Black Sun Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 01557279 (England and Wales)
Black Sun Limited
Company Information
Directors
D Christopherson
R Dixon
P Edison
S Henderson
M Savarese
S Lawrence-Jones
(Appointed 19 January 2024)
Company number
01557279
Registered office
Fulham Palace
Bishop's Avenue
London
United Kingdom
SW6 6EA
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Black Sun Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 28
Black Sun Limited
Strategic Report
For the year ended 31 December 2023
Page 1

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

Black Sun is a global advisory and stakeholder engagement agency. We support businesses through expert analysis, strategic thinking, creative storytelling, and cutting-edge technology to transform the way they engage with their customers, investors, employees and partners worldwide. Our specialist areas of focus include ESG and sustainability, digital transformation and stakeholder reporting and communications.

 

We are delighted that every part of Black Sun Limited performed strongly in a tough economic climate during 2023. Revenue was £16.2m for the year, representing a 7% decline vs the prior year. Both the UK and Singapore businesses were not impervious to the economic headwinds. Whilst revenue declines had an adverse impact on profitability, some key investments aimed at the long-term future of the business were not decreased in order to enable growth in 2024 and beyond. These included investments in client management resource and our ability to continue to grow our advisory revenues. As ever, these results are testament to the skill and dedication of our people. In terms of our services, we saw revenue declines across Advisory, Digital and Stakeholder Engagement. It was encouraging to see our reporting and disclosure teams win some new clients in the final quarter which will be the start of a strong 2024.

 

Meanwhile, our platform revenues enjoyed steady year-on-year growth during 2023 from its recurring revenue streams for website licensing, hosting, maintenance and support.

 

Our client retention rates remain high in both the UK and Singapore, and I am pleased to say that we landed some notable wins during the year, including Prudential, Capita and Paysafe. We also had success in winning new work from existing clients, proving the value of our strong client relationships.

 

Principal risks and uncertainties

The Company regularly reviews business risk and aims to mitigate these risks wherever possible through its internal systems and controls and where appropriate, targeted staff training. The directors consider the Company's main commercial and financial risks to be:

 

Changing operating environment

Evolving social, political, environmental, technical and economic trends can impact our market, client needs and our business prospects.

 

We engage external thought leaders to complete research and analysis to understand market dynamics, adapt and make any required changes to our offer. This research is at both a macro level and a client­ specific level, and ensures we are continuously improving the ways in which we can help our clients.

 

Our formalised and regularly reviewed planning processes ensure we can co-ordinate all actions to give our clients holistic plans and guidance. We also continuously improve our processes and systems to ensure we can react quickly and appropriately to new circumstances and challenges as they emerge.

 

Commercial risks

Economic downturn and changes to our client' financial circumstances could result in bad debt; poor commercial management; client business failure; revenue and margin pressure; and supplier failure.

 

We have a policy of maintaining a strong balance sheet and holding significant shareholder funds. Our conservative financing principles, robust governance and commercial working practices, strong cash flow, rigorous approach to collections and payments, and our targeted client selection help to minimise financial risk. The Board regularly reviews financial performance against our KPls and performance metrics.

Black Sun Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2

Client satisfaction

Our ability to attract and retain as clients a range of the world's largest companies is essential to our success. Such clients are demanding, and to remain competitive we must anticipate and respond to their changing needs.

 

We centre our mitigation strategy around a cohesive account management structure that's based on delivery and trust. We ensure this approach responds to changing customer needs and is responsive to any concerns. We do this by measuring and monitoring needs at Board level, promoting a service-delivery culture and continuously investing in project management tools to improve efficiency and service levels.

Data security and protection

Our investments in market-leading technology and robust practices and procedures are providing our operating businesses and our clients with powerful data protection facilities. For example, migrating Group BAU workflows to M365 allows us to take advantage of the many data protection and security features of the platform.

In addition, we communicate regularly with our employees, suppliers and partners about data protection best practices. Security and technology practices are constantly reviewed and benchmarked, and industry best practices are implemented. Additionally, we have a dedicated Information Security Officer who oversees the Group’s data security, manages our risk register, and monitors and mitigates new cyber risks. As part of our data protection strategy, we carry cyber insurance coverage against malware and ransomware, and continue to invest in the maintenance of our ISO 27001 certification and the standards that go with it.

Artificial Intelligence

We have responded to the rise of new artificial technologies in a number of ways, to ensure that our Group mitigates potential risks from using artificial intelligence (AI) while benefitting from the advantages of technologies that are appropriate for our businesses. As a Group, we have established a work group dedicated to exploring the uses, limitations, cautions and applications of AI, to ensure that we understand the new technologies. We have Group policies around governance practices in place. These policies are reflected in published external information we have reviewed.

 

We have also established protocols about how we use AI as a Group. We are already incorporating AI technologies into our workstreams and service offerings, ensuring that our employees can make best use of emerging technologies in a secure and appropriate way. We are leveraging the existing technologies we have in place, to understand and incorporate the use of AI functionality. We are reviewing the potential inclusion of AI development technologies into our own technologies and how these can benefit the Group. Alongside this, we have run numerous workshops with employees across the Group to ensure best-practice usage and an understanding of how AI can be used in day-to-day practice.

Black Sun Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 3
Key performance indicators

Our key performance indicators are revenue growth, operating margin and staff engagement.

 

Our revenues declined in the year off the back of some client losses offset by some new clients with projects being delivered during 2024. The balance of these changes have resulted in a strong forecast for 2024 which we anticipate a return to higher operating margins.

 

Our operating margins were impacted by a staff base with similar capacity to the prior year which saw record revenues . This additional capacity was repurposed to build on our proposition and strengthen our work processes and procedures to empower our more junior staff and move more senior managers to focus on client relationships, revenue generation and the strategic operations of our business

 

Employee engagement scores are one of the KPI’s that are actively tracked in the business and used as a metric to gauge the level of performance of the managers in the business. Our overall employee engagement score during the October 2023 survey was 57%.

 

Our employee gender diversity is strong across the business with our staff base being 58% female, 42% male. split across the different genders. The business has also recently promoted a female employee to an official director position. The board has also taken steps to reshape the board and other senior management meetings to become more representative of the diversity within the overall business.

On behalf of the board

D Christopherson
Director
30 September 2024
Black Sun Limited
Directors' Report
For the year ended 31 December 2023
Page 4

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 leading stakeholder engagement and advisory agencies, which enable clients to tell their corporate story more effectively, building trust and confidence with their stakeholders.

 

We have established a reputation with our clients, our peers and our market place for helping companies to deliver integrated communications solutions seamlessly across diverse channels quickly, accurately and effectively, so that stakeholders receive a consistent and coherent message.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £750,000. 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:

D Christopherson
R Dixon
P Edison
S Henderson
M Savarese
S Lawrence-Jones
(Appointed 19 January 2024)
Auditor

In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the company will be put at a General Meeting.

Black Sun Limited
Directors' Report (Continued)
For the year ended 31 December 2023
Page 5
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:

 

 

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.

On behalf of the board
D Christopherson
Director
30 September 2024
Black Sun Limited
Independent Auditor's Report
To the Member of Black Sun Limited
Page 6
Opinion

We have audited the financial statements of Black Sun 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 FRS 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:

Basis for opinion

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.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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.

Black Sun Limited
Independent Auditor's Report (Continued)
To the Member of Black Sun Limited
Page 7

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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:

 

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.

Black Sun Limited
Independent Auditor's Report (Continued)
To the Member of Black Sun Limited
Page 8
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

 

Black Sun Limited
Independent Auditor's Report (Continued)
To the Member of Black Sun Limited
Page 9

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

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.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Francesca Robe
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
30 September 2024
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Black Sun Limited
Statement of Comprehensive Income
For the year ended 31 December 2023
Page 10
2023
2022
Notes
£
£
Turnover
3
16,182,334
17,405,765
Cost of sales
(4,781,540)
(3,379,852)
Gross profit
11,400,794
14,025,913
Administrative expenses
(10,157,534)
(10,102,105)
Other operating income
366,896
-
0
Operating profit
4
1,610,156
3,923,808
Interest receivable and similar income
7
99,623
28,679
Profit before taxation
1,709,779
3,952,487
Tax on profit
8
(354,459)
(697,118)
Profit for the financial year
1,355,320
3,255,369

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

Black Sun Limited
Balance Sheet
As at 31 December 2023
Page 11
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
328,206
327,434
Tangible assets
11
235,375
273,059
Investments
12
6,228,393
6,218,593
6,791,974
6,819,086
Current assets
Debtors
14
8,284,384
6,482,363
Cash at bank and in hand
4,039,856
6,526,755
12,324,240
13,009,118
Creditors: amounts falling due within one year
15
(5,435,767)
(7,428,341)
Net current assets
6,888,473
5,580,777
Total assets less current liabilities
13,680,447
12,399,863
Creditors: amounts falling due after more than one year
16
-
0
(3,645)
Provisions for liabilities
Provisions
17
(50,000)
(226,667)
Deferred tax liability
18
(52,681)
(61,105)
(102,681)
(287,772)
Net assets
13,577,766
12,108,446
Capital and reserves
Called up share capital
21
49,095
48,383
Share premium account
927,616
64,328
Capital redemption reserve
10,000
10,000
Profit and loss reserves
12,591,055
11,985,735
Total equity
13,577,766
12,108,446
The financial statements were approved by the board of directors and authorised for issue on 30 September 2024 and are signed on its behalf by:
D Christopherson
Director
Company Registration No. 01557279
Black Sun Limited
Statement of Changes in Equity
For the year ended 31 December 2023
Page 12
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
52,452
46,639
5,000
10,945,893
11,049,984
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
3,255,369
3,255,369
Issue of share capital
21
931
17,689
-
-
18,620
Dividends
9
-
-
-
(1,000,000)
(1,000,000)
Redemption of shares
21
(5,000)
-
0
5,000
-
0
-
0
Repurchase of shares
-
-
-
(1,215,527)
(1,215,527)
Balance at 31 December 2022
48,383
64,328
10,000
11,985,735
12,108,446
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
1,355,320
1,355,320
Issue of share capital
21
712
863,288
-
-
864,000
Dividends
9
-
-
-
(750,000)
(750,000)
Balance at 31 December 2023
49,095
927,616
10,000
12,591,055
13,577,766
Black Sun Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 13
1
Accounting policies
Company information

Black Sun Limited is a private company limited by shares incorporated in England and Wales. The registered office is Fulham Palace, Bishop's Avenue, London, United Kingdom, SW6 6EA.

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.

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 is taken on fee income in the period to which it relates. Project income is recorded in the period in which the project is worked on. For projects which fall over the financial year end, income is recognised to reflect the partial performance of the contractual obligations in accordance with FRS102.

 

Third party costs and the associated income relating to bought in costs directly rechargeable to the client are recognised in the period to which they relate.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
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.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 14

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:

Sotware
5 years
Trademarks
10 years
1.6
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:

Fixtures, Fittings and Equipment
10 years
Computer equipment
3 years

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.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 15

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.

1.9
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.

1.10
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.

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.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 16
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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
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.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 17
1.12
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.

1.13
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.14
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.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

1.16
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the black-scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

1.17
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.

1.18
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.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 19
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Revenue Recognition

Revenue from contracts is assessed on an individual basis with revenue earned being ascertained based on the stage of completion of the contract which is estimated using a combination of the milestones in the contract and the time spent to date compared to the total time expected to be required to undertake the contract. Estimates of the total time required to undertake the contracts are made on a regular basis and subject to management review. These estimates may differ from the actual results due to a variety of factors such as efficiency of working, accuracy of assessment of progress to date and client decision making. See note 13 and 14 for disclosure of the amount by which revenue exceeds progress billing or billing exceeds revenue.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,367,645
11,952,210
Europe
1,793,850
1,036,671
Rest of the world
3,020,839
4,416,884
16,182,334
17,405,765
2023
2022
£
£
Other significant revenue
Interest income
99,623
28,679
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 20
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
97,302
(113,800)
Research and development costs
27,250
-
Fees payable to the company's auditor for the audit of the company's financial statements
31,480
33,650
Depreciation of owned tangible fixed assets
115,153
122,605
Amortisation of intangible assets
81,637
48,893
Operating lease charges
420,696
391,998
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Fee earners
105
84
Non-fee earners
19
15
Total
124
99

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
6,401,614
6,153,529
Social security costs
781,499
771,577
Pension costs
173,536
165,736
7,356,649
7,090,842
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,002,727
985,908
Company pension contributions to defined contribution schemes
33,678
34,558
1,036,405
1,020,466
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
6
Directors' remuneration
(Continued)
Page 21
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
191,300
228,057
Company pension contributions to defined contribution schemes
7,462
7,515
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
99,623
28,679
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
362,883
710,731
Deferred tax
Origination and reversal of timing differences
(8,424)
(13,613)
Total tax charge
354,459
697,118
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
8
Taxation
(Continued)
Page 22

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
1,709,779
3,952,487
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
401,798
750,973
Tax effect of expenses that are not deductible in determining taxable profit
16,449
7,203
Effect of change in corporation tax rate
332
-
0
Permanent capital allowances in excess of depreciation
(40,933)
(16,394)
Depreciation on assets not qualifying for tax allowances
27,061
32,585
Amortisation on assets not qualifying for tax allowances
20,633
(7,565)
Deferred tax adjustments in respect of prior years
(8,116)
(13,613)
Tax relief in respect of gift aid
-
0
931
Provisions adjustment
5,934
133
Share scheme deduction under Part 12 CTA 2009
(68,699)
(57,135)
Taxation charge for the year
354,459
697,118
9
Dividends
2023
2022
£
£
Final paid
750,000
1,000,000
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 23
10
Intangible fixed assets
Sotware
Trademarks
Total
£
£
£
Cost
At 1 January 2023
1,270,720
-
0
1,270,720
Additions - internally developed
66,708
-
0
66,708
Additions - separately acquired
-
0
15,701
15,701
At 31 December 2023
1,337,428
15,701
1,353,129
Amortisation and impairment
At 1 January 2023
943,286
-
0
943,286
Amortisation charged for the year
78,945
2,692
81,637
At 31 December 2023
1,022,231
2,692
1,024,923
Carrying amount
At 31 December 2023
315,197
13,009
328,206
At 31 December 2022
327,434
-
0
327,434
11
Tangible fixed assets
Fixtures, Fittings and Equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2023
255,231
299,761
554,992
Additions
-
0
77,469
77,469
At 31 December 2023
255,231
377,230
632,461
Depreciation and impairment
At 1 January 2023
111,432
170,501
281,933
Depreciation charged in the year
25,478
89,675
115,153
At 31 December 2023
136,910
260,176
397,086
Carrying amount
At 31 December 2023
118,321
117,054
235,375
At 31 December 2022
143,799
129,260
273,059
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 24
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
6,228,393
6,218,593
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
6,218,593
Additions
9,800
At 31 December 2023
6,228,393
Carrying amount
At 31 December 2023
6,228,393
At 31 December 2022
6,218,593
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Country of incorporation or residency
Class of shareholding
% Held
Direct
Indirect
Black Sun International Limited
United Kingdom
Ordinary
100.00
-
Black Sun PTE Limited
Singapore
Ordinary
-
100.00
Black Sun Technology Services Ltd
United Kingdom
Ordinary
100.00
-
People Made (UK) Limited
United Kingdom
Ordinary
-
100.00
People Made Group Limited
United Kingdom
Ordinary
100.00
-
People Made (NL) B.V.
Netherlands
-
100.00
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,729,528
4,366,194
Amounts owed by group undertakings
4,880,760
864,108
Other debtors
68,160
55,173
Prepayments and accrued income
605,936
1,196,888
8,284,384
6,482,363
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 25
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
438,323
588,869
Amounts owed to group undertakings
3,013,086
97,920
Corporation tax
444,562
1,244,332
Other taxation and social security
435,818
565,330
Other creditors
42,646
2,923,004
Accruals and deferred income
1,061,332
2,008,886
5,435,767
7,428,341
16
Creditors: amounts falling due after more than one year
2023
2022
£
£
Accruals and deferred income
-
0
3,645
17
Provisions for liabilities
2023
2022
£
£
Dilapidations provision
50,000
226,667
Movements on provisions:
Dilapidations provision
£
At 1 January 2023
226,667
Revaluation
(176,667)
At 31 December 2023
50,000
Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 26
18
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:
£
£
ACAs
52,681
61,105
2023
Movements in the year:
£
Liability at 1 January 2023
61,105
Credit to profit or loss
(8,424)
Liability at 31 December 2023
52,681

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
173,536
165,736

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.

20
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023 and 31 December 2023
-
0
6,095
-
0
34.02
Exercisable at 31 December 2023
-
0
3,265
-
0
-
0

The options outstanding at 31 December 2022 had an exercise price of £34.02 (2021: £34.02). Of these outstanding options, 3,265 had a remaining contractual life of two years and 2,830 had a remaining contractual life of six years.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 27
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Class A Shares of £1 each
40,000
40,000
40,000
40,000
Class B Shares of £1 each
5,000
5,000
5,000
5,000
Class C Shares of £1 each
3,383
3,383
3,383
3,383
Class E Shares of £1 each
712
-
712
-
49,095
48,383
49,095
48,383

 

Ordinary E shares were issued as part of the consideration paid in relation to the acquisition of People Made Group Limited and subsidiaries. Total consideration paid for E shares was £864,000.

22
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
303,750
324,000
Between two and five years
911,250
1,296,000
1,215,000
1,620,000
23
Related party transactions

The Company is a wholly owned subsidiary of The Positive Change Group Limited and as such has taken advantage of the exemption permitted under Section 33 'Related party disclosures' not to provide disclosures of the transactions entered into with wholly owned members of the group.

24
Directors' transactions

The director's owed £3,265 to the company as at 31 December 2023.

Black Sun Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 28
25
Ultimate controlling party

The Company's immediate parent company is The Positive Change Group Limited, a company

registered in England and Wales.

 

The Positive Change Group Limited is the parent undertaking of the smallest and the largest group, that prepares financial statements that include the Company. Copies can be obtained from Fulham Palace, London, United Kingdom, SW6 6EA.

 

By virtue of shareholdings, D Christopherson is identified as the ultimate controlling party

 

 

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