Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
COMPANY INFORMATION
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RIDGEWALL LIMITED
CONTENTS
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RIDGEWALL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present the Strategic Report for the year ended 31 December 2022.The company continued to trade as providers of managed IT and print management services.
The Company's key objectives are the retention of existing clients through continued service excellence, organic growth by securing new clients and growth by acquisition in existing and complementary markets.
Results and performance The revenue and operating loss of the Company for the year ended 31 December 2022 were £6.3m and £7.2m respectively. After interest receivable, interest payable and tax the retained loss for the year was £7.8m. Trading conditions continued to be difficult in 2022. Revenue decreased by £0.2m on the previous year, reflecting the continued impact of adverse economic factors on our customers, with reduced activity levels on our recurring services and continued deferral of discretionary spend. Gross profit decreased by £1.2m, and gross margin fell from 52.9% in 2021 to 35.4% in 2022, reflecting increased costs. Operating loss increased by £2.4m. We continue to invest in the business to prepare for future growth and different client landscape and services as the market recovers. We anticipate revenues and profits turning around in 2023 as the economy in general, and the hospitality sector specifically, continues the recovery process. The above metrics are considered to be the key performance indicators of the Group.
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RIDGEWALL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
The Company is entirely dependent on the financial performance of the trading group of companies that form the Ridgewall group of companies.
The key business risks for the Group are: •Credit risk – the Company is exposed to credit risk from its trading activities primarily from its trade receivables. Failure of a customer to meet their financial obligation could result in a financial loss to the Company. Credit quality of the customer is assessed based on third party scoring and individual credit limits are defined following this assessment. Outstanding receivable balances are monitored and chased on a regular basis where needed. Service is halted promptly if credit terms are exceeded. •Liquidity risk – the risk that the Company will not be able to meet its financial obligations as they fall due. Insufficient funds could result in the Company not being able to fund its operations. The Comapny currently has bank and investor finance with interest charges that must be serviced. The Company’s approach is to ensure that it will always have sufficient funds to meet its liabilities when they fall due, both under normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation. The Company has a close relationship with its investors and bank and is confident it has the liquidity support required. •Going concern – given the liquidity risk noted above, should the Comapny not have the support of the investors and bank, the business’ cashflow would be materially affected and the Company would not be able to continue to operate as a going concern. The terms and conditions of the business lending facility with Clydesdale Bank PLC were updated in February 2024, with revised maturity date, financial covenants and capital repayment requirements. The Company’s cash flow forecasts for the 12 months after the date of approval of these financial statements indicate that there will be no breaches of these covenants. The Company is confident that it’s investors and bank will continue to support the group’s strategy and that the Company will have adequate resources to continue in operational existence. •Customer retention – the Company’s revenue is largely derived from ongoing contracts with existing customers, some of which management deem to be “key contracts” given their size. Loss of existing customer contracts could have a negative impact on the Company’s revenues. Customer relationships are monitored on a regular basis and feedback obtained to ensure the Company is providing service excellence at all times. Post reporting date events Like many businesses, due to adverse economic conditions, the Company has experienced a decrease in business activity and increased costs. The Company’s business model means a decrease in customer business levels actively results in lower usages and therefore revenue for the Company. There is a risk of recession and slowing growth. Inflationary pressures are broadly expected to continue in the short term. These financial statements have been prepared based upon conditions existing at the end of the reporting period, 31 December 2022, and considering those events occurring subsequent to that date, that provide evidence of conditions that existed at the end of the reporting period.
The Company will continue to be at the forefront of next generation managed IT, cyber security, connectivity and cloud services, unified communications and document solutions. Whilst it is particularly strongly represented in the hospitality industry, the team’s experience and capabilities mean that it is delivering value to clients across a broad and well-diversified range of sectors. The Group is well prepared for future growth and different customer landscapes and services.
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RIDGEWALL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
This report was approved by the board on 19 April 2024 and signed on its behalf.
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RIDGEWALL 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.
The loss for the year, after taxation, amounted to £7,784,362 (2021 - loss £5,223,548).
The directors do not propose a dividend at the year end (2021: £Nil).
The directors who served during the year were:
There have been no significant events affecting the Company since the year end.
The auditors, Haslers, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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RIDGEWALL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors are responsible for preparing the Strategic Report, the Directors' Report and the 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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RIDGEWALL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RIDGEWALL LIMITED
We have audited the financial statements of Ridgewall Limited (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company 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.
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 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.
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RIDGEWALL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RIDGEWALL LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the 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 Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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RIDGEWALL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RIDGEWALL LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that: • had a direct effect on the determination of material amounts and disclosures in the financial statements. These included the UK Companies Act and tax legislation etc; and • do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty. These include operational and employment laws and regulations including health and safety regulations, environmental regulations and GDPR. We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by inquiring with management and those responsible for legal and compliance framework’s. These inquiries were corroborated through a review of correspondence with regulatory bodies and gaining an understanding of the entity level controls of the Company in respect to these areas and controls in place to reduce opportunity for fraudulent transactions. We discussed among the audit engagement team regarding the opportunities and incentives, including management override of controls, that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. We also communicated the applicable laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our specific procedures performed to address it are described below: The principal risks related to management override in relation to posting of non-standard manual journals in respect of revenue and management bias in accounting estimates. Procedures performed to address these were as follows: • Walkthrough testing was carried out to identify and assess the design effectiveness of controls, management have in place to prevent and detect fraud, including known of suspected instances or non-compliance with laws and regulations and fraud; • Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; • Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; • Using analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;
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RIDGEWALL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RIDGEWALL LIMITED (CONTINUED)
• Assessing the appropriateness of accounting estimates and challenging any significant assumptions or judgements made by management; • Incorporating testing of manual journal entries that were posted throughout the year. In particular we focused on material journal entries, journal entries posted with unusual account combinations, journal entries crediting revenue or cash, and journal entries with specific defined descriptions. These were scrutinised for evidence of unusual entries; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Old Station Road
Essex
IG10 4PL
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RIDGEWALL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
REGISTERED NUMBER: 07175075
BALANCE SHEET
AS AT 31 DECEMBER 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 13 to 31 form part of these financial statements.
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RIDGEWALL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Ridgewall Limited is a private company, limited by shares, registered in England & Wales, with a registration number 07176075. The registered address of the company is 6th Floor 9 Appold Street, London, United Kingdom, EC2A 2AP. The principal activity of the company is that of managed IT and print management.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest pound sterling.
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Hook Topco Limited as at 31 December 2022 and these financial statements may be obtained from Companies House.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The Company made a loss of £7,784,362 and has net current liabilities of £26,252,747 at the year end. The Company has prepared forecasts for the period to 31 December 2026 that assume that revenue will grow started in 2023 and subsequent years and that the Company will generate positive cash flow. The directors consider that the revenue growth plans are achievable but given they are future events, there is a risk that these growth rates will not be achieved. The directors would take mitigating actions if required.
Since the period end, trading conditions have continued to be challenging. However, there has been a net inflow of cash since the period end, the Group has continued to meet its day to day working capital requirements and has maintained a cash balance. The Directors believe that the hospitality industry is recovering and the sector is experiencing new investment and renewal of existing infrastructure. The Directors are confident that 2023 will show a recovery for the Group. The terms and conditions of the business lending facility with Clydesdale Bank PLC were updated in February 2024, with revised maturity date, financial covenants and capital repayment requirements. The Company’s cash flow forecasts for the 12 months after the date of approval of these financial statements indicate that there will be no breaches of these revised covenants. The Company is confident that its ultimate controlling party and bank will continue to support the Company’s strategy and that the Company will have adequate resources to continue in operational existence. The directors have received written confirmation from its ultimate controlling party, of its intention to support the Company. Having considered these factors, the directors have a reasonable expectation that the Company will have adequate resources to continue in operational existence, meeting all liabilities as they fall due, for a period of twelve months from the approval of the financial statements and as such the directors have determined that the Company’s application of the going concern basis of accounting remains appropriate.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Revenue from the sale of goods is recognised when the following conditions are satisfied: - the Company has transferred the significant risks and rewards of ownership to the buyer; - the Company has dispatched the goods; and - the costs incurred and the costs to complete the transaction can be measured reliably. Sale of IT 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 the following conditions are satisfied: - the amount of revenue received at the end of the reporting period can be measured reliably; - the stage of completion of the contract at the end of the reporting period can be measured using - the costs incurred and the costs to complete the transaction can be measured reliably.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Goodwill
Other intangible assets
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.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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:
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.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. The directors do not believe that there have been judgements (apart from those involving estimates) made in the process of applying the above accounting policies that have had a significant effect on amounts recognised in the financial statements.
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
12.Taxation (continued)
During March 2021 the UK chancellor announced an expected change to the UK’s main corporation tax rates from 19% to 25%. This was enacted into the Finance Act in June 2021. The main rate will increase to 25% from 1 April 2023 and will impact the corporation tax provision of the Company from that date
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £94,409 (2021: £102,512).
Contributions totaling £33,240 (2021: £36,560) were payable to the fund at the balance sheet date and are included in creditors.
26.Other financial commitments
Cross guarantees to secure loan note borrowings in Hook Topco Limited and Hook Midco 1 Limited exists between Hook Topco Limited, Hook Midco 1 Limited, Hook Midco 2 Limited, Hook Bidco Limited, Ridgewall Limited, Connecting London Limited, Telnet International Limited and Nomis Connections Limited. The amounts outstanding at the balance sheet date totalled £53,057,127 (2021: £47,188,057).
A cross guarantee to secure bank loan borrowings in Ridgewall Limited exists between Ridgewall Limited, Connecting London Limited, Telnet International Limited and Nomis Connections Limited. The amount outstanding at the balance sheet date totalled £6,243,807 (2021: £6,026,646).
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RIDGEWALL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors consider the ultimate parent undertaking to be Hook Topco Limited, a company incorporated in the United Kingdom.
Hook Topco Limited is the smallest and largest group for which consolidated accounts are prepared. The consolidated accounts are available from its registered office, 6th Floor 9 Appold Street, London, United Kingdom, EC2A 2AP. The ultimate controlling entity is Inflexion Enterprise Fund V GP Guernsey Limited. In the opinion of the directors there is deemed to be no one controlling party.
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