets less current liabilities
6,851,654
7,497,107
Creditors: amounts falling due after more than one year
19
(700,000)
(2,200,000)
Net assets
6,151,654
5,297,107
Capital and reserves
Called up share capital
22
40,100
40,100
Share premium account
143,856
143,856
Capital redemption reserve
60,000
60,000
Profit and loss reserves
5,907,698
5,053,151
Total equity
6,151,654
5,297,107
The financial statements were approved by the board of directors and authorised for issue on 22 December 2020 and are signed on its behalf by:
S Leleu
Director
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2018
40,100
143,856
60,000
3,829,429
4,073,385
Year ended 31 December 2018:
Profit and total comprehensive income for the year
-
-
-
1,772,249
1,772,249
Dividends
10
-
-
-
(548,527)
(548,527)
Balance at 31 December 2018
40,100
143,856
60,000
5,053,151
5,297,107
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
-
-
1,647,295
1,647,295
Dividends
10
-
-
-
(792,748)
(792,748)
Balance at 31 December 2019
40,100
143,856
60,000
5,907,698
6,151,654
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
1
Accounting policies
Company information
Small Luxury Hotels of The World Management Limited is a private company limited by shares incorporated in England and Wales. The registered office is 7 Howick Place, 2nd Floor, London, SW1P 1BB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Hotel Investment Partners Limited.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Small Luxury Hotels of The World Management Limited is a wholly owned subsidiary of Hotel Investment Partners Limited and the results of Small Luxury Hotels of The World Management Limited are included in the consolidated financial statements of Hotel Investment Partners Limited.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 9 -
1.2
Going concern
The company has been affected by the global pandemic. It is expected that results for 2020 will be significantly decreased from those of the past several years. The company has taken measures to decrease its costs during 2020, including utilising government initiatives such as the Job Retention Scheme. true
The company has reviewed its results from 1 January 2020 to date, and its forecasts for 2021 and beyond. Whilst activity has decreased as a result of Covid 19, the company continues to provide services to hotels around the world and the company will continue to rigorously monitor its costs and cashflow accordingly.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
20% on cost
Fixtures, fittings & equipment
25% on cost
Computer equipment
50% on cost and 25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 10 -
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 11 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
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.
Classification of financial liabilities
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
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 12 -
Other financial liabilities
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 though 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the 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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.
2
Judgements and key sources of estimation uncertainty
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.
Depreciation is provided for at the rates disclosed above in note 1.4.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 14 -
3
Operating profit
2019
2018
Operating profit for the year is stated after charging:
£
£
Exchange losses
46,859
51,824
Fees payable to the company's auditor for the audit of the company's financial statements
11,800
11,757
Depreciation of owned tangible fixed assets
31,007
39,448
Operating lease charges
220,068
226,632
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £46,859 (2018 - £51,824).
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
56
56
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
1,589,992
1,289,922
Social security costs
171,589
181,946
Pension costs
106,111
97,434
1,867,692
1,569,302
5
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
753,822
482,131
Company pension contributions to defined contribution schemes
19,840
18,344
773,662
500,475
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
5
Directors' remuneration
(Continued)
- 15 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2018 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2019
2018
£
£
Remuneration for qualifying services
441,673
197,371
6
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
1,259
825
Other interest income
-
857
Total income
1,259
1,682
7
Interest payable and similar expenses
2019
2018
£
£
Other interest
302
-
8
Amounts written off investments
current asset investments
2019
2018
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
16,626
3,978
9
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
259,548
285,968
Adjustments in respect of prior periods
(14,748)
14,748
Total current tax
244,800
300,716
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
9
Taxation
(Continued)
- 16 -
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:
2019
2018
£
£
Profit before taxation
1,892,095
2,072,965
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
359,498
393,863
Tax effect of expenses that are not deductible in determining taxable profit
29,999
-
Tax effect of income not taxable in determining taxable profit
(3,158)
(1,099)
Adjustments in respect of prior years
(14,749)
14,749
Group relief
(115,223)
(107,306)
Permanent capital allowances in excess of depreciation
(11,567)
509
Taxation charge for the year
244,800
300,716
10
Dividends
2019
2018
£
£
Final paid
792,748
548,527
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 17 -
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2019
139,677
89,819
504,509
734,005
Additions
66,905
4,780
28,870
100,555
At 31 December 2019
206,582
94,599
533,379
834,560
Depreciation and impairment
At 1 January 2019
126,266
88,166
480,025
694,457
Depreciation charged in the year
6,343
2,772
21,892
31,007
At 31 December 2019
132,609
90,938
501,917
725,464
Carrying amount
At 31 December 2019
73,973
3,661
31,462
109,096
At 31 December 2018
13,411
1,653
24,484
39,548
12
Fixed asset investments
2019
2018
Notes
£
£
Investments in subsidiaries
13
896,384
896,384
Investments in associates
14
6,175,565
6,175,565
7,071,949
7,071,949
Movements in fixed asset investments
Shares in group undertakings and participating interests
£
Cost or valuation
At 1 January 2019 & 31 December 2019
7,071,949
Carrying amount
At 31 December 2019
7,071,949
At 31 December 2018
7,071,949
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 18 -
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2019 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
-
-
Luxury Hotel Partners Limited
Portland house, 3rd Floor, Bressenden place, London, SW1E 5BH
Ordinary
100.00
0
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 19 -
14
Associates
Details of the company's associates at 31 December 2019 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Small Luxury Hotels of the World Limited
7 Howick Place, London SW1P1BB
Ordinary
48.30
0
15
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
126,095
109,469
16
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
2,301,815
2,687,824
Corporation tax recoverable
177,815
187,501
Other debtors
481,241
409,878
Prepayments and accrued income
142,325
129,116
3,103,196
3,414,319
17
Current asset investments
2019
2018
£
£
Unlisted investments
126,095
109,469
18
Creditors: amounts falling due within one year
2019
2018
Notes
£
£
Bank loans and overdrafts
20
-
27
Trade creditors
1,397,530
291,093
Taxation and social security
810,645
786,609
Other creditors
1,983,114
1,837,165
Accruals and deferred income
92,472
676,708
4,283,761
3,591,602
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
19
Creditors: amounts falling due after more than one year
2019
2018
£
£
Other creditors
700,000
2,200,000
20
Loans and overdrafts
2019
2018
£
£
Bank overdrafts
-
27
Payable within one year
-
27
21
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
106,111
97,434
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
40,000 Ordinary shares of £1 each
40,000
40,000
100 Ordinary A shares of £1 each
100
100
40,100
40,100
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2019
2018
£
£
Within one year
262,710
219,240
Between two and five years
978,840
100,620
In over five years
1,223,550
-
2,465,100
319,860
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
2019
2018
£
£
Acquisition of tangible fixed assets
200,715
-
25
Events after the reporting date
Since the balance sheet date, the global economy has been directly affected by COVID-19 which has forced many businesses and hotel and hospitality sectors to close.
This has affected many of the clients of the company. Consequently, it is expected that the level of operations and activities reported for 2020 will show a significant decrease on the levels of activity for 2019.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 22 -
26
Related party transactions
Included in debtors is a balance owed by the parent company totalling £4,758 (2018: £4,758)
During the year the company charged a fellow group company fees totalling £626,605 (2018: £481,189). During the year the company was charged fees by the fellow group company totalling £2,403,375 (2018: £2,009,527) The balance owed to the fellow group company was £601,179 (2018: £54,544).
During the year the company charged, a wholly-owned subsidiary fees of £50,004 (2018: £50,004) for administrative services. The balance owed from this company amounted to £291,769 (2018: £608,116 creditor)
During the year the company charged fees totalling £11,884,202 (2018: £13,850,184) to an associated company. During the year, the group made purchases totalling £1,953,993 (2018: £1,640,979) from the associated company. The company was owed £2,037,488 (2018: £2,194,750) by the associated company.
Included in other creditors due within one year is a balance totalling £1,200,000 (2018:£1,200,000) relating to the investment in associate.
Included in other creditors due in more than one year is a balance totalling £700,000 (2018: £2,200,000) also relating to the investment in associate.
27
Ultimate controlling party
The ultimate parent company is Hotel Investment Partners Limited.
The ultimate controlling party is D Shamoon and J S Shamoon Arazi.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
- 23 -
Opinion
We have audited the financial statements of Small Luxury Hotels of The World Management Limited (the 'company') for the year ended 31 December 2019 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and 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 FRS 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 2019 and of its profit 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
- 24 -
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.
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 and the directors' report.
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, 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 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 directors' responsibilities statement, 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 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALL LUXURY HOTELS OF THE WORLD MANAGEMENT LIMITED
- 25 -
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.
Declan McCusker (Senior Statutory Auditor)
for and on behalf of Perrys Accountants Limited
Chartered Accountants
Statutory Auditor
First Floor
12 Old Bond Street
London
W1S 4PW
23 December 2020
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