Registration number:
Right to Dream Limited
|
Brebners
|
Right to Dream Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Income Statement |
|
Consolidated Statement of Comprehensive Income |
|
Consolidated Statement of Financial Position |
|
Statement of Financial Position |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Notes to the Financial Statements |
Right to Dream Limited
Company Information
Directors |
L Mansour D Dickinson T A Vernon K A Siddiqui M Mansour C Vernon |
Registered office |
|
Auditor |
|
Right to Dream Limited
Strategic Report for the Year Ended 31 December 2022
The directors present their strategic report for the year ended 31 December 2022.
Fair review of the business
The company is principally engaged in the management of its subsidiaries, who are themselves engaged in the operation of a professional football club, the development of professional football players and the education of disadvantaged young people.
Right to Dream Limited Group combines elite football development, innovative educational provision and a tailored character development programme through their Academy in Ghana, club FC Nordsjaelland A/S in Denmark and foundations in USA and the UK. The Right to Dream Academy in Ghana is involved in football education and training, mentorships and and offers educational pathways for talented young men and women. The group's operations have been largely stable.
FC Nordsjaelland A/S was placed 2nd in the Danish Superliga for 2022/2023, after finishing 9th in 2021/2022. The decrease in total revenue was a result of decreased transfer sales (comprises 51% (2021: 76%) of total revenue for the year) compared to 2021 by 57%. Conditional income from previous player transfers increased in the year. TV revenue has increased in the year by 43% due to a better league position in the second half of 2022, with the club in 1st place at 31 December 2022. Matchday income increased by 98% from 2021. All other forms of revenue, including sponsorship and other revenue also showed smaller increases in 2022 compared to 2021. The club continues to develop the talent of players through the cooperation of football academies in Farum and Ghana.
The year ended 31 December 2022 showed a loss in the group's operations as the investments in competencies continue an upward trajectory. One of the main drivers of this loss was FC Nordsjaelland A/S actively rejecting offers on key players to keep momentum in the performance in the Danish Superliga. Furthermore, the parent company received 74% less funding income in the year but its administrative expenses increased by 94% due to high cost international expansion projects.
The overall cost base of the group has a continuous upward trajectory. However, should the group want to reduce the losses being made, the transfer income can be increased significantly by accepting the continuous offers received for key players.
Right to Dream Limited
Strategic Report for the Year Ended 31 December 2022
Trading Performance
The group’s turnover for the year ended 31 December 2022 was £16.0m compared to £25.2m in 2021, a decrease of £9.2m.
Direct costs have increased by 17% from 2021 despite decreased expenditure related to player transfers. Amounts spent on player transfers have decreased by 12% from 2021 because of a sell-on clause to a former club of a player sold in 2021. Matchday costs and costs on sponsorships have increased due to increased activity due to better league position and partly recovery of revenue returning to pre COVID-19 levels. The decrease in player transfer costs have resulted in the gross profit margin decreasing with a gross profit margin of 51% compared to 74% in 2021.
Employment costs have increased by 29% in 2022, the increase is a result of new contracts being signed by key players and increased number of staff. The increase in staff is seen as an investment in future activities and growth. Overall general admin expenses have increased by 29% in the current year. The increase is due to investment in future activities and growth, as well as a loss of £459k being made on foreign currency compared to a loss of £246k in 2021. Consequently, the group made a loss after tax of £12,418k, an increase on the loss in 2021 of £1,052k.
At 31 December 2022 the consolidated Statement of Financial Position showed total net assets of £4.9m (£11.3m in 2021) and in terms of liquidity, current assets exceeded current liabilities by £635k.
During the year additional share capital was subscribed of an amount of £6.0m.
Financial KPIs
The group's key financial and other performance indicators during the year were as follows:
Unit |
2022 |
2021 |
|
Turnover |
£000 |
15,989 |
25,230 |
Gross Profit |
£000 |
8,171 |
18,571 |
Profit/(Loss) after tax (£) |
£000 |
12,418 |
(853) |
Non-financial KPIs
There are a number of non-financial KPIs monitored by the Board but none are considered key.
Principal risks and uncertainties
The company and group's principal financial instruments comprise bank balances and contractual revenue. The main purpose of these instruments is to finance the group's operations.
Due to the nature of the financial instruments used by the group there is exposure to price risk on future contracts for sponsorship and player sales revenues. The group's approach to managing other risks applicable to the financial instruments concerned is detailed below.
In respect of bank balances the liquidity risk is managed by maintaining a positive balance in cash flow estimates based on contracted revenues and utilising budgets and forecasts for non-planned spending decisions, as well as conservative estimations of non-contractual revenue.
Credit risk revenue is managed by ensuring invoicing and payment chasing are under a strict review process and credit checks are undertaken on new customers and clients.
Right to Dream Limited
Strategic Report for the Year Ended 31 December 2022
Future outlook
The directors expect to continue the investments in staff to provide a stronger foundation for growing revenues.
The group expects the income due from player transfers to increase in 2023. There is also an expectation that sponsorship and matchday income will increase in the future due to better performance current season. There is already a positive development in sponsorship agreements being renewed and new agreements signed.
Additional share capital has been subscribed to post year end for a total of £4.5m.
Approved by the
.........................................
Director
Right to Dream Limited
Directors' Report for the Year Ended 31 December 2022
The directors present their report and the for the year ended 31 December 2022.
Directors of the company
The directors who held office during the year were as follows:
Dividends
No interim dividends were paid in the year (2021: £Nil) and no final dividend is proposed.
Disclosure of information in the strategic report
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the group's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial risk management and exposure.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
.........................................
Director
Right to Dream Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
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 enable them to ensure that the financial statements comply with the Companies Act 2006 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.
Right to Dream Limited
Independent Auditor's Report to the Members of
Right to Dream Limited
Opinion
We have audited the financial statements of Right to Dream Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, 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).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the company's affairs as at 31 December 2022 and of the group's loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
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.
Right to Dream Limited
Independent Auditor's Report to the Members of
Right to Dream Limited
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor 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.
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 Group and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006), UK corporate taxation laws, environmental legislation, health and safety legislation, anti-bribery legislation and data protection legislation. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.
Right to Dream Limited
Independent Auditor's Report to the Members of
Right to Dream Limited
We understood how the Group is complying with relevant legislation by making enquiries of management and those responsible for legal and compliance procedures. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.
We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection of any regulatory or legal correspondence; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.
Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
The primary responsibility for the detection and prevention of fraud rests with those responsible for governance and management. The further removed non-compliance with laws and regulations is from the events reflected in the financial statements, the less likely the auditor will become aware of it.
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, collusion, omission, misrepresentation or forgery.
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.
......................................
For and on behalf of
130 Shaftesbury Avenue
W1D 5AR
Right to Dream Limited
Consolidated Income Statement for the Year Ended 31 December 2022
Note |
2022 |
2021 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Operating (loss)/profit |
( |
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
82,168 |
(202,305) |
||
(Loss)/profit before tax |
( |
|
|
Taxation |
|
( |
|
(Loss)/profit for the financial year |
( |
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
( |
|
|
Non controlling interests |
( |
|
|
( |
|
Right to Dream Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2022
2022 |
2021 |
|
(Loss)/profit for the year |
( |
|
Foreign currency translation gains/(losses) |
|
( |
Total comprehensive income for the year |
( |
|
Total comprehensive income attributable to: |
||
Owners of the company |
( |
|
Non controlling interests |
( |
|
( |
|
Right to Dream Limited
Consolidated Statement of Financial Position as at 31 December 2022
Note |
2022 |
2021 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
4,584 |
4,584 |
|
Share premium reserve |
12,551,416 |
6,551,416 |
|
Capital contribution reserve |
2,137,866 |
2,137,866 |
|
Retained earnings |
(9,879,478) |
2,268,168 |
|
Equity attributable to owners of the company |
4,814,388 |
10,962,034 |
|
Minority interests |
158,539 |
279,064 |
|
Shareholders' funds |
4,972,927 |
11,241,098 |
Approved and authorised by the
.........................................
Director
Company registration number: 09914944
Right to Dream Limited
Statement of Financial Position as at 31 December 2022
Note |
2022 |
2021 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
- |
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Share premium reserve |
|
|
|
Capital contribution reserve |
|
|
|
Profit and loss account |
( |
( |
|
Total equity |
|
|
Approved and authorised by the
......................................... |
Company registration number: 09914944
Right to Dream Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2022
Equity attributable to the parent company
Share capital |
Share premium |
Capital contribution reserve |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2022 as previously stated |
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
( |
( |
( |
( |
Other comprehensive income |
- |
- |
- |
|
|
- |
|
Total comprehensive income |
- |
- |
- |
( |
( |
( |
( |
New share capital subscribed |
- |
|
- |
- |
|
- |
|
At 31 December 2022 |
|
|
|
( |
|
|
|
Share capital |
Share premium |
Capital contribution reserve |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2021 |
|
|
|
|
|
|
|
Prior period adjustment |
- |
- |
- |
( |
( |
- |
( |
At 1 January 2021 (As restated) |
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
|
|
|
|
Other comprehensive income |
- |
- |
- |
( |
( |
- |
( |
Total comprehensive income |
- |
- |
- |
|
|
|
|
New share capital subscribed |
- |
|
- |
- |
|
- |
|
Purchase of own share capital |
- |
- |
- |
(21,662) |
(21,662) |
- |
(21,662) |
At 31 December 2021 |
|
|
|
|
|
|
|
Right to Dream Limited
Statement of Changes in Equity for the Year Ended 31 December 2022
Share capital |
Share premium |
Capital redemption reserve |
Retained earnings |
Total |
|
At 1 January 2022 |
|
|
|
( |
|
Loss for the year |
- |
- |
- |
( |
( |
New share capital subscribed |
- |
|
- |
- |
|
At 31 December 2022 |
|
|
|
( |
|
Share capital |
Share premium |
Capital contribution reserve |
Profit and loss account |
Total |
|
At 1 January 2021 |
|
|
|
( |
|
Prior period adjustment |
- |
- |
- |
( |
( |
At 1 January 2021 (As restated) |
|
|
|
( |
|
Loss for the year |
- |
- |
- |
( |
( |
Total comprehensive income |
- |
- |
- |
( |
( |
New share capital subscribed |
- |
|
- |
- |
|
At 31 December 2021 |
|
|
|
( |
|
Right to Dream Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2022
Note |
2022 |
2021 |
|
Cash flows from operating activities |
|||
(Loss)/profit for the year |
( |
|
|
Adjustments to cash flows from non-cash items |
|||
Prior year adjustment - loan impairment |
- |
( |
|
Depreciation and amortisation |
|
|
|
Profit from sales of investment properties |
- |
( |
|
Loss on disposal of intangible assets |
|
- |
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
( |
|
|
Foreign exchange gains/losses on non-operating assets and liabilities |
( |
( |
|
( |
|
||
Working capital adjustments |
|||
Increase in stocks |
( |
( |
|
Decrease/(increase) in trade and other debtors |
|
( |
|
Increase in trade and other creditors |
|
|
|
Cash generated from operations |
|
( |
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
( |
( |
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Acquisition of intangible assets |
( |
( |
|
Proceeds from sale of intangible assets |
|
- |
|
Purchase of own shares |
- |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Proceeds from issue of ordinary shares, net of issue costs |
|
|
|
Proceeds from bank borrowing draw downs |
( |
- |
|
Repayment of other borrowing |
- |
( |
|
Receipts from finance lease debtors |
|
- |
|
Net finance lease receipts/(payments) |
( |
( |
|
Net cash flows from financing activities |
|
|
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
3,240,114 |
3,003,039 |
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is :
The principal place of business is:
FC Nordsjaelland A/S
Farum Park 2
DK3520-Farum
Denmark
The principal activity of the company is that of an investment holding company. The principal activity of the group is that of the operation of a professional football club, the development of professional football players and the education of disadvantaged young people.
Accounting policies |
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and Companies Act 2006.
No income statement is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial period of £6,481,274 (2021: £780,791).
Basis of preparation
These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below.
Summary of disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosure exemptions available under FRS 102:
(a) No cash flow statement has been presented for the company
(b) Disclosures in respect of financial instruments of the company have not been prepared.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December each year.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Minority interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Going concern
The consolidated statement of financial position at 31 December 2022 showed net assets amounting to £4,972,927.
The year ended 31 December 2022 has been significantly affected by the effects of the COVID-19 pandemic.
In the January 2023 transfer window, the Group accepted an offer for a key player and executed the transfer receiving income of £8m. Furthermore, sell-on bonuses on former players have been received. The Group's expectation is that further significant transfer income will arise in the future.
The period subsequent to 31 December 2022 has been consistent with expectations. New sponsorship partners have been signed and the group expects renewals of sponsorship agreements to be back to normal following the COVID-19 pandemic.
The group has also received all amounts due in respect of historic player transfers. Some clubs deferred payment to the group but the amounts due were all received in full. The group has been executing an investment plan to increase the capacity in staff for future growth. Therefore, it is expected that the number of employees and the related staff costs will continue to increase during 2023.
In October 2023 an additional academy to the Right to Dream family will be opened in Cairo, Egypt. The operations of this academy will not have a significant impact on costs and income, except for time spent on integrating this academy. In the future there will be a close cooperation between the current academies and this new academy. It is expected that the first players will arrive to FC Nordsjaelland will be in 2027.
The group's management accounts to 30 June 2023 show the group is currently meeting budget and is able to generate sufficient working capital to meet its obligations as they fall due. The group has received £4.5m in additional funding after 31 December 2022 through the issue of new shares.
The group has prepared cashflow forecasts and budgets and considered the position for a period of at least twelve months from the approval of the financial statements to ensure the group has sufficient working capital.
After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis when preparing the financial statements.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Judgements
Other than those involving estimations there are no judgements that management have made in the process of applying the entity's accounting policies that have a significant effect on the amounts recognised in the financial statements. |
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the group’s activities. Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the group.
The group recognises revenue from sponsorships and TV contracts over the period to which the contract relates. Transfer fee income is recognised once a legally binding contract is in place and stadium match-day revenue is recognised as arising.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
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 or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
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 group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Furniture, fittings and equipment |
Straight line over 3-10 years |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intangible assets
Separately acquired rights and licences are shown at historical cost.
Acquired rights and licences acquired in a business combination are recognised at fair value at the acquisition date.
Acquired rights and licences acquired have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Goodwill and licences |
Over 10 years |
Acquired rights |
over the life of the contract |
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.
Creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset.
Where there are a number of similar obligations, for example where a warranty provision has been given, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Leases
Assets held under hire purchase contracts are capitalised at the lesser of fair value or present value of minimum lease payments in the statement of financial position. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease. A corresponding liability is recognised at the same value in the statement of financial position. The asset is then depreciated over its useful life.
The minimum lease payments are apportioned between the finance charge recognised in the income statement and the reduction of the outstanding liability using the effective interest method. The finance charge in each period is allocated so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Financial instruments
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Long term debts with an interest rate that is considered to be less than the market rate are initially measured at the present value of the future payments discounted at an applicable market rate of interest.
Long term debts are subsequently remeasured at amortised cost, using the effective interest rate method.
Turnover |
The analysis of the group's revenue for the year from continuing operations is as follows:
2022 |
2021 |
|
Football revenue |
15,988,988 |
25,230,166 |
The analysis of the group's turnover for the year by geographical market is as follows:
2022 |
2021 |
|
UK |
|
|
Denmark |
|
|
|
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Operating (loss)/profit |
Arrived at after charging/(crediting)
2022 |
2021 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange (gains)/losses |
( |
|
Other interest receivable and similar income |
2022 |
2021 |
|
Interest income on bank deposits |
|
|
Other finance income |
|
|
|
|
Interest payable and similar expenses |
2022 |
2021 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest expense on other finance liabilities |
|
|
|
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Staff costs |
The aggregate payroll costs were as follows:
2022 |
2021 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the group during the year, analysed by category was as follows:
2022 |
2021 |
|
Playing staff |
|
|
Administration and management |
|
|
Football Support Staff |
|
|
|
|
Auditor's remuneration |
2022 |
2021 |
|
Audit of the subsidiary undertakings |
|
|
Other fees paid to auditors
|
|
|
Audit of subsidiary undertakings |
4,600 |
4,000 |
14,835 |
9,100 |
Taxation |
Tax charged/(credited) in the income statement
2022 |
2021 |
|
Foreign tax charge |
- |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
( |
Tax (receipt)/expense in the income statement |
( |
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK of
The differences are reconciled below:
2022 |
2021 |
|
(Loss)/profit before tax |
( |
|
Corporation tax at standard rate |
( |
|
UK effect of disallowed expenses |
|
|
UK effect of tax losses |
|
|
Foreign tax adjustments |
|
|
Deferred tax movement |
( |
( |
Other timing differences |
( |
( |
Total tax (credit)/charge |
( |
|
The rate of taxation payable by the subsidiary undertakings is 22%.
Deferred tax
Group
Deferred tax assets and liabilities
2022 |
Asset |
Liability |
Accelerated Capital Allowances |
|
- |
Unrealised foreign exchange |
- |
( |
Trading losses |
|
- |
Other losses |
|
- |
|
( |
2021 |
Asset |
Liability |
Accelerated Capital Allowances |
|
- |
Unrealised foreign exchange |
- |
( |
Other losses |
|
- |
|
( |
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Intangible assets |
Group
Goodwill |
Acquired rights |
Licences |
Total |
|
Cost or valuation |
||||
At 1 January 2022 |
|
|
|
|
Additions |
- |
|
- |
|
Disposals |
- |
( |
- |
( |
Foreign exchange movements |
- |
|
- |
|
At 31 December 2022 |
|
|
|
|
Amortisation |
||||
At 1 January 2022 |
|
|
|
|
Amortisation charge |
|
|
|
|
Amortisation eliminated on disposals |
- |
( |
- |
( |
Foreign exchange movements |
- |
|
- |
|
At 31 December 2022 |
|
|
|
|
Carrying amount |
||||
At 31 December 2022 |
|
|
|
|
At 31 December 2021 |
|
|
|
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
Licenses |
Total |
|
Cost or valuation |
||
At 1 January 2022 |
|
|
At 31 December 2022 |
|
|
Amortisation |
||
At 1 January 2022 |
|
|
Amortisation charge |
|
|
At 31 December 2022 |
|
|
Carrying amount |
||
At 31 December 2022 |
|
|
At 31 December 2021 |
|
|
Tangible assets |
Group
Furniture, fittings and equipment |
Total |
|
Cost or valuation |
||
At 1 January 2022 |
|
|
Additions |
|
|
Foreign exchange movements |
|
|
At 31 December 2022 |
|
|
Depreciation |
||
At 1 January 2022 |
|
|
Charge for the period |
|
|
Foreign exchange movements |
|
|
At 31 December 2022 |
|
|
Carrying amount |
||
At 31 December 2022 |
|
|
At 31 December 2021 |
|
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Investments |
Group
2022 |
2021 |
|
Investments in associates |
|
|
Associates |
£ |
Cost |
|
At 1 January 2022 and 31 December 2022 |
|
Carrying amount |
|
At 31 December 2022 |
|
At 31 December 2021 |
|
Company
2022 |
2021 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2022 and 31 December 2022 |
|
Carrying amount |
|
At 31 December 2022 |
|
At 31 December 2021 |
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Details of undertakings
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2022 |
2021 |
|||
|
Farum Park 2, 3520 Farum Denmark |
Ordinary |
|
|
|
Farum Park 2, 3520 Farum Denmark |
Ordinary |
|
|
|
130 Shaftesbury Avenue
|
Ordinary |
|
|
* = Direct holding
The principal activities of each subsidiary undertaking are as follows:
Pathways Holding DK ApS - Holding company
F.C. Nordsjælland A/S - Operation of a football club in Denmark
Right To Dream Services Limited - Football support services
Stocks |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Stocks |
|
|
- |
- |
Debtors |
Group |
Company |
||||
Note |
2022 |
2021 |
2022 |
2021 |
|
Trade debtors |
|
|
- |
|
|
Amounts owed by group undertakings |
- |
- |
|
|
|
Other debtors |
|
|
|
|
|
Prepayments |
|
|
- |
|
|
Deferred tax assets |
|
|
|
|
|
Corporation tax asset |
- |
- |
|
- |
|
|
|
|
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Cash and cash equivalents |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Cash at bank |
|
|
- |
|
Creditors |
Group |
Company |
|||
2022 |
(As restated) |
2022 |
2021 |
|
Due within one year |
||||
Bank loans |
|
|
- |
- |
Finance lease obligations |
251,985 |
107,385 |
- |
- |
Trade creditors |
|
|
|
|
Amounts due to group undertakings |
- |
- |
|
|
Social security and other taxes |
|
- |
- |
- |
Other payables |
|
|
- |
|
Accruals |
|
|
|
|
Corporation tax liability |
- |
870,239 |
- |
- |
Deferred income |
|
|
- |
|
|
|
|
|
|
Due after one year |
||||
Bank loans |
|
|
- |
- |
Other non-current financial liabilities |
|
|
- |
- |
Finance lease obligations |
113,081 |
239,292 |
- |
- |
4,864,477 |
6,304,502 |
- |
- |
Finance lease obligations are secured on the assets concerned.
The bank loan relates to a 48,125,000 secured Danish krone loan and interest is payable every 6 months at 1.25% + CIBOR. An amount of 13,750,000 Danish krone is due for repayment within one year.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Analysis of changes in net debt |
Group
At 1 January 2022 |
Other non cash changes |
Cash Flows |
At 31 December 2022 |
|||||
Cash and cash equivalents |
||||||||
Cash |
3,003,039 |
- |
237,075 |
3,240,114 |
||||
Borrowings |
||||||||
Bank borrowings |
(6,213,566) |
487,233 |
- |
(5,726,333) |
||||
Finance lease liabilities |
(346,667) |
- |
(18,400) |
(365,067) |
||||
(7,409,862) |
458,907 |
390,722 |
(6,091,400) |
Pension and other schemes |
The group operates a defined contribution pension scheme. The pension cost charge for the year amounts to £189,683 (2021: £144,813).
Share capital |
Allotted, called up and fully paid shares
2022 |
2021 |
|||
No. |
£ |
No. |
£ |
|
|
|
3,529.70 |
|
3,529.40 |
|
|
779.20 |
|
779.20 |
|
|
275.00 |
|
275.00 |
|
|
0.10 |
|
0.10 |
|
|
0.10 |
|
0.10 |
|
|
0.10 |
|
0.10 |
|
|
|
|
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
During the year 3 ordinary 'A' shares of £0.10 each were issued for a total consideration of £6,000,000. The excess over par value was credited to the share premium account.
Each class of share capital has separate rights in respect of participation in dividends, the return of capital and voting rights in accordance with the company's Articles of Association.
Reserves |
Profit and loss account - This reserve records retained earnings and accumulated losses.
Other reserves - This reserves records capital contributions from shareholders.
Commitments, guarantees and contingencies |
Group
The total of future minimum lease payments under operating leases not recognised in the statement of financial position is as follows:
2022 |
2021 |
|
Within 12 months |
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £449,358 (2021: £341,142).
Related party transactions |
Summary of transactions with subsidiaries
Summary of transactions with other related parties
At 31 December 2022 an amount of £98,991 (2021: £94,633) was due from a company under the control of a director.
Right to Dream Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Compensation paid to key management personnel
Key management personnel comprises the directors of the company together with the directors of the subsidiary undertakings. Compensation paid to these persons is as follows:
2022 |
2021 |
|
Remuneration |
|
|
Pension contributions |
|
|
|
|
Parent and ultimate parent undertaking |
The immediate and ultimate parent undertaking is Man Sports (Cayman) Limited, incorporated in the Cayman Islands. The registered address of Man Sports (Cayman) Limited is PO Box 309, Ugland House, Grand Cayman, KY1 - 1104, Cayman Islands.
The entity with ultimate control is Mr M. Mansour.