Z_Hotels_City_Limited - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.

Z Hotels City Limited is a private company limited by shares incorporated in England and Wales. The registered office is 45 Monmouth Street, London, WC2H 9DG.

These financial statements have been prepared in accordance with Section 1A of FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.

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 pound.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of leasehold properties at fair value. The principal accounting policies adopted are set out below.

The company’s ultimate parent undertaking, Z Hotels Group Limited, included the company in its consolidated financial statements. The consolidation financial statements of Z Hotels Group Limited are prepared in accordance with FRS 102 and are available to the public from Companies House. In these financial statements, the company is considered to be a qualifying entity and has applied the exemptions available under FRS 102 in respect of the following:

- Reconciliation of the number of shares outstanding from the beginning to the end of the period;

- Cash flow statement and related notes;

- Key management personnel compensation; and

- Basic financial instruments.

The company made a profit for the year of £426,054 (2019: £126,805) and had net assets at the reporting date of £7,715,892 (2019: £7,289,838) Included within creditors is an amount of £2,830,404 (2019: £6,857,662) due to group undertakings. The post year end trading conditions have been significantly impacted by the COVID-19 pandemic which has resulted in the operations of the group being curtailed due to the lockdown restrictions. true

Subsequent to the year end the company was acquired by a new parent group. As part of the transaction the company was released from the composite cross guarantee structure and the amounts due to the group undertakings at the reporting date.

The Directors' of the ultimate parent company have assessed the Group's financial position, budgets and cash flow forecasts for the period ending 30 April 2022, including stress testing these budgets. The directors have a reasonable expectation that the group has adequate resources to continue in operational existence for more than one year from the signing of these accounts. These expectations have taken into account the actual and anticipated ongoing financial impact resulting from the change in customer habits arising from the COVID-19 pandemic. As a result the subsidiary company has prepared financial statements on a going concern basis.

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and revenue can be reliably measured.

Turnover comprises revenue recognised by the company in respect of goods and services supplied during the year, exclusive of Value Added Tax and trade discounts. Turnover in respect of accommodation is recognised at the point of the customers stay whilst other sales, including food and beverage revenues, are recognised at the point of purchase.

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:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

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

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

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

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

Stock is stated at the lower of cost and estimated selling price less costs to complete and sell. Where stock is held for distribution at no consideration it is measured at the lower of cost and replacement cost.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stock over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments at fair value.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 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.

Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed.

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:

The leasehold property was valued on an open market basis by the directors, guided by an external valuation obtained from an external firm of professional valuer on 31 March 2019. The directors do not consider that there has been any subsequent change in the valuation as at 31 March 2020.

If revalued assets were stated on a historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

Stock recognised in cost of sales during the year was £225,153 (2019: £245,789).

An impairment loss of £Nil (2019: £nil) was recognised in cost of sales during the year.

An impairment loss of £12,728 (2019: £3,525) was recognised against debtors during the year.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The deferred tax liability set out above is expected to reverse in more than 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

A composite cross guarantee structure exists between Z Hotels Trading WB Limited, Z Hotels OCS Limited, Z Hotels OS Limited, Z Hotels LBS Limited, Z Hotels Old Street Limited, Z Hotels City Limited, Z Hotels Bath Limited, Z Hotels Operations Limited, Z Hotels Management Contracts Limited and Z Hotels Management Limited. The aggregate amount outstanding under these agreements at the balance sheet date was £32,434,341 (2019: £27,021,237).

Subsequent to the reporting date, the company was released from the composite cross guarantee structure.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

As a wholly owned subsidiary of Z Hotels Group Limited at the reporting date, advantage has been taken of the exemption in FRS 102 (section 33) "Related Party Disclosure" in respect of the disclosures of transactions and balances with other wholly owned group undertakings as consolidated financial statements including the company are prepared.

No key management received remuneration from the company during the year or the prior year.

The immediate parent company is Z Hotels Trading WB Limited. The ultimate controlling party is Z Hotels Group Limited. Subsequent to the year end the immediate parent company became Z Hotels City LLP and ceased to be part of the Z Hotels Group Limited.

The smallest and largest group of undertakings for which group accounts have been drawn up is headed by Z Hotels Group Limited. Copies of the group financial statements can be obtained from Companies House.

As the income statement has been omitted from the filing copy of the financial statements the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was qualified and the auditor reported as follows:

With respect to leasehold property valued on an open market basis of £14,764,444 as at 31 March 2020, the audit evidence available to us was limited because the global lockdown restrictions in place at the reporting date as a result of the COVID-19 pandemic meant that there was no active market to assess the basis of the valuation. The basis of valuation is linked to the yield on the average room rates. Due to the lockdown restrictions, the hotel was not open for trading at the reporting date. Owing to the lack of active market data, we were unable to obtain sufficient appropriate audit evidence regarding the basis of valuation of the leasehold property by using other audit procedures.

In our opinion, except for the effects of the matter described in the Basis for qualified opinion section of our report, the financial statements:

give a true and fair view of the state of the company's affairs as at 31 March 2020 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.