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Res-Q (Seaham) Limited

Registered number: 09983000
Annual report and financial
statements
For the year ended 31 December 2022

 
RES-Q (SEAHAM) LIMITED
 
 
COMPANY INFORMATION


Directors
N L Marshall 
G C Marchbank 




Registered number
09983000



Registered office
1st Floor
1 Paragon Square

Hull

East Yorkshire

HU1 3JZ




Independent auditor
Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor

3 Wellington Place

Leeds

LS1 4AP




Bankers
Santander UK plc
6-8 King Edward Street

Hull

HU1 3SS





 
RES-Q (SEAHAM) LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 5
Independent Auditor's Report
 
6 - 9
Statement of Comprehensive Income
 
10
Statement of Financial Position
 
11
Statement of Changes in Equity
 
12
Notes to the Financial Statements
 
13 - 25


 
RES-Q (SEAHAM) LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The Directors present their Strategic Report and the financial statements for the year ended 31 December 2022.

Business review
 
The principal activity of the business 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 energy clients managed in Seaham were not immune to events which played out on the world stage in 2022. The impact was significant and continued for much longer than the markets anticipated. For ResQ it meant a significant reduction in turnover from the energy clients of c£2.7m for the year. Whilst the sudden downturn was managed to limit the financial impact, the business was unable to flex in parallel with the speed of the reduction and therefore incurred a loss of £1.9m.
The business was challenged with head winds in the form of recruitment in the first half of 2022. This was due to a PLC opening a new contact centre in the region. The PLC targeted ResQ staff with a charm offensive around pay and rewards. Furthermore, the PLC’s recruitment campaign soaked up the local recruitment pool, hampering ResQ’s ability to replace the number and quality of people in a timely fashion.
The business held fast on its people strategy to ensure ResQ continued to be an employer of choice within the region. This strategy was rewarded with a healthy number of the high performing team return to ResQ throughout the final quarter of the year.  The attrition related costs were brought back to within normal operating tolerances and ResQ once again was able to deliver on the recruitment demands of the business.
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 (Seaham) has net liabilities of £230k. These will be addressed through normal trading during the 2024 financial year.

Principal risks and uncertainties
 
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 Group'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 to delivering the Group's strategy. However, the Group's diverse portfolio of customers and service offerings, means that the Group is not overly exposed to one sector of the UK economy.
The Utility market has already seen significant demand, against a limited number of available products, from households looking for the certainty of a fixed tariff. The business is supporting their clients with the customer initiatives in retention, customer management and acquisition.
The pipeline of new business carried over from 2022 is encouraging with a significant number of high-profile prospects who are looking for solutions at scale. It is interesting to note that there is a building momentum from businesses who are choosing to repatriate their current BPO work from India and South Africa.

- 1 -

 
RES-Q (SEAHAM) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Financial key performance indicators


2022
2021
Change
Change

£'000
 
£'000
£'000
%
Turnover
13,421
17,865
(4,444)
(25)
Gross profit
3,682
5,687
(2,005)
(35)
EBITDA*
(1,807)
606
(2,413)
(398)

*EBITDA is calculated as operating profit adjusted for depreciation.

Future developments
 
Significant interest has been garnered in ResQ’s technology stack. The ability to integrate in to third party systems to harvest information, in order to compliment operational metrics, is going to be of immense value going forward.
ResQ’s continued ability to work consultatively with existing and new clients will ensure that the business moves forward at pace and certainty. The mantra of super charging every human interaction with technology will underpin ResQ’s ability to deliver high value transactions, market leading NPS and CSAT.
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.



N L Marshall
Director

- 2 -

 
RES-Q (SEAHAM) 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

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; 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 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £1,873,352 (2021 - profit £340,679).

No dividends were paid or declared in the period (2021 - £Nil).

Directors

The directors who served during the year were:

N L Marshall 
G C Marchbank 

- 3 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Going concern

Despite the headwinds of 2022, the business was able to flex its overhead and resources to reduce the losses.  The actions taken coupled with the resurgence of the energy markets has reinforced the confidence for the business to return to a normal operating rhythm and profitability. The streamlining of costs has been carried through to 2023 to underpin margins and EBITDA and return the company to profitability.
Further comfort can be taken from the 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 and the Group.
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 Group and 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

Employees are kept well-informed about the progress and position of the Company by means of regular departmental meetings.
Disabled employees receive appropriate training to promote their career development within the Company.

Qualifying third party indemnity provisions

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

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

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.

- 4 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Auditor

The auditor, Mazars LLPwill 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.
 





N L Marshall
Director

- 5 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RES-Q (SEAHAM) LIMITED
 

Opinion

We have audited the financial statements of Res-Q (Seaham) 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 loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’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.
- 6 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RES-Q (SEAHAM) 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 has 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 and 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.

- 7 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RES-Q (SEAHAM) 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 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.  
- 8 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RES-Q (SEAHAM) 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 and 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), impairment of tangible fixed assets, 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
- 9 -

 
RES-Q (SEAHAM) LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
 £
£

  

Turnover
 4 
13,421,433
17,864,632

Cost of sales
  
(9,739,059)
(12,177,697)

Gross profit
  
3,682,374
5,686,935

Administrative expenses
  
(5,613,313)
(5,195,277)

Other operating income
 5 
-
3,431

Operating (loss)/profit
 6 
(1,930,939)
495,089

Interest payable and similar expenses
 10 
(4,392)
(18,449)

(Loss)/profit before tax
  
(1,935,331)
476,640

Tax on (loss)/profit
 11 
61,979
(135,961)

(Loss)/profit for the financial year
  
(1,873,352)
340,679

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2022 (2021: £NIL).

The notes on pages 13 to 25 form part of these financial statements.

- 10 -

 
RES-Q (SEAHAM) LIMITED
REGISTERED NUMBER: 09983000

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible assets
 12 
345,629
427,100

  
345,629
427,100

Current assets
  

Debtors: amounts falling due after more than one year
 13 
3,001,000
3,001,000

Debtors: amounts falling due within one year
 13 
1,158,296
1,130,848

Cash at bank and in hand
 14 
21,944
73,696

  
4,181,240
4,205,544

Creditors: amounts falling due within one year
 15 
(1,908,311)
(2,288,151)

Net current assets
  
 
 
2,272,929
 
 
1,917,393

Total assets less current liabilities
  
2,618,558
2,344,493

Creditors: amounts falling due after more than one year
 16 
(2,841,165)
(631,769)

Provisions for liabilities
  

Deferred tax
 17 
(8,791)
(70,770)

Net (liabilities)/assets
  
(231,398)
1,641,954


Capital and reserves
  

Called up share capital 
 18 
1,000
1,000

Profit and loss account
 19 
(232,398)
1,640,954

  
(231,398)
1,641,954


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 3 October 2023.




N L Marshall
Director

The notes on pages 13 to 25 form part of these financial statements.

- 11 -

 
RES-Q (SEAHAM) LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2021
1,000
1,300,275
1,301,275


Comprehensive income for the year

Profit for the year
-
340,679
340,679
Total comprehensive income for the year
-
340,679
340,679



At 1 January 2022
1,000
1,640,954
1,641,954


Comprehensive income for the year

Loss for the year
-
(1,873,352)
(1,873,352)
Total comprehensive income for the year
-
(1,873,352)
(1,873,352)


At 31 December 2022
1,000
(232,398)
(231,398)


The notes on pages 13 to 25 form part of these financial statements.

- 12 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Res-Q (Seaham) Limited is a private company, limited by shares, registered in England and Wales, registration number 09983000. 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

 
2.1

Basis of preparation of financial statements

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:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

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.

- 13 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Going concern

Despite the headwinds of 2022, the business was able to flex its overhead and resources to reduce the losses. The actions taken coupled with the resurgence of the energy markets has reinforced the confidence for the business to return to a normal operating rhythm and profitability. The streamlining of costs has been carried through to 2023 to underpin margins and EBITDA and return the company to profitability.
Further comfort can be taken from the 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 and the Group.
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 Group and 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. 

 
2.4

Revenue

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.

- 14 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.5

Government grants

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.

 
2.6

Tangible fixed assets

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.

Depreciation is provided on the following basis:

Leasehold improvements
-
10%
Fixtures & fittings
-
10%
Office equipment
-
25%

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.

 
2.7

Finance costs

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.

 
2.8

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss 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.

- 15 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.9

Debtors

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.

 
2.10

Cash and cash equivalents

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.

 
2.11

Creditors

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.

 
2.12

Pensions

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.

 
2.13

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except that a charge 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 reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, 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

- 16 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.14

Provisions for liabilities

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.

 
2.15

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in 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 debtors and creditors, 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 in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

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 of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting 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.

- 17 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

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.


4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Outsourced services
13,421,433
17,864,632


All turnover arose within the United Kingdom.


5.


Other operating income

2022
2021
£
£

Government grants receivable
-
3,431



6.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2022
2021
£
£

Depreciation of tangible fixed assets
124,354
110,641

Other operating lease rentals
179,949
120,255

Defined contribution pension cost
164,140
170,814

- 18 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2022
2021
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements

31,250
25,000

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.


8.


Employees

Staff costs, including directors' remuneration, were as follows:


2022
2021
£
£

Wages and salaries
13,104,941
13,920,219

Social security costs
801,721
821,578

Cost of defined contribution scheme
164,140
170,814

14,070,802
14,912,611


The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Direct
50
45



Support
70
58



Agent
464
593

584
696

The average number of full-time equivalent employees during the year was 469 (2021: 592).


9.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
93,000
91,500


- 19 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Interest payable and similar expenses

2022
2021
£
£


Other loan interest payable
-
8,087

Other interest payable
4,392
10,362

4,392
18,449


11.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
-
(2,256)


Deferred tax


Origination and reversal of timing differences
(4,777)
138,217

Adjustments in respect of prior periods
(57,202)
-

Total deferred tax
(61,979)
138,217


Taxation on (loss)/profit on ordinary activities
(61,979)
135,961
- 20 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 - higher than) the standard rate of corporation tax in the UK of19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


(Loss)/profit on ordinary activities before tax
(1,935,331)
476,640


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(367,713)
90,562

Effects of:


Fixed asset differences
4,596
(2,099)

Expenses not deductible for tax purposes
2,292
11,621

Movement in deferred tax not recognised
-
(133,893)

Remeasurement of deferred tax for changes in tax rates
2,110
16,984

Research and development tax credits
-
(1,727)

Group relief surrendered
353,938
154,513

Adjustments to tax charge in respect of previous periods (deferred tax)
(57,202)
-

Total tax charge for the year
(61,979)
135,961


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.

- 21 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Tangible fixed assets





Leasehold improvements
Fixtures & fittings
Office equipment
Total

£
£
£
£



Cost


At 1 January 2022
335,823
229,518
423,326
988,667


Additions
-
31,640
11,243
42,883



At 31 December 2022

335,823
261,158
434,569
1,031,550



Depreciation


At 1 January 2022
152,403
117,730
291,434
561,567


Charge for the year
37,054
28,024
59,276
124,354



At 31 December 2022

189,457
145,754
350,710
685,921



Net book value



At 31 December 2022
146,366
115,404
83,859
345,629



At 31 December 2021
183,420
111,788
131,892
427,100

- 22 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Debtors

2022
2021
£
£

Due after more than one year

Amounts owed by group undertakings
3,001,000
3,001,000


2022
2021
£
£

Due within one year

Trade debtors
30,081
30,000

Other debtors
86,025
613

Prepayments and accrued income
1,039,934
1,097,979

Tax recoverable
2,256
2,256

1,158,296
1,130,848



14.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
21,944
73,696



15.


Creditors: Amounts falling due within one year

2022
2021
£
£

Trade creditors
20,810
1,924

Other taxation and social security
812,266
1,247,973

Other creditors
115,749
130,330

Accruals and deferred income
959,486
907,924

1,908,311
2,288,151


An amount of £26,744 (2021: £26,742) arising from an invoice discounting facility, included within other creditors, is secured against the Company's trade debtors and a fixed and floating charge over all assets of the Company.

- 23 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Amounts owed to group undertakings
2,841,165
631,769


Intercompany balances are not subject to interest and are repayable on demand, however the fellow group company has confirmed that the balance will not be recalled in a period of less than 12 months from the date of these financial statements.


17.


Deferred taxation




2022
2021


£

£






At beginning of year
(70,770)
67,447


Charged to profit or loss
61,979
(138,217)



At end of year
(8,791)
(70,770)

The provision for deferred taxation is made up as follows:

2022
2021
£
£


Fixed asset timing differences
(17,506)
(74,436)

Short term timing differences
8,715
3,666

(8,791)
(70,770)


18.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



1,000 (2021 - 1,000) Ordinary shares of £1.00 each
1,000
1,000



19.


Reserves

Profit & loss account

The profit & loss account reserve represents cumulative profits and losses, less dividends payments.

- 24 -

 
RES-Q (SEAHAM) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

20.


Pension commitments

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 £164,140 (2021: £170,814). 
Contributions totalling £34,859 (2021: £35,416) were payable to the fund at the balance sheet date and are included in other creditors.


21.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
150,074
144,354

Later than 1 year and not later than 5 years
304,731
449,060

454,805
593,414

Lease payments recognised as an expense during the year totalled £179,949 (2021: £120,255).


22.


Related party transactions

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.


23.


Controlling party

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.

- 25 -