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WelcomeBreak hlo. 3 Limited (RegisteredNumber: 833 l918) Annual report and financial statements For the 52 weeks ended 27 January 2015 WelcomeBreak No. 3 Limited
Annual report and financial statements for the 52 weeks ended 27 January 2015
Contents
Pages
Strategic report I
Directors' report 2-3
Independent auditors' report to the members of Welcome Break No. 3 Limited 4-5
Profit and loss account 6
Balance sheet 7
Notes to the financial statements 8-13 WelcomeBreak No. 3 Limited
Strategic report
The directors present their Strategic report on the Company for the 52 weeks ended 27 lanuary 20 I 5.
Businessreview
The Company was incorporated on 14 December 2012 with the purpose of acquiring and holding the sharesin Welcome Break No. 2 Limited and subsidiarycompanies. The principal activity of the Company is that of holding and financing company.
The Company'sloss for the financialperiod is f6.0m (2014: f.5.0m). The loss for the period and the period end financial position is consideredby the directorsto be in line with expectations.
Principal risks and uncertainties
With regard to the Company, the principal risks and uncertaintiesare incorporatedwith the principal risks of the Group and are not managed separately. Therefore, the principal risks and uncertainties of Appia Group Limited, which include those of the Company, are discussedon page3 of the Group's Annual report which doesnot form part of this report.
Financial key performance indicators
As the Company is not a trading company the directors believe it is inappropriateto include key perfonnance indicators in this report to get an understanding of the development, perfirrmanceor position of the businessof Welcome Break No. 3 Limited. The development, performance and position of the business of Appia Group Limited, which includes the Company,are discussedon page 3 of the Group's Annual report, which does not form part of this report.
By order of the Board
Nicholas Wright I)irector
L7 tpril2o1s WelcomeBreak No. 3 Limited
Directors' report
The directors present their report and the audited financial statementsof the Company for the 52 weeksended 27 January2015.
Future developments
The directors do not anticipate that any trading will be undertaken by the Company in the foreseeablefuture.
Dividends
The directorsdo not recommendthe paymentof a dividend for the period (2014: fnil).
I)irectors
The directors of the Company who were in office during the period and up to the date of signing the financial statementswere:
Roderick McKie Nicholas Wright Darren Kyte Michael Canham Artur Kawonczyk Lisa Parsons Appointed2l't 0ctober 2014 Anne Grandin Appointed1l* December2014 GeorgeMullett ResignedI l* December2014
Qualifying third party indemnity provision
A qualifoing third pa4y indemnity provision was in place for the Company's directorsand officers during the financial period and at the date of approval of the financial statements.
Environment
The Company is committed to conducting its business in a manner which shows responsibility towards the environment,and in ensuring high standardsof health and safety for its employees, visitors and the general public. The Company is further committed to taking into account the effect of its working practices upon the environment and in minimising potential negative effects. The Company complies with all statutory and mandatoryrequirements.
Statement of directors' responsibilities
The directorsare responsiblefor preparingthe Annual report and the financial statementsin accordancewith applicablelaw and regulations. WelcomeBreak No. 3 Limited
Directors' report (continued)
Statementof directors' responsibilities(continued)
Company law requires the directors to prepare financial statementsfor each financial period. Under that law the directors have preparedthe financial statementsin accordancewith United Kingdom Generally AcceptedAccounting Practice (United Kingdom Accounting Standards and applicablelaw). Under companylaw the directorsmust not approvethe financial statementsunless they are satisfiedthat they give a true and fair view of the stateof affairs of the Company and of the profit or loss of the Company for that period. In preparingthese f,rnancialstatements, the directors are required to:
. selectsuitable accounting policies and then apply them consistently; . makejudgements and accountingestimates that are reasonableand prudent; . statewhether applicableUK Accounting Standardshave beenfollowed, subjectto any material departuresdisclosed and explained in the financial statements; . preparethe financial statementson the going concernbasis unlessit is inappropriate to presumethat the Companywill continue in business.
The directors are responsiblefor keeping adequateaccounting records that are sufficient to show and explain the Company's transactionsand disclosewith reasonableaccuracy at any time the financial position of the Company and enablethem to ensurethat the financial statementscomply with the CompaniesAct 2006. They are also responsiblefor safeguarding the assetsof the Company and hence for taking reasonablesteps for the prevention and detectionof fraud and other irregularities.
Statementof disclosureof information to auditors
So far as each director is aware,there is no relevant audit information (that is, information neededby the Company's auditorsin connectionwith preparingtheir report) of which the Cornpany'sauditors are unaware.
Each director has taken all the stepsthat helshe ought to have taken in his/trerduty as a director in order to make himself/herselfaware of any relevantaudit information and to establishthat the Company's auditorsare aware of that information.
By order of the Board
Nicholas Wright Director t-j April 2015
Registeredoffice: 2 Vantage Court Tickford Street Newport Pagnell Buckinghamshire MKI6 gEZ INDEPENDENTAUDITORS'REPORT TO THE MEMBERSOF WELCOME BRBAKNO. 3 LIMITED
Report on the financial statements
Our opinion 's In our opinion, Welcome Break No. 3 Limited financial statements (the "financial statements"): . give a true and fair view of the stateof the company's affairs as at 27 January2AI5 and of its loss for the 52 week period (the "period") then ended; o have been properly preparedin accordancewith United Kingdom Generally Accepted Accounting Practice;and . have been preparedin accordancewith the requirementsof the CompaniesAct 2006-
What we have audited 's Welcome Break No. 3 Limited financial statementscomprise: . the balancesheet as at 28 JanuaryZ0l4 as at27 January2015; . the profit and loss accountfor the 52 weeks ended27 January2015 for the period then ended;and . the notesto the financial statements,which include a summaryof significant accountingpolicies and other explanatoryinformation. Certain required disclosures have been presented elsewhere in the Annual Report and Financial Statements,rather than in the notes to the financial statements.These are cross- referencedfrom the f,rnancialstatements and are identified as audited. The financial reporting framework that has been applied in the preparationof the financial statementsis applicable law and United Kingdom Accounting Standards(United Kingdom GenerallyAccepted Accounting Practice). In applying the financial reporting framework, the directorshave made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates,they have made assumptionsand consideredfuture events.
Opinion on other matter prescribedby the CompaniesAct 2006 ln our opinion, the information given in the StrategicReport and the Directors' Report for the financiai period for which the financial statementsare preparedis consistentwith the financial statements.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received Under the CompaniesAct 2006 we are requiredto report to you if in our opinion: . we have not receivedall the information and explanationswe require for our audit; or o adequateaccounting records have not been kept, or refurnsadequate for our audit have not beenreceived from branchesnot visited by us; or . the financial statementsare not in agreementwith the accountingrecords and refurns. We have no exceptionsto report arising from this responsibility. INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELCOME BREAK N0.3 LIMITED (CONTINUED)
Directors' remuneration Underthe CompaniesAct 2006 we are requiredto reportto you if, in our opinion,certain disclosuresof directors'remuneration specified by law are not made.We haveno exceptions to reportarising from this responsibility.
Responsibilitiesfor the financialstatements and the audit
Our responsibilitiesand those of thedirectors As explainedmore fully in the Statementof Directors'Responsibilities set out on pages2 and 3, the directorsare responsiblefor the preparationof the financial statementsand for being satisfiedthat they give a true and fair view. Our responsibilityis to auditand express an opinionon the financialstatements in accordance with applicablelaw and InternationalStandards on Auditing (UK and lreland)("lSAs (UK & Ireland)").Those standards require us to complywith the Auditing PracticesBoard's Ethical Standardsfor Auditors. This report, includingthe opinionsohas been preparedfor and only for the company's membersas a body in accordancewith Chapter3 of Part 16 of the CompaniesAct 2006 and for no otherpurpose. We do not, in giving theseopinions, accept or assumeresponsibility for any otherpurpose or to any other personto whom this reportis shownor into whosehands it may comeSave where expressly agreed by our prior consentin writing.
What an audit of financial statements involves We conductedour auditin accordancewith ISAs(UK & Ireland).An auditinvolves obtaining evidenceabout the amountsand disclosuresin the financial statementssufficient to give reasonableassurance that the financial statementsare free from material misstatement, whethercaused by fraudor error.This includesan assessmentof: . whetherthe accounting policies are appropriate to the company'scircumstances and havebeen consistently applied and adequately disclosed; r the reasonablenessof significant accounting estimates made by the directors;and r the overallpresentation of the financialstatements. We primarily focus our work in theseareas by assessingthe directors'judgements against availableevidence, forming our own judgements,and evaluatingthe disclosuresin the financialstatements. We testand examineinformation, using sampling and otherauditing techniques, to the extent we considernecessary to providea reasonablebasis for us to draw conclusions.We obtain audit evidencethrough testing the effectivenessof controls,substantive procedures or a combinationof both. In addition,we readall the financial and non-financialinformation in the Annual Reportand FinancialStatements to identifymaterial inconsistencies with the auditedfinancial statements and to identify any informationthat is apparentlymaterially incorrect based on, or materially inconsistentwith, the knowledgeacquired by us in the courseof performingthe audit.If we becomeaware of any apparentmaterial misstatementsor inconsistencieswe considerthe implicationsfor our report. ?r4"+q- Vl irffi Profit and loss account for the 52 weeks ended 27 January 2015 hlote 52 weeks 52 weeks ended ended 27 January 28 January 2015 2014 f'000 f,'000 Operatingcosts 2 OPERATING LOSS (3) (2) Interestpayable and similar charges 3 (7,563) (6,503) LOSSON ORDINARY ACTIVITIES BEFORE TAXATION (7,566) (6,505) Tax on losson ordinarvactivities 4 1,604 1,518 LOSS FOR THE FINATICIAL PERIOD (5,962) (4,987) The Companyhas no recognisedgains and lossesother than those set out aboveand therefore no separatestatement of total recognisedgains and losseshas been presented. There is no differencebetween the loss on ordinary activitiesbefore taxation and the loss for the financial periods statedabove, and their historical cost equivalents. All the above items relateto continuing activities. WelcomeBreak ltlo.3 Limited Balance sheetas at 27 Januarv 2015 Note 27 28 January January 2015 2014 f,,000 f,'000 FIXED ASSETS Investments 496,ggl 496,991 DEBTORS 3,109 1,507 NET CTJRRENTASSETS 3.108 1,507 TOTAL ASSETSLESS CURRENT LIABILITIES 500,099 498,498 CREDITORS:Amounts falling due after morethan oneyear (49,877) (42,314) NET ASSETS 450,222 456,184 CAPITAL AND RESERVES Called-up sharecapital I I 1 Sharepremium account 9 494,383 494,383 Profit and loss account 9 (44,162) (38,200) TOTAL SHAREHOLDERS' FUNDS 456,184 The financial statementson pages6 to 13 were approvedby the Board of Directors on 22 April2015 and were signed on its behalf by: ,4 ,/ / --- Nicholas Wright Director Registerednumber: 833 I 91I WelcomeBreak No. 3 Limited Notes to the financial statements for the 52 weeks ended 27 January 2015 1. Principal accounting policies The principal accountingpolicies adoptedin the preparationof thesefinancial statementsare set out below. Thesepolicies have been consistentlyapplied to all the periodspresented. (a) Basis of preparation The financial statementshave been preparedon the going concernbasis, under the historical cost convention and in accordancewith the CompaniesAct 2006 and applicableUnited Kingdom Accounting Standards.The going concernbasis has beenadopted on the understandingthat the Company will continueto be supportedwithin the Group to enableit to both meet its liabilities as they fall due and to carry on businessoperations. (b) Cash flow statement The Company is a wholly-owned subsidiary of Welcome Break Holdings Limited and is included in the consolidatedfinancial statementsof Welcome Break Holdings Limited, which are publicly available. Consequentlythe Company has taken advantageof the exemption from preparing a cash flow statementunder the terms of Financial Reporting Standard I (revised 1996). (c) Deferred taxation Deferredtax is recognisedin respectof all timing differencesthat have originatedbut not reversedat the balancesheet date, where transactionsor eventsthat result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheetdate. A net deferredtax assetis recognisedas recoverableand thereforerecognised only when, on the basisof all availableevidence, it can be regardedas more likely than not that there will be suitabletaxable profits againstwhich to recover carried forward tax lossesand from which the reversalof underlying timing differencescan be deducted. Deferredtax is measuredat the tax ratesthat are expectedto apply in the periods in which the timing differencesare expectedto reverse.Deferred tax is measuredon an undiscounted basis. (d) Consolidatedfinancial statements Thesefinancial statementspresent information about Welcome Break No. 3 Limited as an individual undertakingand do not contain consolidatedfinancial information. The Company is exempt under section401 of the CompaniesAct 2006 from the requirementto prepare consolidatedfinancial statementsas it and its subsidiaryundertakings are included by full consolidationin the consolidatedfinancial statementsof its ultimate parent,Appia Group Limited, a company incorporatedin Jersey. (e) Fixed assetinvestments Investmentsin subsidiaryundertakings and joint venturesare recordedin the Company balancesheet at cost less impairment. WelcomeBreak No. 3 Limited Notes to the financial statements for the 52 weeks ended 27 January 2015 (continued) 1. Principal accounting policies(continued) (f) Interest lnterestpayable is accountedfor on an accrualsbasis to the profit and loss accountand is addedto the carrying amount of the vendor loan notes once additional loan noteshave been issued,under the terms of the loan, (31 July and 3l Januaryannually) otherwiseunsettled interestis recordedwithin accruals. 2. Operating loss Auditors' remunerationfor the audit of all group companiesand their financial statementsis borne by Welcome Break Group Limited. The total amount receivablefor the financial period is f 168,000(2014: f.163,000).No amountswere paid by the Companyin respectof non-audit services. In the period to27 January2015 three of the directorswere remuneratedby Welcome Break Group Limited and the amountreceivable is disclosedin its financial statements.The remaining directorsreceived no remunerationfor servicesprovided to Appia Group Limited or any of its subsidiaries. Therewere no employeesof the Companyin the periodto27 January2015 (2014:none). 3. Interest payable and similar charges 52 weeks 52 weeks ended ended 27 January 28 January 2015 2014 f'000 f'000 Vendor loan notes 7,341 6,281 Amortisation of issuecosts of loans 222 222 4. Tax on losson ordinary activities The ta:r on the loss on ordinary activities is made up as follows: 52 weeks 52 weeks ended ended 27 January 28 January 2015 2014 f,'000 f'000 Current tax credit: Group relief receivable 1,518 WelcomeBreak No. 3 Limited Notes to the financial statements for the 52 weeks ended 27 January 2015 (continued) 4. Tax on losson ordinary actirities (continued) The tax assessedfor the currentperiod varies from the standardrate of corporationtax in the UK of 2l% (2014:23%). The differencesare explained below: 52 weeks 52 weeks ended ended 27 January 28 January 2015 2014 f'000 f'000 Loss on ordinary activities before tax (7'566) (6'505) Losson ordinaryactivities multiplied by the standardrate of corpofationtax in the UK of 2l % (20.14:23%) (1,589) (1,496) Tax adjustment for transfer pricing f, not deductible for tax (20) (22) Current tax for the (1,518) In additionto the changesin ratesof Corporationtax disclosedabove a numberof further changesto the UK Corporationtax systemhave been announced. Legislatiol tg.reducethe main rateof corporationtax from 2l%to 20o/ofrom I April 2015was included in the Finance Act 2013. 5. Fixed assetinvestments f,'000 At 2SlJanuary 2014 and 27 January2015 496,991 i Investments in zubiidiaries comprise holdings of equity sharesin the following entities which are incorporated in Grea.tBritain and registered in England and Wales unless otherwise indicated: oh of equity held Direct subsidiary undertaking WelcoriaeBreak No. 2 Limited (holding company) 100 Indirect subsidiary undertakings Welcome Break No. 1 Limited 100 Welcome Break Holdings (2) Limited (holding company) 100 Welcome Break Holdings (1) Limited (holding company) 100 Welcome Break Group Limited r00 Welcome Break Limited 100 Motorway ServicesLimited 92 Welcome Break KFC Limited 100 Welcome Break Coffee Primo Limited 100 WelcomelBreak KFC StarbucksLimited 100 Welcome Break Birchanger Limited 100 Welcome Break Burger King Limited 100 Welcome Break Waitrose Limited 100 10 WelcomeBreak No. 3 Limited Notes to the financial statements for the 52 weeks ended 27 January 2015 (continued) 5. Fixed assetinvestments (continued) "/o of equity held Indirect subsidiary undertakings Welcome Break McDonald's Limited 100 Coffee Primo Burger King Limited 100 Welcome Break Waitrose KFC Limited 100 Welcome Break StarbucksWaitrose I(FC Limited 100 Welcome Break StarbucksBurger King Limited 100 Welcome Break StarbucksMcDonald's Limited 100 Welcome Break StarbucksWaitrose Burger King Limited 100 StarbucksCoffee Burger King Limited 100 StarbucksCoffee KFC Limited 100 StarbucksCoffee McDonald's Limited 100 StarbucksCoffee Waitrose Limited r00 StarbucksCoffee Waitrose KFC Limited 100 StarbucksCoffee McDonald's Waitrose Limited 100 Partnership Welcome Break Gretna Green Partnership 100 The directors believe that the carrying value of the investments is supportedby their underlying net assets. 6. Debtors 27 January 28January 2015 2014 f'000 f,'000 Amounts owed by group undertakings 3,108 1,507 The amounts owed by group undertakings are unsecured,interest free and are repayable on demand. 7. Creditors: amounts falling due after more than one year 27January 28 January 2015 20r4 t'000 f '000 Vendor loan note and accrued interest 49,977 42,314 Avendor loannoteagreement of f37,240,889was entered into on29 January2013. The debt matureson29 July 2019. The rateof interestis 16.25%per annum.Interest is payableon 3l July and3l January.The first interestperiod ended on 3l July 2013.The balance outstanding at28 January2014 is f43,538,000.The total interestcharged in theyear is f.7,341,000. Additionalloan notes totalling f,6,813,000 were issued on 31 January2014 and 31 July 201,4 andf,3,775,000has been accrued at theyear end. The closingloan balance at 27 January 2015rs f.4'7,105,000. 1l WelcomeBreak I\o. 3 Limited Notes to the financial statements for the 52 weeks ended 27 January 2015 (continued) 7. Creditors: amounts falling due after more than one year (continued) The issue costs of the vendor loan totalled f,l ,432,000 (2014: f'1,432,000). These costs are being amortised over the term of the loan. In order to show the Company's net borrowings the loan and the issue costs have been offset. The un-amortised amount of these costs was f,I,002,000as at27 January2015 (2014:f 1,224,000). The Company has guaranteedthe obligations of itself under the vendor loan which are securedby fixed and floating chargesover its assets. 8. Called up share capital 27 January 28January 2015 20r4 g'000 '000 Allotted and fully paid f 1,0012014:1,001) ordina sharesof f 1 9. Reconciliation of movements in shareholders' funds Called up Share Profit share premium and loss capital account account Total f '000 f,'000 f,'000 f,'000 At 29 January2014 494,383 (38,200) 456,184 Lossfor the financial (5,962) (5,962) 10. Ultimate controlling company Welcome Break Holdings Limited, incorporated in England and Wales, is the immediate parent undertaking and is the smallest group to consolidate these financial statements.Copies of W"l"ome Break Holdings Limited's consolidated financial statements can be obtained from Companies House. Appia Group Limited, incorporated in Jersey,is the largest group to consolidate these financial statements.Copies of Appia Group Limited's consolidated financial statementsare available from CompaniesHouse as an appendix to Appia Europe Limited's financial statements. Appia Europe Limited is the top UK company within the Appia group of companies. Appia Group Limited, the ultimate parent company, is owned by a consortium of infrastructure investors and the holdings of the consortium are: NIBC European Infrastructure Fund 55% (2014: 55%); ING European Infrastructure Fund 30% (2014: 30%) and Challenger Life I S%(2014: 15%). There is no single ultimate parentundertaking or controlling party of Appia Group Limited. l2 WelcomeBreak No. 3 Limited Notes to the financial statements for the 52 weeks ended 27 January 2015 (continued) 11. Related party disclosures The Company has taken advantageof the exemption provided by Financial Reporting Standard 8, where subsidiary undertakings (of which 90% or more of the voting rights are controlled within the Group) are exempt from the need to disclose transactionswith other group companieswhere the ultimate parent publishes its consolidated financial statements. l3