Company Registration No. 09173982 (England and Wales)
Blackwood Capital Group (UK) Limited
Annual report and financial statements
for the year ended 31 December 2021
Blackwood Capital Group (UK) Limited
Company information
Directors
Ronald Grosman
Thomas Kardos
Company number
09173982
Registered office
5 Welbeck Street
London
W1G 9YQ
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Blackwood Capital Group (UK) Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Income statement
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
Blackwood Capital Group (UK) Limited
Strategic report
For the year ended 31 December 2021
Page 1

The directors present the strategic report for the year ended 31 December 2021.

Fair review of the business

The year to 31 December 2021 followed a difficult 2019 and the challenging Covid year 2020 which, however, ended strongly.  We started 2021 with a decent pipeline of transactions due to complete in Q1/2 and winning some early new mandates at the beginning of 2021.  However, the pandemic still had its effects on the market and our clients’ willingness and ability to proceed in a timely fashion, the result of which was a delay in the completion of 2 transactions (into Q2) and the abandonment of 2 other transactions.  We won 2 important mandates, both with the objective of a deal occurring by year-end, however, while not abandoned, these transactions carried through into 2022.

 

The second half of the year was characterised by an increasing appetite for M&A in the market but the focus was still on preparatory work versus deal completions, therefore not generating any success fees.  As a consequence, cash flow was very tight and whilst the directors ensured that the team was being paid, they themselves were not able to earn any salaries and the company was not in a position to pay HMRC contributions during most of the second half of 2021.

 

In addition, as a consequence, the company was also not able to rectify its capital adequacy shortfall and the directors therefore agreed to convert £100,000 in loan notes to reduce the deficit. This conversion was enacted post year end on 11 January 2023.

 

Overall, therefore, it was a challenging and disappointing year although with a promising pipeline for 2023.

Principal risks and uncertainties

The key risk facing the company continues to be the binary cash flow profile of its M&A activity. Success fee income is only generated when a deal completes, which as an adviser the company does not control. Otherwise, income from any one deal can be minimal. The directors note 2021 was a challenging financial year, despite the strong performance in the second half of 2021.

 

Cash flow has required careful monitoring throughout 2021 and 2022 and the company has been dependent on the continued support of the directors to maintain an appropriate cash balance. This ongoing financial support has been detailed further in Note 1.2, as well as other uncertainties regarding the company's ability to continue as a going concern. Based on the future sales pipeline for 2023 the directors are confident about the future prospects and therefore continue to adopt the going concern basis of accounting in preparing the financial statements.

 

The other risk of the business relates to retaining key employees and finding new talent to help develop and promote business opportunities.

Blackwood Capital Group (UK) Limited
Strategic report (continued)
For the year ended 31 December 2021
Page 2
Key performance indicators

The directors remain of the opinion that the company will survive the current crises and become profitable and self-sustaining in the next 2-5 years.  The company managed to survive due to the cash support of the directors until such time that the company began closing transactions again, without the need to lay off any personnel.

On behalf of the board

..............................
Thomas Kardos
Director
.........................
Blackwood Capital Group (UK) Limited
Directors' report
For the year ended 31 December 2021
Page 3

The directors present their annual report and financial statements for the year ended 31 December 2021.

Principal activities

The principal activity of the company continued to be that of providing corporate finance and M&A advisory services.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

No preference dividends were paid.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Ronald Grosman
Thomas Kardos
Auditor

Saffery LLP have expressed their willingness to continue in office.

Statement of directors' responsibilities

The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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:

 

 

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 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.

Blackwood Capital Group (UK) Limited
Directors' report (continued)
For the year ended 31 December 2021
Page 4
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Going concern

As stated in Note 1.2, the company is dependent on generating future revenues and the continued support of the directors. The directors have considered trading forecasts and cash flow requirements for a period of 12 months from the date of approval of these financial statements and have concluded that it is appropriate to prepare these financial statements on a going concern basis.

On behalf of the board
Thomas Kardos
Director
19 October 2023
Blackwood Capital Group (UK) Limited
Independent auditor's report
To the members of Blackwood Capital Group (UK) Limited
Page 5
Opinion

We have audited the financial statements of Blackwood Capital Group (UK) Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:

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.

Material uncertainty related to going concern

We draw attention to Note 1.2 in the financial statements, which indicates that the company had net liabilities of £308,993 at 31 December 2021. The historic trading losses and net liabilities of the company indicate there is a degree of uncertainty that the going concern assumption is an appropriate basis for the preparation of the financial statements. As stated in Note 1.2, the company is dependent on generating future revenues and the continued financial support of its directors. These events or conditions, along with other matters as set forth in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt of the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors assessment of the entity's ability to continue to adopt the going concern basis of accounting included a review of current trading results, sales pipelines, cash flow forecasts and each director's financial position and ability to support the business.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Blackwood Capital Group (UK) Limited
Independent auditor's report (continued)
To the members of Blackwood Capital Group (UK) Limited
Page 6

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.

 

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:

Matters on which we are required to report by exception

In the 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:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Blackwood Capital Group (UK) Limited
Independent auditor's report (continued)
To the members of Blackwood Capital Group (UK) Limited
Page 7
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. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006, UK Tax legislation and The Financial Services and Markets Act 2000, on which The Financial Conduct Authority (FCA) Handbook is based.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

Blackwood Capital Group (UK) Limited
Independent auditor's report (continued)
To the members of Blackwood Capital Group (UK) Limited
Page 8

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

 

The company is regulated by the FCA. We discussed the company’s authorisation and permitted activities with the SMF16 and obtained evidence of this from the FCA register. We obtained additional evidence about compliance by discussing any breaches with the SMF16 and SMF17 and reviewing correspondence with the FCA.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our 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.

Roger Weston (Senior Statutory Auditor)
For and on behalf of Saffery LLP
19 October 2023
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Blackwood Capital Group (UK) Limited
Statement of comprehensive income
For the year ended 31 December 2021
Page 9
2021
2020
Notes
£
£
Turnover
3
1,487,197
2,827,313
Cost of sales
(42,578)
(45,424)
Gross profit
1,444,619
2,781,889
Administrative expenses
(1,448,328)
(2,762,597)
Other operating income
20,938
23,426
Operating profit
4
17,229
42,718
Interest payable and similar expenses
8
(20,415)
(13,870)
(Loss)/profit before taxation
(3,186)
28,848
Tax on (loss)/profit
9
-
0
-
0
(Loss)/profit for the financial year
(3,186)
28,848

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Blackwood Capital Group (UK) Limited
Balance sheet
As at 31 December 2021
Page 10
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,442
5,848
Current assets
Debtors
12
767,547
264,531
Cash at bank and in hand
578
431,220
768,125
695,751
Creditors: amounts falling due within one year
13
(1,047,560)
(962,406)
Net current liabilities
(279,435)
(266,655)
Total assets less current liabilities
(273,993)
(260,807)
Creditors: amounts falling due after more than one year
14
(35,000)
(45,000)
Net liabilities
(308,993)
(305,807)
Capital and reserves
Called up share capital
16
4,732,022
4,732,022
Share premium account
2,062,570
2,062,570
Other reserves
235,713
235,713
Profit and loss reserves
(7,339,298)
(7,336,112)
Total equity
(308,993)
(305,807)
The financial statements were approved by the board of directors and authorised for issue on 19 October 2023 and are signed on its behalf by:
Thomas Kardos
Director
Company Registration No. 09173982
Blackwood Capital Group (UK) Limited
Statement of changes in equity
For the year ended 31 December 2021
Page 11
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2020
4,732,022
2,062,570
235,713
(7,364,960)
(334,655)
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
28,848
28,848
Balance at 31 December 2020
4,732,022
2,062,570
235,713
(7,336,112)
(305,807)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(3,186)
(3,186)
Balance at 31 December 2021
4,732,022
2,062,570
235,713
(7,339,298)
(308,993)
Blackwood Capital Group (UK) Limited
Statement of cash flows
For the year ended 31 December 2021
Page 12
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
21
(2,279)
747,320
Interest paid
(20,415)
(13,870)
Net cash (outflow)/inflow from operating activities
(22,694)
733,450
Investing activities
Purchase of tangible fixed assets
(1,745)
-
0
Loans made
(401,479)
(32,524)
Net cash used in investing activities
(403,224)
(32,524)
Financing activities
Repayment of borrowings
(4,724)
(272,106)
Net cash used in financing activities
(4,724)
(272,106)
Net (decrease)/increase in cash and cash equivalents
(430,642)
428,820
Cash and cash equivalents at beginning of year
431,220
2,400
Cash and cash equivalents at end of year
578
431,220
Blackwood Capital Group (UK) Limited
Notes to the financial statements
For the year ended 31 December 2021
Page 13
1
Accounting policies
Company information

Blackwood Capital Group (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5 Welbeck Street, London, W1G 9YQ.

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”).

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

The potential impacts upon the corporate finance and M&A advisory services sector from the ongoing economic challenges remain uncertain. The directors have considered as far as possible the impact of wider events such as the Russian invasion of Ukraine and the current cost of living crisis and have short term measures in place to control costs on an ongoing basis.

 

The company is reliant on key clients and winning new business to maintain its going concern position. Given the nature of the company trading activity the directors are unable to project with significant certainty the quantum and timing of revenue and cash receipts, however they are winning new mandates. The directors have carefully considered financial projections for 2023 and 2024, including review of costs and pipelines for potential revenues. The company is dependent on a percentage of deals and transactions finalising in the coming year to generate profits and positive cash flows.

 

Revenues and cash flows generated in late 2022 and early 2023 were positive, however the company owed material balances to HMRC in respect of historic VAT and PAYE liabilities. The company has relied upon the deferral of HMRC debts and time to pay arrangements.

 

There have been delays to the completion of projects in Q2 and Q3 of 2023, with a reduction in revenue and this having a negative impact on cash flows. At the time of approving the financial statements the company continues to rely upon the deferral of HMRC debts as well as working capital financial support from the directors personally to remain cash positive. At the year-end date the directors loan account was overdrawn by £472,300, with the current position being a loan account of £548,123 overdrawn.

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 14
Due to the significant liabilities, the company has remained in a net liability position. The company has been dependent on the continued support of the directors, to maintain its positive cash position. The directors are aware that the future company cash flow requires careful monitoring,  and the company has at times relied on their financial support as sole shareholders since February 2020. The company has received written confirmation from the directors of the intention to provide continuing financial support, the waiver of their directors salaries and the provision of working capital loans to maintain the going concern status for a period of at least twelve months from the date of approval of the financial statements.

Although dependent on the future pipeline of revenue and the directors' continued support, the directors have a reasonable expectation of the company's ability to continue trading. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

1.4
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.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Intellectual property
Straight line basis over 25 years
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
10% straight line
Computer equipment
33% straight line
Office furniture
20% straight line
Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 15

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.

1.6
Impairment of fixed assets

At each reporting 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).

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.

1.7
Cash at bank and in hand

Cash and cash equivalents 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. Bank overdrafts are shown within borrowings in current liabilities.

1.8
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, 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.

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 16
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities

Basic financial liabilities, including trade and other creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 receipts discounted at a market rate of interest.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as 'creditors: amounts falling due within one year' if payment is due within one year or less. If not, they are presented as 'creditors: amounts falling due after more than one year'. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 17
Other financial liabilities

Other financial liabilities, including debt instruments that do not meet the definition of a basic financial instrument, are measured at fair value through profit or loss.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments, including preference shares that are classified as equity, issued by the company are recorded at the proceeds received, net of direct issue costs.

1.10
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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.12
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 leases asset are consumed.

1.13
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 18
1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Going concern

The continued trading losses of the company and closing net liabilities indicate there is a degree of uncertainty that the going concern assumption is an appropriate basis for the preparation of the financial statements. The directors prepare regular sales pipelines and carefully monitor cash flow, so therefore continue to adopt the going concern basis of accounting in preparing the financial statements. This has been detailed further in Note 1.2.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2021
2020
£
£
Turnover analysed by class of business
Fees
1,475,427
2,795,672
Recharged expenses
11,770
31,641
1,487,197
2,827,313
Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
3
Turnover and other revenue (continued)
Page 19
2021
2020
£
£
Other income
Grants received
20,938
23,426
2021
2020
£
£
Turnover analysed by geographical market
Europe
989,588
2,819,805
Rest of the World
497,609
7,508
1,487,197
2,827,313
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences
28,340
22,090
Government grants
(20,938)
(23,426)
Depreciation of owned tangible fixed assets
2,151
2,455
Operating lease charges
152,954
150,980
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,500
9,500
For other services
Preparation of the financial statements
3,750
3,500
Other assurance services
2,500
2,250
Taxation compliance services
3,750
3,500
10,000
9,250
Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 20
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2021
2020
Number
Number
Directors
2
2
Administrative
6
7
Total
8
9

Their aggregate remuneration comprised:

2021
2020
£
£
Wages and salaries
812,536
1,487,879
Social security costs
102,828
197,317
Pension costs
6,584
8,544
921,948
1,693,740
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
210,000
800,000
Company pension contributions to defined contribution schemes
660
875
210,660
800,875

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2020 - 2).

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
7
Directors' remuneration (continued)
Page 21
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
105,000
400,000
Company pension contributions to defined contribution schemes
330
438

The directors are considered to be the key management personnel.

8
Interest payable and similar expenses
2021
2020
£
£
Interest payable on loans
600
4,725
Interest payable on overdue taxation
19,815
9,145
20,415
13,870
9
Taxation

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2021
2020
£
£
(Loss)/profit before taxation
(3,186)
28,848
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(605)
5,481
Unutilised tax losses carried forward
-
0
(5,481)
Change in unrecognised deferred tax assets
605
-
0
Taxation charge for the year
-
-

The company has trading tax losses available to carry forward of approximately £7,140,000 (2020: £7,160,000). No deferred tax asset has been recognised on these losses as the recognition criteria have not been met.

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 22
10
Intangible fixed assets
Intellectual property
£
Cost
At 1 January 2021 and 31 December 2021
1,680,000
Amortisation and impairment
At 1 January 2021 and 31 December 2021
1,680,000
Carrying amount
At 31 December 2021
-
0
At 31 December 2020
-
0
11
Tangible fixed assets
Fixtures and fittings
Computer equipment
Office furniture
Total
£
£
£
£
Cost
At 1 January 2021
12,365
34,754
158,343
205,462
Additions
-
0
1,745
-
0
1,745
At 31 December 2021
12,365
36,499
158,343
207,207
Depreciation
At 1 January 2021
6,961
34,310
158,343
199,614
Depreciation charged in the year
1,270
881
-
0
2,151
At 31 December 2021
8,231
35,191
158,343
201,765
Carrying amount
At 31 December 2021
4,134
1,308
-
0
5,442
At 31 December 2020
5,404
444
-
0
5,848
Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 23
12
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,779
55,488
Corporation tax recoverable
131,762
-
0
Other debtors
452,300
50,821
Prepayments and accrued income
92,146
69,662
678,987
175,971
2021
2020
Amounts falling due after more than one year:
£
£
Other debtors
88,560
88,560
Total debtors
767,547
264,531

Included within other receivables above is an amount of £88,560 (2020: £88,560) relating to a rental deposit receivable in more than one year.

 

13
Creditors: amounts falling due within one year
2021
2020
£
£
Bank loans
10,276
5,000
Trade creditors
165,751
67,848
Corporation tax
131,762
-
0
Other taxation and social security
562,079
673,366
Other creditors
100,000
125,906
Accruals and deferred income
77,692
90,286
1,047,560
962,406
Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 24
14
Creditors: amounts falling due after more than one year
2021
2020
£
£
Bank loans
35,000
45,000

During the prior year, the company entered in to a fixed rate loan agreement for £50,000 with National Westminster Bank Plc attracting an annual interest of 2.5%, after one year from the date the loan was granted. The loan is due for repayment in monthly instalments and to be repaid in full by 15 June 2026. The balance at 31 December 2021 was £45,276 (2020: £50,000). This lending facility is supported by the Bounce Back Loan Scheme (BBLS), managed by the British Business Bank with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy.

15
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
6,584
8,544

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

16
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
490 Ordinary A Shares of £1 each
490
490
510 Ordinary B Shares of £1 each
510
510
1,000
1,000
The A and B shares rank pari passu.
Preference share capital
Issued and fully paid
Non-cumulative perpetual preference shares of £1 each
4,731,022
4,731,022
Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
16
Share capital (continued)
Page 25

On 20 February 2020 a transaction was concluded whereby the two directors equally acquired all Ordinary shares and Non-cumulative perpetual preference shares.

At 31 December 2021, the directors held £4,731,022 of non-cumulative perpetual preference shares in the company. Post year end, on 11 January 2023, £100,000 of non-cumulative perpetual preference shares (£50,000 to each director) were issued in return for the cancellation of £100,000 of shareholder loan notes (£50,000 owed to each director).

17
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2021
2020
£
£
Within one year
147,600
147,600
Between two and five years
258,300
405,900
405,900
553,500
18
Related party transactions

On 20 February 2020, the directors equally acquired all Ordinary shares and Non-cumulative perpetual preference shares held by the previous majority shareholder and controlling party, Levante Capital Partners S.L., along with £119,998 of loan notes and £202,108 of other loans due to Levante Capital Partners S.L.

 

At the year end the amount due to the directors, in respect of amounts transferred on 20 February 2020, was £100,000 (2020: £125,906). During the year, the company repaid the directors £25,906 (£12,953 each).

 

On 11 January 2023, after the balance sheet date but prior to the signing of the financial statements, the remaining £100,000 amount due to the directors was settled by way of an additional share issue.

 

During the year the company was recharged £nil for premises costs (2020: £3,840) by Blackwood Capital Group Holding Limited, a company of which Thomas Kardos and Ronald Grosman are directors. During the year, the company paid £nil (2020: £7,680) and as at the year end the balance owed by the company amounted to £7,680 (2020: £7,680).

Blackwood Capital Group (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 26
19
Directors' transactions

During the year interest free advances were made by the company to Thomas Kardos. The largest amount owed to the company during the year in respect of this was £472,850 (2020: £100,034). The amount payable at the year end was £452,300 (2020: £50,000).

 

During the year interest free advances were made by the company to Ronald Grosman. The largest amount owed to the company during the year in respect of this was £1,066 (2020: £821). The amount payable at the year end was £nil (2020: £821).

20
Control

At the year end, the two directors are considered to be the ultimate controlling party.

21
Cash (absorbed by)/generated from operations
2021
2020
£
£
(Loss)/profit for the year after tax
(3,186)
28,848
Adjustments for:
Finance costs
20,415
13,870
Depreciation and impairment of tangible fixed assets
2,151
2,455
Movements in working capital:
Decrease in debtors
30,225
214,882
(Decrease)/increase in creditors
(51,884)
487,265
Cash (absorbed by)/generated from operations
(2,279)
747,320
22
Analysis of changes in net funds/(debt)
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
431,220
(430,642)
578
Borrowings excluding overdrafts
(50,000)
4,724
(45,276)
381,220
(425,918)
(44,698)
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