Registered number:
FOR THE PERIOD ENDED 28 MARCH 2020
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BEDS & BARS GROUP LIMITED
COMPANY INFORMATION
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BEDS & BARS GROUP LIMITED
CONTENTS
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BEDS & BARS GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 28 MARCH 2020
The directors present the strategic report for the year ended 28 March 2020.
FY20 saw further growth in our European network by acquiring and opening a new leasehold in the Mitte district of Berlin. In addition, we upgraded the existing Berlin hostel to reflect the high standards of Belushi's and St Christopher's Inns. We also acquired a second leasehold in Edinburgh which required a full conversion development into a bar and hostel. Other major redevelopments in the estate were seen at The Winston in Amsterdam; and at Hammersmith in London, both of which had full bar closures in order to complete.
The first 9 months of this financial year were trading to our expectations. However, the last 3 months saw a significant reduction in revenue due to Covid 19 concerns, and latterly social distancing and activity restrictions across all our 21 units in the UK and Europe: This trend has continued into 2021. The impact on the hospitality sector is well publicised and is ongoing. We entered the last quarter of the year to 3/2021 in our strongest position for many years, and immediately took action to reduce our cost base across all expenditure lines recognising that we had to cut our cash outgoings in order to survive until business returned to anywhere near normal. We took advantage of the Government Furlough schemes and their equivalents in each of our core Cities of London, Edinburgh, Paris, Amsterdam, Berlin, Barcelona and Bruges. The various deferrals and forgiveness of business rates and similar taxes have been important in reducing our cash outflows. We are grateful to our sole UK bankers HSBC for granting significant lines of credit including a CLBILS Government backed loan which whilst subject to strict conditions have given us a lifeline to continue to trade with the expectation that we can recover our Hostel and F&B revenues once our territories return to some form of normality. Our Landlords have been supportive, recognising that they are stakeholders, like us, in the hospitality sector and we place on record our thanks for the pragmatism they have shown. Our suppliers also extended terms and have been supportive over the various lockdown and Government imposed closures across the group. Our staff and colleagues have been magnificent and we pay tribute to their flexibility and unfailing commitment during what has been a difficult time for everyone. Our condolences to the family of a a valued member of staff who sadly passed away early in the pandemic. Our insurers, Zurich, refused any claim for business interruption cover and whilst there are ongoing legal proceedings we expect only minimum acceptance for those claims. It was with much regret that for the first time in our history we had a short round of redundancy in 2020 and lost 4 UK staff and whilst our staff in the UK accepted a 3 day week unanimously it was not implemented as the UK Government extended the furlough scheme. As we write this strategy review there is hope that the vaccination role out will enable some of our units to open in late Spring, but in the meantime we continue to ensure that our staff are safe and that we are in good shape to open again when Government restrictions allow. Having invested heavily to become ‘Covid Secure’, sales growth upon re-opening in spring/summer 2020, after the first lockdown ended, exceeded expectations with group revenues increasing by more than 10% each week as restrictions were lifted. We expect a similar strong performance when we are able to re-open again in 2021.
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BEDS & BARS GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
The Beds & Bars Group has operated in the hospitality industry for 58 years.
The Covid 19 pandemic has forced us to close or curtail our business in all our units. Thus our major business risk is outside of our control, as we depend upon European Governments to manage the Covid 19 pandemic and allow our units to trade with some degree of normality. This will entail a relaxation of the current closure notices together with a recognition that social distancing and quarantine edicts will have to relax if we are to regain occupancy levels of past years. The major risk within our control is liquidity risk. The group has used all levers to curtail the outflow of funds and increase our credit lines whilst maintaining our capacity to retain key personnel and systems within the group. We are ready to trade at short notice once the lockdowns are lifted, either in whole or partially. We have continued with our training programmes and are proud of our IIP Platinum award which will stand us in good stead when we are permitted to trade again. At the core of what we do are the four cornerstones of the experience we strive to deliver – one that is Safe, Secure, Fun and Value for money. As an established player, a well invested portfolio of properties, the strength of its branded presence and focus on the guest experience Beds and Bars is well placed to protect its unique market position once we can trade again.
Beds and Bars has funded the development of its business through retained profits and bank facilities. The bank loans have variable interest rates which track a mixture of Bank base rates, LIBOR and Euribor. Thus any increases in those Base rates will increase the cost of finance and therefore impact the net profit of the company. The group regularly reviews both its interest hedging and currency risk. Our relationship with HSBC as our sole UK banker remains excellent and our bankers are regularly updated with our performance and plans
The Group has the benefit of a number of prime freehold properties The Group is exposed to short term cancellation of bookings. In mitigation management ensure that a non refundable deposit is taken at the time of booking and encourages full payment in advance through, amongst other things, the fixing of exchange rates.
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BEDS & BARS GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
Health and Safety is at the core of our business. The Health and Safety Strategy (H&S Strategy) supports the strategic and operational management of the group and looks to go beyond the traditional role of preventing harm. The H&S Strategy commits the group to continually improve the health and safety environment for its staff and customers. The H&S Strategy is not just about achieving compliance, but will assist in realising:
• Efficient, proactive and pragmatic ways of keeping all our staff, customers, sub contractors and visitors safe. • A robust health and safety culture across the group. • Effective means of protecting stakeholders, including staff, customers and visitors from harm. The H&S Strategy describes in broad terms what our approach to health and safety is and what we intend to do which is closely monitored and tested unit by unit and updated on a regular basis. Data Protection The Directors believe that they have robust data protection procedures in place. However this is an ever more complex area and the Group continually reviews and upgrades its defences against attack. In addition to its in house team the Directors engage external consultants to ensure that the group is fully compliant with relevant legislation. The Group continues to evaluate its data security policies and procedures in accordance with GDPR regulations. Key performance indicators The board use a number of indicators to track the performance of the company (KPIs). These include, amongst others: weekly turnover, no of beds sold per division, accommodation, food and beverage gross margins, revenues by booking channel, EBITDA performance by site and customer review data. The KPIs are reviewed on a weekly and monthly basis and compared to budget and prior years’ performance.
This report was approved by the board on 26 March 2021
and signed on its behalf.
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BEDS & BARS GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 28 MARCH 2020
The directors present their report and the financial statements for the period ended 28 March 2020.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the 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 for the Group's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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.
The loss for the period, after taxation and minority interests, amounted to £
603,650
(2019 -
profit
£
6,745,376
)
.
The results for period are set out on pages 11 to 12.
The directors did not recommend a dividend during the year. In 2019 dividends amounting to £229,226 were paid to non-controlling interests in Barcelona as per shareholders agreement.
The directors who served during the period were:
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BEDS & BARS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
The Beds & Bars Group has continued to invest in people at all levels in the organisation, as we see this as a key factor in maintaining and improving performance in all aspects of the business. The emphasis on internal development through our award winning footsteps training programme, as well as encouraging employees to take an active role in their career, has helped to ensure ongoing employee engagement and retention. It has also helped to ensure that the majority of our new managers are promoted from within, having successfully come through the training programme.
In addition, we have continued to invest in our employee rewards systems. Performance related bonus schemes, together with the development of our employee benefits package, has continued to ensure our success in both retaining and recruiting the best employees in the hospitality market.
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BEDS & BARS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
Following the year end, the company has experienced a reduction in revenue due to concern over the coronavirus and government restrictions which has resulted in bars, restaurants and hostels being closed and therefore unable to trade. No adjustment has been made as a reliable measurement of the impact is currently unavailable.
Under section 487(2) of the Companies Act 2006, Elman Wall Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board on
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BEDS & BARS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEDS & BARS GROUP LIMITED
We have audited the financial statements of Beds & Bars Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 28 March 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Group's or the parent 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.
We draw attention to note 2.2 of the financial statements, which details the risks and uncertainties arising from the COVID-19 pandemic. Our opinion is not modified with respect to this matter.
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 Auditors' Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
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BEDS & BARS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEDS & BARS GROUP LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 Directors' Report.
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BEDS & BARS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEDS & BARS GROUP LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
36 Old Jewry
EC2R 8DD
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BEDS & BARS GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 28 MARCH 2020
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BEDS & BARS GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
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BEDS & BARS GROUP LIMITED
REGISTERED NUMBER:
10661826
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
28 MARCH 2020
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BEDS & BARS GROUP LIMITED
REGISTERED NUMBER:
10661826
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(CONTINUED)
AS AT
28 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 26 March 2021
.
The notes on pages 20 to 52 form part of these financial statements.
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BEDS & BARS GROUP LIMITED
REGISTERED NUMBER:
10661826
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
28 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 20 to 52 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
28 MARCH 2020
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
30 MARCH 2019
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
28 MARCH 2020
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BEDS & BARS GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 28 MARCH 2020
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BEDS & BARS GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 28 MARCH 2020
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Beds & Bars Group Limited ("the company") is a private company limited by shares and is registered and incorporated in England and Wales. The address of the registered office is Overlord House, 1D Colet Gardens, Hammersmith, London, England, W14 9DH.
The group consists of Beds & Bars Group Limited and all of its subsidiaries. The company's and the group's principal activities and nature of its operations are disclosed in the Directors' Report.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The Group is not entitled to take the Qualifying Entity exemptions detailed in paragraph 1.12 of FRS 102 however the company in its individual financial statements has taken advantage of the following disclosure exemptions:
- The requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv). - The requirements of Section 7 Statement of Cash Flows and Section 3 Financial statements presentation paragraph 3.17(d). - The requirements of Section 11 paragraphs 11.39 to 11.48A and Section 12 paragraphs 12.26 to 12.29A providing the equivalent disclosures required by this FRS are included in the consolidated financial statements of the group in which the entity is consolidated. - The requirement of Section 33 Related Party Disclosures paragraph 33.7.
The following principal accounting policies have been applied:
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
The consolidated financial statements incorporate those of Beds & Bars Group Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method, except where stated below. Their results are incorporated from the date that control passes.
The company acquired 100% of the ordinary share capital of Beds & Bars Limited in a share for share exchange as part of a group reconstruction on 30 March 2017. As the business combination meets the definition of a group reconstruction, Beds & Bars Group Limited has applied merger accounting under section 19 of FRS 102 where the controlling party was the same before and after the transaction. In line with the requirement of merger accounting the consolidated financial statements have been prepared as if the group had always been in existence. The requirements of merger accounting state that the difference, if any, between the nominal value of the shares issued plus the fair value of any other consideration given, and the nominal value of the shares received in exchange shall be shown as a movement on other reserves in the consolidated financial statements. Any existing balances on the share premium account of the new subsidiary shall be brought in by being shown as a movement on other reserves. These movements shall be shown in the statement of changes in equity. The directors consider it is appropriate to use merger accounting to present consolidated information for the group as if the new legal structure had always existed. This will be necessary to ensure that the shareholders receive useful information about their investment on an ongoing basis, recognising that there has been no change in the substance of their investment. The directors consider that the alternative approach of acquisition accounting, with the restatement of separable assets and liabilities to fair values, the creation of goodwill and inclusion of post reorganisation results only, would not give a true and fair view of the group results and financial position. The substance of the transaction was not the acquisition of a business but a group reconstruction under which a new holding company has been established with the former controlling party of Beds & Bars Limited having the same control in the new holding company as they had previously held in Beds & Bars Limited. The directors consider that it is not practicable to quantify the effect of this departure from the requirements of the Companies Act 2006. All financial statements are made up to 28 March 2020. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group. All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Outside the requirements of merger accounting, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
The financial statements have been prepared on a going concern basis.
The Group is financed by long term funding of £11 million from HSBC (drawn down on 31 March 2015) with further facilities of £500k drawn down in May 2016 and £4.2 million drawn down in December 2016. The covenants attached to these facilities are considered reasonable and achievable. The directors have prepared a detailed business plan including cash flow projections which indicate that the group will meet the covenant requirements. Having considered potential risks and the current economic environment, the directors have a reasonable expectation that the group and company will achieve the forecasted performance and has adequate resources to continue in operational existence for the foreseeable future. Based on the foregoing, the directors believe that it remains appropriate to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of 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.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Page 22
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
On entering an arrangement with the group, a franchisee pays an initial setup fee. This is used to cover the group's cost in the initial setup of the franchisee on the advertising platforms, setup of a website on behalf of the franchisee, and such other initial services as the company agrees. Turnover is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, turnover is recognised only to the extent of the expenses recognised that are recoverable.
The group charges commission on the bookings made through the group's website within the agent relationship with the franchisee. In the event that a booking is cancelled, the group's commission element is not refundable. Therefore, commission is recognised on the date that the booking is made. The company recognises revenue in respect of management charges receivable from its associated undertakings. Turnover is recognised when the company becomes entitled to receive the revenue under the intercompany arrangement.
Functional and presentation currency
Transactions and balances
Page 23
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
Page 24
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Page 25
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life of thirty years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, .
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Statement of Comprehensive Income.
Page 26
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers. 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. In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Statement of Financial Position, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy.
Page 27
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Provisions are charged as an expense to the Consolidated Statement of Comprehensive Income in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
Page 28
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
The group 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 when the group 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 trade and other debtors, loans to fellow group companies, 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 financial asset is measured at the present value of the future receipts discounted at a market rate of interest. 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 trade and other creditors, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Decrecognition of financial liabilities Financial liabilities are derecognised when, and only when, the group's contractual obligations are discharged, cancelled, or they expire. Equity instruments Equity instruments issued by the group are recorded at the fair value of proceeds received, net of direct issue costs.
The cost 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.
Page 29
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
2.
Accounting policies (continued)
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability. 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 affect only that period, or in the period of the revision and future periods where the revision affects both current and future periods. Critical judgements The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements: Lease categorisation In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the group as lessee, or the lessee, where the company is a lessor. Key sources of estimation uncertainty The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows: Impairment of assets The recoverable amount of goodwill is based on value in use which requires estimates in respect of the allocation of goodwill to cash generating units, the future cashflows and an appropriate discount rate. The key inputs to the value in use calculations are the discount rate and the future earnings growth. Following their review, the directors have determined that no impairment is necessary (2019 - nil). The carrying value of goodwill at the year end was £5,754,205 (2019 - £3,005,228).
Page 30
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Analysis of turnover by country of destination:
Page 31
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 32
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 33
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contribution payable to the fund at the year end and included within creditors were £38,242 (2019 - £14,641).
Page 34
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 35
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
13.
Taxation (continued)
Page 36
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 37
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 38
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
16.
Tangible fixed assets (continued)
Page 39
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 40
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 41
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Subsidiary undertakings (continued)
Page 42
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 43
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 44
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 45
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 46
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
23.
Loans (continued)
Page 47
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 48
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 49
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Revaluation reserve
Other reserves
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £162,593 (2019 - £119,570). Contributions totalling £38,242 (2019 - £14,641) were payable to the fund at the reporting date and are included in creditors.
31.
Financial commitments, guarantees and contingent liabilities
The Company and Group have various commitments under the security arrangements for borrowings. See note 23 for details of the arrangements. The directors do not consider it likely that any liability will arise as a result of these arrangements.
Page 50
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
Page 51
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BEDS & BARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 28 MARCH 2020
The ultimate controlling party is Mr K C Knowles.
Page 52
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