ResQ Limited
Registered number: 07711754
Annual report and
financial statements
For the year ended 31 December 2020
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RESQ LIMITED
COMPANY INFORMATION
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Chartered Accountants
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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 2020
The directors present their Strategic Report and the financial statements for the year ended 31 December 2020.
The principal activity of the Company is the provision of outsourced services for leading companies operating in the UK.
2020 started out with great promise on the back of strong financial performances in January and February. March was on course to deliver record levels of revenue and net profit before tax. The shockwave felt from the outbreak of Covid-19 halted the business’s progress in its tracks. Large numbers of employees began self-isolating throughout March and April putting significant pressure on the business. This was further amplified as a solution for home working had to be built. Procuring the necessary hardware at scale was difficult and costly.
The business demonstrated great resolve and developed its own technologies which allowed for remote working. This technology was created, tested and rolled out within weeks. The technology enabled the business to return to a profitable operating rhythm in May 2020.
New customer wins were secured during 2020. The technology allowed for significant growth in employee numbers without the traditional overheads. The benefit of which was seen in the year end results.
The continued focus on people and their wellbeing resulted in all time highs of employee engagement. Whilst the Times Top 100 Best Companies to work for survey was paused in 2020, the business is confident that the trajectory towards a 2 star business has been maintained.
In summary, having navigated the challenges of 2020, the business has demonstrated great resolve and grown significantly during the year. The outlook for 2021 is positive as the momentum from 2020 continues.
Principal risks and uncertainties
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Risk identification and management is of key concern for senior management of the Company. 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 is going to be a key risk to delivery of the Company's strategy. However, the Company's diverse portfolio of customers means that the Company is not overly exposed to one particular sector of the UK economy.
Financial key performance indicators
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The key financial performance indicators are:
*EBITDA is calculated as operating profit adjusted for depreciation and amortisation
- 1 -
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RESQ LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2020 has seen the Company enjoy significant growth and secure new client wins. Based on the current run rates and business forecasts, the directors fully expect this upward trajectory to continue into 2021 as the full year effects flow through.
The business continues to extend its portfolio of services and offerings. The development of a new technology service is well advanced and will be taken to the market in the second half of 2021.
Accordingly, the directors are delighted with the outlook for the Company for the coming year.
Coronavirus disease (COVID-19) pandemic
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Since March 2020 the world has faced the pandemic which has had a detrimental impact on the economy. The decisive actions taken at the end of March 2020 to adjust our operations has demonstrated the Company's ability to quickly flex, respond and adapt our operations with minimal disruption.
Clients benefitted from our continued support during this period and as a result led to a number of new opportunities for the Company.
Considering the Company's agility and the strong performance in 2020, the Directors consider the company is well placed to manage the risks and any future detrimental impact associated with Coronavirus.
This report was approved by the board on 15 September 2021
and signed on its behalf.
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RESQ LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended
31 December 2020
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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:
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select suitable accounting policies for the Company's financial statements and then apply them consistently;
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make judgments and accounting estimates that are reasonable and prudent;
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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 £
1,753,847
(2019 -
loss
£
132,884
)
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The financial statements have been prepared on a going concern basis.
The directors have 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 annual financial statements.
Based on budgets, forecasts and current knowledge of the business the directors believe that the Company is well placed to manage its business risks successfully.
The directors who served during the year were:
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RESQ LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
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.
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 & 2 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:
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so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
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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.
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
15 September 2021
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 2020 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:
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give a true and fair view of the state of the Company’s affairs as at 31 December 2020 and of its
profit for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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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 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.
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RESQ LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RESQ LIMITED
Other information (continued)
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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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
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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:
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors' remuneration specified by law are not made; or
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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 3, 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 either the directors intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 ResQ Limited and its industry, we identified that the principal risks of non-compliance with laws and regulations related to the UK tax legislation, pensions legislation, employment regulation, fraud, money laundering, non-compliance with implementation of government support schemes relating to COVID-19, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006.
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 cut-off, and significant one-off or unusual transactions.
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
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discussing with the directors and management their policies and procedures regarding compliance with laws and regulations;
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communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and
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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
Our audit procedures in relation to fraud included but were not limited to:
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making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
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gaining an understanding of the internal controls established to mitigate risks related to fraud;
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discussing amongst the engagement team the risks of fraud; and
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addressing the risks of fraud through management override of controls by performing journal entry testing.
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
16 September 2021
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RESQ LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
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Interest payable and expenses
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Profit/(loss) for the financial year
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There were no recognised gains and losses for 2020 or 2019 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2020 (2019: £
NIL).
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The notes on pages 12 to 29 form part of these financial statements.
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RESQ LIMITED
REGISTERED NUMBER:
07711754
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2020
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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
15 September 2021
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The notes on pages 12 to 29 form part of these financial statements.
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RESQ LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2020
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At 1 January 2019 (as previously stated)
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At 1 January 2019 (as restated)
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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 12 to 29 form part of these financial statements.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
ResQ Limited is a private company, limited by shares, registered in England and Wales, registration number 07711754. The registered office is Criterion House, 75-81 George Street, Hull, East Yorkshire, HU1 3BA.
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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These financial statements have been presented in pound sterling which is the functional currency of the company, and rounded to the nearest £.
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
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The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The company has adopted the triennial review of FRS 102 effective for periods commencing on or after 1 January 2019.
The policies applied under the entity's previous accounting framework are not materially different to the triennial review of FRS 102 and have not impacted on equity or profit or loss.
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":
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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);
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the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
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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 2020 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 2020
2.
Accounting policies (continued)
The financial statements have been prepared on a going concern basis.
The current economic conditions in light of the COVID-19 pandemic present risks for all businesses. In response to such conditions, the directors have carefully considered these risks, including an assessment of future trading for a period of at least 12 months from the date of signing the financial statements, and the extent to which any risks might affect the preparation of the financial statements on a going concern basis. The forecasts shows that the Company will continue to trade within its available facilities. As such the directors continue to adopt the going concern basis of accounting in preparation of the annual 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:
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the amount of revenue can be measured reliably;
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it is probable that the Company will receive the consideration due under the contract;
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the stage of completion of the contract at the end of the reporting period can be measured reliably; and
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the costs incurred and the costs to complete the contract can be measured reliably.
The UK government has offered a range of financial support packages to help companies, including government backed financing arrangements, furlough schemes, deferment of VAT payments and, for some sectors, business rates holidays. Of the offered schemes, the company used the government backed financing arrangements and furlough scheme. The income from the furlough scheme has been recognised within 'Other operating income'. They are recognised when the entity has reasonable assurance that they will comply with the conditions attaching the grant, and that the grant will be received.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life.
Other intangible assets
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.
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.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
Accounting policies (continued)
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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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 other creditors 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.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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 Statement of Financial Position 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
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Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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.
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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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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- 18 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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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, including goodwill
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Defined contribution pension cost
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Fees payable to the Company's auditor for the audit of the Company's annual accounts
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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 group financial statements of the Parent Company.
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- 19 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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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 775 (2019: 547).
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to
3
directors
(2019 -
3
)
in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £
307,221
(2019 - £
205,312
)
.
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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 £
1,095
(2019 - £
34,385
)
.
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- 20 -
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RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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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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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Effect of tax rate change on opening balance
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Taxation on profit on ordinary activities
|
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- 21 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
11.
Taxation (continued)
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is higher than
(2019 - higher than)
the standard rate of corporation tax in the UK of
19
%
(2019 -
19
%)
. The differences are explained below:
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Profit on ordinary activities before tax
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Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)
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Expenses not deductible for tax purposes
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Adjustment in research and development tax credit leading to a decrease in the tax charge
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Adjustments to tax charge in respect of previous periods - deferred tax
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Movement in deferred tax rates
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Total tax credit for the year
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Factors that may affect future tax charges
|
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.
- 22 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charge for the year on owned assets
|
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|
- 23 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
|
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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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|
- 24 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
|
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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|
- 25 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
|
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 £2,544,714 (2019: £3,195,331) on an invoice discounting facility, included within other creditors, is secured against the Company's trade debtors.
Loans due in less than one year of £160,345 (2019: £341,230) are secured by personal guarantees provided by Mr N Marshall.
Loans due in less than one year of £nil (2019: £75,000) are secured by personal guarantees provided by Mr S Lunt, a director of Res-Q Outsourcing Solutions Limited.
An amount of £100,000 (2019: £100,000) due in less than one year included in other loans has been guaranteed by the directors of the Company.
|
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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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- 26 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
|
Hire purchase and finance leases
|
|
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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|
Charged to profit or loss
|
|
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|
|
The provision for deferred taxation is made up as follows:
|
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|
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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
|
|
|
|
|
|
|
|
|
|
1,200
(2019 -
1,200
)
Ordinary
shares of £
1.00
each
|
|
|
- 27 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Profit & loss account
The profit and loss account reserve represents cumulative profits and losses.
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 £278,500 (2019: £221,135). Contributions totalling £218,190 (2019: £193,991) were payable to the fund at the Statement of Financial Position date and are included in other creditors.
|
Commitments under operating leases
|
|
At 31 December 2020 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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|
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|
|
Lease payments recognised as an expense during the year totalled £249,642 (2019: £233,273).
|
|
Transactions with directors
|
At 31 December 2020, the Directors owed the Company £1,007,276 (2019: £969,071) in respect of an interest free loan. Further advances during the year were made totalling £38,205 (2019: £104,249).
During the year the Company recognised remuneration of £47,000 (2019: £54,750) to Directors which is not included in Directors' remuneration (note 8). In respect of these amounts £116,200 (2019: £116,200) is included in other creditors and £126,750 (2019: £79,750) is included within accruals.
During the year the Company also paid interest of £9,025 (2019: £21,197) to a Director in respect of a loan granted to the Company, the balance outstanding at year end was £nil (2019: £75,000).
|
Related party transactions
|
|
During the year the Company made payments of £180,885 (2019: £250,000) and paid interest of £45,115 (2019: £36,000) in respect of a loan issued to the Company by a close family member of a Director. The amount outstanding at 31 December 2020 was £Nil (2019: £180,885). In addition consultancy fees of £9,115 were made to an other related party.
|
- 28 -
|
RESQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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.
- 29 -
|