Weisscomm Partners Limited
Annual Report and Financial Statements
For the year ended 31 December 2022
Company Registration No. 06525018 (England and Wales)
Weisscomm Partners Limited
Company Information
Directors
M Holt
B Murphy
C Abolt
(Appointed 1 June 2022)
S Narayanan
(Appointed 3 January 2022)
P Stanton
(Appointed 12 December 2022)
Secretary
B Ostrom
Company number
06525018
Registered office
10 Chiswell Street
London
England
EC1Y 4UQ
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Weisscomm Partners Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
Weisscomm Partners Limited
Strategic Report
For the year ended 31 December 2022
Page 1
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
The company, incorporated in England and Wales in the United Kingdom, is a wholly owned subsidiary of AJW Communications LLC, incorporated in the United States of America.
In 2022, the ultimate parent company, W2O Holdings Inc., introduced intercompany remuneration between the parent and the company with respect to the following intercompany transactions:
• The provision of certain marketing and advertising consulting services; and
• The granting of rights to use certain network resources and intellectual property.
The impact of this change was an increase in revenue of £1,776,465 and a decrease in cost of sales of £8,463,719.
The results of the company for the year are set out in the Statement of Comprehensive Income. The company made a profit before tax of £1,312,547 (2021: loss £5,470,646). In 2022, transfer pricing was implemented. Loss before tax excluding transfer pricing is £8,927,634 (2021: loss £5,470,646).
The company generated turnover of £14,675,739 in 2022, compared to £15,027,038 in 2021, a decrease of 2%. The reduction in turnover is due to a change in the client portfolio. In response to the rapidly changing trading environment for marketing and consulting services, the Company has focused on managing its cost base by reorganising the executive management structure, with closer ties to the parent company. All strategic decisions are undertaken by the parent, ensuring strategic goals drive the business with greater collaboration with fellow group entities.
The company generated gross profit before tax of £6,579,767 in 2022, compared to gross loss of £410,588 in 2021, an increase of 1,703%. In 2022, transfer pricing was implemented. Gross loss excluding transfer pricing is £3,660,415 (2021: loss £410,588). The increase in gross loss (excluding transfer pricing) is mainly due to the decrease in revenue as stated above, and an increase in salary costs within the entity driven by promotions and severance costs. The implementation of transfer pricing has led to an increase in operating profit of £1,125,738 in 2022 from a loss of £5,589,416 in 2021.
The Balance Sheet shows the company’s financial position. At 31 December 2022, the Company was in a net current liability position of £9,114,146 (2021: £10,372,906) and a net liability position of £8,922,520 (2021: £9,986,673).
Weisscomm Partners Limited
Strategic Report (Continued)
For the year ended 31 December 2022
Page 2
Principal risks and uncertainties
The company’s activities are based principally on agreed contracts with clients that provide a significant level of continuity in supporting ongoing income streams.
Nevertheless, as in the nature of the industry, the key risk the company faces is the reduction in spend from clients, or a loss of clients through either the cancellation of the client contract concerned or a competitive pitch process. In addition, a large proportion of revenue is derived from one customer and therefore there is a risk should that client not renew their contract. However, management endeavour to mitigate these risks by:
Maintaining a wide portfolio of clients and projects;
Working closely with clients to ensure that projects achieve their key objectives;
Winning new clients; and
Developing the range of services provided to each client to strengthen and deepen the agency/client relationship.
The company is exposed to the normal risk of trade debtors defaulting on payment. However, the wide spread of customers and credit control procedures in place minimises the risk of such default.
The principal financial assets employed by the company are cash and cash equivalents. Daily cash reporting for all operations is maintained to ensure the business retains sufficient cash reserves and effective working capital management.
The company’s cash position is reported on a regular basis and monitored on a projected basis in the light of the company’s historical and expected future trading performance.
Development and performance
The company operates in a contract and project-based environment, which relies heavily on existing client relationships and the ability to win new client growth. Historically the business has performed well in these disciplines and as such the Board remains confident about the company’s prospects for the future.
The company depends on the commitment, talent, creative abilities, and technical skills of its people. Engagement and clear communication are important. Engagement with the workforce is achieved through:
The systematic provision of information covering the matters that concern both the business in general and employees specifically. This is done through event specific electronic communications, regular UK and group wide emails and business line or business unit specific emails, and several electronic platforms for employee reference including an intranet;
Annual employee engagement surveys; and
Townhalls including regular calls from the global leadership population.
The company engages with its customers through dedicated client relationship teams. The company develops various services, with an emphasis on innovation for clients and managing any conflicts of interest with multiple agencies. Due diligence is undertaken for all new clients and written contracts must be in place before commencing any significant work.
Weisscomm Partners Limited
Strategic Report (Continued)
For the year ended 31 December 2022
Page 3
Key performance indicators
The management team monitor various key performance indicators including billing, turnover, and profitability compared with budget and prior years on a client basis.
Refer to the fair review of the business for details explaining the operating results for the year.
P Stanton
Director
30 October 2023
Weisscomm Partners Limited
Directors' Report
For the year ended 31 December 2022
Page 4
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of public relations and promotions.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M Holt
B Murphy
C Abolt
(Appointed 1 June 2022)
S Narayanan
(Appointed 3 January 2022)
J Weiss
(Resigned 3 January 2022)
P Stanton
(Appointed 12 December 2022)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
Liquidity risk
The company does not use derivative financial instruments. The company actively manages its finances to ensure the company has sufficient funds available for its operations.
Foreign currency risk
The company has foreign currency assets and liabilities. The company does not currently use financial instruments to manage the risk of fluctuating exchange rates and as such no hedge accounting is applied. The directors keep these measures under constant review.
Credit risk
The company does not use credit checks. The company actively manages its relationships with clients and in 2022 there were no bad debts within the company.
Post reporting date events
There were no post reporting date events that require disclosure in the financial statements.
Future developments
The directors have disclosed information on future developments in the strategic report, as permitted by section 414C(11) of the Companies Act 2006.
Auditor
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Weisscomm Partners Limited
Directors' Report (Continued)
For the year ended 31 December 2022
Page 5
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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 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.
Information included in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
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
The directors consider that the company has access to sufficient funding to meet its financial obligations as they fall due. In forming their decision, the directors have considered the fact that the parent company has provided a letter confirming that it will provide financial support as required for at least one year from the date of signing of these financial statements. As a result, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
On behalf of the board
P Stanton
Director
30 October 2023
Weisscomm Partners Limited
Independent Auditor's Report
To the Members of Weisscomm Partners Limited
Page 6
Opinion
We have audited the financial statements of Weisscomm Partners Limited (the 'company') for the year ended 31 December 2022 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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.
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.
Weisscomm Partners Limited
Independent Auditor's Report (Continued)
To the Members of Weisscomm Partners Limited
Page 7
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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:
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
Weisscomm Partners Limited
Independent Auditor's Report (Continued)
To the Members of Weisscomm Partners Limited
Page 8
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Weisscomm Partners Limited
Independent Auditor's Report (Continued)
To the Members of Weisscomm Partners Limited
Page 9
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
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.
Ian Graham
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
31 October 2023
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Weisscomm Partners Limited
Statement of Comprehensive Income
For the year ended 31 December 2022
Page 10
2022
2021
Notes
£
£
Turnover
3
14,675,739
15,027,038
Cost of sales
(8,095,972)
(15,437,626)
Gross profit/(loss)
6,579,767
(410,588)
Administrative expenses
(5,583,414)
(5,178,828)
Other operating income
129,385
Operating profit/(loss)
4
1,125,738
(5,589,416)
Interest receivable and similar income
6
186,809
118,770
Profit/(loss) before taxation
1,312,547
(5,470,646)
Tax on profit/(loss)
7
(248,394)
(49,068)
Profit/(loss) for the financial year
1,064,153
(5,519,714)
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Weisscomm Partners Limited
Balance Sheet
As at 31 December 2022
Page 11
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
8
391
972
Tangible assets
9
201,671
391,627
202,062
392,599
Current assets
Debtors
11
2,169,732
1,765,220
Cash at bank and in hand
9,639,995
3,804,673
11,809,727
5,569,893
Creditors: amounts falling due within one year
12
(20,923,873)
(15,942,799)
Net current liabilities
(9,114,146)
(10,372,906)
Total assets less current liabilities
(8,912,084)
(9,980,307)
Provisions for liabilities
Deferred tax liability
13
(10,436)
(6,366)
(10,436)
(6,366)
Net liabilities
(8,922,520)
(9,986,673)
Capital and reserves
Called up share capital
15
100
100
Profit and loss reserves
(8,922,620)
(9,986,773)
Total equity
(8,922,520)
(9,986,673)
The financial statements were approved by the board of directors and authorised for issue on 30 October 2023 and are signed on its behalf by:
P Stanton
Director
Company Registration No. 06525018
Weisscomm Partners Limited
Statement of Changes in Equity
For the year ended 31 December 2022
Page 12
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
100
(4,467,059)
(4,466,959)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(5,519,714)
(5,519,714)
Balance at 31 December 2021
100
(9,986,773)
(9,986,673)
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,064,153
1,064,153
Balance at 31 December 2022
100
(8,922,620)
(8,922,520)
Weisscomm Partners Limited
Statement of Cash Flows
For the year ended 31 December 2022
Page 13
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
17
5,796,909
2,384,788
Investing activities
Purchase of intangible assets
(2,767)
Purchase of tangible fixed assets
(59,140)
(261,013)
Interest received
97,553
225,837
Net cash generated from/(used in) investing activities
38,413
(37,943)
Net increase in cash and cash equivalents
5,835,322
2,346,845
Cash and cash equivalents at beginning of year
3,804,673
1,457,828
Cash and cash equivalents at end of year
9,639,995
3,804,673
Weisscomm Partners Limited
Notes to the Financial Statements
For the year ended 31 December 2022
Page 14
1
Accounting policies
Company information
Weisscomm Partners Limited is a private company limited by shares incorporated in England and Wales. The registered office is 10 Chiswell Street, London, England, EC1Y 4UQ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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. The principal accounting policies adopted are set out below.
The directors have chosen not to prepare consolidated financial statements as the subsidiary undertaking is not material for the purpose of giving a true and fair view, in accordance with section 405(2) of the Companies Act 2006 and FRS 102 paragraph 9.9A. The wholly owned subsidiary, Weisscomm Partners Singapore Private Limited, a company registered in Singapore, is legally dormant and is in the process of dissolution.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In forming their decision, the directors have considered the fact that the parent company has provided a letter confirming that it will provide financial support as required for at least one year from the date of signing of these financial statements. Thus 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 goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 15
Fixed fee
When a contract indicates services are supplied on a fixed fee basis, the company recognises revenue over the period in which the service is provided to the customer representing the effort incurred over the life of the project. In the current period, management began assessing the work performed on a periodic basis to ensure that the period over which services are being provided remains appropriate. In previous years, fixed fee revenue was recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete could be estimated reliably.
Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Time-and-expense
Time-and-expense professional service arrangements require the client to pay based on the number of hours worked by revenue-generating professionals at contractually agreed-upon rates. The company recognises revenues for professional services rendered under time-and-expense engagements based on an over time input method utilising the hours incurred at agreed-upon rates as work is performed. In some cases, time-and-expense arrangements are subject to a cap, in which case management assesses the work performed on a periodic basis to ensure that the cap has not been exceeded.
Other operating income
Other operating income includes the company's allocation of the release of the lease incentive liability following the exit of the office lease held by a fellow group undertaking.
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.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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:
Software
10% - 33% straight line
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:
Leasehold land and buildings
10% straight line
Fixtures and fittings
20% straight line
Computer equipment
33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 16
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.8
Financial instruments
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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 are assessed for indicators of impairment at each reporting date.
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.
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 17
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 18
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
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
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.
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 19
2
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Turnover
In the current year, the company implemented a change in the way that it assesses the stage of completion relating to services that are supplied on a fixed fee basis. The company now assesses the progress of a project by reference to the amount of effort incurred on that project as a proportion of the total actual (or estimated) effort required for that project. The company previously assessed the stage of completion by reference to the delivery of certain milestones within each project. The impact of this change was a decrease in revenue of £80,154. The company has reported total revenue of £14,675,739 for 2022.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Revenue from third party customers
5,379,674
5,581,068
Revenue from group undertakings
9,296,065
9,445,970
14,675,739
15,027,038
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
8,525,629
8,421,783
Europe
4,637,279
5,246,204
Rest of the World
1,512,831
1,359,051
14,675,739
15,027,038
2022
2021
£
£
Other significant revenue
Interest income
186,809
118,770
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 20
4
Operating profit/(loss)
2022
2021
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange gains
(223,495)
(52,252)
Fees payable to the company's auditor for the audit of the company's financial statements
23,700
14,500
Depreciation of owned tangible fixed assets
197,168
180,289
Loss on disposal of tangible fixed assets
51,928
-
Amortisation of intangible assets
581
5,273
Operating lease charges
145,426
166,947
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Employees
225
214
2022
2021
£
£
Wages and salaries
17,319,273
15,812,018
Social security costs
1,992,127
1,632,199
Pension costs
825,127
793,722
20,136,527
18,237,939
The company contractually employs all UK employees of the Real Chemistry group. Employees are contracted to fellow group undertakings; the fees recognised for this service are shown as revenue.
The number of employees allocated to the company is 104 (2021: 99).
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 21
6
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest receivable from group companies
146,876
118,770
Other interest income
39,933
Total income
186,809
118,770
Interest income includes the following:
Interest on financial assets not measured at fair value through profit or loss
146,876
118,770
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
244,324
Deferred tax
Origination and reversal of timing differences
4,070
62,551
Changes in tax rates
(13,483)
Total deferred tax
4,070
49,068
Total tax charge
248,394
49,068
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
7
Taxation
(Continued)
Page 22
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit/(loss) before taxation
1,312,547
(5,470,646)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
249,384
(1,039,423)
Tax effect of expenses that are not deductible in determining taxable profit
33,394
1,032
Effect of change in corporation tax rate
14,218
(11,623)
Group relief
1,097,456
Other permanent differences
1,886
Fixed asset differences
6,194
(9,316)
Movement in deferred tax not recognised
(54,796)
9,056
Taxation charge for the year
248,394
49,068
8
Intangible fixed assets
Software
£
Cost
At 1 January 2022 and 31 December 2022
10,437
Amortisation and impairment
At 1 January 2022
9,465
Amortisation charged for the year
581
At 31 December 2022
10,046
Carrying amount
At 31 December 2022
391
At 31 December 2021
972
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 23
9
Tangible fixed assets
Leasehold land and buildings
Computer equipment
Total
£
£
£
Cost
At 1 January 2022
52,094
584,160
636,254
Additions
59,140
59,140
Disposals
(52,094)
(94,122)
(146,216)
At 31 December 2022
549,178
549,178
Depreciation and impairment
At 1 January 2022
9,985
234,642
244,627
Depreciation charged in the year
2,605
194,563
197,168
Eliminated in respect of disposals
(12,590)
(81,698)
(94,288)
At 31 December 2022
347,507
347,507
Carrying amount
At 31 December 2022
201,671
201,671
At 31 December 2021
42,109
349,518
391,627
10
Subsidiaries
The directors have chosen not to prepare consolidated financial statements as the subsidiary undertaking is not material for the purpose of giving a true and fair view, in accordance with section 405(2) of the Companies Act 2006 and FRS 102 paragraph 9.9A. The wholly owned subsidiary Weisscomm Partners Singapore Private Limited, a company registered in Singapore, was struck off on 7 November 2022. The company has no other subsidiaries.
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,818,445
1,169,899
Other debtors
116,417
183,762
Prepayments and accrued income
234,870
411,559
2,169,732
1,765,220
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 24
12
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
122,933
327,182
Amounts owed to group undertakings
18,567,032
13,866,032
Corporation tax
269,789
25,465
Other creditors
885
123,970
Accruals and deferred income
1,963,234
1,600,150
20,923,873
15,942,799
13
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
10,436
37,136
Short term
-
(30,770)
10,436
6,366
2022
Movements in the year:
£
Liability at 1 January 2022
6,366
Charge to profit or loss
4,070
Liability at 31 December 2022
10,436
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
14
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
825,127
793,722
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.
Weisscomm Partners Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 25
15
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
16
Ultimate controlling party
The company considers its immediate parent company to be AJW Communications LLC, a company registered in the United States of America. The ultimate parent company is W2O Holdings Inc. The registered office address is 199 Water Street 14th Floor New York, NY 10038 United States of America.
W2O Holdings Inc. is the largest and smallest company in the group of which the company is a member which prepares consolidated accounts.
17
Cash generated from operations
2022
2021
£
£
Profit/(loss) for the year after tax
1,064,153
(5,519,714)
Adjustments for:
Taxation charged
248,394
49,068
Investment income
(186,809)
(118,771)
Loss on disposal of tangible fixed assets
51,928
-
Amortisation and impairment of intangible assets
581
5,273
Depreciation and impairment of tangible fixed assets
197,168
180,289
Movements in working capital:
Increase in debtors
(404,512)
(1,154,386)
Increase in creditors
4,826,006
8,943,029
Cash generated from operations
5,796,909
2,384,788
18
Analysis of changes in net funds
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
3,804,673
5,835,322
9,639,995
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