Company registration number 04187662 (England and Wales)
TALASCEND LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
TALASCEND LIMITED
COMPANY INFORMATION
Directors
J A Urpi
D S Robertson
Company number
04187662
Registered office
Parry House
Birchwood Boulevard
Birchwood
Warrington
Cheshire
WA3 7QU
Auditor
Sumer Auditco Limited
The Beehive
City Place
Gatwick
RH6 0PA
TALASCEND LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditor's report
8 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 23
TALASCEND LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
We’re delighted with our 2023 performance with a 11% improvement on revenue from 2022. Thanks to all the dedication and focus from our employee’s as it has allowed us to grow in 2023 and in certain areas surpass our forecasted numbers.
We continue to maintain a strong focus within the technical and engineering sectors to deliver both contract and permanent solutions to our clients. The market sectors remain broad and extensive, which include Oil and Gas, Petrochemical, Nuclear, Power, Utilities, Life Sciences and General Engineering Sectors and our Payroll Solutions to our clients and contractors.
Although our recruitment and workforce management services are mainly provided to UK based clients, we’ve continued our overseas expansion with the provision of recruitment, contractor payroll, compliance and managed services.
Continuous development, improvement and investment in our recruitment and workforce management processes and systems is a key internal focus as this will enable us to expand and protect our excellent client and candidate relationships. Workplace culture, strong alignment with our values and a steadfast commitment to quality, trust and integrity will be the basis of our strategy. This will also drive our decisions when investing in our front and back office software systems and processes, with an emphasis on in-house development of USP’s. This approach has led to the development of novel live management information reports that support our objectives, decision making and leadership.
During the year, the company has undertaken a reduction of its share premium reserve, with this being credited fully to reserves. This has allowed an intra-group dividend of £2m to be voted which has resulted in a reduction in overall net assets. At the year end, the company had net current assets of £4.4m and net assets of £4.4m, which the directors believe illustrates the financial strength of the company.
Principal risks and uncertainties
The main risk areas are:
Internal control risk
Our leadership team regularly review the system of internal financial and non-financial controls in operation and these include controls designed to ensure that our assets are safeguarded and accurate accounting records are maintained. Continual improvements to our internal systems and processes ensure compliance, efficiency and integrity within a seemingly constant flow of legislative and regulatory changes, related to the hiring and engagement of permanent and contingent workers.
Currency risk
Fluctuations in exchange rates over the year have a minor impact on our results because of the relatively low level sales denominated in foreign currencies and we continue to minimise this risk in our commercial arrangements with customers and suppliers.
Financial risk
We will take quick and appropriate actions to mitigate any risks and uncertainties arising from sudden and unexpected reductions in the demand from our customers to measure, review and manage the impact of these risks regularly, together with the now very significant risk of inflationary pressures that could result in interest rate changes and increased banking costs.
Interest rates
The Bank of England base rate increased in early 2023 from 3.5% to 5.25%. Due to the usual nature to fund working capital of a Recruitment Agency with an Invoice Discount facility or similar, our costs in 2023 went up significantly in tandem when we have grown the business. We constantly monitor these trends closely to mitigate any serious impact upon our business overheads and cash flow.
As changes occur, we will evaluate the impact of these on our finances to enable us to react as quickly and confidently as possible to unforeseen movements.
TALASCEND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties (continued)
General
We have a wide customer base across a range of market sectors. We’re also anticipating continued demand for our specialist services, for high demand, skilled and experienced engineers and technical personnel on a permanent and contingent basis. Our leadership team remain focussed on continually undertaking regular and robust reviews of the future risks and opportunities that exist within our market sectors.
Key performance indicators
Our performance continues to be measured and managed against our detailed annual goals, budgets and forecasts by the leadership team.
We’re satisfied with the performance of the business during the year and remain confident in our focus on continually reviewing and modifying our operations to meet our 2024 forecasts as we continued to operate on a profitable and cash-generative basis.
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Profit before tax ("PBT") | | |
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The directors strategically achieved turnover growth during 2023 due to the continued growth of the contingent labour market. The gross profit margins have been squeezed due to the inflationary pressures felt within the UK economy.
The effective cost controls and profitability focus by the management team has allowed the company to maintain significant profit levels.
The significant net current assets of the company illustrates continued and high level liquidity.
During the year, an intra-group dividend of £2m has been voted which has resulted in a reduction in overall net assets, despite the significant profits generated during the year.
The wider group's policy is that surplus profits are voted as intra-group dividends. The company continues to maintain significant net assets, demonstrating continued financial strength.
Section 172
Our purpose, strategy and core values
We are committed to supporting our local and the wider community. Our culture is driven by our commitment to our mission, vision and values which ensures that we succeed in the current rapidly changing political and economic economy.
We remain positive and determined to continue to focus on investment in staff development and our business systems to minimise risk and maximise opportunities.
Recent investments have demonstrated our commitment to be a quality, honest and trustworthy company with efficient and reliable recruitment and workforce management solutions. We remain committed to safeguarding and maintaining our compliance and that of our clients and candidates within the highly regulated contingent workforce market sector.
TALASCEND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Employees
We have regular social events, celebrations, gifts for births, birthdays, weddings etc. and regular group meetings to explain our operational and financial results, present employee awards and provide updates of our charity and social support initiatives.
We’re fully invested in our employees’ development.
We support each of them, in every possible way.
We involve them in significant decisions.
We’re there for them when they have personal or family issues.
We all pull together to minimise the negatives and maximise the positives.
We’re delighted that our staff are central in defining the mission and values of our company.
All staff are kept up to date with our bi-weekly newsletter, highlighting personal achievements, positive clients focussed news, new employees, legislative, system, QHSE updates and more.
We celebrate successes on a daily basis and our staff are rewarded based on their agreed goals, service delivery and openly shared performance results.
We remain committed to all our staff being paid at least the “real” Living Wage.
Customers and suppliers
Our approach is based upon the values of the original founders of the company, who created a unique business model, based on a strong commitment to maintaining regular contact and good understanding of our experienced engineering and technical sector candidates. The foundations of this approach continue to change and evolve to satisfy the needs and desired work aspirations of our candidates and our clients’ workforce requirements.
We provide additional value through regular contact, open dialogue and by sharing with our customers our knowledge and expertise via news insights, blogs and recruitment legislation guidance. Alongside this we maintain strong relationships with our key suppliers with an emphasis on fair and ethical trading, open and honest dialogue.
Environmental/ social responsibility
We believe in supporting charitable organisations that align with our two main desired outcomes;
1. To be effective, whilst not having to spend vital donations on employing lots of highly paid staff and;
2. To provide sustainable support and development to poor and/or vulnerable people.
We’re a Disability Confident Employer (Level 2) and we approach diversity and inclusion (D&I) by actively engaging with EVENBREAK to further develop our knowledge and capabilities of disability in the workplace. We strongly believe our organisation can benefit through tapping into this broader range of talent both for ourselves and for our clients and this is central to us achieving a diverse, inclusive and vibrant organisation.
We are committed to full compliance with GDPR. Our GDPR processes and policy are regularly reviewed to ensure all risks are addressed and compliantly managed. We also take cyber security very seriously therefore our systems and customer data are well protected, tested and verified.
Senior management team and longer term objectives
The senior management team will continue to focus on delivering world class recruitment solutions to our existing clients whilst developing new relationships with clients within our chosen sectors. We’re pleased to report that our investments into “neutral vendor” workforce management services and a new fully compliant payroll and billing solution are now well established. The senior management team expect these solutions to continue to grow in line with the expectations of our clients and contractors and with the continual increases in legislative compliance requirements. Our broad range of service offerings, engagement with our contractors, our clients and the wider contingent workforce will also help to promote our brand and enhance our reputation as a provider of excellent, fully compliant recruitment solutions.
TALASCEND LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
J A Urpi
Director
5 September 2024
TALASCEND LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of outsourcing and placement of permanent and contract personnel, primarily in the UK oil and gas, power and rail industries.
Results and dividends
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £2,000,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J A Urpi
A Rowlands
(Resigned 19 September 2023)
D S Robertson
Disabled persons
The company attaches particular importance to the needs of disabled people. Under the terms of the company's Corporate Social Responsibility policy, managers are required to:
Make reasonable adjustment to maintain the services of an employee who becomes disabled, for example, training, provision of special equipment, reduced working hours.
Include disabled people in training/development programmes.
Give full and proper consideration to disabled people who apply for jobs, having regard to making reasonable adjustments for their particular aptitudes and abilities to allow them to be able to do the job.
It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
To further support the needs of disabled people, the following measures have been implemented as part of the company's Diversity and Inclusion policy:
Communicating why we are targeting disabled employees and candidates, together with the benefits.
Establishing long-term relationships with agencies, organisations and schemes such as .
Making our website fully accessible to disabled candidates.
Include job boards in our preferred supplier list that specifically target disabled candidates along with other diverse websites.
Ensuring that it is known that our facilities are fully accessible, and we are prepared to offer a reasonable alternative.
Making sure all our employees are aware of our strategy and obligations and how they can support these.
TALASCEND LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Employee involvement
The company's policy is to consult and discuss with employees, matters likely to affect employees' interests.
Information about matters of concern to employees is communicated through channels such as our Weekly Voice internal newsletter, social media and our intranet and these seek to achieve a common awareness on the part of all employees of the factors affecting the company's performance.
As part of the company's Diversity and Inclusion policy, the following areas have been identified to further promote employee involvement throughout the company:
Educating employees so they are aware of the company's strategy and obligations, how they can support these and keeping them updated on the company's progress.
Developing the company's understanding of where it is and identifying what more it needs to do through interaction with employees and candidates.
Future developments
We will continue to develop and invest in current and new solutions, to the benefit of our customers, through our focus on the provision of tailored recruitment solutions, based on quality and trust.
Auditor
Sumer Auditco Limited were appointed as auditor to the company and is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statement, including this company. The company has therefore taken advantage of exemptions from the disclosure requirements relating to energy and carbon reporting.
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.
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.
TALASCEND LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
On behalf of the board
J A Urpi
Director
5 September 2024
TALASCEND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALASCEND LIMITED
- 8 -
Opinion
We have audited the financial statements of Talascend Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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.
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.
TALASCEND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALASCEND LIMITED (CONTINUED)
- 9 -
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.
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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: laws related to employment, off-payroll working, health & safety and data protection.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
TALASCEND LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALASCEND LIMITED (CONTINUED)
- 10 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud;
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Caroline Snape
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
5 September 2024
Statutory Auditor
The Beehive
City Place
Gatwick
RH6 0PA
TALASCEND LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
78,113,252
70,437,839
Cost of sales
(75,969,411)
(68,382,871)
Gross profit
2,143,841
2,054,968
Administrative expenses
(766,241)
(620,695)
Operating profit
4
1,377,600
1,434,273
Interest receivable and similar income
8
261
Interest payable and similar expenses
9
(23,498)
(172)
Profit before taxation
1,354,363
1,434,101
Tax on profit
10
(341,851)
698,469
Profit for the financial year
1,012,512
2,132,570
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TALASCEND LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Current assets
Debtors
14
11,538,467
10,156,803
Cash at bank and in hand
755,691
1,213,845
12,294,158
11,370,648
Creditors: amounts falling due within one year
15
(7,943,581)
(6,032,592)
Net current assets
4,350,577
5,338,056
Capital and reserves
Called up share capital
18
100
91
Share premium account
7,515,600
Profit and loss reserves
4,350,477
(2,177,635)
Total equity
4,350,577
5,338,056
The financial statements were approved by the board of directors and authorised for issue on 5 September 2024 and are signed on its behalf by:
J A Urpi
Director
Company Registration No. 04187662
TALASCEND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
91
7,515,600
(4,310,205)
3,205,486
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
2,132,570
2,132,570
Balance at 31 December 2022
91
7,515,600
(2,177,635)
5,338,056
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
1,012,512
1,012,512
Issue of share capital
18
9
-
9
Dividends
11
-
-
(2,000,000)
(2,000,000)
Reduction of shares
18
(7,515,600)
7,515,600
Balance at 31 December 2023
100
4,350,477
4,350,577
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information
Talascend Limited is a private company limited by shares incorporated in England and Wales. The registered office is Parry House, Birchwood Boulevard, Birchwood, Warrington, Cheshire, WA3 7QU.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of First Technical Recruitment Limited. These consolidated financial statements are available from its registered office, Parry House, Birchwood Boulevard, Birchwood, Warrington, Cheshire, WA3 7QU.
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. 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.
Revenue constitutes the value of services undertaken by the company from its principal activities, which are recruitment consultancy and other ancillary services. These consist of:
Revenue from temporary placements, which represents amounts billed for services of temporary staff, including the salary cost of these staff. This is recognised when the service has been provided.
Revenue from permanent placements is typically based on a percentage of the candidate's remuneration package. Income is recognised at the candidate's start date.
Revenue from amounts billed to clients for expenses incurred on their behalf is recognised when the expense is incurred.
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Goodwill
10 years 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 improvements
20% p.a. straight line
Fixtures and fittings
20% p.a. straight line
Computers
33% p.a. 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.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors 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.
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
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.
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
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.
Deferred tax asset
The realisation of the deferred tax asset is dependent upon projections of future trading coming to fruition, and therefore by its very nature there is a level of estimation uncertainty. At the year-end, the directors have included a deferred tax asset of £1,884,504 (2022: £2,226,355) based on the estimated utilisation of tax losses in future years.
Cost of sale accruals
The directors make estimates regarding the cost of sales accruals required at year-end. The estimate is based on the level of corresponding accrued income less an appropriate gross margin. At the year-end, the directors have included cost of sale accruals of £1,005,830 (2022: £1,251,603).
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
77,350,867
69,950,689
Europe
376,449
353,528
Rest of World
385,936
133,622
78,113,252
70,437,839
2023
2022
£
£
Other revenue
Interest income
261
-
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
8,871
5,468
Depreciation of owned tangible fixed assets
-
2,220
Operating lease charges
22,010
9,992
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
14,000
For other services
Other taxation services
9,500
During 2022, the audit fees were borne by the ultimate parent company.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administrative staff
7
6
Temporary staff
397
341
Total
404
347
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
38,320,548
36,803,942
Social security costs
4,755,672
4,761,200
Pension costs
2,705,961
2,384,763
45,782,181
43,949,905
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
120,774
68,649
Company pension contributions to defined contribution schemes
881
1,321
121,655
69,970
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
261
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
23,498
172
10
Taxation
2023
2022
£
£
Deferred tax
Changes in tax rates
(167,633)
Tax losses carried forward
341,851
(530,836)
Total deferred tax
341,851
(698,469)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,354,363
1,434,101
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
338,591
272,479
Tax effect of expenses that are not deductible in determining taxable profit
3,260
85
Change in unrecognised deferred tax assets
(803,400)
Effect of change in corporation tax rate
(167,633)
Taxation charge/(credit) for the year
341,851
(698,469)
In October 2022, the government announced an increase in the corporation tax main rate from 19% to 25% for companies with profit over £250,000. There is a small company rate of 19% for taxable profits under £50,000 and marginal relief available for profits falling between £50,000 - £250,000 with effect from 1 April 2023.
11
Dividends
2023
2022
£
£
Final paid
2,000,000
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
11,129
Amortisation and impairment
At 1 January 2023 and 31 December 2023
11,129
Carrying amount
At 31 December 2023
At 31 December 2022
13
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023 and 31 December 2023
32,831
72,248
239,048
344,127
Depreciation and impairment
At 1 January 2023 and 31 December 2023
32,831
72,248
239,048
344,127
Carrying amount
At 31 December 2023
At 31 December 2022
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,895,265
5,491,032
Amounts owed by group undertakings
825,045
990,943
Other debtors
192,532
Prepayments and accrued income
933,653
1,255,941
9,653,963
7,930,448
Deferred tax asset (note 16)
392,500
367,500
10,046,463
8,297,948
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Debtors
(Continued)
- 22 -
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 16)
1,492,004
1,858,855
Total debtors
11,538,467
10,156,803
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
9,010
2,558
Taxation and social security
3,991,663
4,081,750
Other creditors
2,899,354
665,338
Accruals and deferred income
1,043,554
1,282,946
7,943,581
6,032,592
Included in other creditors is a balance of £2,086,319 (2022: £Nil) in respect of an invoice discounting facility which is secured by a fixed and floating charge over the company's assets.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2022
Balances:
£
£
Tax losses
1,884,504
2,226,355
2023
Movements in the year:
£
Asset at 1 January 2023
(2,226,355)
Charge to profit or loss
341,851
Asset at 31 December 2023
(1,884,504)
The deferred tax asset set out above relates to the utilisation of tax losses against expected profits in future periods.
TALASCEND LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
2,705,961
2,384,763
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.
As at the year-end, contributions due to the schemes in respect of the current reporting year were £268,603 (2022: £217,616).
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
91
100
91
During the year, 9 Ordinary shares of £1 were issued at par value.
On 5 October 2023, the share premium reserve of £7,515,600 was reduced and credited fully to reserves.
19
Related party transactions
The company has taken advantage of the exemption provided in Financial Reporting Standard 102 Section 33 from disclosing related party transactions with wholly owned members of the group.
At the year end, the company was owed £182,869 (2022: £179,475) from a fellow 90% owned subsidiary undertaking. Subcontractor fees of £2,510,964 (2022: £2,598,261) were charged to the fellow 90% owned subsidiary undertaking during the year.
20
Ultimate controlling party
The ultimate parent company is First Technical Recruitment Limited a company, registered in England and Wales.
Talascend Limited is consolidated within First Technical Recruitment Limited's group financial statements and copies can be obtained on request from the groups registered office, Parry House, Birchwood Boulevard, Birchwood, Warrington, Cheshire, WA3 7QU.
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