Limited Liability Partnership Registration No. OC428284 (England and Wales)
RED LION HOLDINGS LLP
MEMBERS' REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
RED LION HOLDINGS LLP
LIMITED LIABILITY PARTNERSHIP INFORMATION
Designated members
Grosvenor Red Lion Holdings B Limited
Grosvenor Red Lion Holdings C Limited
KH V Properties 103 Limited
KH V Properties 104 Limited
Limited liability partnership number
OC428284
Registered office
The Wool Barn
Peper Harow
Godalming
Surrey
GU8 6BQ
Auditors
UHY Hacker Young
Quadrant House
4 Thomas More Square
London
E1W 1YW
RED LION HOLDINGS LLP
CONTENTS
Page
Members' report
1 – 2
Independent auditors' report
3 – 6
Consolidated profit and loss account
7
Consolidated statement of comprehensive income
8
Consolidated balance sheet
9 – 10
Individual balance sheet
11 - 12
Consolidated reconciliation of members' interest
13 - 14
Individual reconciliation of members' interest
15
Consolidated statement of cash flows
16 - 17
Notes to the financial statements
18 – 45
RED LION HOLDINGS LLP
MEMBERS' REPORT
FOR THE PERIOD ENDED 25 DECEMBER 2022
The members present their report and the financial statements for the period ended 25 December 2022.
Principal activities and review of the business
The principal object of the LLP is a holding entity and the principal activities of the group in the period under review were those of operating premium food led public houses in Surrey, Hampshire, Berkshire and Gloucestershire.
Throughout the period the group disposed of 4 of its pubs leaving it with 12 pubs, 10 freeholds and 2 leaseholds, located in Southeast England.
The COVID 19 lockdown in the UK ended in December 2021. The hospitality business began to recover as, despite inflation rising steeply throughout the period, consumers' confidence returned to socialize and eat and drink out.
Much of the Directors' time was spent trying to rebuild revenues and manage costs in a higher inflationary environment.
The use of financial instruments is not material for the assessment of the assets, liabilities, financial position and loss of the group.
The results for the period and the financial position at the period-end were considered satisfactory by the members.
No events have occurred since the balance sheet date which significantly affect the group.
Designated members
The designated members who held office during the period and up to the date of signature of the financial statements were as follows:
Grosvenor Red Lion Holdings B Limited
Grosvenor Red Lion Holdings C Limited
KH V Properties 103 Limited
KH V Properties 104 Limited
Policy on members' drawings
The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.
A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership.  There is no opportunity for appreciation of the capital subscribed.  Just as incoming members introduce their capital at “par”, so the retiring members are repaid their capital at “par”.
Statement of members' responsibilities
The members are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance
Page  1
RED LION HOLDINGS LLP
MEMBERS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 limited liability partnership and the group and of the profit or loss of the limited liability partnership and group for that year. In preparing those financial statements, the members are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership's transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and to enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the group and the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as the members are aware, there is no relevant audit information of which the limited liability partnership's auditors are unaware. Additionally, the members have taken all the necessary steps that they ought to have taken as members in order to make themselves aware of all relevant audit information and to establish that the limited liability partnership's auditors are aware of that information.
Auditors
The auditors, UHY Hacker Young, are deemed to be reappointed under section 487(2) of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008).
On behalf of the members
…………………
David Ramsey
for and on behalf of Grosvenor Red Lion Holdings B Limited
Designated Member
12 March 2024
Page  2
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF RED LION HOLDINGS LLP
Opinion
We have audited the group and parent (‘the limited liability partnership') financial statements of Red Lion Holdings LLP for the year ended 25 December 2022, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and notes to the financial statements, including 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).
In our opinion the financial statements:
  • *
give a true and fair view of the state of the group's and limited liability partnership's affairs as at 25 December 2022 and of its loss for the period 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 as applied to limited liability partnerships.
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 limited liability partnership in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statement 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 limited liability partnership'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 members with respect to going concern are described in the relevant sections of this report.
Page  3
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF RED LION HOLDINGS LLP
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 members are responsible for the other information. Our opinion on the financial statements does not cover the other information and 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit.
Responsibilities of members
As explained more fully in the statement of members' responsibilities, the members 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 members 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 members are responsible for assessing the limited liability partnership'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 members either intend to liquidate the limited liability partnership or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Page  4
Irregularities, including fraud, are instances of non-compliance with laws and regulations.  We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.  The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the limited liability partnership and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the limited liability partnership, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 as applied to limited liability partnerships. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to inflated revenue.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of correspondence with and reports to the regulators, including correspondence with the financial conduct authority, review of correspondence with legal advisors, and enquiries of management in so far as they related to the financial statements, and testing of journals and evaluating whether there was evidence of bias by the members that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
Page  5
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF RED LION HOLDINGS LLP
Use of our report
This report is made solely to the members, as a body, in accordance with part 3 of Chapter 16 of the Companies Act 2006 as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the Limited Liability Partnership'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 LLPs members as a body, for our audit work, for this report, or for the opinions we have formed.
Marc Waterman (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young LLP
Chartered Accountants
Statutory Auditor
Quadrant House
4 Thomas More Square
London
E1W 1YW
12 March 2024
2024-03-12
Page  6
RED LION HOLDINGS LLP
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 25 DECEMBER 2022
2022
2021
Notes
£
£
Turnover
16,763,981
11,211,104
Cost of sales
(4,813,032)
(3,552,078)
__________
__________
Gross profit
11,950,949
7,659,026
Administrative expenses
(19,807,009)
(12,711,881)
Exceptional administrative expenses
11
(709,413)
(1,972,914)
Other operating income
3
252,777
1,104,980
__________
__________
Operating loss
(8,312,697)
(5,920,789)
(Losses)/gains in respect of interests
in associated undertakings
(3,803)
981,262
__________
__________
Total operating loss
(8,316,500)
(4,939,527)
Interest receivable and similar income
8
-
121
Interest payable and similar expenses
9
(1,997,901)
(1,837,875)
__________
__________
Loss on ordinary activities before taxation
(10,314,401)
(6,777,281)
Tax on loss on ordinary activities
10
-
(91,981)
__________
__________
Loss for the period after taxation before
members' remuneration and loss available for
discretionary division among members
(10,314,401)
(6,869,262)
Loss attributable to:
Members of the parent
(10,314,401)
(5,706,724)
Non-controlling interests
-
(1,162,538)
__________
__________
(10,314,401)
(6,869,262)
Loss for the period before members' remuneration
and profit shares
(10,314,401)
(6,869,262)
Non-controlling interests
-
1,162,538
__________
__________
Loss for the period available for
discretionary division among members
(10,314,401)
(5,706,724)
Page  7
RED LION HOLDINGS LLP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 25 DECEMBER 2022
2022
2021
£
£
Loss for the financial period
(10,314,401)
(6,869,262)
Other comprehensive income
Unrealised surplus on revaluation of tangible fixed assets
2,544,488
4,774,282
Deferred tax movement on revaluation of tangible fixed assets
(81,659)
(1,193,601)
__________
__________
Other comprehensive income for the period
2,461,829
3,580,681
__________
__________
Total comprehensive expense for the period
(7,851,572)
(3,288,580)
Total comprehensive expense attributable to:
Members of the parent
(7,851,572)
(3,115,017)
Non-controlling interests
-
(173,563)
__________
__________
(7,851,572)
(3,288,580)
Page  8
RED LION HOLDINGS LLP
CONSOLIDATED BALANCE SHEET
AS AT 25 DECEMBER 2022
26 December
25 December
  2021
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
7,004,275
2,621,148
Tangible assets
13
29,746,087
36,866,527
Investments
14
-
-
__________
__________
36,750,362
39,487,675
Current assets
Stocks
239,707
255,018
Debtors: amounts falling due
within one year
15
1,219,870
2,135,655
Cash at bank and in hand
670,689
858,446
_________
_________
2,130,266
3,249,119
Creditors: amounts falling due
within one year
16
(17,832,972)
(16,071,520)
_________
_________
Net current liabilities
(15,702,706)
(12,822,401)
__________
__________
Total assets less current liabilities
21,861,248
26,665,274
Creditors: amounts falling due
after more than one year
17
(16,381,593)
(16,316,389)
Provision for liabilities
Deferred taxation
18
(2,088,765)
(2,170,424)
_________
_________
(2,088,765)
(2,170,424)
__________
__________
Net assets
2,577,298
8,178,461
Page  9
RED LION HOLDINGS LLP
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 25 DECEMBER 2022
26 December
  25 December
2022
2021
Notes
£
£
REPRESENTED BY:
Loans and other amounts due to
members within one year
Other amounts
-
10,784,934
Equity - Members' other interests:
Members' capital classified as equity
14,656,442
1,000,000
Revaluation reserve classified as equity
5,136,194
2,591,706
Other reserves classified as equity
(17,215,338)
(8,234,313)
__________
__________
2,577,298
(4,642,607)
Non-controlling interests
-
2,036,134
__________
__________
2,577,298
8,178,461
TOTAL MEMBERS' INTERESTS
Loans and other debts due to members
14,656,442
11,784,934
Members' other interests
(12,079,144)
(5,642,607)
__________
__________
2,577,298
6,142,327
The financial statements were approved by the members and authorised for issue on
12 March 2024
2024-03-12
and are signed on their behalf by:
…………………
David Ramsey
for and on behalf of Grosvenor Red Lion Holdings B Limited
Designated Member
Limited Liability Partnership Registration No. OC428284
Page  10
RED LION HOLDINGS LLP
INDIVIDUAL BALANCE SHEET
AS AT
25 DECEMBER 2022
25 December 2022
25 December
26 December
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
14
-
2,440,688
Current assets
Debtors: amounts falling due after more than
one year
15
-
1,605,268
Debtors: amounts falling due within one year
15
22,808,156
11,072,725
_________
_________
22,808,156
12,677,933
Creditors: amounts falling due
   within one year
16
(7,121,213)
(3,253,730)
_________
_________
Net current assets
15,686,943
9,424,263
_________
_________
Total assets less current liabilities
15,686,943
11,864,951
Creditors: amounts falling due
after more than one year
    17
(1,136,000)
-
_________
_________
Net assets
14,550,943
11,864,951
Page  11
RED LION HOLDINGS LLP
INDIVIDUAL BALANCE SHEET (CONTINUED)
AS AT 25 DECEMBER 2022
26 December
25 December
2022
2021
Notes
£
£
£
£
REPRESENTED BY:
Loans and other amounts due to
members within one year
Other amounts
-
10,784,934
Equity - Members' other interests:
Members' capital classified as equity
14,656,442
1,000,000
Other reserves classified as equity brought forward
80,017
105,321
Loss for the period available for
Discretionary division among members
(185,516)
(25,304)
_________
_________
Other reserves classified as equity carried forward
(105,499)
80,017
__________
__________
14,550,943
1,080,017
__________
__________
14,550,943
11,864,951
TOTAL MEMBERS' INTERESTS
Loans and other debts due to members
-
10,784,934
Members' other interests
14,550,943
1,080,017
__________
__________
14,550,943
11,864,951
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent limited liability partnership is not presented as part of these financial statements. The parent limited liability partnership's loss on ordinary activities after taxation for the financial period amounted to £185,516 (2021: £25,304).
The financial statements were approved by the members and authorised for issue on 12 March 2024 and are signed on their behalf by:
…………………
David Ramsey
for and on behalf of Grosvenor Red Lion Holdings B Limited
Designated Member
Limited Liability Partnership Registration No. OC428284
Page  12
RED LION HOLDINGS LLP
CONSOLIDATED RECONCILATION OF MEMBERS' INTERESTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
Non-
   Equity
other interests
Current financial period – Group
Members'
Members'
Revaluation
Other
attributable
controlling
Total
Capital
reserve
reserves
to members
interest
equity
£
£
£
£
£
£
Members' interests
at 27 December 2021
1,000,000
2,591,706
(8,234,313)
(4,642,607)
2,036,134
(2,606,473)
Loss for the period available for
division among members
-
-
(10,314,401)
(10,314,401)
-
(10,314,401)
Removal of non-controlling interest
-
-
(1,162,538)
(1,162,538)
1,162,538
-
Other adjustment
-
-
2,495,914
2,495,914
-
2,495,914
__________
__________
_________
__________
__________
__________
Members' interests after loss for
the period
1,000,000
2,591,706
(17,215,338)
(13,623,632)
3,198,672
(10,424,960)
Deferred tax on revaluation relating to
non-controlling interests
-
(329,658)
-
(329,658)
329,658
-
Surplus on revaluation of freehold property
-
(48,785)
-
(48,785)
-
(48,785)
Deferred tax on revaluation
-
81,659
-
81,659
-
81,659
Other adjustment
-
1,522,639
-
1,522,639
-
1,522,639
Non-controlling interest proportion of
revaluation surplus
-
1,318,633
-
1,318,633
(1,318,633)
-
Measurement of business combination
-
-
-
-
(2,209,697)
(2,209,697)
Introduced by members
13,656,422
-
-
13,656,422
-
13,656,422
_________
__________
__________
_________
__________
__________
Members' interests
at 25 December 2022
14,656,442
5,136,194
(17,215,338)
2,577,298
-
2,577,298
Page  13
RED LION HOLDINGS LLP
CONSOLIDATED RECONCILATION OF MEMBERS' INTERESTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
Non-
Prior financial period – Group
Members'
other interests
   Equity
Members'
Revaluation
Other
attributable
controlling
Total
Capital
reserve
reserves
to members
interest
equity
£
£
£
£
£
£
Members' interests
at 28 December 2020
1,000,000
-
(2,527,589)
(1,527,589)
-
(1,527,589)
Loss for the period available for
division among members
-
-
(5,706,724)
(5,706,724)
(1,162,538)
(6,869,262)
__________
__________
_________
__________
__________
__________
Members' interests after loss for
the period
1,000,000
-
(8,234,313)
(7,234,313)
(1,162,538)
(8,396,851)
Deferred tax on revaluation relating to
non-controlling interests
-
-
-
-
(329,658)
(329,658)
Surplus on revaluation of freehold property
-
3,455,649
-
3,455,649
-
3,455,649
Deferred tax on revaluation
-
(863,943)
-
(863,943)
-
(863,943)
Non-controlling interest proportion of
revaluation surplus
-
-
-
-
1,318,633
1,318,633
Measurement of business combination
-
-
-
-
2,209,697
2,209,697
Introduced by members
-
-
-
-
-
-
_________
__________
__________
_________
__________
__________
Members' interests
at 26 December 2021
1,000,000
2,591,706
(8,234,313)
(4,642,607)
2,036,134
(2,606,473)
Page  14
RED LION HOLDINGS LLP
INDIVIDUAL RECONCILATION OF MEMBERS' INTERESTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
Current financial year – Limited Liability Partnership
Members' other
Loans
Total
Interests
and other
Members'
Other
Total
debts due
Capital
reserves
to/(from)
members
£
£
£
£
£
Members' interests
at 27 December 2021
1,000,000
80,017
1,080,017
-
1,080,017
Loss for the period available for
division among members
-
(185,516)
(185,516)
-
(185,516)
_________
_________
_________
_________
_________
Members' interests after loss
for the period
1,000,000
(105,499)
894,501
-
894,501
Introduced by member
13,656,422
-
13,656,422
-
13,656,422
_________
_________
_________
_________
_________
Members' interests
at 25 December 2022
14,656,422
(105,499)
14,550,923
-
14,550,923
Prior financial year – Limited Liability Partnership
Members' other
Loans
Total
Interests
and other
Members'
Other
Total
debts due
Capital
reserves
to/(from)
members
£
£
£
£
£
Members' interests
at 27 December 2020
1,000,000
105,321
1,105,321
-
1,105,321
Loss for the year available for
division among members
-
(25,304)
(25,304)
-
(25,304)
_________
_________
_________
_________
_________
Members' interests after loss
for the year
1,000,000
80,017
1,080,017
-
1,080,017
Introduced by member
-
-
-
-
-
_________
_________
_________
_________
_________
Members' interests
at 26 December 2021
1,000,000
80,017
1,080,017
-
1,080,017
Page  15
RED LION HOLDINGS LLP
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 25 DECEMBER 2022
2022
2021
Note
£
£
£
£
Cash flows from operating activities
Loss for the financial period
(10,314,401)
(5,706,724)
Adjustments for:
Amortisation of intangible assets
456,640
251,984
Depreciation of tangible assets
2,005,405
1,524,889
Government grants
(60,667)
(969,833)
Interest paid
1,997,901
1,837,875
Devaluations
619,637
-
Interest received
-
(121)
Taxation charge
-
91,981
(Increase) in stocks
15,311
(247,311)
(Increase) in debtors
915,785
(1,648,358)
lncrease/(decrease) in creditors
(4,538,986)
3868,490
Share of operating (loss)/profit in associates
-
(981,262)
Corporation tax received
-
55,988
Loss for the year attributable
to non-controlling interests
-
(1,162538)
Non-cash flow loan movement
896,799
-
Gain on sale of subsidiary
2,037,526
-
Revaluation reserve movement
2,544,488
-
Minority interest
(2,036,134)
-
_________
_________
4,853,705
2,621,784
Net cash flow from operating activities
(5,460,696)
(3,084,940)
Investing activities
Purchase of intangible fixed assets
-
(46,306)
Purchase of tangible fixed assets
(763,580)
(8,310,947)
Government grants received
-
969,833
Purchase of fixed asset investments
(313,473)
(2,551,671)
Interest received
-
121
_________
_________
Net cash used in investing activities
(1,077,053)
(9,938,970)
Financing activities
New secured loans
-
1,074,610
Repayment of loans
(422,106)
(7,480,538)
New other loans
6,391,951
12,825,854
Amounts introduced by members
-
7,238,730
_________
_________
Net cash generated from financing activities
5,969,845
13,658,656
Page  16
RED LION HOLDINGS LLP
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
2022
2021
Note
£
£
£
£
_________
_________
Net (decrease)/increase in cash and cash equivalents
(187,757)
634,746
Cash and cash equivalents at beginning of period
858,446
223,700
_________
_________
Cash and cash equivalents at end of period
670,689
858,446
Relating to:
Cash at bank and in hand
670,689
858,446
Page  17
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies
Limited liability partnership information
Red Lion Holdings LLP is a limited liability partnership incorporated in England and Wales. The registered office is The Wool Barn, Peper Harow, Godalming, England, GU8 6BQ.
The
group
consists
of Red Lion Holdings LLP and all of its subsidiaries.
1.1
Accounting convention
These financial statements have been prepared in accordance with the Statement of Recommended Practice “Accounting by Limited Liability Partnerships” issued in January 2017, together 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 except that information relating to the group's joint ventures has not been disclosed as the members consider this information to be of a sensitive nature.
The financial statements are prepared in sterling, which is the functional and presentational currency of the limited liability partnership.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The parent limited liability partnership is included in the consolidated financial statements, and is considered to be a qualifying entity for the purposes of FRS 102. The limited liability partnership has therefore taken advantage of exemptions from the following disclosure requirements for parent limited liability partnership information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows' – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments' and Section 12 ‘Other Financial Instrument Issues' – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures' – Compensation for key management personnel.
1.2
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the limited liability partnership and its subsidiary undertakings, which were prepared to 25 December 2022, using the principles of acquisition accounting.  Intra-group transactions, balances and results are eliminated fully on consolidation.  Uniform accounting policies have been used across the group.
Page  18
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
1.12
Going concern
At the balance sheet date the group had net current liabilities of £15,702,706. Included in creditors due in less than year are amounts totalling £8,697,029 borrowed under a loan facility with KH V Lending 302 Limited, a company whose ultimate parent entity is Kitty Hawk Capital Partners V LP, a limited partnership registered in Jersey, and which has a controlling interest in KH Properties 103 Limited and KH Properties 104 Limited, who are corporate members of the LLP. The members have received confirmation that such amounts will not be required to be repaid until the LLP has the resources to do so.
Management has prepared cash flow forecasts for the group covering a period extending beyond 12 months from the date of approval of these financial statements that demonstrate the sufficient availability of funds to continue on in business and meeting its liabilities as they fall due. For these reasons, the members believe it is appropriate to prepare the financial statements on a going concern basis.
1.4
Turnover
Turnover 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 for food and beverage sales, and accommodation income, excluding value added tax and other sales tax.
1.5
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.
1.6
Government grants
Government grants are accounted under the accruals model as permitted by FRS 102. Grants received in the year are revenue based grants under the Coronavirus Job Retention Scheme (CJRS) and the Retail, Hospitality and Leisure Grant Fund. They have been recognised as Other Income in the Statement of Comprehensive Income.
1.7
Interest income
Interest income is recognised in profit or loss using the effective interest method.
1.8
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.
1.9
Borrowing costs
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Page  19
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
1.10
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 Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
1.11
Current and deferred taxation
The tax expense for the period 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 reporting date in the countries where the LLP 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 reporting 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 reporting date.
1.12
Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Page  20
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
1.13
Division and distribution of profits
A division of profits is the mechanism by which the profits of a Group become a debt due to members. A division may be automatic or discretionary, may relate to some or all of the profits for a financial period and may take place during or after the end of a financial period.
An automatic division of profits is one where the Group does not have an unconditional right to avoid making a division of an amount of profits based on the members' agreement in force at the time, whereas a discretionary division of profits requires a decision to be made by the Group, which it has the unconditional right to avoid making.
The Group divides profits both automatically and discretionarily. Automatic divisions of profits are recognised as 'Members' remuneration charged as an expense in the Consolidated Statement of Comprehensive Income. Discretionary divisions of profits are recognised as amounts due to members, although may be used to offset amounts which have been drawn by members, which are recognised as loan assets repayable.
Profits of the Group which are not yet divided among the members are shown under 'Other reserves' on the Statement of Financial Position, pending a discretionary decision to divide the profits.
In the event of the Group making losses, the loss is recognised as a credit amount of 'Members' remuneration charged as an expense where it is automatically divided or as a debit within equity under 'Other reserves' if not divided automatically.
1.14
Members' participating interests
Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by
members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised
within ‘Members' remuneration charged as an expense' in arriving at the relevant year's result.
Undivided amounts that are classified as equity are shown within ‘Members' other interests'. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members' interests.
Once
an
obligation has been created in favour of members through allocation of profits or
unavoidable
other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts
due
to members' to the extent they exceed debts due from a specific member.
Page  21
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
Accounting policies (continued)
2
1.15
Intangible fixed 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 Income Statement over its useful economic life and recognised within administrative expenses.
Management have estimated the useful economic life of positive and negative goodwill at 10 years.
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.
Tangible fixed assets
1.16
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, as follows:
Straight line over the shorter of the useful economic life and the period of the lease
Freehold property
2% straight line
Long-term leasehold property
Over the life of the lease
Short-term leasehold property
20% Rates vary between 10% - 20% straight line and 25% reducing balance basis
Furniture, fittings and equipment
Computer equipment
33%  straight line
Other fixed assets
WIP so no depreciation charge
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.
Page  22
RED LION HOLDINGS LLP
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Page  23
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
1.17
Revaluation of tangible fixed assets
Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
1.18
Impairment of fixed assets and goodwill
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
1.19
Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment.
1.20
Associates and joint ventures
An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.
An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
Page  24
RED LION HOLDINGS LLP
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 Income Statement 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.
Page  25
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
1.21
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to ·complete and sell. The impairment loss is recognised immediately in profit or loss.
1.22
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.
1.23
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.
1.24
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.
1.25
Provisions for liabilities
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting 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.
1.26
Financial instruments
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 in the 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.
Page  26
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
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.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
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 group after deducting all of its liabilities.
Basic 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 Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument 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.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Page  27
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.27
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.28
Leasing
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
2
Judgements in applying accounting policies and key sources of estimation uncertainty
In the process of applying its accounting policies, the Group is required to make certain estimates, judgements and assumptions that is believes are reasonable based on the information available. These judgements, estimates and assumptions affect the amounts of assets and liabilities at the date of the financial statements and the amounts of revenues and expenses recognised during the reporting periods presented.
Page  28
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
2
Judgements in applying accounting policies and key sources of estimation uncertainty (continued)
On an ongoing basis, the Group evaluates its estimate using historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Actual results may differ significantly from the estimates, the effect of which is recognised in the period in which the facts that give rise to the revision become known.
The following paragraphs detail the estimates and judgements the Group believes to have the most significant impacts on the annual results under FRS 102.
Tangible Fixed Assets - useful economic lives
The estimated useful economic lives of tangible fixed assets are based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively. Due to the significance of tangible fixed asset investment to the group, variations between actual and estimated useful economic lives could impact operating results both positively and negatively, although historically few changes to estimated useful economic lives have been required.
Adoption of revaluation policy in respect of freehold and leasehold properties  and  impairment review
Management have adopted a policy of revaluation in respect of freehold and leasehold properties as they consider that such a policy enables the accounts to present more relevant information to users of the accounts. In accordance with FRS 102.10.1OA, the adoption of the revaluation basis for these assets has been accounted for prospectively.
The estimated useful economic lives of tangible fixed assets are based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively. Due to the significance of tangible fixed asset investment to the company, variations between actual and estimated useful economic lives could impact operating results both positively and negatively, although historically few changes to estimated useful economic lives have been required.
The group is required to evaluate the carrying values of tangible fixed assets for impairment whenever circumstances indicate, in management's judgement, that the carrying value of such assets may not be recoverable. An impairment review requires management to make subjective judgements and estimates regarding the cash generating units under review. Management have identified each site to be a cash generating unit.
Management tested the carrying value of the sites for impairment in accordance with the requirements of FRS 102 and the group's accounting policy set out in Note 2.17 to these accounts. In carrying out this test, management have estimated the recoverable amount, being the greater of fair value less costs to sell and the asset's value in use. This estimate of the recoverable amount is based on a market valuation of the site at the balance sheet date. On the basis of this value, management considered it appropriate for this. reduction in value of (619,637) to be recognised as an impairment charge in the Statement of Comprehensive Income (see Note 14). These sites will continue to be assessed for impairment in future years based on estimates of the recoverable amount of the sites and the carrying value of the assets held at each reporting date under the existing revaluation policy.
Page  29
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
1
Accounting policies (continued)
2
Judgements in applying accounting policies and key sources of estimation uncertainty (continued)
Estimates of the fair value of the company's sites is an area of judgement. While management consider the assumptions applied to be appropriate and reasonable, changes would impact the estimated recoverable amount and consequently the impairment charge recognised, and the carrying value of tangible fixed assets, in these financial statements.
Goodwill
The useful economic life of the goodwill is based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimate used to calculate amortisation, that charge is adjusted prospectively.
The annual impairment assessment in respect of goodwill requires estimates of the value in use of cash generating units to which goodwill has been allocated. As a result, estimates of future cashflows are required.
Recoverability of intercompany debt
At the balance sheet date the LLP holds balances owed from subsidiary undertakings totalling £11,072,725 resulting from the provision of financing to its subsidiaries provided by its members. Management are required to assess whether there are any indicators of impairment. Where such indicators are identified, management are required to estimate the recoverable amount of the debt and compare this to the carrying amount at the reporting date.
Management consider that at the balance sheet date that such balances were recoverable. Where indications of impairment arise in future periods, any changes would impact the estimated recoverable amount and consequently could result in an impairment loss being recognised in the Statement of Comprehensive Income, and a reduction in the carrying value of amounts owed from group undertakings in the LLP Statement of Financial Position.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment
The group assesses at each reporting date whether there is an indication that investments and loans in its joint ventures may be impaired. If any indication exists, or when annual impairment testing is required, the group estimates the recoverable amount of the investment.
When the carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and is written down to the recoverable amount.
Key sources of estimation uncertainty
Other than estimation of the recoverability of investments described in the critical judgement of impairment above, the group does not have any major sources of estimation uncertainties that, if revised, would result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Page  30
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
3
Other operating income
2022
2021
£
£
Other operating income
120,552
133,822
Government grants receivable
60,667
969,833
Insurance claims receivable
34,885
1,325
Sundry Income
36,673
-
_________
_________
252,777
1,104,980
_________
_________
Government grants receivable consist of the following amounts:
-  2022: (£0) (2021: £650,765) in respect of grants made under the Coronavirus Job Retention Scheme.
- 2022: (£60,667) (2021: £277,944) in respect of local government support grants including those made under the Retail, Hospitality and Leisure Grant Fund, Local Restrictions Support Grants, Lockdown Payments and Restart Grants.
4
Auditor's remuneration
During the period, the Group obtained the following services from the LLP's auditor:
2022
2021
£
£
Fees payable to the LLP's auditor for the audit of the consolidated and
parent LLP's financial statements
157,659
141,500
Fees payable to the LLP's auditor in respect of:
Taxation compliance services
-
17,450
All non-audit services not included above
-
20,300
Group            LLP
5
Employees
      Group
  LLP
2022
2022
2021
2021
£
£
£
£
Wages and salaries
7,644,832
-
5,962,871
-
Social security costs
642,853
-
428,873
-
Cost of defined contribution scheme
134,730
-
144,998
-
__________
_________
__________
_________
8,421,844
-
6,536,742
-
Page  31
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
5
Employees (continued)
The average monthly number of persons (including members with contracts of employment) employed during the period was as follows:
2022
2021
No.
No.
Average number of employees
308
365
The entity has no employees other than the members, who did not receive any remuneration (2021 - £Nil).
6
Information in relation to members
2022
2021
No.
No.
The average number of members during the period was
6
6
7
Members' remuneration
During the period retirement benefits were accruing to no members (2021 - Nil) in respect of defined contribution pension schemes.
8
Interest receivable
2022
2021
£
£
Other interest receivable
-
121
9
Interest payable and similar expenses
2022
2021
£
£
Bank interest payable
247,822
117,976
Other loan interest payable
1,031,401
1,718,523
Loans from group undertakings
718,678
274
Other interest payable
-
1,102
_________
_________
1,997,901
1,837,875
Page  32
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
10
Taxation charge
2022
2021
£
£
Current period tax
UK corporation tax
-
(54,713)
_________
_________
Total current tax charge
-
(54,713)
Deferred tax
Origination and reversal of timing differences
-
146,694
_________
_________
Total deferred tax
-
146,694
_________
_________
Tax on loss
-
91,981
Factors affecting the tax charge for the year
The tax assessed for the period is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:
2022
2021
£
£
Loss on ordinary activities before taxation
(10,314,401)
(6,869,262)
Expected tax charge based on the standard
rate of UK corporation tax of 19% (2021: 19%)
(1,959,736)
(1,305,160)
Effects of:
Expenses not deductible for tax purposes, other
than goodwill amortisation and impairment
382,490
478,802
Fixed assets differences
-
43,386
Deferred tax not recognised
1,577,246
654,071
Other differences leading to an increase in the tax charge
-
220,882
_________
_________
Total tax charge for the period
-
91,981
Page  33
RED LION HOLDINGS LLP
Factors that may affect future tax charges
The corporation tax rate has increased from 19% to 25% from 1 April 2023 for companies making more than £250,000 profit.
Page  34
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
11
Exceptional items
2022
2021
£
£
Impairment charge in respect of tangible fixed assets
-
474,785
Revaluation deficit on freehold property
619,637
1,498,129
Other exceptional items
89,776
-
_________
_________
709,413
1,972,914
The group adopted a policy of revaluation of freehold land and buildings during the period. In respect of all sites this resulted in devaluation totalling £619,637 which have been recognised within profit and loss for the period.
12
Intangible fixed assets
Computer
Negative
Group
software
Goodwill
goodwill
Total
£
£
£
£
Cost
At 27 December 2021
23,100
3,365,896
(409,542)
2,979,454
Consolidation adjustment
-
2,158,653
-
2,158,653
On acquisition of subsidiaries
-
2,293,424
409,542
2,702,966
On disposal of subsidiaries
-
(23,206)
-
(23,206)
_________
_________
_________
_________
At 25 December 2022
23,100
7,794,767
-
7,817,867
_________
_________
_________
_________
Amortisation
At 27 December 2021
-
396,231
(37,925)
358,306
Charge for the period on owned assets
7,700
411,015
37,925
456,640
Eliminated on disposal
-
(1,354)
-
(1,354)
_________
_________
_________
_________
At 25 December 2022
7,700
805,892
-
813,592
_________
_________
_________
_________
Net book value
At 25 December 2022
15,400
6,988,875
-
7,004,275
At 26 December 2021
23,100
2,969,665
(371,617)
2,621,148
Page  35
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
13
Tangible fixed assets
Freehold
Leasehold
Computer
Fixtures,
Total
Group
property
property
equipment
fittings &
equipment
£
£
£
£
£
Cost or valuation
At 27 December 2021
32,361,479
2,186,557
213,339
3,769,639
38,531,014
Adjustment
(725,195)
141,102
(28,106)
2,851,387
2,239,188
_________
_________
_________
_________
_________
At 27 December 2021(adjusted)
31,636,284
2,327,659
185,233
6,621,026
40,770,202
Additions
495,744
4,200
71,505
192,131
763,580
Disposals
(3,830,733)
(204,486)
-
(1,290,356)
(5,325,575)
Impairment
(519,350)
-
-
(40,363)
(599,713)
Transfer
(11,330)
11,330
-
-
-
Revaluations
228,523
-
-
-
228,523
_________
_________
_________
_________
_________
At 25 December 2022
27,999,138
2,138,703
256,738
5,482,438
35,877,017
_________
_________
_________
_________
_________
Depreciation
At 27 December 2021
269,915
553,970
56,057
784,545
1,664,487
Adjustment
4,348
163,719
295
2,917,099
3,085,497
_________
_________
_________
_________
_________
At 27 December 2021(adjusted)
274,299
717,689
56,352
3,701,644
4,749,984
Charge for the period
on owned assets
904,640
119,701
65,034
884,122
1,973,497
Eliminated on disposal
(156,129)
(24,179)
-
(789,838)
(970,146)
On revalued assets
377,595
-
-
-
377,595
_________
_________
_________
_________
_________
At 25 December 2022
1,400,405
813,211
121,386
3,795,928
6,130,930
_________
_________
_________
_________
_________
Net book value
At 25 December 2022
26,598,733
1,325,492
135,352
1,686,510
29,746,087
At 26 December 2021
32,091,564
1,632,587
157,282
2,985,094
36,866,527
The limited liability partnership has no tangible fixed assets as at 25 December 2022 and at 26 December 2021.
Page  36
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
13
Tangible fixed assets (continued)
The net book value of land and buildings may be further analysed as follows:
2022
2021
£
£
Freehold
26,598,733
32,091,564
Long leasehold
1,318,146
1,625,091
Short leasehold
7,346
7,496
_________
_________
27,924,225
33,724,152
The freehold properties have been valued as fully equipped operational sites on the basis of their trading potential as at 25 December 2022 by CBRE at £28,975,000, and incorporated into the financial statements at £27,924,225 to allow for the estimated value of those assets held as fixtures, fittings and equipment included within the valuation.
In respect of two sites this revaluation resulted in a deficit of £619,637 which has been recognised in
profit and loss.
14
Fixed asset investments
Investments
in subsidiaries
Limited Liability Partnership
£
Cost
At 27 December 2021
2,440,688
Reallocation of cost from Red Lion Holdings LLP to
(2,440,688)
Red Lion Holdings 3 Limited
________
At 25 December 2022
-
On 16 March 2022, Grosvenor Pubs Limited, a private limited company in which the LLP held ordinary shares providing 50% of the voting rights, sold its entire interest in its wholly owned subsidiary, Grosvenor Pubs Trading Limited to Red Lion Holdings 3 Limited, a wholly owned subsidiary undertaking of the group. As the underlying basis of the cost of the investment in Grosvenor Pubs Limited was its shareholding in Grosvenor Pubs Trading Limited, the directors have reallocated cost of £2,440,688 to the investment in Red Lion Holdings 3 Limited.
Page  37
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
14
Fixed asset investments (continued)
Subsidiary undertakings
The following were subsidiary undertakings of the LLP:
Name
Class
of shares
Holding
Red Lion Holdings 1 Limited
Ordinary
100%
Red Lion Properties 1 Limited*
Ordinary
100%
Red Lion Properties 2 Limited*
Ordinary
100%
Red Lion Properties 3 Limited*
Ordinary
100%
Red Lion Operations 1 Limited*
Ordinary
100%
Red Lion Operations 2 Limited*
Ordinary
100%
Red Lion Operations 3 Limited*
Ordinary
100%
Red Lion Management and Administration Limited
Ordinary
100%
Red Lion Holdings 2 Limited
Ordinary
100%
Red Mist Holdings Limited*
Ordinary
100%
Red Mist Leisure Limited*
Ordinary
100%
Red Mist Parrot Inn Limited*
Ordinary
100%
Red Mist Pubs Limited*
Ordinary
100%
MWR Developments Limited*
Ordinary
100%
Red Lion Holdings 3 Limited
Ordinary
100%
Grosvenor Pubs Trading Limited*
Ordinary
100%
*Indirect subsidiary undertakings
The registered address for all subsidiary undertakings, direct or indirect is, The Wool Barn, Peper Harow, Godalming, England, GUS 6BQ.
On 1 July 2022 the subsidiary Red Mist Rose and Crown Limited (now known as NDPC Limited) was sold as part of the acquisition of the remaining shares of Red Mist Holdings Limited.
Page  38
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
15
Debtors
Group
LLP
Group
LLP
2022
2022
2021
2021
£
£
£
£
Amounts falling due after more than one year
Amounts owed by group undertakings
-
-
-
1,605,268
Group
LLP
Group
LLP
2022
2022
2021
2021
£
£
£
£
Amounts falling due within one year
Trade debtors
90,218
-
30,315
-
Amounts owed by subsidiary undertakings
-
22,797,959
-
11,072,725
Other debtors
126,375
-
1,724,327
-
Loans and other receivables
435,135
-
-
-
VAT recoverable
39,709
10,197
-
-
Corporation tax recoverable
41,949
-
2,616
-
Prepayments and accrued income
486,484
-
378,397
-
_________
_________
_________
_________
1,219,870
22,808,156
2,135,655
11,072,725
16
Creditors: amounts falling due
Group
LLP
Group
LLP
within one year
2022
2022
2021
2021
£
£
£
£
Bank overdrafts
126,836
-
-
-
Bank loans
4,707,497
-
332,786
-
Other loans
8,697,029
-
7,683,514
-
Trade creditors
708,002
-
2,695,500
-
Amounts owed to group undertakings
-
7,085,827
-
3,253,730
Corporation tax
-
-
1,275
-
Other taxes and social security costs
786,651
-
542,038
-
Other creditors
225,202
375
3,412,932
-
Wages and salaries
598,650
-
-
-
Deposits received
6,791
-
-
-
Accruals and deferred income
1,904,314
35,011
1,403,475
-
_________
_________
_________
_________
17,832,972
7,121,213
16,071,520
3,253,730
Page  39
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
17
Creditors: amounts falling due
Group
LLP
Group
LLP
after more than one year
2022
2022
2021
2021
£
£
£
£
Bank loans
29,986
-
4,754,574
-
Other loans
16,351,607
-
11,190,796
-
Accruals and deferred income
-
-
371,019
-
__________
_________
__________
_________
16,381,593
-
16,316,389
-
Bank loans
The group's borrowing from banks at the balance sheet date consisted of amounts repayable by quarterly instalment equivalent to 1.25% of the loan principal. The terms of these loans were amended in October 2022 and December 2022 and were on the payable on the 29th December 2022.
Other loans
KH V Lending 302 Limited
Other loans include amounts lent to group undertakings by KH V Lending 302 Limited totalling £18,432,500. Under the terms of the loans agreements in relation to £13,462,500 of these loans interest is accrued at 10% per annum.
In respect of one loan of £5,000,000, interest was payable at a rate of 12% per cent per annum for the first six months and 18% per cent per annum thereafter, compounded on each interest payment date, being every three months after the loan is made. The loan termination date is two years. Interest charged on this loan totalled £720, 174 and has been included in accruals payable in less than one year.
KH V Properties 103 Limited
Other loans included amounts lent to group undertakings by KH V Properties 103 Limited totalling £1,486,015. Under the terms of the loans agreements in relations to £1,000,000 of these loans interest is accrued at 25% per annum.
In respect of two loans of £486,015 they have a 25% IRR applied to them upon payment from the conversion date of the loans and are being treated as additional funding.
Page  40
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
18
Deferred taxation
Group
£
At 27 December 2021
2,170,424
Charged to profit or loss
-
Charged to other comprehensive income
(81,659)
Arising on business combinations
-
________
At 25 December 2022
2,088,765
The deferred taxation balance is made up as follows:
£
Accelerated capital allowances
408,474
Deferred tax - rolled over gain into long leasehold assets
55,813
Timing differences
5,030
Unrealised capital gains
1,349,366
Revaluations
270,082
________
At 25 December 2022
2,088,765
19
Loans and other debts due to members
Group
LLP
Group
LLP
2022
2022
2021
2021
£
£
£
£
Other amounts due to members
-
10,784,934
-
10,784,934
Loans and other debts due to members may be further analysed as follows:
Group
LLP
Group
LLP
2022
2022
2021
2021
£
£
£
£
Falling due within one year
-
10,784,934
-
10,784,934
Loans and other debts due to members rank equally with debts due to ordinary creditors in the event of a winding up.
Page  41
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
20
Analysis of net debt (Group)
At 26
Acquisition
At 25
December
Arising from
or disposal of
December
2021
cash flows
subsidiaries
2022
£
£
£
£
Cash at bank and in hand
858,446
125,716
(313,473)
670,689
Bank overdrafts
-
-
-
-
Borrowings due within 1 year
(8,016,300)
(5,515,062)
-
(13,531,362)
Borrowings due after 1 year
(27,101,323)
10,719,730
-
(16,381,593)
__________
_________
__________
_________
Net debt (before members' debt)
(34,,259,177)
5,330,384
(313,473)
(29,242,266)
21
Related party transactions
KH V Lending 302 Limited
KH V Lending 302 Limited is a company whose ultimate parent entity is Kitty Hawk Capital Partners V LP, a limited partnership registered in Jersey, and which has a controlling interest in KH Properties 103 Limited and KH Properties 104 Limited, who are corporate members of the LLP.
The company has made loans to the group as detailed in Note 19 to the accounts. At the balance sheet date, the group owed amounts consisting of £18,892,500 (2021: £10,372,051) in respect of the principal amounts lent. Total interest accrued and recognised as part the loans payable totalled £1,954,146 (2021: £821,747).
Splendid Management Services Limited ("SMSL")
SMSL is a private limited company controlled by the directors of Grosvenor Red Lion Holdings B Limited and Grosvenor Red Lion Holdings C Limited, corporate members of the LLP. During the year SMSL invoiced  the  group  amounts  totalling 416,500 (2021:  £453,064 ). At the balance sheet date £67,786 (2021: £131,710) was due to SMSL from the group.
Taste Food Solutions Limited ("TFSL")
TFSL is a private limited company controlled by the directors of Grosvenor Red Lion Holdings B Limited and Grosvenor Red Lion Holdings C Limited, corporate members of the LLP. During the year the group incurred charges from TFSL in respect of food development consultancy and food products totalling £Nil (2021: £469,286). At the balance sheet date the group owed a balance of £Nil (2021: £Nil) to TFSL.
The LLP has taken advantage of the exemption available under FRS 102 not to disclose transactions with wholly owned group members.
21
Financial commitments
Capital commitments
There were no capital commitments at the end of the period.
Page  42
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
22
Business combinations
On 1 July 2022 the LLP acquired the remaining shares equivalent to a 38.41% interest in Red Mist Holdings Limited and its subsidiaries via its wholly owned subsidiary Red Lion Holdings 2 Limited.
Acquisition of Red Mist Holdings Limited and its subsidiary undertakings
Recognised amounts of identifiable assets acquired and liabilities assumed.
Fair value
Book value
adjustments
Fair value
£
£
£
Fixed Assets
Tangible
20,273,118
765,030
21,416,272
Intangible
151,038
-
151,038
_________
_________
_________
20,424,156
765,030
21,567,310
Current Assets
Stocks
186,315
-
186,315
Debtors
2,845,542
-
2,845,542
Cash at bank and in hand
384,364
-
384,264
_________
_________
_________
Total assets
23,840,277
765,030
24,983,431
_________
_________
_________
Creditors
Due within one year
(17,529,042)
-
Due after one year
(665,928)
-
(665,928)
Deferred taxation
(1,868,798)
-
(1,868,798)
_________
_________
_________
Total Identifiable net assets
3,776,509
765,030
4,919,625
£
Fair value of net assets already owned
3,029,997
Fair value of net assets acquired
1,889,627
Non-controlling interests
-
Goodwill
2,702,810
_________
Total purchase consideration
4,592,437
Page  43
RED LION HOLDINGS LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 25 DECEMBER 2022
22
Business combinations (continued)
Consideration
£
Cash
313,473
Market value of pubs transferred to subsidiary
4,025,000
Proceeds of disposal of shares in subsidiary
18,050
Novation of Directors' loans
(749,917)
Impairment of intercompany loans with subsidiary
1,171,479
Directly attributable costs
29,331
Accounting adjustment
(214,980)
_________
Total purchase consideration
4,592,437
Cash outflow on acquisition
£
Purchase consideration settled in cash, as above
313,473
Directly attributable costs
29,331
_________
342,804
Less: Cash and cash equivalents acquired
-
_________
Net cash outflow on acquisition
342,804
23
Pension costs
Defined contribution money purchase
The Group operates a defined contribution pension scheme. During the year the Group made contributions totalling £134,730 (2021: £141,624). Contributions totalling £48,277 (2021: £54,026) were payable to the fund at the balance sheet date and are included in other creditors.
24
Post balance sheet events
Subsequent to the period end the following events occurred:
On 29 December 2022 the group entered into further funding arrangements under which the group became party to a fixed and floating charge over its assets in respect of group borrowings.
On the 27th October 2023 the subsidiary Red Mist Parrot Inn Limited sold its freehold properties.
On 24th January 2024 the group sold its freehold properties within Red Mist Pubs Limited for £925,000.
Page  44
RED LION HOLDINGS LLP
25
Control
The limited liability partnership is controlled by its members.
Page  45
falseCCH SoftwareiXBRL Review & Tag 2022.22022-12-252021-12-27OC4282842021-12-272022-12-25OC4282842022-12-25OC4282842020-12-272021-12-26OC428284bus:FRS1022021-12-272022-12-25OC428284bus:LimitedLiabilityPartnershipLLP2021-12-272022-12-25OC428284bus:Audited2021-12-272022-12-25OC428284bus:FullAccounts2021-12-272022-12-25xbrli:purexbrli:sharesiso4217:GBP