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Registered number: 06435616










ORBITAL MANAGEMENT SERVICES LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2023

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
COMPANY INFORMATION


Director
J Myatt 




Registered number
06435616



Registered office
Digital Media Centre
County Way

Barnsley

South Yorkshire

S70 2JW




Independent auditors
Shorts

Chartered Accountants & Statutory Auditor

Cedar House

63 Napier Street

Sheffield

South Yorkshire

S11 8HA





 
ORBITAL MANAGEMENT SERVICES LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Director's Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Statement of Income and Retained Earnings
 
9
Balance Sheet
 
10
Notes to the Financial Statements
 
11 - 20


 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

Introduction
 
The director presents his strategic report for the year ended 31 October 2023.

Principal activity
 
The principal activities of the entity are to operate as a payroll intermediary offering outsourced self-employed
and PAYE pay models to contingent workers who are engaged on temporary assignments through recruitment
agencies.

Business review
 
2023-24 was a challenging year for the business. We experienced a drop in sales in the last half of the year which adversely affected turnover and gross margin. This was due to adverse market conditions which impacted the whole sector. Furthermore, we deemed that further provision against historic outstanding debt was required based on the age collectability of the book debts. 
The turbulent economic backdrop in the UK has impacted the construction sector with a number of large-scale construction projects being deferred to 2024 and several reputable companies going into administration.        This has had a knock on effect on the business as a large proportion of workers are employed in this sector.
Work has been ongoing on validation of historical debt with many customers now settling debt via payments plans or where the debt is deemed uncollectable making provision in the accounts for such. This exercise is expected to be completed during 2024. The business now has robust financial controls in place which limit exposure to bad debts so this is a legacy issue rather than an ongoing one.
The business has now attained SafeRec accreditation which audits all our payslips in real-time, per pay run.  This gives both workers and agencies the confidence that all payroll deductions are legitimate and all tax and national insurance contributions are being paid over to HMRC correctly.  As an early adopter of SafeRec, it is felt we have a competitive advantage and an opportunity to expand market share over the coming years.
Given the adverse market conditions and legacy issues regarding recoverability of debt it is felt that the modest pre-tax profit reported is reasonable.  Moreover, now that the historical debt has been largely addressed, robust business processes and systems are in place and with the achievement of the SafeRec accreditation the business is well placed to grow back to previous levels of activity and importantly any increase in margin will not be eroded as has been the case in prior years.

Principal risks and uncertainties
 
The principal risks still include adhering to HMRC legislation and any sudden changes to how it interprets compliance enforcement for payroll intermediaries. 
The business is sensitive to downturns in the construction industry and is seeking to mitigate this by targeting business within other areas such as education and healthcare.

Financial key performance indicators
 
The director uses the following key performance indicator to monitor performance of the business:
Gross Margin: 1.0% (2022: 1.1%).

Page 1

 
ORBITAL MANAGEMENT SERVICES LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023


This report was approved by the board on 30 July 2024 and signed on its behalf.



J Myatt
Director

Page 2

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

The director presents his report and the financial statements for the year ended 31 October 2023.

Results and dividends

The loss for the year, after taxation, amounted to £2,005,092 (2022 - profit of £17,921).

Director

The director who served during the year was:

J Myatt 

Director's responsibilities statement

The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable him to ensure that the financial statements comply with the Companies Act 2006He is 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.

Future developments

We are hopeful that 2024 will see an upturn in the general economy and the construction sector in particular. With the advantage of SafeRec accreditation and much more robust business processes in place the business can focus it’s efforts on sales growth and we have successfully managed to achieve listing on a number of tenders due to holding the SafeRec accreditation. We expect sales to increase from Q2 onwards and plan to have an exit rate similar to FY22 levels.  We are also targeting non-construction sectors such as education to mitigate exposure. 

Page 3

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023

Disabled employees

The Company has given full and fair consideration to applications for employment from disabled persons, having regard to their particular aptitudes and abilities. Wherever possible the Company continues the employment of, and arranges for the appropriate training of, employees who become disabled whilst employed by the Company. The Company’s policy of training, career development and promotion applies equally to all employees whether disabled or not.

Disclosure of information to auditors

The director at the time when this Director's Report is approved has confirmed that:
 
so far as  is aware, there is no relevant audit information of which the Company's auditors are unaware, and

 has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditorsShortswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 30 July 2024 and signed on its behalf.
 





J Myatt
Director

Page 4

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORBITAL MANAGEMENT SERVICES LIMITED
 

Qualified opinion


We have audited the financial statements of Orbital Management Services Limited (the 'Company') for the year ended 31 October 2023, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion, except for the possible 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 October 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.


Basis for qualified opinion


In the prior year, in seeking to obtain sufficient appropriate audit evidence in respect of the trade debtors balance, we were unable to confirm or verify by alternative means the recoverability, completeness or accuracy of the balance. 
The nature of the Company’s (and the wider Group’s) business is that it processes large amounts of payroll data for its clients and often these clients trade with several different companies within the Group. In many instances, payments are made by clients either to the incorrect Group company or in round sum amounts with no payment reference to the original invoice being settled. 
Against the backdrop of Covid-19, a decision was taken by the Director to focus on continuing to deliver a high level of service to the Group’s clients and the collection of cash, rather than its allocation to the individual invoices raised. Accordingly, due to the sheer volume of transactions (both in invoices raised by Orbital and cash received from clients), a material level of unallocated cash received, and outstanding trade debtors existed across all Group Companies in the previous accounting period ended 31 October 2022. 
We were therefore unable to determine whether any adjustments might have been found necessary in respect of the amounts recorded or unrecorded for trade debtors, and the elements making up the Statement of Income and Retained Earnings and the Balance Sheet in the previous year. 
During the current year the company has been able to identify and reconcile its unallocated cash to the appropriate historic outstanding debtor. These adjustments have been correctly reflected via the applicable intercompany account with no impact on the current year profit and loss account. We have therefore been able to obtain sufficient and appropriate audit evidence in the current year to gain comfort around the recoverability, completeness and accuracy of the trade debtors balance as at 31 October 2023. 


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.

Page 5

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORBITAL MANAGEMENT SERVICES LIMITED (CONTINUED)



Conclusions relating to going concern


In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


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 director with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' Report thereon.  The director is 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.


Opinion on other matters prescribed by the Companies Act 2006
 

Except for the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's 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 Director's 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 director's remuneration specified by law are not made; or
Page 6

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORBITAL MANAGEMENT SERVICES LIMITED (CONTINUED)


we have not received all the information and explanations we require for our audit.
 


Responsibilities of directors
 

As explained more fully in the Director's Responsibilities Statement set out on page 3, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Auditors' 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 Auditors' 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
 
the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
through discussions with the director and other management and from our commercial knowledge and experience of the clients business, we identified the laws and regulations applicable to the Company; and
focusing on the specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, we assessed the extent of compliance with those laws and regulations identified above through making enquiries of management and inspecting relevant correspondence.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
 
making enquiries of management as to where they considered there was susceptibility to fraud, their     knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:
 
Page 7

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORBITAL MANAGEMENT SERVICES LIMITED (CONTINUED)


performed analytical procedures to identify any unusual or unexpected relationships;
reviewed the general ledger entries during the year to identify unusual transactions;
assessed  whether  judgements  and  assumptions  made  in  determining  the  accounting  estimates were      indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
 
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims;
considering relationships with HMRC and other relevant regulators; and
reviewing legal and professional costs to identify any indicators of litigation
 
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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 Irvine (Senior Statutory Auditor)
  
for and on behalf of
Shorts
 
Chartered Accountants & Statutory Auditor
Cedar House
63 Napier Street
Sheffield
South Yorkshire
S11 8HA

30 July 2024
Page 8

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 OCTOBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
123,378,305
139,177,891

Cost of sales
  
(122,154,327)
(137,611,502)

Gross profit
  
1,223,978
1,566,389

Administrative expenses
  
(1,301,759)
(1,646,557)

Exceptional administrative expenses
 5 
(2,284,186)
-

Other operating income
 6 
426,608
120,000

Operating (loss)/profit
 7 
(1,935,359)
39,832

Interest receivable and similar income
 11 
1,603
338

Interest payable and similar expenses
 12 
(40,776)
(20,548)

(Loss)/profit before tax
  
(1,974,532)
19,622

Tax on (loss)/profit
 13 
(30,560)
(1,701)

(Loss)/profit after tax
  
(2,005,092)
17,921

  

  

Retained earnings at the beginning of the year
  
(133,780)
(151,701)

(Loss)/profit for the year
  
(2,005,092)
17,921

Retained earnings at the end of the year
  
(2,138,872)
(133,780)
The notes on pages 11 to 20 form part of these financial statements.

Page 9

 
ORBITAL MANAGEMENT SERVICES LIMITED
REGISTERED NUMBER: 06435616

BALANCE SHEET
AS AT 31 OCTOBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 14 
7,207
9,929

Current assets
  

Debtors: amounts falling due within one year
 15 
13,139,019
5,854,747

Cash at bank and in hand
  
3,629,496
1,570,671

  
16,768,515
7,425,418

Creditors: amounts falling due within one year
 16 
(18,913,123)
(7,566,964)

Net current liabilities
  
 
 
(2,144,608)
 
 
(141,546)

Total assets less current liabilities
  
(2,137,401)
(131,617)

Provisions for liabilities
  

Deferred tax
 17 
(1,371)
(2,063)

Net liabilities
  
(2,138,772)
(133,680)


Capital and reserves
  

Called up share capital 
 18 
100
100

Profit and loss account
 19 
(2,138,872)
(133,780)

  
(2,138,772)
(133,680)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 July 2024.




J Myatt
Director

The notes on pages 11 to 20 form part of these financial statements.

Page 10

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

1.


General information

Orbital Management Services Limited is a private company limited by shares, incorporated in England and Wales (registered number: 06435616). Its registered office is Digital Media Centre, County Way, Barnsley, South Yorkshire, S70 2JW. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company's functional and presentation currency is pounds sterling.

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Orbital Payroll Group Limited as at 31 October 2023 and these financial statements may be obtained from Companies House.

 
2.3

Going concern

At the balance sheet date, the Company had net liabilities of £2,138,772 due to impairment of debt owed to fellow companies in the Orbital Payroll Group Limited group of companies (the "Group") which in its entirety is profitable. After due consideration of revised forecasts for the Group which take into account plausible scenarios and available cash resources in the period 12 months from the date of signing these financial statements, the financial statements have been prepared on a going concern basis. 

Page 11

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Turnover represents the fair value of consideration received or receivable from the sale of consultancy services. Fair value reflects the amount agreed in the form of contractual charges for each type of service. Fee income is stated net of amounts collected on behalf of third parties such as sales taxes, goods and services taxes and value added taxes.
Turnover is recognised to the extent that the Company obtains the right to consideration in exchange for its performance. Right to consideration is based on the Company confirming completion of its contractual obligations in relation to the services provided.
The contractor will complete an assignment for an agency who will then pay Orbital Management Services Limited the agreed contract rate (after deducting their fee). Orbital Management Services Limited will then recognise the gross revenue in respect of this assignment and the cost of the contractor. Once the contractor then submits their timesheet, Orbital Management Services Limited will transfer the remuneration due to the contractor to them after deducting the fee (margin).
This means that there are two elements of revenue recognised; the gross revenue received from the agency which is recognised when the money is received from the agency (which is net nil as it is equal to the cost of the contractors), and the margin recognised when processing timesheets. 

 
2.5

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Income and Retained Earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.6

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 12

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)


2.7
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, as follows.

Depreciation is provided on the following basis:

Fixtures and fittings
-
25%
Straight line
Computer equipment
-
33%
Straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.8

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as bank and cash balances, trade and other accounts receivable and payable, loans from banks and other third parties and loans to and from related parties.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at the transaction price and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 
2.9

Current and deferred taxation

Tax is recognised in the Statement of Income and Retained Earnings.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Page 13

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

No significant judgements have had to be made by management in preparing these financial statements.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimate will, by definition, seldom equal the related actual results. The estimate and assumption that has the greatest level of uncertainty is addressed below: 
(i) Impairment of debtors 
The Company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of the debtors and historical experience. The bad debt provision as at the year end was £140,587 (2022: £226,208).


4.


Turnover

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


2023
2022
£
£

Sales
121,322,294
136,771,124

Admin fees
2,056,012
2,406,767

123,378,306
139,177,891


All turnover arose within the United Kingdom.


5.


Exceptional items

2023
2022
£
£


Impairment of amounts owed from group undertaking
2,284,186
-

The exceptional cost in the year relates to an impairment of a debtor balance of another entity in the group which ceased trading in the year. 


6.


Other operating income

2023
2022
£
£

Other operating income
426,608
120,000


Page 14

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

7.


Operating (loss)/profit

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

2023
2022
£
£

Depreciation charge
4,867
5,002

Other operating lease rentals
40,934
38,392


8.


Auditors' remuneration

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


2023
2022
£
£



Fees payable to the Company's auditors for the audit of the Company's financial statements
12,000
11,000


9.


Employees

Staff costs, including director's remuneration, were as follows:


2023
2022
£
£

Wages and salaries
691,709
705,501

Social security costs
55,092
58,503

Cost of defined contribution pension scheme
11,210
10,157

758,011
774,161


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


        2023
        2022
            No.
            No.







Employees
26
26

Page 15

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

10.


Director's remuneration

2023
2022
£
£

Director's emoluments
8,628
8,628



11.


Interest receivable

2023
2022
£
£


Other interest receivable
1,603
338


12.


Interest payable and similar expenses

2023
2022
£
£


Other interest payable
40,776
20,548


13.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
30,651
-

Adjustments in respect of previous periods
601
-


Total current tax

31,252
-

Deferred tax


Origination and reversal of timing differences
(692)
1,206

Effects of changes to tax rates
-
495

Total deferred tax

(692)
1,701


Taxation on profit
30,560
1,701
Page 16

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
 
13.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the calculated rate of corporation tax in the UK of22% (2022: 19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit before tax
(1,974,532)
19,622


(Loss)/profit multiplied by calculated rate of corporation tax in the UK of 22% (2022 - 19%)
(434,397)
3,728

Effects of:


Expenses not deductible for tax purposes
515,307
7,669

Capital allowances for year in excess of depreciation
-
(643)

Remeasurement of deferred tax for changes in tax rates
(83)
494

Tax credits
705
-

Adjustments to tax charge in respect of previous periods
601
-

Group relief
(51,573)
(9,547)

Total tax charge for the year
30,560
1,701

Page 17

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

14.


Tangible fixed assets





Fixtures and fittings
Computer equipment
Total

£
£
£



Cost


At 1 November 2022
7,985
46,277
54,262


Additions
990
1,155
2,145


Disposals
-
(10,920)
(10,920)



At 31 October 2023

8,975
36,512
45,487



Depreciation


At 1 November 2022
7,880
36,453
44,333


Charge for the year on owned assets
145
4,722
4,867


Disposals
-
(10,920)
(10,920)



At 31 October 2023

8,025
30,255
38,280



Net book value



At 31 October 2023
950
6,257
7,207



At 31 October 2022
105
9,824
9,929


15.


Debtors

2023
2022
£
£


Trade debtors
2,528,137
4,196,130

Amounts owed by group undertakings
10,514,709
1,628,163

Other debtors
48,781
2,065

Prepayments and accrued income
47,392
28,389

13,139,019
5,854,747


Page 18

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

16.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
41,100
156,164

Amounts owed to group undertakings
13,756,953
155,541

Corporation tax
30,651
-

Other taxation and social security
4,903,505
7,167,371

Other creditors
7,214
3,793

Accruals and deferred income
173,700
84,095

18,913,123
7,566,964


The banking facilities are secured by a fixed and floating charge over the Company's assets.


17.


Deferred taxation




2023
2022


£

£






At beginning of year
2,063
362


Charged to profit or loss
(692)
1,701



At end of year
1,371
2,063

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
1,541
2,205

Short term timing differences
(170)
(142)

1,371
2,063


18.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £1.00 each
100
100


Page 19

 
ORBITAL MANAGEMENT SERVICES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

19.


Reserves

Profit and loss account

The profit and loss account consists of profits made by the Company attributable to the shareholders of the parent company.


20.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £11,210 (2022: £10,157). Contributions totalling £2,011 (2022: £2,052) were payable to the fund at the balance sheet date. 


21.


Commitments under operating leases

At 31 October 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
13,022
24,324

Later than 1 year and not later than 5 years
-
10,952

13,022
35,276


22.


Controlling party

The ultimate parent company is Orbital Payroll Group Limited, with a registered office of Digital Media Centre, County Way, Barnsley, South Yorkshire, S70 2JW. Consolidated accounts are prepared for Orbital Payroll Group Limited which can be obtained from Companies House.

 
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