Company registration number 12158205 (England and Wales)
RED LION OPERATIONS 3 LIMITED
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
RED LION OPERATIONS 3 LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 11
RED LION OPERATIONS 3 LIMITED
BALANCE SHEET
AS AT 25 DECEMBER 2022
25 December 2022
- 1 -
25 December 2022
26 December 2021
Notes
£
£
£
£
Fixed assets
Intangible assets
4
355,068
405,068
Tangible assets
5
233,008
287,474
588,076
692,542
Current assets
Stocks
39,491
38,365
Debtors
6
5,020,008
2,386,158
Cash at bank and in hand
5,025
238,172
5,064,524
2,662,695
Creditors: amounts falling due within one year
7
(7,652,730)
(4,183,370)
Net current liabilities
(2,588,206)
(1,520,675)
Total assets less current liabilities
(2,000,130)
(828,133)
Creditors: amounts falling due after more than one year
8
(242,329)
Net liabilities
(2,242,459)
(828,133)
Capital and reserves
Called up share capital
9
Profit and loss reserves
(2,242,459)
(828,133)
Total equity
(2,242,459)
(828,133)
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.
RED LION OPERATIONS 3 LIMITED
BALANCE SHEET (CONTINUED)
AS AT 25 DECEMBER 2022
25 December 2022
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 29 February 2024 and are signed on its behalf by:
Mr David Ramsey
Director
Company registration number 12158205 (England and Wales)
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
- 3 -
1
Accounting policies
Company information
Red Lion Operations 3 Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Wool Barn, Peper Harow, Godalming, Surrey, GU8 6BQ.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The Company has net liabilities of £2,2true42,459 (2021: £828,133) and net current liabilities of £2,588,206 (2021: £1,520,675).
The directors have reviewed the future liquidity requirements and have considered the cash flow forecasts of the Company. The Company is party to a group structure and the group produces long-term financial forecasts which show the Company is able to operate and meet its financial obligations as they fall due as they have support from its holding company as and when required. Fellow group companies will also relinquish the right to call up intercompany loans owned by the Company when required. Based on this review and the future business prospects of the Company and its group the Directors believe the Company will be able to meet its liabilities as they fall due. 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), 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.
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
Revenue from contracts for the provision of professional services 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, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
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 land and buildings
Over the life of the lease
Fixtures and fittings
20% straight line
Computers
33% straight line
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
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.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks 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.
1.8
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.
1.9
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.
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies
(Continued)
- 6 -
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.
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.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
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.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies
(Continued)
- 7 -
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
5,833
1,057
3
Employees
The average monthly number of persons (including directors) employed by the company during the Period was:
2022
2021
Number
Number
Total
66
15
4
Intangible fixed assets
Goodwill
£
Cost
At 27 December 2021 and 25 December 2022
500,000
Amortisation and impairment
At 27 December 2021
94,932
Amortisation charged for the Period
50,000
At 25 December 2022
144,932
Carrying amount
At 25 December 2022
355,068
At 26 December 2021
405,068
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
- 8 -
5
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 27 December 2021
7,543
441,919
449,462
Additions
40,208
40,208
At 25 December 2022
7,543
482,127
489,670
Depreciation and impairment
At 27 December 2021
2,149
159,839
161,988
Depreciation charged in the Period
1,509
93,165
94,674
At 25 December 2022
3,658
253,004
256,662
Carrying amount
At 25 December 2022
3,885
229,123
233,008
At 26 December 2021
5,394
282,080
287,474
6
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
10,149
1,409
Amounts owed by group undertakings
4,921,926
2,155,629
Other debtors
16,942
VAT
-
191,849
Prepayments and accrued income
59,511
37,271
5,008,528
2,386,158
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
- 9 -
7
Creditors: amounts falling due within one year
2022
2021
£
£
Bank loans and overdrafts
42,535
Trade creditors
190,086
410,108
Amounts owed to group undertakings
6,408,533
3,669,571
Taxation and social security
113,277
19,154
Deposits received
6,791
Wages and salaries
106,020
52,905
Other creditors
25,960
4,960
Accruals and deferred income
766,319
27,643
7,659,521
4,184,341
8
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Other borrowings
242,329
9
Called up share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
1 share (2021: 1 share) of 1p each
1
1
-
-
1
1
The ordinary share is allocated, called up and fully paid.
10
Audit report information
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 unqualified.
Senior Statutory Auditor:
Marc Waterman
Statutory Auditor:
UHY Hacker Young
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
- 10 -
11
Pension Commitments
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £12,522 (2021: £1,375). Contributions totalling £6,556 (2021: £1,275) were payable to the fund at the reporting date and are included in creditors.
RED LION OPERATIONS 3 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
- 11 -
12
Related party transactions
KH V Lending 302 Limited is a company who's ultimate parent entity is Kitty Hawk Capital Partners V LP, a limited partnership registered in Jersey, and which has a controlling interest in Red Lion Holdings LLP, the smallest and largest undertaking which produces consolidated accounts that include the Company.
At the balance sheet date amounts borrowed under the agreed loan facility totalled £230,000 (2021: £Nil). Amounts lent under the agreement accrue interest at 10% per annum. Total interest recognised in the year totals £12,329 (2021: £Nil).
The Company has taken advantage of the exemption available under FRS 102 not to disclose transactions with wholly owned group members.
13
Parent company
The Company's immediate and ultimate parent entity is Red Lion Holdings LLP, a limited liability partnership incorporated in England and Wales. The registered office address of Red Lion Holdings LLP is The Wool Barn, Peper Harow, Godalming, Surrey, GU8 6BQ. The smallest and largest group of which the Company is a member and for which group accounts are prepared is Red Lion Holdings LLP. Copies of these are available from Companies House.
It is the opinion of the directors that there is no single controlling party of the Company.
2022-12-252021-12-27false29 February 2024CCH SoftwareCCH Accounts Production 2023.300No description of principal activityThis audit opinion is unqualifiedMr Jason MyersMr David Ramseyfalse121582052021-12-272022-12-25121582052022-12-25121582052021-12-2612158205core:NetGoodwill2022-12-2512158205core:NetGoodwill2021-12-2612158205core:LandBuildings2022-12-2512158205core:OtherPropertyPlantEquipment2022-12-2512158205core:LandBuildings2021-12-2612158205core:OtherPropertyPlantEquipment2021-12-2612158205core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-2512158205core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-2612158205core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-2512158205core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-2612158205core:CurrentFinancialInstruments2022-12-2512158205core:CurrentFinancialInstruments2021-12-2612158205core:ShareCapital2022-12-2512158205core:ShareCapital2021-12-2612158205core:RetainedEarningsAccumulatedLosses2022-12-2512158205core:RetainedEarningsAccumulatedLosses2021-12-2612158205core:ShareCapitalOrdinaryShares2022-12-2512158205core:ShareCapitalOrdinaryShares2021-12-2612158205bus:Director22021-12-272022-12-2512158205core:Goodwill2021-12-272022-12-2512158205core:LandBuildingscore:LongLeaseholdAssets2021-12-272022-12-2512158205core:FurnitureFittings2021-12-272022-12-2512158205core:ComputerEquipment2021-12-272022-12-25121582052020-12-282021-12-2612158205core:NetGoodwill2021-12-2612158205core:NetGoodwill2021-12-272022-12-2512158205core:LandBuildings2021-12-2612158205core:OtherPropertyPlantEquipment2021-12-26121582052021-12-2612158205core:LandBuildings2021-12-272022-12-2512158205core:OtherPropertyPlantEquipment2021-12-272022-12-2512158205core:Non-currentFinancialInstruments2022-12-2512158205core:Non-currentFinancialInstruments2021-12-2612158205bus:PrivateLimitedCompanyLtd2021-12-272022-12-2512158205bus:SmallCompaniesRegimeForAccounts2021-12-272022-12-2512158205bus:FRS1022021-12-272022-12-2512158205bus:Audited2021-12-272022-12-2512158205bus:Director12021-12-272022-12-2512158205bus:FullAccounts2021-12-272022-12-25xbrli:purexbrli:sharesiso4217:GBP