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COMPANY REGISTRATION NUMBER: 08665811
CC33 FS Limited
Financial Statements
31 March 2023
CC33 FS Limited
Financial Statements
Year ended 31 March 2023
Contents
Pages
Officers and professional advisers
1
Strategic report
2 to 3
Directors' report
4 to 6
Independent auditor's report to the members
7 to 10
Statement of income and retained earnings
11
Statement of financial position
12 to 13
Statement of cash flows
14
Notes to the financial statements
15 to 25
CC33 FS Limited
Officers and Professional Advisers
The board of directors
Mr P D Fletcher
Mr G Russo
Mr A S Cassidy
Mr A Robinson
Mr M A Lazenby
Registered office
The Portergate
257 Ecclesall Road
Sheffield
S11 8NX
Auditor
Hebblethwaites
Chartered Accountants & statutory auditor
2 Westbrook Court
Sharrow Vale Road
Sheffield
S11 8YZ
CC33 FS Limited
Strategic Report
Year ended 31 March 2023
Development and performance of the business
The principal activity of the company during the year continued to be the operation of a contact centre. With a strong emphasis on technology the aim is to become the number one choice in the UK for outsourced contact centre services. As a result of rapid growth during the 2020 and 2021 years, the company was making use of three different locations within the local area. In order to accommodate its longer term growth plan and to achieve greater cost and management efficiencies, significant investment was made in new premises in the prior period (2022) to consolidate the previously diversified operations. This has created capacity for further expansion but at the cost of higher administrative expenses particularly in the short term pending further growth. Shortly after the consolidation of the company's activities into its new premises. the company's growth and margins were adversely affected by the departure of many energy sector customers from the contact centre market. In autumn 2021, the energy sector experienced an unprecedented increase in the cost of wholesale energy. This disruption in the energy market resulted in the company's energy customers having to revise their sales strategies, resulting in market consolidation and restrictions in in advertising budgets. As they were no longer able to compete in the retail energy sector market, most energy clients either dramatically reduced their outbound sales activities or stopped them altogether. The company lost significant revenue and as a result incurred losses. The company responded by appointing a new marketing team and focusing on other market sectors and has subsequently seen growth in its non-energy customer base. This market repositioning is taking time to return the business to profitability. Coupled with higher operating costs, this has led to losses being reported in the current year. Key Performance Indicators are as follows: Year ended 31 March 2023 31 March 2022 Total Turnover £11,540,087 £13,610,040 Gross Profit £ 2,580,196 £ 2,957,795 Gross Profit Return 22.36% 21.73% In the prior year a major energy customer entered liquidation owing the company £1.445 million in gross debtor quantum. The directors are confident of eventual recovery of this debt in full at the end of the liquidation, albeit it is accepted that the recovery process may take several years as, indeed, is proving to be the case. No provision has yet been made in either these accounts, nor those of the prior year, for this debt. However, the board continue to monitor the situation closely. Further shareholder loan funding has been provided during the year to assist with the ongoing working capital requirements. Despite the further loss in the year the closing Statement of Financial Position remains positive, including the afore-mentioned debt. With the actions taken to develop new markets and capacity the board remain confident of the future potential for the business.
This report was approved by the board of directors on 22 December 2023 and signed on behalf of the board by:
Mr G Russo
Director
Registered office:
The Portergate
257 Ecclesall Road
Sheffield
S11 8NX
CC33 FS Limited
Directors' Report
Year ended 31 March 2023
The directors present their report and the financial statements of the company for the year ended 31 March 2023 .
Directors
The directors who served the company during the year were as follows:
Mr P D Fletcher
Mr G Russo
Mr A S Cassidy
Mr A Robinson
Mr M A Lazenby
Mr J Robinson
(Resigned 16 June 2022)
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Future developments
The company and the directors continue to develop the medium term corporate strategy of investment and growth in a post pandemic era which is perceived to create significant new opportunities for exploitation.
Working capital facilities are in place, assisted by new shareholder funding, to facilitate this ongoing period of development and re-establishment.
No fundamental changes to the nature of the business are anticipated in the foreseeable future, with an emphasis on investment in people, which form the backbone of the business and the industry.
Flexible working in a safe environment for all team members if seen as a priority.
Employment of disabled persons
The company has a policy of equal opportunities and is committed to training, developing and promoting employees of all nationalities, religions, gender or physical ability.
Employee involvement
The company has continued its policy of consultation, as appropriate, with employees relative to the provision of information and in the context of performance and awareness of factors impacting the company.
Financial instruments
The company finances its operation through a mixture of commercial finance and loans from participators.
Liquidity risk is managed by ensuring sufficient levels of cash and draw-down are available to enable the company to meet its short and medium-term working capital obligations, allied to the periodic funding provided by the directors and shareholders as and when required.
Credit risk remains a factor in the industry and is managed by means of constant monitoring and review procedures.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 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 judgments and accounting estimates that are reasonable and prudent; - 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 22 December 2023 and signed on behalf of the board by:
Mr G Russo
Director
Registered office:
The Portergate
257 Ecclesall Road
Sheffield
S11 8NX
CC33 FS Limited
Independent Auditor's Report to the Members of CC33 FS Limited
Year ended 31 March 2023
Qualified opinion
We have audited the financial statements of CC33 FS Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the financial statements: - give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
Included in debtors within the statement of financial position at this period end and the prior period end is a gross total of £1,470,522 of debtors in relation to customers who have now ceased trading and are in liquidation. No provision has been made in these financial statements to reflect the potential non-recovery of these debtor balances by CC33 FS Limited. In our opinion, provision should have been made in these financial statements as against all, or at least part, of these debtor balances. Had the subject net debtor balances been provided for in these financial statements, the effect on the loss for the year would be to increase this by £1,225,435 with an equivalent impact in terms of period end shareholder funds. Except for the financial effect of not making the provision referred to in the preceding paragraph, in our opinion, the financial statements: - Give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its loss for the year then ended; - Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, and; - Have been prepared in accordance with the requirements of the Companies Act 2006.
Material uncertainty related to going concern
In forming our opinion on the financial statements, we have considered the adequacy of the disclosure made in note 3 to the financial statements concerning the company’s ability to continue as a going concern.
The company incurred a net loss, after tax, of £924,010 during the year ended 31 March 2023 prior to any debtor balance provisions.
Despite the losses as recorded, the Statement of Financial Position at the period end date reflects a positive net asset position. However this would not remain the case with full provision for the debtor balances.
Our opinion is not modified in respect of this matter.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- 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 directors' 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.
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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: - the nature of the industry and sector, control environment and business performance, including the identification of related party transactions, and matters which could potentially impact on the company's continuation as a going concern; - results of our enquiries of management and assessment of the risks of irregularities; - any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to: - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; - the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; - the matters discussed among the audit engagement team, including how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, UK Corporate Governance Code and local tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. As part of an audit in accordance with ISAs (UK), we exercise professional judgment 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 purpose of expressing an opinion on the effectiveness of the 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. 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.
Andrew Throssell FCA
(Senior Statutory Auditor)
For and on behalf of
Hebblethwaites
Chartered Accountants & statutory auditor
2 Westbrook Court
Sharrow Vale Road
Sheffield
S11 8YZ
22 December 2023
CC33 FS Limited
Statement of Income and Retained Earnings
Year ended 31 March 2023
2023
2022
Note
£
£
Turnover
4
11,540,087
13,610,040
Cost of sales
8,959,891
10,652,245
-------------
-------------
Gross profit
2,580,196
2,957,795
Selling and distribution costs
41,654
50,399
Administrative expenses
3,776,650
3,316,876
Other operating income
5
16,935
------------
------------
Operating loss
6
( 1,238,108)
( 392,545)
Other interest receivable and similar income
9
1,515
1,465
Interest payable and similar expenses
10
12,502
7,582
------------
------------
Loss before taxation
( 1,249,095)
( 398,662)
Tax on loss
11
( 325,085)
( 166,143)
------------
---------
Loss for the financial year and total comprehensive income
( 924,010)
( 232,519)
------------
---------
Dividends paid and payable
12
( 150,000)
Retained earnings at the start of the year
1,538,871
1,921,390
------------
------------
Retained earnings at the end of the year
614,861
1,538,871
------------
------------
All the activities of the company are from continuing operations.
CC33 FS Limited
Statement of Financial Position
31 March 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
13
550
750
Tangible assets
14
442,745
579,230
---------
---------
443,295
579,980
Current assets
Stocks
15
4,047
937
Debtors
16
4,112,150
3,215,997
Cash at bank and in hand
110,915
33,239
------------
------------
4,227,112
3,250,173
Creditors: amounts falling due within one year
18
3,881,263
2,049,304
------------
------------
Net current assets
345,849
1,200,869
---------
------------
Total assets less current liabilities
789,144
1,780,849
Creditors: amounts falling due after more than one year
19
108,883
132,853
Provisions
21
65,300
109,025
---------
------------
Net assets
614,961
1,538,971
---------
------------
CC33 FS Limited
Statement of Financial Position (continued)
31 March 2023
2023
2022
Note
£
£
Capital and reserves
Called up share capital
25
100
100
Profit and loss account
614,861
1,538,871
---------
------------
Shareholders funds
614,961
1,538,971
---------
------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 22 December 2023 , and are signed on behalf of the board by:
Mr G Russo
Director
Company registration number: 08665811
CC33 FS Limited
Statement of Cash Flows
Year ended 31 March 2023
2023
2022
Note
£
£
Cash flows from operating activities
Loss for the financial year
( 924,010)
( 232,519)
Adjustments for:
Depreciation of tangible assets
192,909
178,745
Amortisation of intangible assets
200
4,163
Government grant income
( 16,935)
Other interest receivable and similar income
( 1,515)
( 1,465)
Interest payable and similar expenses
12,502
7,582
Tax on loss
( 325,085)
( 166,143)
Accrued income
( 402,956)
( 681,291)
Changes in:
Stocks
( 3,110)
44,044
Trade and other debtors
( 180,231)
1,622,149
Trade and other creditors
910,222
( 301,516)
---------
------------
Cash generated from operations
( 721,074)
456,814
Interest paid
( 12,502)
( 7,582)
Interest received
1,515
1,465
Tax paid
( 66,878)
---------
---------
Net cash (used in)/from operating activities
( 732,061)
383,819
---------
---------
Cash flows from investing activities
Purchase of tangible assets
( 56,424)
( 45,486)
---------
---------
Net cash used in investing activities
( 56,424)
( 45,486)
---------
---------
Cash flows from financing activities
New capital introduced by directors
199,991
Government grant income
16,935
Payment of hire purchase liabilities
( 22,516)
( 20,086)
Dividends paid
( 150,000)
---------
---------
Net cash from/(used in) financing activities
177,475
( 153,151)
---------
---------
Net (decrease)/increase in cash and cash equivalents
( 611,010)
185,182
Cash and cash equivalents at beginning of year
(134,900)
(320,082)
---------
---------
Cash and cash equivalents at end of year
17
( 745,910)
( 134,900)
---------
---------
CC33 FS Limited
Notes to the Financial Statements
Year ended 31 March 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is The Portergate, 257 Ecclesall Road, Sheffield, S11 8NX.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The financial year ended 31 March 2022 and, in this respect to a lesser extent for the latest year ended 31 March 2023, presented a number of continued financial and operational challenges linked to large price movements in the wholesale and retail energy sectors which have historically been a major commercial focus for CC33 FS Ltd. This resulted in market consolidation and restrictions on advertising budgets. Just prior to this the business had consolidated its operations onto one site which entailed considerable extra investment. The business has consequentially, and necessarily, refocussed on other non-energy sectors, in particular during this latest year which has presented further challenges both operationally and financially. These strategic changes and challenges have resulted in a further and more significant loss in the year, allied to the ongoing issue of the prior year insolvency of a large customer with an outstanding debt of a gross sum of £1.446 million. The substantial debt outstanding and owing by this customer relates to turnover during the 2020 and 2021 calendar years. Despite this, the company has continued to operate from mid 2021 onwards without the benefit of funds previously expected to be received in this regard whilst remaining within its agreed funding limits. As described in the Strategic Report, the Board are anticipating eventual full recovery of these funds, though the recovery process may take several years. The company has continued to trade and has retained the financial support of its shareholders and third party financial partners. During the financial year, a significant shareholder injected further loan capital, maintaining financial flexibility and demonstrating the confidence of the investors in the future of the business. The statement of financial position at the year end date remains positive if much depleted as a consequence of the losses recorded, and with the afore-mentioned debt retained as an asset in the Statement of Financial Position. This position clearly presents fiscal challenges and material financial uncertainty for the company going forward, with forecasts reliant on the company trading out of the current challenges.
Disclosure exemptions
(c) Disclosures in respect of financial instruments have not been presented. (d) Disclosures in respect of share-based payments have not been presented.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for services rendered, stated net of discounts and of Value Added Tax. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
10% straight line
Other intangible assets
-
20% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Property improvements
-
20% straight line
Furniture and fixtures
-
20% straight line
Motor vehicles
-
25% straight line
Office equipment
-
25% straight line
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Rendering of services
11,540,087
13,610,040
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2023
2022
£
£
Government grant income
16,935
----
--------
6. Operating loss
Operating profit or loss is stated after charging:
2023
2022
£
£
Amortisation of intangible assets
200
4,163
Depreciation of tangible assets
192,909
178,745
Operating lease rentals
31,009
14,947
---------
---------
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Production staff
466
515
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
9,011,517
10,363,968
Social security costs
640,550
586,840
Other pension costs
131,405
138,816
------------
-------------
9,783,472
11,089,624
------------
-------------
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
338,187
552,812
Company contributions to defined contribution pension plans
2,157
---------
---------
338,187
554,969
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
1
----
----
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
£
£
Aggregate remuneration
93,333
95,000
--------
--------
9. Other interest receivable and similar income
2023
2022
£
£
Interest on bank deposits
1,515
1,465
-------
-------
10. Interest payable and similar expenses
2023
2022
£
£
Interest on obligations under finance leases and hire purchase contracts
8,904
6,698
Other interest payable and similar charges
3,598
884
--------
-------
12,502
7,582
--------
-------
11. Tax on loss
Major components of tax income
2023
2022
£
£
Current tax:
UK current tax income
( 281,360)
( 108,184)
Adjustments in respect of prior periods
( 66,202)
---------
---------
Total current tax
( 281,360)
( 174,386)
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 43,725)
8,243
---------
---------
Tax on loss
( 325,085)
( 166,143)
---------
---------
Reconciliation of tax income
The tax assessed on the loss on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 19 % (2022: 19 %).
2023
2022
£
£
Loss on ordinary activities before taxation
( 1,249,095)
( 398,662)
------------
---------
Loss on ordinary activities by rate of tax
( 237,328)
( 75,746)
Adjustment to tax charge in respect of prior periods
( 66,202)
Effect of expenses not deductible for tax purposes
57,506
75,746
Effect of capital allowances and depreciation
102,448
8,243
R&D Tax Claim
( 281,360)
( 108,184)
Tax losses carried forward
33,649
------------
---------
Tax on loss
( 325,085)
( 166,143)
------------
---------
12. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
150,000
----
---------
13. Intangible assets
Goodwill
Other intangible assets
Total
£
£
£
Cost
At 1 April 2022 and 31 March 2023
2,000
88,112
90,112
-------
--------
--------
Amortisation
At 1 April 2022
1,250
88,112
89,362
Charge for the year
200
200
-------
--------
--------
At 31 March 2023
1,450
88,112
89,562
-------
--------
--------
Carrying amount
At 31 March 2023
550
550
-------
--------
--------
At 31 March 2022
750
750
-------
--------
--------
14. Tangible assets
Property improvements
Furniture and fixtures
Motor vehicles
Office equipment
Total
£
£
£
£
£
Cost
At 1 April 2022
129,237
164,046
175,455
428,580
897,318
Additions
25,145
13,971
17,308
56,424
---------
---------
---------
---------
---------
At 31 March 2023
154,382
178,017
175,455
445,888
953,742
---------
---------
---------
---------
---------
Depreciation
At 1 April 2022
41,935
50,125
17,058
208,970
318,088
Charge for the year
26,612
34,609
29,243
102,445
192,909
---------
---------
---------
---------
---------
At 31 March 2023
68,547
84,734
46,301
311,415
510,997
---------
---------
---------
---------
---------
Carrying amount
At 31 March 2023
85,835
93,283
129,154
134,473
442,745
---------
---------
---------
---------
---------
At 31 March 2022
87,302
113,921
158,397
219,610
579,230
---------
---------
---------
---------
---------
15. Stocks
2023
2022
£
£
Work in progress
4,047
937
-------
----
16. Debtors
2023
2022
£
£
Trade debtors
1,039,209
2,311,197
Prepayments and accrued income
1,169,715
729,016
Corporation tax repayable
455,952
174,592
Other debtors
1,447,274
1,192
------------
------------
4,112,150
3,215,997
------------
------------
17. Cash and cash equivalents
Cash and cash equivalents comprise the following:
2023
2022
£
£
Cash at bank and in hand
110,915
33,239
Bank overdrafts
( 856,825)
( 168,139)
---------
---------
( 745,910)
( 134,900)
---------
---------
18. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
856,825
168,139
Trade creditors
491,160
273,774
Accruals and deferred income
438,746
407,140
Social security and other taxes
1,760,420
893,731
Obligations under finance leases and hire purchase contracts
23,970
22,516
Director loan accounts
262,631
62,640
Other creditors
47,511
221,364
------------
------------
3,881,263
2,049,304
------------
------------
The above bank borrowing relates to liabilities in respect of which security has been provided by the company by means of a charge over trade debtors as shown at note 8 above.
19. Creditors: amounts falling due after more than one year
2023
2022
£
£
Obligations under finance leases and hire purchase contracts
108,883
132,853
---------
---------
20. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Not later than 1 year
23,970
22,516
Later than 1 year and not later than 5 years
108,883
132,853
---------
---------
132,853
155,369
---------
---------
21. Provisions
Deferred tax (note 22)
£
At 1 April 2022
109,025
Additions
( 43,725)
---------
At 31 March 2023
65,300
---------
22. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 21)
65,300
109,025
--------
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
65,300
109,025
--------
---------
23. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 12,395 (2022: £ 8,501 ).
24. Government grants
The amounts recognised in the financial statements for government grants are as follows:
2023
2022
£
£
Recognised in other operating income:
Government grants recognised directly in income
16,935
----
--------
25. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 0.01 each
10,000
100
10,000
100
--------
----
--------
----
26. Analysis of changes in net debt
At 1 Apr 2022
Cash flows
At 31 Mar 2023
£
£
£
Cash at bank and in hand
33,239
77,676
110,915
Bank overdrafts
(168,139)
(688,686)
(856,825)
Debt due within one year
(85,156)
(201,445)
(286,601)
Debt due after one year
(132,853)
23,970
(108,883)
---------
---------
------------
( 352,909)
( 788,485)
( 1,141,394)
---------
---------
------------
27. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
528,553
528,553
Later than 1 year and not later than 5 years
1,802,409
2,330,962
------------
------------
2,330,962
2,859,515
------------
------------
28. Related party transactions
A loan account exists as between the company and Mr G Russo (a director) in relation to which the company was indebted to the director at the year end date in the sum of £10,714 (2022: £10,714). There are no formal repayment terms attaching to this unsecured loan and interest is not being charged. A loan account exists as between the company and Mr P Fletcher (a director) in relation to which the company was indebted to the director at the year end date in the sum of £7,925 (2022: £7,925). There are no formal repayment terms attaching to this unsecured loan and interest is not being charged. A loan account exists as between the company and Mr K Bach (an indirect shareholder) in relation to which the company was indebted to the shareholder at the year end date in the sum of £249,017 (2022: £49,017). There are no formal repayment terms attaching to this unsecured loan and interest is not being charged. During the 12 months ended 31 March 2023, one of the directors, G Russo, provided consultancy services to CC33 FS Ltd on a commercial basis, for the sum of £2,000 (2022: £2,500). During the 12 months ended 31 March 2023, one of the directors, P Fletcher, provided consultancy services to CC33 FS Ltd on a commercial basis, for the sum of £1,000 (2022: £8,380).