ResQ Limited
Registered number: 07711754
Annual report and
financial statements
For the year ended 31 December 2022
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RESQ LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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RESQ LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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RESQ LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The Directors present their Strategic Report and the financial statements for the year ended 31 December 2022.
The principal activity of the Company is the provision of outsourced, contact centre services for market leading companies, operating in the UK.
The financial statements have been submitted on the basis that the business is a going concern.
Our evaluation is based on a comprehensive review of the Company's financial statements, management's representations, discussions with key personnel, and an assessment of market conditions.
The business delivered record beating financial performance for the first quarter of 2022. The achievement was in line with the budget. The events on the world stage disrupted the energy markets and impacted the rest of the year.
The fallout caused by the interruption to the energy market in 2022 was far reaching. ResQ was not immune to this, and the impact was felt from the second quarter of 2022. The effect on revenue was £21m over the year of contracted business that could not be delivered due to the market being immobilised. ResQ’s clients were powerless and as such services and tariffs were withdrawn from the market in quick succession.
Market experts anticipated the energy market returning in the second half of 2022, although this was predicated on the energy cap as determined by Ofgem. The energy market recovery did not return during 2022. That said, the energy market is building momentum and the expectation is that the market will open with new tariffs during Q3 2023. The Company and Group is already delivering more business on behalf of energy companies than it did in 2023. Furthermore, there are several opportunities being negotiated which would see a significant revenue uplift in 2023.
Outside of the energy customers, the tenacity of ResQ once again came to the fore and saw a concerted effort to replace lost revenues through organic growth in other sectors from within the portfolio. This approach was successful, and under pinned the business delivering a positive EBITDA result for the period.
The Group embellished the people strategy to ensure ResQ continued to be an employer of choice within the regions, whilst the wider market struggled to fulfil their job vacancies in the year. This was regularly evidenced at round table events and industry workshops. ResQ navigated the employment market conditions with aplomb delivering on recruitment targets across the year.
The “Return to office” has been a resounding success and has supported the team in their overall wellbeing and development. Whilst the option to work remotely is there, more than 80% choose to work from the contact centres.
ResQ’s technology development continues to deliver groundbreaking solutions to improve efficiencies, productivity and overall profitability within the contact centre operation. The technology road map presented new opportunities and has elevated the Company's and Group’s standing within the industry. This has been recognised by clients and prospects alike.
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RESQ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Principal risks and uncertainties
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Risk identification and management is of key concern for senior management of the Group. Regular reviews are undertaken by the Board of Directors of the Company's risk register to ensure that all potential risks are identified, categorised and the necessary actions taken to minimise the financial and/or reputational impact.
The strength of consumer confidence, driven by the tightening of household budgets, is going to be a key factor in delivering the Group's strategy. However, the Company's diverse portfolio of customers and service offerings, means that the Company is not overly exposed to one sector of the UK economy.
The Responsible Debt Management initiative ResQ developed on behalf of several clients is well placed. This customer focused approach is unique to managing customers’ debt, and has been well received.
Financial key performance indicators
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*EBITDA is calculated as operating profit adjusted for depreciation and amortisation
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RESQ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Directors' statement of compliance with duty to promote the success of the Company
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Directors Duties
The directors of the company, as with all UK companies, must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members, and in doing so have regard (amongst other matters) to:
a. The likely consequences of any decision in the long term.
b. The interests of the company's employees.
c. The need to foster the company's business relationships with suppliers, customers, and others.
d. The impact of the company's operations on the community and the environment.
e. The desirability of the company maintaining a reputation for high standards of business conduct; and
f. The need to act fairly between members of the company.
The following paragraphs summarise how the Directors fulfil their duty to promote the success of the Company:
Our people and values
Our People are fundamental to the growth and success of the business. Our vision has been to create opportunities and careers for people. Our environment, where we support, care for and empower our people, allows our people to flourish and develop. This in turn gives them skills for life, provides career opportunities and means that they do the right things.
We treat everyone as individuals and trust them implicitly, this in turn builds respect, resulting in people going the extra mile to achieve our objectives. We believe that everyone has potential, we hire on attitude not background or current skill set so we can give everyone an opportunity to be the best they can be. This results in exceptional business performance and delighted customers and clients. Our Values of Collaborative, Innovative, Honest, Competitive and Enjoy are part of the cultural DNA and has seen us as award winners for our culture and engagement nationally.
The true testament to this is our very low employee attrition levels which are significantly better than any other business in the outsourcing industry. We provide everyone with opportunities and reward their success. We have built a very successful leadership team that buys into and lives and breathes our DNA meaning that as we grow the great culture is sustainable and fit for growth.
We have many initiatives that contribute to this ethos. For example, we have clear succession plans through our Leadership Development Programmes. We are investing heavily in Leadership Development through an inhouse programme. Significant financial investment is provided to run ongoing engagement activities. We regularly look at how we improve our environment from annual employees surveys to ongoing 4 and 8 week reviews with our people.
We attribute the success of our business is down to the success of our people.
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RESQ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Business Relationships
The directors are committed to seek value in mutually beneficial partnerships, providing prosperity for all involved.
The strategy of the Company is to target organic growth, driven by cross-selling and up-selling products to existing customers, alongside the development of new customers and market territories.
To do this, we have a dedicated sales team who focus on developing and maintaining strong customer relationships, investing time in developing existing products or developing new products to meet the customer needs.
We value all our suppliers, many of whom we have been in partnership with for over 10 years and commit to engaging responsibly and fairly. It is the policy of the Company to pay suppliers promptly to agreed terms.
Community and Environment
The Company recognise their responsibility to act sustainably and to play their part in protecting and enhancing the global environment.
The Company participates in waste reduction with local recycling schemes. Wherever possible it seeks to target improvements in energy efficiency and reduction of the businesses’ carbon footprint.
Shareholders
The strategy and objectives of the Group are deployed through the Company via the annual budget setting process and mid-term plan, which seek to align the goals of the Company to those of the Group to ultimately promote the long-term growth and success of the business.
2022 was heralded as a good outcome in light of the interruption to revenue from the Energy market. The swift implementation to right size the overhead allowed for a positive EBITDA to be recorded. The benefits from the right sizing will be taken forward in to 2023 and 2024.
The business continues to attract some of the UK’s biggest brands. There is a high degree of confidence in the ability to convert these opportunities into long term, strategic accounts. Public sector interest has been stimulated by the ability to deploy cloud-based technology, via ResQ, to measure productive and compliance.
An additional 33,000 sq ft of contact space will come online in Q4 2023. The centre will accommodate existing and new clients in a state of the art, 600 FTE centre focused on wellbeing and underpinning the ResQ culture.
Accordingly, the directors are delighted with the outlook for the Company for the coming year.
This report was approved by the board on 3 October 2023 and signed on its behalf.
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RESQ LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,404,147 (2021 - £2,362,645).
No dividends were paid or declared during the period (2021 - £Nil).
The directors who served during the year were:
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RESQ LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
During the year the Company generated a profit of £2.1m. There is increased level of engagement with clients and prospects alike who are looking to ResQ to assist them with transformation projects and repatriation of existing services. The Company is engaged at senior level with a number of UK prospects.
In addition to a well-established invoice discounting facility partnership that continues to grow with the business, a second line of facilities have been secured. The strong covenants from our client contracts have allowed ResQ to avail of supplier financing facilities which are commercially competitive and further underpin the cash flow of the Company.
Based on client engagement, cash flow and actual results for the period ending 31 August 2023, the current cash position and knowledge of the business the directors believe that based on the forecast they have prepared the business is well placed to manage its risks successfully and meet its obligations as they fall due for at least 12 months from the date of signing these financial statements.
The directors have a reasonable expectation that the Company has adequate resources to continue in operation for the foreseeable future, thus they continue to adopt the going concern basis of accounting in preparing the Company financial statements.
Engagement with employees
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Employees are kept well-informed about the progress and position of the Company by means of regular departmental meetings.
Disabled employees received appropriate training to promote their career development within the Company.
Qualifying third party indemnity provisions
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The Company maintains insurance policies on behalf of the directors against liability arising from negligence, breach of duty and breach of trust in relation to the Company.
Energy and carbon reporting
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The Streamlined Energy and Carbon report (SECR) is compiled on a group basis and can be found within the Directors' report of the Parent Company financial statements, Res-Q Outsourcing Solutions Limited.
Matters covered in the Strategic Report
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Certain information not shown in the Directors' Report is shown in the Strategic Report on pages 1 to 4 instead in accordance with Section 414C(11) of the Companies Act 2006. This includes a business review and principal risks and uncertainties.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
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RESQ LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
The auditor, Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 3 October 2023 and signed on its behalf.
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RESQ LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RESQ LIMITED
Opinion
We have audited the financial statements of ResQ Limited (the ‘Company’) for the year ended 31 December 2022 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity 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 FRS 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 Company’s affairs as at 31 December 2022 and of its profit 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’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.
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.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
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RESQ LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RESQ LIMITED
Other information (continued)
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 the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙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.
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RESQ LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RESQ LIMITED
Responsibilities of Directors
As explained more fully in the directors' responsibilities statement set out on page 5, 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 intend either 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 the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, and anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
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RESQ LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RESQ LIMITED
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the cut-off assertion), recoverability of intercompany loans, and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit 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.
Shaun Mullins (Senior Statutory Auditor)
for and on behalf of
Mazars LLP
Chartered Accountants and Statutory Auditor
5th Floor
3 Wellington Place
Leeds
LS1 4AP
5 October 2023
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RESQ LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
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Interest payable and similar expenses
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Profit for the financial year
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There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2022 (2021: £NIL).
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The notes on pages 15 to 32 form part of these financial statements.
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RESQ LIMITED
REGISTERED NUMBER: 07711754
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 3 October 2023.
The notes on pages 15 to 32 form part of these financial statements.
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RESQ LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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Comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 15 to 32 form part of these financial statements.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ResQ Limited is a private company, limited by shares, registered in England and Wales, registration number 07711754. The registered office is 1st Floor, 1 Paragon Square, Hull, East Yorkshire, England, HU1 3JZ.
The principal activity of the Company is the provision of outsourced services for leading companies operating in the UK.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
These financial statements have been presented in pound sterling which is the functional currency of the Company, and rounded to the nearest £.
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Res-Q Outsourcing Solutions Limited as at 31 December 2022 and these financial statements may be obtained from Companies House.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
During the year the Company generated a profit of £2.1m. There is increased level of engagement with clients and prospects alike who are looking to ResQ to assist them with transformation projects and repatriation of existing services. The Company is engaged at senior level with a number of UK prospects.
In addition to a well-established invoice discounting facility partnership that continues to grow with the business, a second line of facilities have been secured. The strong covenants from our client contracts have allowed ResQ to avail of supplier financing facilities which are commercially competitive and further underpin the cash flow of the Company.
Based on client engagement, cash flow and actual results for the period ending 31 August 2023, the current cash position and knowledge of the business the directors believe that based on the forecast they have prepared the business is well placed to manage its risks successfully and meet its obligations as they fall due for at least 12 months from the date of signing these financial statements.
The directors have a reasonable expectation that the Company has adequate resources to continue in operation for the foreseeable future, thus they continue to adopt the going concern basis of accounting in preparing the Company financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. The estimate useful lives range as follows:.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
- 18 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except that a change attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Statement of Financial Position date in the countries where the Company operates and generates income.
Deferred balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
- 19 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
- 20 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Judgments in applying accounting policies and key sources of estimation uncertainty
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The critical judgments that the directors have made in the process of applying the Company’s accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
We consider there to be no other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
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An analysis of turnover by class of business is as follows:
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All turnover arose within the United Kingdom.
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- 21 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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Amortisation of intangible assets
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(Profit)/loss on disposal of assets
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Defined contribution pension cost
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated financial statements of the parent Company.
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- 22 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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The average number of full-time equivalent employees during the year was 1,018 (2021: 1,059).
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 1 director (2021 - 1) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £256,545 (2021 - £253,843).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2021 - £NIL).
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- 23 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Interest payable and similar expenses
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Other loan interest payable
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Finance leases and hire purchase contracts
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Taxation on (loss)/profit on ordinary activities
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- 24 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of19% (2021 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
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Expenses not deductible for tax purposes
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Research and development expenditure credits
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Other differences leading to an increase (decrease) in the tax charge
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Adjustments to tax charge in respect of previous periods - deferred tax
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Remeasurement of deferred tax for changes in tax rates
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Adjustments to tax charge in respect of previous periods
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Total tax charge for the year
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Factors that may affect future tax charges
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The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19% which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.
- 25 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Charge for the year on owned assets
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Charge for the year on financed assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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- 27 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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- 28 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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An amount of £4,107,868 (2021: £3,070,465) on an invoice discounting facility, included within other creditors, is secured against the Company's trade debtors and a fixed and floating charge over an asset of the Company.
Loans due in less than one year of £160,345 (2021: £160,345) are secured by personal guarantees provided by Mr N Marshall.
An amount of £100,000 (2021: £100,000) due in less than one year included in other loans has been guaranteed by the directors of the Company.
Loans totalling £150,527 (2021: £150,000) due in less than one year included in other loans have been secured by a floating charge against the leasehold property assets at Paragon Street.
Obligations under finance lease are hire purchase contracts that are secured upon the assets to which they relate.
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Obligations under finance lease are hire purchase contracts that are secured upon the assets to which they relate.
Loans totalling £441,711 (2021: £600,000) due after more than one year included in other loans have been secured by a floating charge against the leasehold property assets at Paragon Street.
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- 29 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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See note 16 and 17 for details of any security given against the loans.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Obligations under finance leases and hire purchase contracts are secured against the related assets.
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- 30 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Fixed asset timing differences
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Short term timing differences
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Allotted, called up and fully paid
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1,200 (2021 - 1,200) Ordinary shares of £1.00 each
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Profit & loss account
The profit and loss account reserve represents cumulative profits and losses, less dividend payments.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £463,104 (2021: £437,086). Contributions totalling £96,783 (2021: £93,593) were payable to the fund at the Statement of Financial Position date and are included in other creditors.
- 31 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Commitments under operating leases
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At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Lease payments recognised as an expense during the year totalled £576,303 (2021: £534,876).
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Transactions with directors
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At 31 December 2022, the Directors owed the Company £2,278,530 (2021: £1,693,224) in respect of an interest free loan. Further advances during the year were made totalling £585,306 (2021: £685,948).
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Related party transactions
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The Company has taken advantage of the exemption in Section 33 of FRS102 and not disclosed transactions with related parties by virtue of the fact that the transactions are between entities which are wholly owned subsidiaries in the Group.
During the year consultancy fees of £37,000 (2021: £77,500) were received from a other related party.
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The Company is controlled by the immediate and ultimate parent company, Res-Q Outsourcing Solutions Limited, a company registered in England and Wales. Res-Q Outsourcing Solutions Limited is also the parent undertaking of the smallest and largest group for which group financial statements are drawn up and of which the Company is a member. Copies of the financial statements of Res-Q Outsourcing Solutions Limited can be obtained from: Companies House, Cardiff, CF14 3UZ.
In the opinion of the directors there is no ultimate controlling party.
- 32 -
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