Company registration number 00053703 (England and Wales)
THE READING FOOTBALL CLUB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
THE READING FOOTBALL CLUB LIMITED
COMPANY INFORMATION
Directors
Mr N Niruttinanon
Ms X Hawken
Mr Y Dai
Mr D Pang
Secretary
Mr GP Odell
Company number
00053703
Registered office
Select Car Leasing Stadium
Junction 11
M4
Reading
RG2 0FL
Auditor
Myers Clark
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
Bankers
Bank of China
1 Lothbury
London
EC2R 7DB
THE READING FOOTBALL CLUB LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 31
THE READING FOOTBALL CLUB LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The directors present their report on the affairs of The Reading Football Club Limited (“the Company” or “the Club”), together with the financial statements for the year ended 30 June 2023.

 

Background

 

The Club’s Board of Directors is set out on page 4 along with details of appointments and resignations where applicable during the year.

 

The chief executive has responsibility, in close liaison with the directors, for the day to day running and long term operation of the Club and refers to the Board in regard to significant decisions affecting all aspects of the Club.

Financial Review

The Company reported a loss before tax for the year of £21.7m (2022: £17.3m). The loss for the year increases the deficit on profit and loss reserves. The total deficit on shareholders’ funds carried forward at 30 June 2023 increased to £78.6m.

Total turnover increased by £1.77m from £16.91m to £18.68m principally because of increases in media & broadcasting and matchday revenues.

Matchday revenue increased by £1.2m to £4.85m compared to the previous year.

There was an increase of £0.9m in media and broadcasting revenues to £9.39m.

Salary costs, which are included in other operating expenses have continued to fall and they decreased by £0.8m from £25.3m in 2022 to £24.5m in 2023.

Amortisation, depreciation and impairment costs have decreased from £9.6m in 2022 to £4.8m in 2023.

The profit on disposal of players' registrations comprises total profits of £1.65m generated from sales, appearance and sell-on clauses.

THE READING FOOTBALL CLUB LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Principal risk and uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the Company’s long term performance. These risks and uncertainties are monitored by the Board on a regular basis.

Income

The Club derives its income from three principal sources: gate receipts, television and commercial relationships.

All three sources of income are dependent on the performance of the first team and its appeal to football supporters. The performance of the first team is significantly influenced by the quality of the coaching staff and the players that the Club can attract in a highly competitive market both on the domestic and European levels.

Expenditure

In order to attract the talent which will continue to improve the performances of the first team the Club continually invests in the playing staff by way of both transfer and wages.

Regulatory environment

The Club is regulated by the rules of the FA, FAPL, UEFA and FIFA. These regulations have a direct impact of the Club as they cover areas such as the division of centrally negotiated television deals and the operation of the transfer market. The Club has staff whose roles include ensuring that the Club monitors the evolution of the rules and ensures compliance with them.

Funding

Funding is provided by the Club’s owners. The Club reviews and updates its cash forecasts on a regular basis and keeps the owners aware of financial commitments going forwards.

Going concern

The company's business activities, together with the factors likely to affect its future development and performance are set out above. The financial position of the Company, its cash flows, liquidity position and borrowings are described in these financial statements. The directors have prepared cash flow forecasts which indicate that the company will need additional funds over the next 12 months, and it is uncertain whether those additional funds will be made available and on this basis, there exists a material uncertainty. If additional funds were not available then it casts significant doubts on the company's ability to continue as a going concern and therefore it may not be able to realise its assets and discharge its liabilities in the normal course of business.

THE READING FOOTBALL CLUB LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
Key performance indicators

 

The Club has a range of financial and non-financial performance indicators.

 

On-field performance

EFL Championship 22nd place

FA Cup 4th Round

EFL Cup 1st Round

 

Revenue

2022/23 £18.7m

2021/22 £16.9m

2020/21 £13.8m

2019/20 £17.8m

2018/19 £21.0m

2017/18 £17.9m

2016/17 £36.7m

 

Match attendance

Average attendance 14,027 (2022: 14,249, 2021*, 2020: 12,684, 2019: 14,991)

No of season ticket holders 8,204 (2022: 8,346, 2021*, 2020: 9,561, 2019: 10,052)

Matchday revenue £4.8m (2022: £3.6m, 2021: £0.6m*, 2020: £3.6m, 2019: £4.7m)

 

* Only 3 matches were played with fans allowed in the stadium due to Covid-19 restrictions

 

Wages costs

Wages costs to turnover ratio 131% (2022: 150%)

Total wage costs of £24.5m (2022: £25.3m)

 

On behalf of the board

Mr D Pang
Director
24 March 2025
THE READING FOOTBALL CLUB LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -

The directors present their annual report and financial statements for the year ended 30 June 2023.

Principal activities

The principal activity of the Company continues to be that of a professional Football League Club. Following the company’s expansion of its facilities in recent years, the company also provides sports and event venue and conference facilities.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr N Niruttinanon
Ms X Hawken
Mr Y Dai
Mr D Pang
Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Disabled persons

The company gives full consideration to applications for employment from disabled persons where the candidate’s aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career developments and promotion.

 

Where existing employees become it is the group’s policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.

Employee involvement

The company operates a framework for employee information and consultation which complies with the requirements of the Information and Consultation of Employees Regulations 2004. Regular meetings are held between local management and employees to allow a free flow of information and ideas.

Future developments

The Club’s owners continue to strive for promotion without jeopardising the Club’s financial position.

Auditor

In accordance with the company’s articles, a resolution proposing that Myers Clark be re-appointed as auditors of the company will be put at the Annual General Meeting.

Energy and carbon report

The company is exempt from the requirement to include Streamlined Energy and Carbon Reporting (SECR) data due to this information being included in the group report of the parent company, Renhe Sports Management Limited. The group report is prepared for the same financial year end as the company and complies with the SECR disclosure requirements set out in Part 7A of Schedule 7.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

THE READING FOOTBALL CLUB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 5 -
Going concern

The financial statements have been drawn up on the basis that the company is a going concern. The validity of the going concern basis of accounting depends on the continuing support of the shareholders. The shareholders have confirmed that they will not seek repayment of their loans to the company unless the company's cash flow permits repayment to be made without jeopardising the company's ability to continue as a going concern. The directors have prepared cash flow forecasts which indicate that the company will need additional funds over the next 12 months, and it is uncertain whether those additional funds will be made available and on this basis, there exists a material uncertainty. If additional funds were not available, then it casts significant doubts on the company's ability to continue as a going concern and therefore it may not be able to realise its assets and discharge its liabilities in the normal course of business.

On behalf of the board
Mr D Pang
Director
24 March 2025
THE READING FOOTBALL CLUB LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 6 -

The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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:

 

 

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 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.

THE READING FOOTBALL CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE READING FOOTBALL CLUB LIMITED
- 7 -
Opinion

We have audited the financial statements of The Reading Football Club Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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:

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 company 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.

Material uncertainty related to going concern

We draw attention to note 1.2 in the financial statements which states that the directors have prepared cash flow forecasts which indicate that the company will need additional funds over the next 12 months, and it is uncertain whether those additional funds will be made available. As stated in note 1.2 these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

Conclusions relating to going concern

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual 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.

Opinions on other matters prescribed by the Companies Act 2006

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

THE READING FOOTBALL CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE READING FOOTBALL CLUB LIMITED
- 8 -
Matters on which we are required to report by exception

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.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

THE READING FOOTBALL CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE READING FOOTBALL CLUB LIMITED
- 9 -
Identifying and assesing risks of material misstatement in respect of irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following;

 

- identifying, evaluating and complying with laws and regulation and whether they were aware of any instances of non-compliance;

- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, tax legislation and pension legislation.

 

In addition, we considered provisions of other laws and regulations that 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 included employment law and the Health and Safety Act.

Audit response to risks identified

As a result of performing the above, we identified revenue recognition, management override of controls and regulation compliance as key audit matters related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit matter. Our procedures to respond to risks identified included the following:

 

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

THE READING FOOTBALL CLUB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE READING FOOTBALL CLUB LIMITED
- 10 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Windmill
Senior Statutory Auditor
For and on behalf of Myers Clark
25 March 2025
Chartered Accountants
Statutory Auditor
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
THE READING FOOTBALL CLUB LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
Operations excluding
Player trading
30 June 2023
Operations excluding
Player
Trading
30 June
2022
player trading
player trading
Notes
£
£
£
£
£
£
Turnover
3
18,679,926
-
18,679,926
16,906,169
-
16,906,169
Administrative expenses
(36,825,146)
(4,500,032)
(41,325,178)
(37,009,957)
(5,243,796)
(42,253,753)
Intercompany loan provision
(8,334,343)
-
0
(8,334,343)
-
0
-
0
-
0
Operating loss
4
(26,479,563)
(4,500,032)
(30,979,595)
(20,103,788)
(5,243,796)
(25,347,584)
Profit on disposal of investments
7,658,939
-
7,658,939
-
-
-
Interest payable and similar charges
8
(51,503)
-
0
(51,503)
(2,250)
-
0
(2,250)
Profit on disposal of players' registrations
-
1,654,390
1,654,390
-
8,092,881
8,092,881
Loss before taxation
(18,872,127)
(2,845,642)
(21,717,769)
(20,106,038)
2,849,085
(17,256,953)
Taxation
9
-
0
-
0
-
0
-
0
-
0
-
0
Loss for the financial year
(18,872,127)
(2,845,642)
(21,717,769)
(20,106,038)
2,849,085
(17,256,953)
Other comprehensive income
-
-
Total comprehensive income for the year
(21,717,769)
(17,256,953)
Player trading consists primarily of the amortisation of the costs of acquiring player registrations, impairment charges and profit on disposal of player registrations.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

THE READING FOOTBALL CLUB LIMITED
BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
-
0
6,787,796
Tangible assets
12
450,317
980,877
Investments
13
2
3,700,885
450,319
11,469,558
Current assets
Stocks
15
-
154,991
Debtors
16
17,667,326
23,118,269
Cash at bank and in hand
210,215
1,082,299
17,877,541
24,355,559
Creditors: amounts falling due within one year
17
(96,885,173)
(98,449,107)
Net current liabilities
(79,007,632)
(74,093,548)
Total assets less current liabilities
(78,557,313)
(62,623,990)
Creditors: amounts falling due after more than one year
18
(18,739)
(234,293)
Net liabilities
(78,576,052)
(62,858,283)
Capital and reserves
Called up share capital
22
122,803,005
117,072,346
Share premium account
23
11,847,892
11,578,551
Profit and loss reserves
(213,226,949)
(191,509,180)
Total equity
(78,576,052)
(62,858,283)
The financial statements were approved by the board of directors and authorised for issue on 24 March 2025 and are signed on its behalf by:
Mr D Pang
Director
Company registration number 00053703 (England and Wales)
THE READING FOOTBALL CLUB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2021
91,995,558
10,399,942
(174,252,227)
(71,856,727)
Year ended 30 June 2022:
Loss and total comprehensive income
-
-
(17,256,953)
(17,256,953)
Issue of share capital
22
25,076,788
1,178,609
-
26,255,397
Balance at 30 June 2022
117,072,346
11,578,551
(191,509,180)
(62,858,283)
Year ended 30 June 2023:
Loss and total comprehensive income
-
-
(21,717,769)
(21,717,769)
Issue of share capital
22
5,730,659
269,341
-
6,000,000
Balance at 30 June 2023
122,803,005
11,847,892
(213,226,949)
(78,576,052)
THE READING FOOTBALL CLUB LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
29
(14,869,112)
(23,453,925)
Interest paid
(51,503)
(2,250)
Net cash outflow from operating activities
(14,920,615)
(23,456,175)
Investing activities
Proceeds on disposal of intangibles
1,654,390
8,892,881
Purchase of tangible fixed assets
(65,160)
(165,108)
Proceeds on disposal of tangible fixed assets
-
834
Net cash generated from investing activities
1,589,230
8,728,607
Financing activities
Proceeds from borrowings
12,467,055
9,250,000
Payment of finance leases obligations
(7,754)
34,247
Net cash generated from financing activities
12,459,301
9,284,247
Net decrease in cash and cash equivalents
(872,084)
(5,443,321)
Cash and cash equivalents at beginning of year
1,082,299
6,525,620
Cash and cash equivalents at end of year
210,215
1,082,299
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 15 -
1
Accounting policies
Company information

The Reading Football Club Limited is a private company limited by shares incorporated in England and Wales. The registered office is Select Car Leasing Stadium, Junction 11, M4, Reading, RG2 0FL.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

The Reading Football Club Limited was a wholly owned subsidiary of Renhe Sports Management Co Limited and the results of The Reading Football Club Limited are included in the consolidated financial statements of Renhe Sports Management Co Limited which are available from Select Car Leasing Stadium, Reading, RG2 0FL.

1.2
Going concern

The financial statements have been drawn up on the basis that the company is a going concern. The validity of the going concern basis of accounting depends on the continuing support of the shareholders. The shareholders have confirmed that they will not seek repayment of their loans to the company unless the company’s cash flow permits repayment to be made without jeopardising the company’s ability to continue as a going concern. The directors have prepared cash flow forecasts which indicate that the company will need additional funds over the next 12 months, and it is uncertain whether those additional funds will be made available and on this basis, there exists a material uncertainty. If additional funds were not available, then it casts significant doubts on the company’s ability to continue as a going concern and therefore it may not be able to realise its assets and discharge its liabilities in the normal course of business.true

 

1.3
Turnover

Turnover, which excludes value added tax, represents receipts and all other income associated with the company’s principal activity, excluding fees receivable from other football clubs on the transfer of players’ registrations.

 

Match day receipts are stated after deducting the percentage based payments to The Football Association, The Football League and visiting clubs. This revenue is recognised over the course of the football season as the games are played.

 

Broadcasting fees are recognised over the course of the season as the games are played. The fixed element of broadcasting income is recognised over the course of the playing season.

 

Sponsorship and similar commercial income is recognised over the duration of the respective contracts.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
1.4
Players' registration costs

Transfer fees payable for the acquisition of players’ registrations, including transfer fee levies and other direct costs, are capitalised as intangible fixed assets. These costs are amortised, in equal annual instalments, fully over the contract period. In the event that the initial contract is renegotiated prior to expiry, the written down value at the date of renegotiation is amortised over the extended period. Fees receivable are set off against the players' net book value at the date of sale, plus any payments made in settlement of contracts, and the difference is treated as a profit or loss on disposal. Permanent diminutions in value below the amortised value, such as through injury or loss of form, are provided for when management become aware that the diminution is permanent.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is calculated so as to write off the cost of all tangible fixed assets over their expected useful economic lives on a straight line basis. The principal annual rates used for this purpose, are as follows:

Training ground improvements
10% of cost
Fixtures, fittings and equipment
20% of cost / 25% reducing balance

Assets in the course of construction are not depreciated until they are brought into use.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

1.7
Impairment of fixed assets

At each reporting end date, the company reviews the carrying amounts of its tangible, intangible and financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognised in profit or loss.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include trade and other receivables and cash due within one year, are initially measured at transaction price including transaction costs and are subsequently carried at cost less impairment.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities including trade and other payables and loans from fellow group companies due within one year, are initially recognised at transaction price including transaction costs and are subsequently measured at the undiscounted amount of the cash or other consideration expected to be paid.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 18 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 19 -
1.12
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 company'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.

 

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.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Leases

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of change on the net obligation in each period.

 

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

1.15
Grants

Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate.

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 20 -
1.17

Players' signing on fees

Players’ contracts of employment may include a signing on fee payable in equal instalments over the period of the contract. The company’s policy is to recognise the expense when paid to the player.

1.18

Deferred income

Deferred income represents income from sponsorship agreements and other contractual agreements which will be credited to the profit and loss account over the period of the agreements, season ticket renewals for the 2023/24 season and advance income from executive boxes.

1.19

Pensions

The company makes contributions on behalf of employees and directors to The Football League Pension and Life Assurance Scheme. Contributions are charged to the profit and loss account over the period to which they relate. In addition, the company is making contributions in respect of its share of the deficit of the defined benefit section of The Football League Pension and Life Assurance Scheme (the “Scheme”). Under the provisions of FRS 102 Section 28 the Scheme would be treated as a defined benefit multi-employee scheme. The Scheme’s actuary has advised that the participating employers’ share of the underlying assets and liabilities cannot be identified on a reasonable and consistent basis and accordingly no disclosures are made under the provisions of FRS 102 Section 28. The assets of the Scheme are held independent from the company.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover and other revenue

The company has one main business segment, that of professional football operations. As a result, no additional business segment information is required to be provided. The company operates in one geographical location, the United Kingdom, and accordingly no additional geographical information is required to be provided.

 

Notwithstanding this, a voluntary analysis of the turnover is given below to assist with the understanding of the business,

 

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Media & broadcasting
9,391,781
8,449,049
Matchday receipts
4,847,057
3,643,777
Commercial income
4,304,836
4,650,792
Other income
136,252
162,551
18,679,926
16,906,169
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
4
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
323,638
393,023
Depreciation of tangible fixed assets held under finance leases
8,702
6,963
Amortisation of intangible assets
4,500,032
9,208,138
Profit on disposal of player registrations
1,654,390
1,607,520
Cost of stocks recognised as an expense
-
418,863
Operating lease charges
1,579,726
1,598,042
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
26,000
24,500
Remuneration of auditors for accounting and taxation services
19,000
18,700
45,000
43,200
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Players
51
39
Football management and coaching staff
79
74
Administrative staff
59
60
Staff employed under government training schemes
27
23
Matchday staff
67
53
Total
283
249

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
21,807,198
22,421,164
Social security costs
2,513,181
2,758,569
Pension costs
149,832
143,044
24,470,211
25,322,777
Redundancy payments made or committed
-
-
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
316,775
302,167
Company pension contributions to defined contribution schemes
2,641
2,490
319,417
304,657

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
232,775
213,375
8
Interest payable and similar expenses
2023
2022
£
£
Other loans
13,930
21,435
Charges on finance leases and hire purchase contracts
2,065
22,553
Disclosed on the profit and loss account as follows:
Other interest payable and similar expenses
51,503
2,250
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 23 -
9
Taxation

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(21,717,769)
(17,256,953)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(4,126,376)
(3,278,821)
Unutilised tax losses carried forward
4,126,376
3,278,821
Taxation credit for the year
-
-

On the basis of these financial statements no provision has been made for corporation tax.

 

A deferred tax asset has not been recognised in respect of the net timing differences relating to tax trading losses and accelerated capital allowances as there is insufficient evidence that the asset will be recovered. The amount of the asset not recognised is approximately £60m (2022: £50m). The asset would be recovered if sufficient taxable trading profits arose in the future.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
10
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Intangible assets
11
709,454
-
0
Recognised in:
Administrative expenses
709,454
-

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

11
Intangible fixed assets
£
Cost
At 1 July 2022
20,604,484
Disposals
(17,672,411)
At 30 June 2023
2,932,073
Amortisation and impairment
At 1 July 2022
13,816,688
Amortisation charged for the year
4,500,032
Impairment losses
709,454
Disposals
(16,094,101)
At 30 June 2023
2,932,073
Carrying amount
At 30 June 2023
-
0
At 30 June 2022
6,787,796

More information on impairment movements in the year is given in note 10.

The figures for cost of player registrations are historic cost figures for purchased players only. Accordingly, the net book amount of player registrations will not reflect, nor is it intended to, the current market value of these players, nor does it take into account players developed through the company’s youth system.

 

The directors consider the net realisable value of intangible fixed assets to be significantly greater than their book value.

    

Amortisation of intangible fixed assets is included in operating expenses.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 25 -
12
Tangible fixed assets
Training ground improvements
Fixtures, fittings and equipment
Total
£
£
£
Cost
At 1 July 2022
266,415
2,738,690
3,005,105
Additions
-
0
65,160
65,160
Disposals
(266,415)
(341,474)
(607,889)
At 30 June 2023
-
0
2,462,376
2,462,376
Depreciation and impairment
At 1 July 2022
-
0
2,024,227
2,024,227
Depreciation charged in the year
-
0
332,340
332,340
Eliminated in respect of disposals
-
0
(344,508)
(344,508)
At 30 June 2023
-
0
2,012,059
2,012,059
Carrying amount
At 30 June 2023
-
0
450,317
450,317
At 30 June 2022
266,414
714,463
980,877

Assets held under finance lease and hire purchase contracts during the year have an original cost of £41,770 (2022: £41,770) and have a net book value of £26,493 (2022: £34,808). Depreciation charged for the year was £8,702 (2022: £6,963).

 

All tangible fixed assets are pledged as security for the company’s other loans.

13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
2
2
Investments in associates
-
0
3,700,883
2
3,700,885
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
13
Fixed asset investments
(Continued)
- 26 -
Movements in fixed asset investments
Shares in subsidiaries and associates
£
Cost or valuation
At 1 July 2022
3,700,885
Disposals
(3,700,883)
At 30 June 2023
2
Carrying amount
At 30 June 2023
2
At 30 June 2022
3,700,885
14
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Reading FC Community Trust
England
Charitable activities
Ordinary
100.00
RFC Bearwood Limited
England
Property development
Ordinary
100.00
Reading Women's Football Club Limited
England
Football club
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Profit/(Loss)
Capital and Reserves
£
£
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
-
0
154,991
The estimated replacement cost of stocks does not materially differ from the balance sheet value.
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 27 -
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,004,718
1,427,814
Player registrations
2,373,164
-
Amounts owed by group undertakings
12,541,013
19,115,162
Other debtors
8,634
1,822,383
Prepayments and accrued income
1,086,544
752,910
17,014,073
23,118,269
2023
2022
Amounts falling due after more than one year:
£
£
Player registrations
653,253
-
0
Total debtors
17,667,326
23,118,269
17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
20
7,754
7,754
Other borrowings
19
79,795,543
83,384,205
Player regsitration fees
-
0
500,000
Trade creditors
3,303,003
2,512,394
Taxation and social security
3,141,482
978,483
Deferred income
2,546,405
1,827,520
Other creditors
20,696
2,270,330
Accruals
8,070,290
6,968,421
96,885,173
98,449,107
18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
20
18,739
26,493
Other borrowings
19
-
389,400
Accruals and deferred income
-
118,955
18,739
534,848
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 28 -
19
Loans and overdrafts
2023
2022
£
£
Other loans
194,600
389,400
Loans from group undertakings
79,600,743
83,189,605
79,795,343
83,579,005
Payable within one year
79,795,343
83,384,205
Payable after one year
-
389,400

The loans from group undertakings are secured by fixed charges over all property or undertaking of the company. No security has been provided for the Other Loans.

20
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
7,754
7,754
In two to five years
18,739
26,493
26,493
34,247

Certain plant and machinery and motor vehicles are held under finance lease arrangements. Finance lease liabilities are secured by the assets held under finance leases. The lease agreements include fixed lease payments and a purchase option at the end of the lease term.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
149,832
143,044

The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company in independently administered funds. The pension cost charge represents contributions payable by the company to the funds.

 

Defined benefit scheme

 

Certain of the company’s ex-employees are members of The Football League Pension and Life Assurance Scheme, a defined benefit scheme. The company is one of a number of participating employers in the scheme. The assets of the scheme are held separately from those of the company. Under the provisions of FRS 102 the scheme is accounted for as a defined contribution scheme. The latest actuarial valuation of the scheme reported that there was a deficit of £27.6m as at 31 August 2020. The Reading Football Club Limited’s share of the deficit at 31 August 2020 was £43,559. This is being repaid by increased contributions in the years to 2027. The share of the deficit has not been recognised in the financial statements as the balance is not material.

 

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 29 -
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 50p each
245,606,010
234,144,692
122,803,005
117,072,346

The company has one class of ordinary shares. Each share is entitled to one vote in any circumstances, equal rights to dividends, entitles the holder to participate in a distribution including arising from a winding up of the company and are non-redeemable.

During the year 11,461,318 (2022: 50,153,576 ) Ordinary 50p shares were issued in exchange for debt totalling £6,000,000(2022: £26,255,397).

23
Share premium account
2023
2022
£
£
At the beginning of the year
11,578,551
10,399,942
Issue of new shares
269,341
1,178,609
At the end of the year
11,847,892
11,578,551

Share premium account includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

24
Operating lease commitments
Lessee

Operating lease payments include rentals payable by the company for the use of the Madejski Stadium. The charge is £1,500,000 per annum until 28 June 2043.

At the reporting end date the company was committed to making the following payments under non-cancellable operating leases in the year to 30 June 2023:

2023
2022
£
£
Within one year
1,500,000
1,530,884
Between two and five years
6,046,675
6,005,634
In over five years
22,500,000
24,000,000
30,046,675
31,536,518
THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 30 -
25
Financial commitments, guarantees and contingent liabilities

Under the terms of certain contracts for the purchase of players’ registrations, future payments may be due dependent on the future success of the team and/or future team selection of individual players. The maximum un-provided liability which may arise in respect of this at 30 June 2023 is £220,000 (2022: £1,720,000). In addition, under the terms attached to the purchase of certain players’ registrations, an amount may become payable to the previous club on any subsequent sale of the players’ registration. This is normally expressed as a percentage of the subsequent transfer fee received in excess of the original transfer fee paid. Due to its unpredictable nature the amount in respect of these cannot be quantified.

26
Related party transactions
Remuneration of key management personnel

Key management personnel include all directors of the company who together have authority and responsibility for planning, directing and controlling the activities of the company. The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
458,913
607,199

Other related party transactions

The company has taken advantage of the exemption available in accordance with FRS 102 not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.

 

At the year end, RFC Prop Co Limited, an associate of the company, owed the company £NIL (2022: £2,252,925 ). The loan is interest free and repayable on demand.

 

At the year end, the company owed it's shareholder, Reading Asia Holdings Limited (previously known as Reading Football Holdings Limited) £1,089,142 (2022: £1,142,455 ). The loan is interest free and repayable on demand.

 

During the year, the company was invoiced £1,500,000 (2022: £1,500,000) from Prestige Fortune Asia Limited in relation to the lease of Madejski Stadium. Mr Yongge Dai is a director and ultimate owner of Prestige Fortune Asia Limited.The amount owed at the year end £6,000,000 (2022: £4,500,000).

 

Transactions have taken place during the year with businesses in which directors have an interest as follows:

 

27
Events after the reporting date

Since the year end, the company has acquired no players’ registrations other than free transfers (2022: £Nil). The company has also sold players’ registrations for proceeds of £Nil (2022: £Nil). The company has agreed to terminate contracts of 1 player (2022: None) for amounts payable of £Nil (2022: £Nil).

28
Ultimate controlling party

The immediate parent company is Renhe Sports Management Co Limited, a company incorporated in England and Wales. The ultimate parent company is Great Shine International Limited, a company incorporated in Hong Kong. The ultimate controlling party is Mr Yongge Dai by virtue of his shareholding in Great Shine International Limited.

THE READING FOOTBALL CLUB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 31 -
29
Cash absorbed by operations
2023
2022
£
£
Loss for the year after tax
(21,717,769)
(17,256,953)
Adjustments for:
Finance costs
51,503
2,250
Amortisation and impairment of intangible assets
5,209,486
5,243,796
Depreciation and impairment of tangible fixed assets
332,340
420,032
Profit on disposal of player registrations
(1,654,390)
(8,092,881)
Profit on disposal of fixed assets
(7,658,939)
-
Movements in working capital:
Decrease in stocks
154,991
84,130
Decrease/(increase) in debtors
5,450,943
(849,431)
Increase/(decrease) in creditors
4,243,838
(1,532,261)
Increase/(decrease) in deferred income
718,885
(1,472,607)
Cash absorbed by operations
(14,869,112)
(23,453,925)
30
Analysis of changes in net debt
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
1,082,299
(872,084)
210,215
Borrowings excluding overdrafts
(83,592,005)
3,796,462
(79,795,543)
Obligations under finance leases
(34,247)
7,754
(26,493)
(82,543,953)
2,932,132
(79,611,821)
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