Company Registration No. 07731925 (England and Wales)
PROFILE FINANCIAL SOLUTIONS LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
PAGES FOR FILING WITH REGISTRAR
PROFILE FINANCIAL SOLUTIONS LTD
CONTENTS
Pages
Balance sheet
1
Notes to the financial statements
2 - 8
PROFILE FINANCIAL SOLUTIONS LTD
BALANCE SHEET
AS AT
31 DECEMBER 2018
31 December 2018
- 1 -
31 December
31 December
2018
2017
Note
£
£
£
£
Fixed assets
Intangible assets
681,436
542,426
Tangible assets
5
77,504
119,706
Current assets
Debtors
6
3,478,384
2,838,777
Cash at bank and in hand
174,664
128,888
3,653,048
2,967,665
Creditors: amounts falling due within one year
7
(1,478,472)
(1,366,578)
Net current assets
2,174,576
1,601,087
Total assets less current liabilities
2,933,516
2,263,219
Creditors: amounts falling due after more than one year
8
(119,498)
(390,748)
Net assets
2,814,018
1,872,471
Capital and reserves
Called up share capital
9
517
517
Share premium account
663,283
663,283
Other reserves
10
7,250,000
3,750,000
Profit and loss reserves
(5,099,782)
(2,541,329)
Total equity
2,814,018
1,872,471
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 18 July 2019 and are signed on its behalf by:
Mr A C Wearing
Director
Company Registration No. 07731925
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
- 2 -
1
Accounting policies
Company information
Profile Financial Solutions Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Norwest Court, Guildhall Street, Preston, PR1 3NU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company is still in the early stages of its lifecycle. Turnover is forecasted to grow and expenditure decrease so the Directors expect that the company will make profits in the future. The company has the continued support of its parent company and has received a capital contribution of £3,500,000. Further to this, the company has received a letter of support from Smedvig Capital AS, a shareholder in the parent company. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.
1.3
Reporting period
The company changed its year end to 31 December in the prior period and as a result the prior year financial statements reflect an 18 month period and are not comparable to the current year amounts for the year ending 31 December 2018 which represent a 12 month period.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable
for
services provided in the normal course of business
.
The fair value of consideration takes into account trade discounts
and
settlement discounts
.
1.5
Research and development expenditure
Research expenditure is
charged to administrative expenses in the period
in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost
of assets less their residual values over their useful lives on the following bases:
Development Costs
2 years straight-line
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 3 -
1.7
Tangible assets
Tangible assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
4 years straight-line
Computer equipment
3 years straight-line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.8
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Cash at bank and in hand
Cash at bank and in hand
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 4 -
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans
and
loans from
fellow group companies, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 5 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Share-based payments
Certain employees of the company participate in an EMI share option scheme, with options granted in relation to shares of the parent company, Profile FSH Limited. The fair value at the grant date of all options issued to date is immaterial in aggregate. Therefore, no amount has been charged to the profit and loss account and no other accounting entries have been recognised by the Company.
1.15
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 105 (2017 - 100).
3
Taxation
2018
2017
£
£
Current tax
UK corporation tax on losses for the current year / period
(133,111)
(145,466)
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 6 -
4
Intangible fixed assets
Development costs
£
Cost
At 1 January 2018
609,046
Additions
534,661
At 31 December 2018
1,143,707
Accumulated amortisation and impairment
At 1 January 2018
66,620
Amortisation charged for the year
395,651
At 31 December 2018
462,271
Carrying amount
At 31 December 2018
681,436
At 31 December 2017
542,426
Intangible fixed assets relate to software development and the expenditure has been amortised for the full year.
5
Tangible assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2018
67,237
262,337
329,574
Additions
13,672
21,450
35,122
At 31 December 2018
80,909
283,787
364,696
Accumulated depreciation and impairment
At 1 January 2018
29,766
180,102
209,868
Depreciation charged in the year
17,751
59,573
77,324
At 31 December 2018
47,517
239,675
287,192
Carrying amount
At 31 December 2018
33,392
44,112
77,504
At 31 December 2017
37,471
82,235
119,706
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 7 -
6
Debtors
2018
2017
Amounts falling due within one year:
£
£
Corporation tax recoverable
133,111
145,466
Amounts owed by group undertakings
2,803,417
2,056,284
Other debtors
541,856
637,027
3,478,384
2,838,777
7
Creditors: amounts falling due within one year
2018
2017
£
£
Other borrowings
642,127
370,877
Trade creditors
275,576
372,222
Amounts due to group undertakings
20,602
12,052
Other taxation and social security
116,238
118,183
Other creditors
65,405
897
Accruals and deferred income
358,524
492,347
1,478,472
1,366,578
8
Creditors: amounts falling due after more than one year
2018
2017
£
£
Other borrowings
119,498
390,748
Other borrowings are secured by way of a debenture over all present and future assets, including any intellectual property and policies or contracts of insurance.
9
Called up share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
516,666 (2017: 516,666) Ordinary shares of 0.1p each
517
517
517
517
10
Other reserves
Other reserves represents a capital contribution from the parent company and is non-distributable.
PROFILE FINANCIAL SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 8 -
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Nick Dumper.
The auditor was PricewaterhouseCoopers LLP.
12
Financial commitments, guarantees and contingent liabilities
The company is party to cross-company security arrangements in relation to a loan included in its parent company accounts, of £2,480,178. The loan is secured by way of a fixed and floating charge over the assets of the company's parent, the company and the company's fellow subsidiary.
13
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2018
2017
£
£
383,546
609,136
14
Related party transactions
During the year / period £146,695 (2017: £373,028) was received for the provision of management services to a fellow group company including the provision of guidance, oversight and strategy. At the balance sheet date the company was owed the sum of £27,327 (2017: £560,720) by a fellow group company.
At the balance sheet date the company was owed £2,722,315 (2017: £1,495,564) as part of a working capital loan by a fellow group company.
At the balance sheet date the company has a loan balance of £915,315 (2017: £809,713) due to an affiliated company which owns 49.44% of the company's parent. £795,837 (2017: £418,965) is included in Creditors: amounts falling due within one year.
At the balance sheet date the company owed £20,602 (2017: £12,052) to the same affiliated company.
At the balance sheet date the company owed £11,630 (2017: £nil) to one of the directors for expenses incurred, and is included within other creditors.