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Registered number: 10211704










RED GROUP HOLDINGS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
RED GROUP HOLDINGS LIMITED
 

COMPANY INFORMATION


Directors
N Vaney (resigned 29 April 2022)
M Sieh 
V Manier (resigned 10 February 2023)
M Lelievre (resigned 27 March 2023)
P Van Troeye (appointed 24 March 2023)




Company secretary
C Pegg



Registered number
10211704



Registered office
2 Church Street
Burnham

Slough

SL1 7HZ




Independent auditor
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor

Reading Bridge House

George Street

Reading

Berkshire

RG1 8LS





 
RED GROUP HOLDINGS LIMITED
 

CONTENTS



Page
Group strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Consolidated statement of comprehensive income
9
Consolidated balance sheet
10
Company balance sheet
11
Consolidated statement of changes in equity
12 - 13
Company statement of changes in equity
14
Consolidated statement of cash flows
15
Notes to the financial statements
16 - 38


 
RED GROUP HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The directors present their strategic report for the year ended 31 December 2022.

Main activities
 
Red Group, through its subsidiaries and affiliates, is a global business active in the provision of specialist building services, process & ICT engineering solutions, and aiming at providing for a more sustainable connected world. 
Active in the fields of MEP services, Sustainability consultancy and solutions, ICT engineering, Health and Safety and Process Engineering, Red Group covers the entire life cycle of any building project. Red Group enjoys a worldwide footprint, deploying activities in Europe, Middle East, Africa and Asia Pacific. 
Formerly a business unit of Engie Impact, Red Group is now part of Tractebel, a global engineering and consulting company delivering integrated solutions for sustainable energy and built environment projects.
ENGIE is a global energy and services group operating in the three key business sectors of low-carbon electricity generation (with particular emphasis on natural gas and renewables), energy infrastructures and customer solutions.
Business review
Development and performance of the company’s business during the year
2022 has seen Red Group pursuing the expansion of its global activities in response to demand in its core markets, particularly in Europe and in Asia Pacific. This translated into a strong increase in its revenue generation compared to previous year by 35%. 
Red Group further consolidated its position in its historical segments of activities, generating positive earnings in UK, APAC, Ireland and in the Philippines. Investments were further maintained in the development of consultancy services relating to Sustainability Solutions, thereby explaining the loss incurred in the financial year. 
In the UK, Red Group Holdings acquired in March three entities from the Engie Group active in the field of sustainability solutions, more particularly in the management and optimisation of utility supplies to its customers. The acquired business was later transferred to its subsidiary Red Engineering Design in the UK. 
The base of operations in the Philippines has undergone a significant development through the provision of services to Group affiliates in the US, thereby requiring the hiring of approximately 200 employees. 
Position at the end of the year
Red Group incurred a loss after taxation for the period of -£3,184,921 (2021: Profit of £974,251) as a result of losses incurred in the new consultancy segments of activities in the UK and APAC.
As at December 31, 2022, Group’s current assets amounted to £42,034,016 (2021: £29,933,475), and Net Assets to £7,903,181 (2021: £11,275,559).
Other Financial key performance indicators
Average staff numbers increased from 645 in 2021 to 1,090 in 2022, in support of the Group’s continued growth particularly in the Philippines.

Page 1

 
RED GROUP HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Principal risks and uncertainties
 
Red Group is exposed to normal risks associated with its sectors of activity, projects and geographies, namely:
 
- Market fluctuations in terms of demand, competition,
- Availability and retention of skilled resources,
- Debt collection and cash flow management,
- Commitments and potential liabilities arising from its ongoing projects,
- Exchange rate fluctuations with exposition being mainly in EUR.
Risks are managed in accordance with Group’s commercial policy and procedures, with their identification, assessment and management forming an integral part of RED’s decision-making process.  

Section 172 statement
 
Promote the success of the Group
Throughout the year RED Group, through the supervision of its board of directors, monitors the commercial, operational and financial success of its operations on a worldwide basis, involving period business reviews, tracking of individual projects, strategic and financial planning, having at stake the long term perennity and success of its activities.  
Engagement with stakeholders
- Clients, suppliers and shareholders
Through regular communication and feedback mechanisms, RED actively engages with clients, suppliers and shareholders, understanding their expectations for sustainable business relationship and growth of activities. Project managers and directors translate this commitment in their day-to-day collaboration with representatives from these key stakeholders, always ensuring optimum quality of committed deliverables. Acting as a key contributor to a successful unfolding of its clients’ operations, the Red Group teams up with like-minded business suppliers, not only sharing its high professional standards but also its core values.
- Employees
RED Group’s commitment to its employees' welfare, professional development, and well-being remains a key focus, acknowledging their valuable contribution to our success. Therefore, keeping its workforce at the heart of its strategy definition, Red Group creates working environments aimed at encouraging, challenging and enabling employees to develop their talent. 
Likely consequences of any decision in the long term
Red Group establishes on a yearly basis a strategic plan aimed at covering its expected evolution in following year, but also in the medium term, taking into consideration its current and future market position, as well as key stakeholders, both local and transversal. Red Group thereby ensures all major decisions taken are made after careful consideration of long-term impacts. 
Red Group further critically evaluates potential outcomes of decisions made, emphasizing on sustainable practices and environmentally friendly initiatives not only aligns with regulatory requirements but also contributes to minimizing our carbon footprint, positively impacting the environment in the long term.
 
Page 2

 
RED GROUP HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


Greenhouse gas emissions and energy consumption
With the purpose of reducing its environmental footprint, RED Group tracks its greenhouse gas emissions, thereby aiming at setting ambitious targets for reducing its carbon footprint, energy efficiency, water consumption and waste disposal. In 2022 emissions and consumption reached following levels:
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At the exception of business travel and commuting, emissions were defined based on absolute values from data collection and did not involve estimations (and/or their corresponding smoothing methods). Commuting related emissions were based on the office attendance percentage (occupancy tracking) at RED sites, while business travel data was defined based on assumptions enabling the conversion of mileage into CO2 emissions.
RED Group has been able to mitigate the expansion of its carbon footprint associated with traveling thanks to lower emissions generated by heating, commuting, and electricity consumption.

Future developments

The outlook Red Group will pursue its expansion in 2023, with strong growth foreseen from its overseas markets and operations in Asia Pacific. Red Group will further focus on maintaining its long-term successful partnerships with key stakeholders. 2023 will also see some changes in the Group structure, with the business in the Middle East being transferred under its Dubai Branch, a part of Red Engineering Design Limited.


This report was approved by the board and signed on its behalf.





M Sieh
Director

Date: 19 February 2024

Page 3

 
RED GROUP HOLDINGS LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The Directors present their report and the financial statements for the year ended 31 December 2022.

Results and dividends

The loss for the year, after taxation, amounted to £3,184,921 (2021 - profit £974,251).

Dividends of £Nil (2021: £Nil) were paid. 

Directors

The Directors who served during the year were:

N Vaney (resigned 29 April 2022)
M Sieh 
V Manier (resigned 10 February 2023)
M Lelievre (resigned 27 March 2023)

Directors' responsibilities statement

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 judgements 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 2006They 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.

Research and development

The Group pursued the development of its R&D activities through its UK subsidiary, engaging in bringing innovative, energy efficient and low emissions solutions to its clients. 

Branches

Red Group indirectly owns through its UK subsidiary three branches outside of the UK, in Turkey and UAE as long term bases of operations, as well as in Denmark in support of its local projects. 

Page 4

 
RED GROUP HOLDINGS LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Disclosure of information to auditor

Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

Post balance sheet events

See note 29 for details of post balance sheet events.

Auditor

The auditor, James Cowper Kreston Auditwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
M Sieh
Director

Date: 19 February 2024

Page 5

 
RED GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RED GROUP HOLDINGS LIMITED
 

Opinion


We have audited the financial statements of Red Group Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2022, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The Directors are responsible for the other information contained within the Annual ReportOur 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. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.
Page 6

 
RED GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RED GROUP HOLDINGS LIMITED (CONTINUED)




Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group strategic report and the Directors' report for the financial year 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.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.


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


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 4, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
RED GROUP HOLDINGS LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RED GROUP HOLDINGS LIMITED (CONTINUED)


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 Group financial statements.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 
The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
•  Enquiry of management and those charged with governance around actual and potential litigation and                      claims;
•      Enquiry of management and those charged with governance to identify any material instances of non-                                                     compliance with laws and regulations;
•       Reviewing financial statement disclosures and testing to supporting documentation to assess                                 compliance with applicable laws and regulations;
•       Performing audit work to address the risk of irregularities due to management override of controls,                  including testing of journal entries and other adjustments for appropriateness, evaluating the business                  rationale of significant transactions outside the normal course of business and reviewing accounting                   estimates for evidence of bias.


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 Auditor's report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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.


Alexander Peal BSc (Hons) FCA DChA (Senior Statutory Auditor)
  
for and on behalf of
James Cowper Kreston Audit
 
Chartered Accountants and Statutory Auditor
  
Reading Bridge House
George Street
Reading
Berkshire
RG1 8LS

19 February 2024
Page 8

 
RED GROUP HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
£
£

  

Turnover
 4 
80,022,503
58,850,152

Cost of sales
  
(47,015,176)
(42,315,967)

Gross profit
  
33,007,327
16,534,185

Administrative expenses
  
(38,106,350)
(15,367,565)

Other operating income
 5 
1,735,793
783,914

Operating (loss)/profit
 6 
(3,363,230)
1,950,534

Interest receivable and similar income
  
300,124
-

Interest payable and similar expenses
 11 
(7,837)
(384,498)

(Loss)/profit before taxation
  
(3,070,943)
1,566,036

Tax on (loss)/profit
 12 
(113,978)
(591,785)

(Loss)/profit for the financial year
  
(3,184,921)
974,251

  

Currency translation differences
  
(174,246)
(230,096)

Actuarial losses on pension scheme
  
(13,211)
(28,109)

Other comprehensive income for the year
  
(187,457)
(258,205)

Total comprehensive income for the year
  
(3,372,378)
716,046

(Loss)/profit for the year attributable to:
  

Owners of the parent Company
  
(3,184,921)
974,251

Total comprehensive income for the year attributable to:
  

Owners of the parent Company
  
(3,372,378)
716,046

The notes on pages 16 to 38 form part of these financial statements.

Page 9

 
RED GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 10211704

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 13 
936,248
531,962

Tangible assets
 14 
3,628,313
2,030,963

  
4,564,561
2,562,925

Current assets
  

Debtors: amounts falling due after more than one year
 16 
109,125
91,945

Debtors: amounts falling due within one year
 16 
33,611,516
24,091,645

Cash at bank and in hand
 17 
8,313,375
5,749,885

  
42,034,016
29,933,475

Creditors: amounts falling due within one year
 18 
(38,078,538)
(20,925,222)

Net current assets
  
 
 
3,955,478
 
 
9,008,253

Total assets less current liabilities
  
8,520,039
11,571,178

Creditors: amounts falling due after more than one year
 19 
(179,003)
-

Provisions for liabilities
  

Other provisions
 22 
(58,966)
(2,128)

  
 
 
(58,966)
 
 
(2,128)

Pension liability
  
(378,889)
(293,491)

Net assets
  
7,903,181
11,275,559


Capital and reserves
  

Called up share capital 
 23 
1,100
1,100

Foreign exchange reserve
 24 
(327,308)
(153,062)

Merger reserve
 24 
63,789
63,789

Profit and loss account
 24 
8,165,600
11,363,732

  
7,903,181
11,275,559


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


M Sieh
Director
Date: 19 February 2024

The notes on pages 16 to 38 form part of these financial statements.

Page 10

 
RED GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 10211704

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Investments
 15 
5,020,955
2,833,070

 
Current assets
  

Debtors: amounts falling due within one year
 16 
1,336,592
1,334,732

Cash at bank and in hand
 17 
2,134
310

  
1,338,726
1,335,042

Creditors: amounts falling due within one year
 18 
(5,078,994)
(2,877,587)

Net current liabilities
  
 
 
(3,740,268)
 
 
(1,542,545)

Total assets less current liabilities
  
1,280,687
1,290,525


Capital and reserves
  

Called up share capital 
 23 
1,100
1,100

Profit and loss account
 24 
1,279,587
1,289,425

  
1,280,687
1,290,525


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




M Sieh
Director

Date: 19 February 2024

The notes on pages 16 to 38 form part of these financial statements.

Page 11

 

 
RED GROUP HOLDINGS LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022



Called up share capital
Foreign exchange reserve
Merger reserve
Profit and loss account
Equity attributable to owners of parent Company
Total equity


£
£
£
£
£
£


At 1 January 2022
1,100
(153,062)
63,789
11,363,732
11,275,559
11,275,559





Loss for the year
-
-
-
(3,184,921)
(3,184,921)
(3,184,921)


Currency translation differences
-
(174,246)
-
-
(174,246)
(174,246)


Actuarial losses on pension scheme
-
-
-
(13,211)
(13,211)
(13,211)



At 31 December 2022
1,100
(327,308)
63,789
8,165,600
7,903,181
7,903,181



The notes on pages 16 to 38 form part of these financial statements.

Page 12

 

 
RED GROUP HOLDINGS LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021



Called up share capital
Foreign exchange reserve
Merger reserve
Profit and loss account
Equity attributable to owners of parent Company
Total equity


£
£
£
£
£
£


At 1 January 2021
1,100
77,034
63,789
10,417,590
10,559,513
10,559,513





Profit for the year
-
-
-
974,251
974,251
974,251


Currency translation differences
-
(230,096)
-
-
(230,096)
(230,096)


Actuarial losses on pension scheme
-
-
-
(28,109)
(28,109)
(28,109)



At 31 December 2021
1,100
(153,062)
63,789
11,363,732
11,275,559
11,275,559



The notes on pages 16 to 38 form part of these financial statements.

Page 13

 
RED GROUP HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2021
1,100
1,291,963
1,293,063



Loss for the year
-
(2,538)
(2,538)



At 1 January 2022
1,100
1,289,425
1,290,525



Loss for the year
-
(9,838)
(9,838)


At 31 December 2022
1,100
1,279,587
1,280,687


The notes on pages 16 to 38 form part of these financial statements.

Page 14

 
RED GROUP HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(3,184,921)
974,251

Adjustments for:

Amortisation of intangible assets
303,285
105,925

Depreciation of tangible assets
1,120,316
453,227

Loss on disposal of tangible assets
-
5,457

Interest paid and similar expenses
7,837
384,498

Interest receivable and similar income
(300,124)
-

Taxation charge
113,978
591,785

(Increase) in debtors
(10,795,450)
(3,239,418)

Increase in creditors
20,532,334
2,828,523

Increase in provisions
56,838
321

(Decrease) in net pension assets/liabalities
(13,211)
(28,109)

Corporation tax (paid)
(1,389,699)
(153,285)

Foreign exchange
(635,743)
(359,891)

Net cash generated from operating activities

5,815,440
1,563,284


Cash flows from investing activities

Purchase of intangible fixed assets
(858,689)
-

Purchase of tangible fixed assets
(2,685,549)
(1,378,160)

Net cash from investing activities

(3,544,238)
(1,378,160)

Cash flows from financing activities

Interest and similar income or expenditure received/(paid)
292,287
(384,498)

Net cash used in financing activities
292,287
(384,498)

Net increase/(decrease) in cash and cash equivalents
2,563,489
(199,374)

Cash and cash equivalents at beginning of year
5,749,886
5,949,260

Cash and cash equivalents at the end of year
8,313,375
5,749,886


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
8,313,375
5,749,886

8,313,375
5,749,886


The notes on pages 16 to 38 form part of these financial statements.

Page 15

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Red Group Holdings Limited is a private limited company incorporated in the UK and registered in England and Wales. The registered office is 2 Church Street, Burnham, Bucks, SL1 7HZ.
The Group's principal places of business are Woolverstone House, 61 Berners Street, London, W1T 3NJ and Lower Farm Barns, 1 Bainton Road, Bucknell, OX27 7LT.
The Group's principal activity is the design of MEP engineering services for infrastructure, new buildings and refurbishment projects with a focus on innovative, low energy solutions.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 judgement 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 following principal accounting policies have been applied:

  
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Subsidiaries are deemed to be those under the control of the Company. Please see note 25.
The group continues to recognise a merger reserve which arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.

Page 16

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold improvements
-
Over the duration of the lease
Fixtures and fittings
-
13%
Office equipment
-
13% to 50%

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 profit or loss.

 
2.5

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Page 17

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.8

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.9

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.10

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.11

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 18

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.12

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.13

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.14

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Balance sheet 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 receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Page 19

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.15

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.16

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Defined benefit pension plan

The Group operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the Balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Group's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with
Page 20

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.16
Pensions (continued)

the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:

a) the increase in net pension benefit liability arising from employee service during the period; and

b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

 
2.17

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 21

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. 
Taxation
The Company establishes provisions based on reasonable estimates, for possible consequences of audits by the tax authorities. The amount of such provisions is based on various factors, such as previous tax submissions.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful economic lives taking into accounts residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as the remaining life of the asset and projected disposal value.
Work in progress
The Group assesses the stage of completion on an individual project basis in order to determine the level of work in progress to recognise at the reporting date. 
Treatment of quasi-subsidiary
During the year ended 31 December 2020, a fellow group subsidiary acquired 100% of the net assets of Callaghan Engineering Limited, a company whose office is registered in Ireland. The Company has deemed Callaghan Engineering Limited to be under the full control of the Company by way of a Power of Attorney document. The investment has therefore been accounted for as a quasi-subsidiary within these financial statements.


4.


Turnover

The whole of the turnover is attributable to the provision of services.

Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
29,725,955
15,727,529

Rest of Europe
32,132,498
29,014,502

Rest of the world
18,164,050
14,108,121

80,022,503
58,850,152


Page 22

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Other operating income

2022
2021
£
£

Other operating income
1,735,793
783,914



6.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2022
2021
£
£

Exchange differences
(30,597)
135,725

Other operating lease rentals
1,731,358
1,711,081


7.


Auditor's remuneration

During the year, the Group obtained the following services from the Company's auditor and its associates:


2022
2021
£
£

Fees payable to the Company's auditor and its associates for the audit of the consolidated and parent Company's financial statements
20,000
11,770

Page 23

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Employees

Staff costs, including Directors' remuneration, were as follows:


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£


Wages and salaries
33,363,017
24,940,676
-
-

Social security costs
2,923,574
2,121,621
-
-

Cost of defined contribution scheme
1,122,746
930,106
-
-

BPO employees
4,165,853
1,959,421
-
-

41,575,190
29,951,824
-
-


The average monthly number of employees, including the Directors, during the year was as follows:


        2022
        2021
            No.
            No.







Management
131
127



Engineers
445
227



Contractors
12
28



Support
122
75



BPO employees
380
188

1,090
645

The BPO team (Business Process Outsourcing Employees) in the Philippines is part of the Engie Impact organisation working exclusively on expenses and data management service provision for Engie Insight.


9.

Directors' remuneration

Director's are remunerated via the subsidiary company Red Engineering Design Limited

2022
2021
        £
        £
Directors' emoluments

176,078

117,570
 

During the year retirement benefits were accruing to two Directors (2021 - two) in respect of defined contribution pension schemes.
The highest paid Director received remuneration of £96,417 (2021 - £72,733).

Page 24

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Interest receivable

2022
2021
£
£


Difference on foreign exchange
300,124
-


11.


Interest payable and similar expenses

2022
2021
£
£


Other loan interest payable
7,837
9,588

Difference on foreign exchange
-
374,910


12.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
113,978
564,723


Total current tax
113,978
564,723

Deferred tax


Origination and reversal of timing differences
-
27,062

Total deferred tax
-
27,062


Taxation on profit on ordinary activities
113,978
591,785
Page 25

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


(Loss)/profit on ordinary activities before tax
(3,070,943)
1,566,036


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(583,479)
297,547

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
234,481
81,275

Capital allowances for year in excess of depreciation
(186,866)
(104,283)

Adjustments to tax charge in respect of prior periods
321,952
-

Non-taxable income
(51,383)
30,890

Adjustment in research and development expenditure credit accrual
125,188
-

Foreign tax rate difference
(59,082)
27,779

Deferred tax asset not recognised
313,167
258,577

Total tax charge for the year
113,978
591,785


Factors that may affect future tax charges

The main rate of corporation tax has risen from 19% to 25% from 1 April 2023. On this basis deferred tax is provided at the future rate of 25%. The impact of these changes is not expected to be material.

Page 26

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Intangible assets

Group





Development expenditure
Goodwill
Total

£
£
£



Cost


At 1 January 2022
474,045
200,770
674,815


Additions
50,000
808,689
858,689


On reclassification of assets
(188,897)
-
(188,897)



At 31 December 2022

335,148
1,009,459
1,344,607



Amortisation


At 1 January 2022
142,853
-
142,853


Charge for the year on owned assets
57,893
245,392
303,285


On reclassification of assets
(37,779)
-
(37,779)



At 31 December 2022

162,967
245,392
408,359



Net book value



At 31 December 2022
172,181
764,067
936,248



At 31 December 2021
331,192
200,770
531,962



Page 27

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

14.


Tangible fixed assets

Group






Office equipment

£



Cost or valuation


At 1 January 2022
3,186,701


Additions
2,685,549


Exchange adjustments
32,117



At 31 December 2022

5,904,367



Depreciation


At 1 January 2022
1,155,738


Charge for the year on owned assets
1,120,316



At 31 December 2022

2,276,054



Net book value



At 31 December 2022
3,628,313



At 31 December 2021
2,030,963




The net book value of land and buildings may be further analysed as follows:


2022
2021
£
£

Short leasehold
342,682
409,999


Page 28

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2022
2,833,070


Additions
2,187,885



At 31 December 2022
5,020,955




During the year ended 31 December 2020, a fellow group subsidiary acquired 100% of the net assets of Callaghan Engineering Limited, a company whose office is registered in Ireland. The Company has deemed Callaghan Engineering Limited to be under the full control of the Company by way of a Power of Attorney document. The investment has therefore been accounted for as a quasi-subsidiary within these financial statements.


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Red Engineering Design Ltd
Ordinary
100%
Engie Impact Philippines
Ordinary
100%
Red Group Services DWC-LLC
Ordinary
100%
Engie Impact PTE
Ordinary
100%
Engie Impact UK Limited
Ordinary
100%
C3 Resources Limited
Ordinary
100%
Power Efficiency Holdings Limited
Ordinary
100%

Page 29

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Debtors

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Due after more than one year

Other debtors
109,125
91,945
-
-


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Due within one year

Trade debtors
19,541,276
12,495,559
-
-

Amounts owed by group undertakings
1,439,658
267,958
1,334,712
1,334,712

Other debtors
171,252
212,803
1,880
20

Prepayments and accrued income
11,246,968
10,949,977
-
-

Tax recoverable
771,486
57,069
-
-

Deferred taxation
440,876
108,279
-
-

33,611,516
24,091,645
1,336,592
1,334,732


Amounts owed by group undertakings are non-interest bearing and repayable on demand.


17.


Cash and cash equivalents

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Cash at bank and in hand
8,313,375
5,749,885
2,134
310


Page 30

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

18.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Trade creditors
11,877,861
5,003,986
120
120

Amounts owed to group undertakings
9,494,681
5,472,403
5,078,874
2,877,467

Cash pool account with group undertaking
1,496,805
-
-
-

Corporation tax
-
893,901
-
-

Other taxation and social security
1,975,318
1,773,945
-
-

Other creditors
1,235,414
668,629
-
-

Accruals and deferred income
11,998,459
7,112,358
-
-

38,078,538
20,925,222
5,078,994
2,877,587


Within the Group's amounts owed to group undertakings, there is an interest bearing loan payable to Engie Treasury Management of £4,623,284 (2021: £1,280,342). This loan is unsecured and bears interest at a rate range between 4.21% to 4.73% per annum, and is repayable on demand.
All other amounts owed to group undertakings are unsecured, non-interest bearing and repayable on demand.


19.


Creditors: Amounts falling due after more than one year

Group
Group
2022
2021
£
£

Accruals and deferred income
179,003
-



Page 31

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

20.


Financial instruments

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Financial assets

Cash at bank
8,313,375
5,749,885
2,134
310

Financial assets measured at amortised cost
30,390,070
12,976,262
1,336,592
1,334,732

38,703,445
18,726,147
1,338,726
1,335,042


Financial liabilities

Financial liabilities measured at amortised cost
(34,175,467)
(18,550,873)
(5,078,994)
(2,877,587)


Financial assets measured at fair value through profit or loss comprise cash at bank.


Financial assets that are debt instruments measured at amortised cost comprise trade debtors, amounts due from group, other debtors and accrued income. 


Financial liabilities measured at amortised cost comprise trade creditors, amounts owed to group undertakings, cash pool with group undertaking accruals and other creditors.

Page 32

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

21.


Deferred taxation


Group



2022
2021


£

£






At beginning of year
108,279
135,341


Charged to profit or loss
332,597
(27,062)



At end of year
440,876
108,279

The deferred tax asset is made up as follows:

Group
Group
2022
2021
£
£

Accelerated capital allowances
440,876
108,279


22.


Provisions


Group



Other provision

£





At 1 January 2022
2,128


Charged to profit or loss
56,838



At 31 December 2022
58,966


23.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



77,000 (2021 - 77,000) A Ordinary shares of £0.01 each
770
770
33,000 (2021 - 33,000) B Ordinary shares of £0.01 each
330
330

1,100

1,100


Page 33

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

24.


Reserves

Foreign exchange reserve

The foreign exchange reserve includes differences arising upon translation of foreign denominated balances as part of the consolidation process.

Merger Reserve

The merger reserve represents the effect of the group reconstruction accounted for using merger accounting.

Profit and loss account

The profit and loss account includes all current and prior year period profits and losses.

Page 34

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

25.
 

Business combinations

On 1 January 2022, the Group acquired 100% of the share capital of C3 Resources, and the immediate parent company of Engie Impact UK Limited (Power Efficiency Holdings Limited).
The total consideration paid by the group across these transactions is greater than the book value of the net assets acquired, meaning goodwill of £808,069 arose from these transactions. The details of the business combinations were as follows:

Acquisition of Engie Impact UK Limited, C3 Resources Limited and Power Efficiency Holdings Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value
£
£

Fixed Assets

Tangible
270,173
270,173

Intangible
129,127
129,127

399,300
399,300

Current Assets

Debtors
1,876,786
1,876,786

Total Assets
2,276,086
2,276,086

Creditors

Due within one year
(1,213,582)
(1,213,582)

Deferred taxation
316,692
316,692

Total Identifiable net assets
1,379,196
1,379,196


Goodwill
808,689

Total purchase consideration
2,187,885

Consideration

£


Debt instruments
2,187,885

Cash outflow on acquisition


Page 35

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022


26.


Pension commitments

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 £1,030,876 (2021: £833,824). Contributions totalling £152,045 (2021: £82,246) were payable to the fund at the balance sheet date and are included in creditors.

The Group operates a Defined benefit pension scheme.

For 2022 and 2021, the Group engaged the services of Zalamea Actuarial Services to determine the retirement benefit obligation and retirement expense as at 31 December 2022. The following tables summarise the component of retirement expense recognised in the financial statements based on the actuarial valuation dated 31 December 2022.



Pension scheme liability
(378,889)
(293,491)


The amounts recognised in profit or loss are as follows:

2022
2021
£
£


Current service cost
53,171
34,586

Past service cost
15,207
8,953

Total
68,378
43,539


Reconciliation of present value of plan assets and liabilities were as follows:

2022
2021
£
£


Opening defined benefit obligation
293,491
234,112

Current service cost
53,171
34,586

Net Interest costs
15,207
8,953

Net Actuarial gains and (losses)
17,615
28,109

Exchange differences on foreign exchange schemes
(595)
(12,269)

Closing defined benefit obligation
378,889
293,491


The cumulative amount of actuarial gains and losses recognised in the Consolidated statement of comprehensive income was £NIL (2021 - £NIL).





 


Page 36

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
26.Pension commitments (continued)


Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

2022
2021
%
%
Discount rate


7.22

5.08
 
Future salary increases


3

3
 



 

No employees of the parent company were members of the defined benefit scheme.






27.


Commitments under operating leases

At 31 December 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2022
2021
£
£

Not later than 1 year
1,382,412
864,028

Later than 1 year and not later than 5 years
1,278,758
2,033,823

Later than 5 years
2,763,257
-

5,424,427
2,897,851

28.


Related party transactions

During the year ended 31 December 2022, the Group made sales of £4,696,320 (2021: £808,406) to other group companies within the Engie group of companies. At the balance sheet date the Group was owed £1,264,586 (2021: £80,069) by other group companies within the Engie Group. The Group also made purchases of £2,068,130 (2021: £455,167) from other companies within the Engie group of companies during the year.  At the balance sheet date the Group owed £287,431 (2021: £124,591) to Engie group companies.
During the year ended 31 December 2020, a fellow group subsidiary, Engie Transition Services SAS acquired 100% of the net assets of Callaghan Engineering Limited, a company whose office is registered in Ireland. The Group has deemed Callaghan Engineering Limited to be under the full control of the Group by way of a Power of Attorney document. The investment has therefore been accounted for within these accounts. In relation to this the Group owed Engie Transition Services SAS £2,510,491 (2021: £2,510,491).

Page 37

 
RED GROUP HOLDINGS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

29.


Post balance sheet events

On 1 January 2023, a subsidiary, RED Engineering Design Ltd, acquired the trade and assets of another subsidiary, RED Group Services DWC LLC. This has no impact on the consolidated results of RED Group Holdings Limited.
On 16 May 2023, a resolution was passed by the Company that the subsidiary RED Group Services DWC LLC will be dissolved.


30.


Controlling party

The controlling party is Tractebel Impact Belgium. The smallest group preparing consolidated financial statements is Engie S.A.  The registered office of the company is 1, Place de Samuel de Champlain Courbevoie, 92400 France.

Page 38