Company Registration No. 05263228 (England and Wales)
RCS SOLUTIONS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
RCS SOLUTIONS LTD
COMPANY INFORMATION
Directors
Mr R J Cook
Mr R L Simmonds
Company number
05263228
Registered office
1350-1360 Montpellier Court
Brockworth
Gloucester
GL3 4AH
Auditor
Kendall Wadley LLP
Granta Lodge
71 Graham Road
Malvern
Worcestershire
WR14 2JS
RCS SOLUTIONS LTD
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
RCS SOLUTIONS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report and financial statements for the year ended 31 December 2023.
The principal activity of the company is that of office and facilities management.
Review of the business
The results for the company show a pre tax loss of £209,108 for the period (2022 pre tax profit of £19,456) on turnover of £534,427 (2022 : £891,666).
The company paid dividends of £nil (2022 : £100,000) to its parent company, Blackfinch Group Limited and there were no significant events requiring disclosure in the financial statements after the balance sheet date.
The company has external debt of £449,216 (2022 : £458,714) and shareholder's funds amount to a surplus of £170,001 (2022 : £312,311).
Principal risks and uncertainties
Key risks and uncertainties relate to inflation and base rate increases. Investments performed in line with expectations. The group has continued to raise a healthy flow of new funds and investment management activities continue to generate revenue. The management team are confident in the group's resilience and ability to trade and adjust to the ‘new normal’.
Mr R J Cook
Director
10 September 2024
RCS SOLUTIONS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
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 office and facilities management.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr R J Cook
Mr R L Simmonds
Auditor
In accordance with the company's articles, a resolution proposing that Kendall Wadley LLP be reappointed as auditor of the company will be put at a General Meeting.
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
Mr R J Cook
Director
10 September 2024
RCS SOLUTIONS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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.
RCS SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RCS SOLUTIONS LTD
- 4 -
Opinion
We have audited the financial statements of RCS Solutions Ltd (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 loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
RCS SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RCS SOLUTIONS LTD
- 5 -
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with management, and from our commercial knowledge and experience of the industry;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
RCS SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RCS SOLUTIONS LTD
- 6 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities 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.
Elizabeth Needham ACA CTA (VAT)
Senior Statutory Auditor
For and on behalf of Kendall Wadley LLP
10 September 2024
Chartered Accountants
Statutory Auditor
Granta Lodge
71 Graham Road
Malvern
Worcestershire
WR14 2JS
RCS SOLUTIONS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
534,427
891,666
Administrative expenses
(711,318)
(850,892)
Operating (loss)/profit
4
(176,891)
40,774
Interest payable and similar expenses
6
(32,217)
(21,318)
(Loss)/profit before taxation
(209,108)
19,456
Tax on (loss)/profit
7
45,842
(136)
(Loss)/profit for the financial year
(163,266)
19,320
Other comprehensive income
Revaluation of tangible fixed assets
20,956
Total comprehensive income for the year
(142,310)
19,320
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RCS SOLUTIONS LTD
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
78,996
730,822
Investment property
10
670,000
748,996
730,822
Current assets
Debtors
11
260,578
115,979
Cash at bank and in hand
36,538
16,530
297,116
132,509
Creditors: amounts falling due within one year
12
(417,187)
(91,665)
Net current (liabilities)/assets
(120,071)
40,844
Total assets less current liabilities
628,925
771,666
Creditors: amounts falling due after more than one year
13
(440,480)
(444,010)
Provisions for liabilities
Deferred tax liability
15
18,444
15,345
(18,444)
(15,345)
Net assets
170,001
312,311
Capital and reserves
Called up share capital
17
1
1
Revaluation reserve
20,956
Profit and loss reserves
149,044
312,310
Total equity
170,001
312,311
The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
Mr R J Cook
Director
Company registration number 05263228 (England and Wales)
RCS SOLUTIONS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
1
392,990
392,991
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
19,320
19,320
Dividends
8
-
-
(100,000)
(100,000)
Balance at 31 December 2022
1
312,310
312,311
Year ended 31 December 2023:
Loss
-
-
(163,266)
(163,266)
Other comprehensive income:
Revaluation of tangible fixed assets
-
20,956
-
20,956
Total comprehensive income
-
20,956
(163,266)
(142,310)
Balance at 31 December 2023
1
20,956
149,044
170,001
RCS SOLUTIONS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
81,819
311,337
Interest paid
(32,217)
(21,318)
Income taxes refunded/(paid)
38,683
(135,899)
Net cash inflow from operating activities
88,285
154,120
Investing activities
Purchase of tangible fixed assets
(59,321)
(47,472)
Proceeds from disposal of tangible fixed assets
542
Net cash used in investing activities
(58,779)
(47,472)
Financing activities
Repayment of bank loans
(9,498)
(13,736)
Dividends paid
(100,000)
Net cash used in financing activities
(9,498)
(113,736)
Net increase/(decrease) in cash and cash equivalents
20,008
(7,088)
Cash and cash equivalents at beginning of year
16,530
23,618
Cash and cash equivalents at end of year
36,538
16,530
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
RCS Solutions Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 1350-1360 Montpellier Court, Brockworth, Gloucester, GL3 4AH.
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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.
RCS Solutions Ltd is a wholly owned subsidiary of Blackfinch Group Limited and the financial statements of the company are consolidated in the financial statements of BF Inter Ltd. These consolidated financial statements are available from its registered office, 1350-1360 Montpellier Court, Brockworth, Gloucester, GL3 4AH.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the group of which this company is part has adequate resources to continue in operational existence for the foreseeable future and will, therefore, be able to continue to provide the financial support to enable this company to continue as a going concern. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable by the company in respect of rental income, service charges and legal fees.
Revenue from professional services is recognised by reference to the stage of completion. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates, 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:
Land and buildings freehold
2% straightline on original cost of assets.
Leasehold improvements
10% straight line on original cost of assets.
Fixtures, fittings & equipment
25% and 33% straight line on original cost of assets.
Computer equipment
25% and 33% straight line on original cost of assets.
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.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
On reclassification of the freehold property, the freehold property was revalued to its fair value. The fair value of the land and buildings is considered to be the market value.
Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss.
1.5
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand.
1.8
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.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
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 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.
1.9
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.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.10
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.
Group relief
Group relief is paid for in full at the rate of tax prevailing in connection with the savings made by the surrender of losses from fellow group undertakings
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.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
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.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Rent receivable
173,888
221,597
Service charges
237,490
262,183
Legal fees
123,049
407,886
534,427
891,666
2023
2022
£
£
Turnover analysed by geographical market
UK income
534,427
891,666
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
9,750
7,000
Depreciation of owned tangible fixed assets
61,562
97,088
Operating lease charges
161,500
161,500
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Administration
4
5
Total
6
7
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
286,835
366,433
Social security costs
33,459
43,566
Pension costs
15,904
19,227
336,198
429,226
6
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
32,217
17,735
Other finance costs:
Other interest
3,583
32,217
21,318
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
10,258
Adjustments in respect of prior periods
(13,358)
Group tax relief
(48,941)
Total current tax
(48,941)
(3,100)
Deferred tax
Origination and reversal of timing differences
3,099
(446)
Changes in tax rates
3,682
Total deferred tax
3,099
3,236
Total tax (credit)/charge
(45,842)
136
The change in UK corporation tax rate from 19% to 25% enacted in the Finance Act 2021 for profits arising after 1 April 2023, led to the 2022 deferred tax liability being revalued based on these rates changes.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 17 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(209,108)
19,456
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(49,184)
3,697
Effect of change in corporation tax rate
3,682
Permanent capital allowances in excess of depreciation
(2,710)
Depreciation on assets not qualifying for tax allowances
3,342
8,403
Under/(over) provided in prior years
(13,358)
Deferred tax adjustments in respect of prior years
422
Taxation (credit)/charge for the year
(45,842)
136
8
Dividends
2023
2022
£
£
Final paid
100,000
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Tangible fixed assets
Land and buildings freehold
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
£
Cost
At 1 January 2023
711,932
127,305
137,322
338,757
1,315,316
Additions
6,450
8,022
44,849
59,321
Disposals
(542)
(542)
Revaluation
20,956
20,956
Transfer to investment property
(732,888)
(732,888)
At 31 December 2023
133,755
145,344
383,064
662,163
Depreciation and impairment
At 1 January 2023
48,654
124,875
134,448
276,517
584,494
Depreciation charged in the year
14,235
324
4,189
42,814
61,562
Transfer to investment property
(62,889)
(62,889)
At 31 December 2023
125,199
138,637
319,331
583,167
Carrying amount
At 31 December 2023
8,556
6,707
63,733
78,996
At 31 December 2022
663,278
2,430
2,874
62,240
730,822
10
Investment property
2023
£
Fair value
At 1 January 2023
Transfers from owner-occupied property
670,000
At 31 December 2023
670,000
Investment property comprises of 1145 Regents Court. The fair value of the investment property has been arrived at on the basis of a valuation carried out by the directors. The valuation was made on a yield basis on the open market rental value by reference to market evidence for similar properties
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
904
Amounts owed by group undertakings
235,102
88,847
Prepayments and accrued income
24,572
27,132
260,578
115,979
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
14
8,736
14,704
Trade creditors
26,254
20,318
Amounts owed to group undertakings
337,510
10,292
Corporation tax
10,258
Other taxation and social security
8,375
23,897
Accruals and deferred income
36,312
12,196
417,187
91,665
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
440,480
444,010
Amounts included above which fall due after five years are as follows:
Payable by instalments
362,272
379,610
14
Loans and overdrafts
2023
2022
£
£
Bank loans
449,216
458,714
Payable within one year
8,736
14,704
Payable after one year
440,480
444,010
The long-term loans are secured by fixed charges over the property at 1145 Regent Court.
The loan is also secured by a series of fixed and floating charges over all the assets on Blackfinch Investments Limited a fellow subsidiary of Blackfinch Group Limited.
The loan is over a period of 25 years and interest is charged at base rate plus 2.5% per annum.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
18,444
15,345
2023
Movements in the year:
£
Liability at 1 January 2023
15,345
Charge to profit or loss
3,099
Liability at 31 December 2023
18,444
The deferred tax liability set out above is expected to reverse within the foreseeable future and relates to accelerated capital allowances that are expected to mature within the same period.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
15,904
19,227
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
100
100
1
1
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for rental of the properties. Leases are negotiated for an average term of 3 years.
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
161,500
Between two and five years
282,625
444,125
19
Ultimate controlling party
The immediate parent company is Blackfinch Group Limited, a company registered in England and Wales, who own 100% of the issued share capital. The ultimate parent company is BF Inter Limited, also incorporated in England and Wales. Copies of group accounts can be obtained from 1350-1360 Montpellier Court, Gloucester Business Park, Gloucester, GL3 4AH.
The ultimate controlling party is Richard Cook who owns 55% of the share capital in BF Inter Limited.
20
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
336,198
429,226
The company is a 100% owned subsidiary of Blackfinch Group Limited. The company has therefore elected to make use of the exemption provided in FRS102.33.1A (Related Party Transactions) not to disclose related party transactions with other members of the group.
RCS SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
21
Cash generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(163,266)
19,320
Adjustments for:
Taxation (credited)/charged
(45,842)
136
Finance costs
32,217
21,318
Depreciation and impairment of tangible fixed assets
61,562
97,088
Movements in working capital:
(Increase)/decrease in debtors
(144,600)
338,426
Increase/(decrease) in creditors
341,748
(164,951)
Cash generated from operations
81,819
311,337
22
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
16,530
20,008
36,538
Borrowings excluding overdrafts
(458,714)
9,498
(449,216)
(442,184)
29,506
(412,678)
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