Company registration number 02844235 (England and Wales)
RADIO COMPUTING SERVICES (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
RADIO COMPUTING SERVICES (UK) LIMITED
COMPANY INFORMATION
Directors
JD Earley
P Generali
Secretary
DK Bruce
Company number
02844235
Registered office
The Mill
Abbey Mill Business Park
Lower Eashing
Godalming
Surrey
GU7 2QJ
Auditor
Myers Clark
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
RADIO COMPUTING SERVICES (UK) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 22
RADIO COMPUTING SERVICES (UK) 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
2023 saw a revenue recovery from the stagnation in 2022, which followed a reduction in 2021. This was fuelled by an increase in hardware revenue, that had dropped drastically over the previous two years. The hardware revenue growth came with sustained margins pushing the gross profit up by 9% on 2022.
Software support costs were kept in check, aided by the conclusion of a long-term external software contract. However, utility costs were considerably higher than last year and the extra hardware revenue led to increased overhead activity.
The resultant profit before taxation is our best achievement post-COVID and underlines our position as the premier distributor of commercial radio broadcast software in the UK & Ireland.
Cash inflows remained strong throughout 2023 and the company declared and paid a dividend of £550,000 (2022: £550,000). The company’s net asset position at the year-end was positive at £504,000 (2022: £469,000).
Principal risks and uncertainties
Our business model has proven strong enough to overcome the recent market distractions of BREXIT, a virus epidemic, high consumer inflation and base rate interest hikes. The directors believe our core business cashflows are sufficient to withstand any economic downturn and we are not directly exposed to the threat of higher borrowing costs.
The greatest risk to our long-term sustainability is our reliance on 2 major clients for a considerable proportion of our revenues. These two clients attract over 80% of all commercial radio listening (source: RAJAR, Q3 2023). This in itself represents a threat if one or both were to migrate their business to a competitor. Our entire business is founded on the provision of broadcasting software to the UK and Irish radio industries. We are ultimately reliant on the strength and liquidity of those sectors.
Following a slump in the past 3 years, according to the Advertising Association, the UK commercial radio sector achieved revenues in 2022 that were 4% higher than in 2018, however this reduced by 3% in 2023. Its forecast for commercial radio is an expected rise of 2.3% in 2024, followed by 1.6% for 2025. The company, therefore, remains cautious in its expectations for future revenue growth.
Key performance indicators
The company is appraised by its owners on its revenue and EBITDA performance in comparison to the previous year’s performance and the company’s budgets. Other key indicators consider the growth and conversion rates of our new product lines.
The company continually monitors market indicators such as audience share, revenue share and UK advertising growth of its clients. Internally, the company evaluates its service quality through regularly soliciting feedback from our clients. The ratio of new to lost clients and the length of new and renewed contracts are also monitored to gauge our future sustainability.
RADIO COMPUTING SERVICES (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Financial Risk Management
The company is exposed to a number of financial risks through its financial assets and liabilities.
The key business risks that affect the company are set out below:
Credit risk: This risk is mitigated as the company generally keeps customers on long-term contracts, which are paid monthly. In addition, access to client licences can be restricted for non-payment. This improves recovery of trade debts owed from customers.
JD Earley
Director
23 August 2024
RADIO COMPUTING SERVICES (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
JD Earley
P Generali
ML Powell
(Resigned 21 January 2024)
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.
On behalf of the board
JD Earley
Director
23 August 2024
RADIO COMPUTING SERVICES (UK) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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 un 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.
RADIO COMPUTING SERVICES (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RADIO COMPUTING SERVICES (UK) LIMITED
- 5 -
Opinion
We have audited the financial statements of Radio Computing Services (UK) 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, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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.
RADIO COMPUTING SERVICES (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RADIO COMPUTING SERVICES (UK) LIMITED
- 6 -
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 and 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; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report.
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.
Identifying and assessing risks of material misstatement in respect of irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following;
the nature of the industry and sector, control environment and business performance;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to:
- identifying, evaluating and complying with laws and regulation and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
RADIO COMPUTING SERVICES (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RADIO COMPUTING SERVICES (UK) LIMITED
- 7 -
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, tax legislation and pension legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included employment law and the Health and Safety Act.
Audit response to risks identified
As a result of performing the above, we identified revenue recognition and the management override of controls as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit matter. Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
testing the completeness of income from outside the accounting system to within;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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.
RADIO COMPUTING SERVICES (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RADIO COMPUTING SERVICES (UK) LIMITED
- 8 -
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.
Paul Windmill
Senior Statutory Auditor
For and on behalf of Myers Clark
10 September 2024
Chartered Accountants
Statutory Auditor
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
RADIO COMPUTING SERVICES (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
3,002,582
2,763,488
Cost of sales
(1,428,945)
(1,336,726)
Gross profit
1,573,637
1,426,762
Administrative expenses
(810,400)
(744,626)
Operating profit
4
763,237
682,136
Interest receivable and similar income
8
9,793
651
Profit before taxation
773,030
682,787
Tax on profit
9
(167,390)
(133,664)
Profit for the financial year
605,640
549,123
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RADIO COMPUTING SERVICES (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
9,193
17,166
Current assets
Stocks
12
16,496
30,898
Debtors
13
177,308
258,761
Cash at bank and in hand
754,244
645,965
948,048
935,624
Creditors: amounts falling due within one year
14
(432,600)
(483,607)
Net current assets
515,448
452,017
Total assets less current liabilities
524,641
469,183
Provisions for liabilities
Deferred tax liability
15
182
-
(182)
Net assets
524,641
469,001
Capital and reserves
Called up share capital
17
300,000
300,000
Profit and loss reserves
224,641
169,001
Total equity
524,641
469,001
The financial statements were approved by the board of directors and authorised for issue on 23 August 2024 and are signed on its behalf by:
JD Earley
Director
Company registration number 02844235 (England and Wales)
RADIO COMPUTING SERVICES (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
300,000
169,878
469,878
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
549,123
549,123
Dividends
10
-
(550,000)
(550,000)
Balance at 31 December 2022
300,000
169,001
469,001
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
605,640
605,640
Dividends
10
-
(550,000)
(550,000)
Balance at 31 December 2023
300,000
224,641
524,641
RADIO COMPUTING SERVICES (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
829,590
882,437
Income taxes paid
(180,001)
(141,783)
Net cash inflow from operating activities
649,589
740,654
Investing activities
Purchase of tangible fixed assets
(1,103)
(8,071)
Proceeds on disposal of tangible fixed assets
1
Interest received
9,793
651
Net cash generated from/(used in) investing activities
8,690
(7,419)
Financing activities
Dividends paid
(550,000)
(550,000)
Net cash used in financing activities
(550,000)
(550,000)
Net increase in cash and cash equivalents
108,279
183,235
Cash and cash equivalents at beginning of year
645,965
462,730
Cash and cash equivalents at end of year
754,244
645,965
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Radio Computing Services (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Mill, Abbey Mill Business Park, Lower Eashing, Godalming, Surrey, GU7 2QJ.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
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 represents amounts receivable for goods and services net of VAT and trade discounts. Revenue is recognised on the date of invoice and deferred over the period to which it relates to.
Revenue from operating lease rentals is recognised in the period to which it relates to.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. In some instances the company will provide a customer with a loan to purchase goods, in which case the full value of the loan is recognised on dispatch of goods to the customer and the customer repays the loan in instalments over the period of the loan.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
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
Straight line over the life of the lease
Fixtures and fittings
5 years straight line
Computers
3 years straight line
Assets held for hire
3 years straight line
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs.
Basic financial liabilities
Basic financial liabilities 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.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received.
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.
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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
Retirement benefits
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
1.11
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.
1.12
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.
1.13
Included within cost of sales are royalties payable to related parties who bear the expense of software
development and ongoing maintenance costs of existing software products. Royalties paid are based on
50% of the collected license fees in the UK for a specific product. Royalties are accrued in accordance
with the substance of the relevant agreement.
1.14
Customer software deposits
It is the company's policy to fully provide for all potential liabilities in respect of software deposits until such times as the company is 100% sure that the debt is not payable.
As many of these deposits have been held for a number of years and many contracts have evolved, there is some ambiguity as to exactly which deposits remain outstanding. When clients decide not to continue trading with the company, the subject of deposits is raised and the company returns the deposits on termination of the contracts.
Radio Computing Services (UK) Limited does not currently operate a deposit system for new contracts.
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities are accruals, the useful economic life of tangible assets and the
provision for doubtful debts.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Software revenue
2,765,848
2,600,989
Rentals from operating leases
225,342
11,704
Hardware revenue
11,392
150,795
3,002,582
2,763,488
2023
2022
£
£
Other revenue
Interest income
9,793
651
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
2,875
(31,950)
Depreciation of owned tangible fixed assets
9,076
8,112
Profit on disposal of tangible fixed assets
-
(1)
Operating lease charges
60,708
59,723
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
7,000
6,650
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
13
13
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
418,217
408,159
Social security costs
34,917
32,218
Pension costs
5,042
4,669
458,176
445,046
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
109,859
102,909
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
4,728
499
Interest receivable from group companies
5,065
Other interest income
152
Total income
9,793
651
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
9,793
499
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
175,588
128,070
Adjustments in respect of prior periods
(6,945)
Total current tax
168,643
128,070
Deferred tax
Origination and reversal of timing differences
(1,253)
5,594
Total tax charge
167,390
133,664
The actual charge 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
773,030
682,787
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
193,258
129,730
Tax effect of expenses that are not deductible in determining taxable profit
261
204
Effect of change in corporation tax rate
(11,437)
Other non-reversing timing differences
(8,118)
(697)
Under/(over) provided in prior years
(6,945)
4,703
Other tax effects for reconciliation between accounting profit and tax expense (income)
(862)
862
Capital allowances and depreciation
1,233
(1,138)
Taxation charge for the year
167,390
133,664
10
Dividends
2023
2022
£
£
Final paid
550,000
550,000
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Computers
Assets held for hire
Total
£
£
£
£
£
Cost
At 1 January 2023
37,808
30,312
121,098
29,699
218,917
Additions
1,103
1,103
Disposals
(4,343)
(55,619)
(29,699)
(89,661)
At 31 December 2023
37,808
25,969
66,582
130,359
Depreciation and impairment
At 1 January 2023
37,808
30,312
103,932
29,699
201,751
Depreciation charged in the year
9,076
9,076
Eliminated in respect of disposals
(4,343)
(55,619)
(29,699)
(89,661)
At 31 December 2023
37,808
25,969
57,389
121,166
Carrying amount
At 31 December 2023
9,193
9,193
At 31 December 2022
17,166
17,166
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
16,496
30,898
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
134,235
140,920
Corporation tax recoverable
5,465
Other debtors
8,754
85,386
Prepayments and accrued income
27,782
32,455
176,236
258,761
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 15)
1,072
Total debtors
177,308
258,761
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
7,967
64,846
Corporation tax
5,892
Other taxation and social security
128,181
109,227
Other creditors
59,788
113,705
Accruals and deferred income
236,664
189,937
432,600
483,607
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
-
182
1,072
-
2023
Movements in the year:
£
Liability at 1 January 2023
182
Credit to profit or loss
(1,254)
Asset at 31 December 2023
(1,072)
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
5,042
4,669
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.
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' shares of £1 each
225,000
225,000
225,000
225,000
Ordinary 'B' shares of £1 each
75,000
75,000
75,000
75,000
300,000
300,000
300,000
300,000
The ordinary 'A' and 'B' shares have the same rights and rank pari passu in all respects with the exception that 'A' shareholders have the right to appoing directors to the board.
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
60,131
60,131
Between two and five years
224,276
229,406
In over five years
64,167
119,167
348,574
408,704
19
Ultimate controlling party
The company's immediate parent is iHeartMedia Management Services, Inc., incorporated in the United States of America.
The ultimate parent is iHeartMedia, Inc., incorporated in the United States of America.
The smallest & largest group that the company is consolidated into is iHeartMedia, Inc.. The group accounts are available from the parent company's website.
RADIO COMPUTING SERVICES (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
605,640
549,123
Adjustments for:
Taxation charged
167,390
133,664
Investment income
(9,793)
(651)
Gain on disposal of tangible fixed assets
-
(1)
Depreciation and impairment of tangible fixed assets
9,076
8,112
Movements in working capital:
Decrease in stocks
14,402
3,741
Decrease in debtors
87,990
157,021
(Decrease)/increase in creditors
(45,115)
31,428
Cash generated from operations
829,590
882,437
21
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
645,965
108,279
754,244
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