Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-312023-01-01truetruetruetruetrue3534falsetruefalse 01280705 2023-01-01 2023-12-31 01280705 2022-01-01 2022-12-31 01280705 2023-12-31 01280705 2022-12-31 01280705 2022-01-01 01280705 c:Exceptional 2023-01-01 2023-12-31 01280705 c:Exceptional 2022-01-01 2022-12-31 01280705 d:Director1 2023-01-01 2023-12-31 01280705 d:Director2 2023-01-01 2023-12-31 01280705 d:Director4 2023-01-01 2023-12-31 01280705 d:Director5 2023-01-01 2023-12-31 01280705 d:Director6 2023-01-01 2023-12-31 01280705 d:Director7 2023-01-01 2023-12-31 01280705 d:RegisteredOffice 2023-01-01 2023-12-31 01280705 c:FurnitureFittings 2023-01-01 2023-12-31 01280705 c:FurnitureFittings 2023-12-31 01280705 c:FurnitureFittings 2022-12-31 01280705 c:FurnitureFittings c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 01280705 c:ComputerSoftware 2023-12-31 01280705 c:ComputerSoftware 2022-12-31 01280705 c:OtherResidualIntangibleAssets 2023-01-01 2023-12-31 01280705 c:CurrentFinancialInstruments 2023-12-31 01280705 c:CurrentFinancialInstruments 2022-12-31 01280705 c:Non-currentFinancialInstruments 2023-12-31 01280705 c:Non-currentFinancialInstruments 2022-12-31 01280705 c:CurrentFinancialInstruments c:WithinOneYear 2023-12-31 01280705 c:CurrentFinancialInstruments c:WithinOneYear 2022-12-31 01280705 c:Non-currentFinancialInstruments c:AfterOneYear 2023-12-31 01280705 c:Non-currentFinancialInstruments c:AfterOneYear 2022-12-31 01280705 c:ShareCapital 2023-12-31 01280705 c:ShareCapital 2022-12-31 01280705 c:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 01280705 c:RetainedEarningsAccumulatedLosses 2023-12-31 01280705 c:RetainedEarningsAccumulatedLosses 2022-12-31 01280705 c:AcceleratedTaxDepreciationDeferredTax 2023-12-31 01280705 c:AcceleratedTaxDepreciationDeferredTax 2022-12-31 01280705 c:OtherDeferredTax 2023-12-31 01280705 c:OtherDeferredTax 2022-12-31 01280705 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2023-12-31 01280705 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2022-12-31 01280705 d:OrdinaryShareClass1 2023-01-01 2023-12-31 01280705 d:OrdinaryShareClass1 2023-12-31 01280705 d:OrdinaryShareClass1 2022-12-31 01280705 d:FRS102 2023-01-01 2023-12-31 01280705 d:Audited 2023-01-01 2023-12-31 01280705 d:FullAccounts 2023-01-01 2023-12-31 01280705 d:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 01280705 c:WithinOneYear 2023-12-31 01280705 c:WithinOneYear 2022-12-31 01280705 c:BetweenOneFiveYears 2023-12-31 01280705 c:BetweenOneFiveYears 2022-12-31 01280705 c:HirePurchaseContracts c:WithinOneYear 2023-12-31 01280705 c:HirePurchaseContracts c:WithinOneYear 2022-12-31 01280705 c:HirePurchaseContracts c:BetweenOneFiveYears 2023-12-31 01280705 c:HirePurchaseContracts c:BetweenOneFiveYears 2022-12-31 01280705 c:ComputerSoftware c:ExternallyAcquiredIntangibleAssets 2023-01-01 2023-12-31 01280705 4 2023-01-01 2023-12-31 01280705 c:ComputerSoftware c:OwnedIntangibleAssets 2023-01-01 2023-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 01280705










RHAPSODY LIMITED










DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
RHAPSODY LIMITED
 
 
COMPANY INFORMATION


Directors
A Berg 
J Hearnden
B G Murray 
M Scanlon 
I Southerland 
P Utting 




Registered number
01280705



Registered office
18 Westside Centre
London Road

Stanway

Colchester

England

CO3 8PH




Principal place of business
The Frames, 201–202
2nd Floor

1 Phipp Street

London

EC2A 4PS






Independent auditor
KPMG LLP

20 Station Road

Cambridge

CB1 2JD





 
RHAPSODY LIMITED
 

CONTENTS



Page
Directors' Report
 
1
Directors' Responsibilities Statement
 
2
Independent Auditor's Report to the Members of Rhapsody Limited
 
3 - 6
Statement of Comprehensive Income
 
7
Balance Sheet
 
8
Notes to the Financial Statements
 
9 - 28


 
RHAPSODY LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their Report and the audited financial statements of Rhapsody Limited ("the Company") for the year ended 31 December 2023.

Rhapsody Limited is a subsidiary of Walstead Holdings Limited ("the Group").

Principal activity

The principal activity of the Company during the year ended 31 December 2023 continued to be that of a creative and media production agency providing end-to-end solutions for brands including print, digital and video experiences.

Directors

The Directors who served during the year ended 31 December 2023 and up to the date of approval of this report were:

A Berg
J Hearnden
N Johnson (appointed 1 June 2023, resigned 3 September 2024)
B G Murray (appointed 3 September 2024)
 
M Scanlon
I Southerland (appointed 5 August 2024)
 
P Utting 

Disclosure of information to auditor

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

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

Auditor

Pursuant to section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office.

Small companies note

In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the Board and signed on its behalf.
 





P Utting
Director
Date: 14 November 2024

Page 1

 
RHAPSODY LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors are responsible for preparing the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Section 1A of Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements 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;
assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


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 to enable them to ensure that the financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them  to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Page 2

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RHAPSODY LIMITED
 

Opinion

We have audited the financial statements of Rhapsody Limited (“the Company”) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet and related notes, including the accounting policies in note 2.
 
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 UK accounting standards applicable to smaller entities, including Section 1A of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and
have been prepared in accordance with the requirements of the Companies Act 2006

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below.  We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard, and the provisions available for small entities, in the circumstances set out in note 2.2 to the financial statements. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. 

Going concern

The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.

Our conclusions based on this work:

we consider that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.

Page 3

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RHAPSODY LIMITED
 

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

Enquiring of directors as to the Company’s high-level policies and procedures to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or alleged fraud.
Reading board minutes.
Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular:

the risk that the Company's management may be in a position to make inappropriate accounting entries; and
the risk that revenue is overstated through recording revenues in the wrong period.

We did not identify any additional fraud risks.

In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of some of the Company-wide fraud risk management controls.

We performed procedures including:

Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. These included journal entries posted to unrelated accounts linked to the fraud risk over revenue recognition, journal entries posted to unrelated accounts linked to cash and borrowings.
Testing a sample of revenue transactions to supporting documentation to assess whether revenue had been recorded in the correct period.

Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors (as required by auditing standards), and discussed with the directors the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Page 4

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RHAPSODY LIMITED
 

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Company’s license to operate.  We identified the following areas as those most likely to have such an effect: health and safety, GDPR, anti-bribery and employment law recognising the nature of the Company’s activities.  Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Directors' Report

The Directors are responsible for the Directors’ Report.  Our opinion on the financial statements does not cover that report and we do not express an audit opinion thereon.

Our responsibility is to read the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

we have not identified material misstatements in the Directors’ Report; 
in our opinion the information given in that report for the financial year is consistent with the financial statements; and 
in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Matters on which we are required to report by exception

Under the Companies Act 2006, we are required 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 Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the Directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption from the requirement to prepare a Strategic Report.

We have nothing to report in these respects.

Page 5

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RHAPSODY LIMITED
 

Directors’ responsibilities

As explained more fully in their statement set out on page 2, the Directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; 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 they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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 our opinion in an Auditor’s Report.  Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. 

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. 

The purpose of our audit work and to whom we owe our responsibilities

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.




Michael Scrivener (Senior statutory auditor)

  
for and on behalf of

KPMG LLP, Statutory Auditor
 
Chartered Accountants

  
20 Station Road
Cambridge
CB1 2JD
14 November 2024

Page 6

 
RHAPSODY LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

* As restated
2023
2022
Note
£'000
£'000

  

Turnover
  
5,597
5,059

Cost of sales
  
(3,411)
(3,100)

Gross profit
  
2,186
1,959

Distribution costs
  
(448)
(427)

Administrative expenses
  
(2,350)
(2,320)

Restructuring and other costs
 4 
(159)
(126)

Other operating income
  
343
915

Operating (loss)/profit
 4 
(428)
1

Interest payable and similar expenses
  
(32)
(14)

Loss before tax
  
(460)
(13)

Tax on loss
  
(11)
(118)

Loss for the financial year
  
(471)
(131)

All activities derive from continuing activities.
There was no other comprehensive income for the year ended 31 December 2023 
(2022£'NIL).
* See Note 7 for details of the prior year restatement.

The notes on pages 9 to 28 form part of these financial statements.

Page 7

 
RHAPSODY LIMITED
REGISTERED NUMBER:01280705

BALANCE SHEET
AS AT 31 DECEMBER 2023

* As restated
* As restated
2023
2023
2022
2022
Note
£'000
£'000
£'000
£'000

Fixed assets
  

Intangible assets
 8 
125
145

Tangible assets
 9 
72
133

Current assets
  

Stocks
 10 
11
9

Debtors: amounts falling due after more than one year
 11 
218
229

Debtors: amounts falling due within one year
 11 
1,754
2,015

Cash at bank and in hand
 12 
133
116

  
2,116
2,369

Creditors: amounts falling due within one year
 13 
(1,292)
(1,139)

Net current assets
  
 
 
824
 
 
1,230

Total assets less current liabilities
  
1,021
1,508

Creditors: amounts falling due after more than one year
 14 
-
(15)

 
Provisions for liabilities
  

Other provisions
 17 
(10)
(10)

Net assets
  
1,011
1,483


Capital and reserves
  

Called up share capital 
 18 
40
40

Profit and loss account
 19 
971
1,443

  
1,011
1,483


The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements were approved and authorised for issue by the Board and were signed on its behalf by: 

B G Murray
Director
Date: 14 November 2024

* See Note 7 for details of the prior year restatement.
The notes on pages 9 to 28 form part of these financial statements.

Page 8

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Rhapsody Limited is a company incorporated, domiciled and registered in the UK under the Companies Act. The Company is a private company limited by shares and is registered in England and Wales with registration number 01280705. The address of the Company’s registered office is 18 Westside Centre, London Road, Stanway, Colchester, England, CO3 8PH.
The principal activity of the Company during the year ended 31 December 2023 continued to be that of a creative and media production agency providing end-to-end solutions for brands including print, digital and video experiences.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared on a going concern basis, under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The financial statements are rounded to the nearest thousand (£'000), unless otherwise stated.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

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

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

Page 9

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

Notwithstanding a loss after tax for the year of £471,000, the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons:
Rhapsody Limited ("the Company") is part of a group, headed by the intermediate parent company Walstead Group Limited ("the Group"). The Directors of the Group have provided the Company with a Letter of Support giving assurance over the going concern position of the Company.  The financing requirements of the Company are considerably below those of the Group.
The Directors have prepared cash flow forecasts and performed a going concern assessment for at least 12 months from the date of approval of these financial statements (the going concern period), which indicates that in the base case scenario the Group will have sufficient funds to meet its liabilities as they fall due during the going concern assessment period.
The Directors have also prepared severe yet plausible downside scenarios, which take account of potential and realistic decline in trading performance driven by inflation and loss in customer demand.  
In particular, these scenarios include modelling reductions in revenue or an increase in the price of goods. Results from these models noted that there was sufficient funds to meet Group’s liabilities as they fall due during the going concern assessment period.
For the year ended 31 December 2023, Walstead Group Limited reported revenue of £582.0m and net assets of £84.6m.
In addition to operating cash flows, the Group meets day to day financing and working capital needs through external facilities and shareholder loan notes, amounting to €149.5m. As part of the Group’s working capital management, it utilises invoice factoring facilities. These ongoing factoring facilities have operated successfully and efficiently for a number of years, and while the earliest date that these facilities could cease to be available is 30 November 2025, the group has no reason to believe that the facilities would not continue to be available beyond this date. The facilities remain attractive to the provider due to the quality and strength of the Group's receivables. The Group also uses a range of revolving credit and other non-term facilities which have been, and are expected to be, renewed as considered appropriate.
There are no covenants attached to the shareholder loan notes and the factoring facility held across the Group is subject to a net equity covenant. The Directors note that at no point in the modelling (i.e. either at the base case or severe but plausible case) the covenants were expected to breach. 
In the unlikely event of these existing factoring facilities ceasing to be available or if other facilities are not renewed, the Group already has prudent back up facilities in place in respect of all but €38m of its projected working capital management requirements at the end of 2025, with adequate time to ensure that additional facilities are in place to fully meet its working capital management requirements.
Walstead Group Limited has indicated its intention to continue to make available such funds as are needed by the Company during the going concern assessment period. As with any Company placing reliance on other group entities for financial support, the Directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
 
Page 10

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.3
Going concern (continued)

Consequently, the Directors are confident that the Group and the Company will have sufficient working capital to continue to meet its liabilities for at least 12 months from the date of approval of these financial statements and therefore have prepared these financial statements on a going concern basis.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is pound sterling.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 11

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Revenue is measured based on the consideration to which the Company expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognised over time as the contracts progress and the services are performed.
For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously.

Page 12

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.6

Leases

Leases in which the Company assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. All other leases are classified as operating leases.
Operating leases
Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation, in which case the payments related to the structured increases are recognised as incurred.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessees benefit from the use of the leased asset.
Finance leases
At commencement of the lease term the Company recognises an asset and liability equal to the lower of the fair value of the leased asset or, if lower, the present value of the minimum lease payments.  Any initial direct costs of the Company (incremental costs directly attributable to negotiating and arranging the lease) are added to the amount recognised as an asset. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease.  Leased assets are depreciated over the shorter of the lease term and their useful lives, except where the Company expects to renew the lease or take legal ownership of the assets at the end of the lease term, where the useful economic life is used. 
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the rate implicit in the lease. The finance charge is allocated to each period during the lease term to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent rents are charged to profit or loss in the period in which they are incurred. Where additional lending is drawn against existing leased assets the additional amounts are treated as further drawings of existing finance leases and not as new leases or separate borrowings.

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 13

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Pensions

Defined contribution pension plan

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

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

 
2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

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

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

The Company intends to use carried forward tax losses against its own future profits.
The Company may utilise group relief, surrendering and receiving tax deductions from carried forward losses with other subsidiaries incorporated in the UK. If the Company surrenders losses, a group relief debtor is recognised for the tax benefit in the receiving Company. If the Company receives losses, a group relief creditor is recognised for the tax benefit received.
The tax charges and credits included in these financial statements are estimates and the final group relief strategy used for the tax computations submitted might differ. In these cases, an adjustment is made in respect of previous periods and this is reflected in the 'Group taxation relief in respect of the prior year' line on Note 6.

Page 14

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Restructuring and other costs

The Company presents restructuring and other costs to provide additional useful information on the operational performance of the Company. Other costs includes redundancy expenses.

 
2.11

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following bases:

Computer software
-
33%
per annum

 
2.12

Tangible fixed assets

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

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Page 15

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Fixtures, fittings and equipment
-
20% to 50% per annum

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

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

 
2.13

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured stocks and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

  
2.14

Financial instruments

Trade and other debtors are recognised initially at transaction price plus attributable transaction costs. Trade and other creditors are recognised initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument. 
All other financial assets are initially are measured at cost less impairment and financial liabilities recognised when the Company becomes a party to the contractual provisions of the instrument.
The measurement of the debt factoring is defined in accounting policy 2.16.

Page 16

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

  
2.16

Debt financing

Trade debtors are subject to a factoring arrangement whereby an advance is received based upon and secured against trade debtors. Where the Company has neither transferred or retained substantially all the risks and rewards of ownership of the trade debtors it recognises the asset to the extent of its continued involvement.
The interest element of the finance charge is recognised as it accrues and is included in profit and loss with other interest charges.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Company’s accounting policies
There are not considered to be any critical judgements that the Directors have made in the process of applying the Company’s accounting policies.
Key sources of estimation uncertainty
There are not considered to be any key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Page 17

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Operating (loss)/profit

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

2023
2022
£'000
£'000

Depreciation of tangible fixed assets
77
83

Amortisation of intangible fixed assets
102
126

Foreign exchange differences
13
45

Operating lease rentals
96
98

Auditor's remuneration - audit of the financial statements
7
7

Restructuring and other costs
159
126

Restructuring and other costs comprise restructuring costs of £56,000 (2022: £NIL), property moving costs of £NIL (2022: £11,000) and project costs of £103,000 (2022: £115,000).


5.


Employees

The average monthly number of employees, including Directors, during the year ended 31 December 2023 was 34 (2022: 35).

Page 18

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Taxation


* As restated
2023
2022
£'000
£'000



Deferred tax


Deferred tax charge in respect of current period
18
118

Adjustments in respect of previous periods
(7)
-


Tax on loss
11
118

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

* As restated
2023
2022
£'000
£'000


Loss on ordinary activities before tax
(460)
(13)


Loss on ordinary activities multiplied by effective rate of corporation tax in
the UK of 23.5% (2022 - 19%)
(108)
(2)

Effects of:


Expenses not deductible for tax purposes
(14)
13

Capital allowances for year in excess of depreciation
2
76

Tax effect of losses
124
31

Adjustments to tax charge in respect of prior periods
(7)
-

Changes in provisions leading to an increase (decrease) in the tax charge
14
-

Total tax charge for the year
11
118

* See Note 7 for details of the prior year restatement.


Factors that may affect future tax charges

An increase in the UK corporation tax rate from 19% to 25% was substantively enacted in June 2021 and took effect from 1 April 2023 for profits over £250,000. For profits under £50,000 the tax rate will remain the same at 19% and for profits between these figures it will be subject to 25% but reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.

Page 19

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.

Prior year restatement

At 31 December 2022, Rhapsody Limited previously recognised a deferred tax asset in respect of carried forward tax losses of £436,000 built up over the last few years. While it remains management's intention to relieve these against future taxable profits, based on recent financial performance and future budgeted results, Management now believe that the hurdle to recognise the asset in the prior years was not met and no deferred tax asset should have been recognised.  A prior year restatement has therefore been made to derecognise this asset in the comparative year and the profit and loss account as at 1 January 2022. This adjustment reduced the comparative profit for the year from £51,000 to a loss of £131,000 and the profit and loss account brought forward was reduced by £254,000 to £1,574,000 as at 1 January 2022.
If these losses cannot be utilised in future years, then they will be surrendered to other UK subsidiaries through group relief. At this point, a group relief debtor will be recognised for the taxable benefit.
The impact on the comparatives in these financial statements are as follows:


Previously reported
Derecognition
As restated

£'000
£'000
£'000


Statement of Comprehensive Income

Tax on loss
64
(182)
(118)


Balance Sheet

Debtors: amounts falling due after more than one year
665
(436)
229

Profit and loss account
1,879
(436)
1,443


Taxation (note 6)

Deferred tax charge in respect of current year
(64)
182
118


Debtors (note 11)

Deferred tax
665
(436)
229


Deferred taxation (note 16)

Deferred tax asset at 1 January
601
(254)
347

Charged to profit or loss
64
(182)
(118)

Page 20

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Intangible assets




Computer software

£'000



Cost


At 1 January 2023
1,545


Additions
82



At 31 December 2023

1,627



Amortisation


At 1 January 2023
1,400


Charge for the year on owned assets
102



At 31 December 2023

1,502



Net book value



At 31 December 2023
125



At 31 December 2022
145



Page 21

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Tangible fixed assets





Fixtures, fittings and equipment

£'000



Cost


At 1 January 2023
1,223


Additions
16



At 31 December 2023

1,239



Depreciation


At 1 January 2023
1,090


Charge for the year on owned assets
77



At 31 December 2023

1,167



Net book value



At 31 December 2023
72



At 31 December 2022
133


10.


Stocks

2023
2022
£'000
£'000

Raw materials and consumables
11
9

11
9


There are no material differences between the value of stocks and their replacement value.

Page 22

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Debtors

2023
* As restated
2022
£'000
£'000

Due after more than one year
  

Deferred taxation
 16 
218
229

  
218
229


2023
2022
£'000
£'000

Due within one year
  

Trade debtors
  
119
278

Amounts owed by group undertakings
 22 
1,384
1,466

Group relief receivable
  
47
47

Other debtors
  
88
92

Prepayments and accrued income
  
116
132

  
1,754
2,015


The carrying amounts of trade debtors include debts which are subject to a factoring arrangement. Under this arrangement, Rhapsody Limited has transferred the relevant debts to the factor in exchange for a facility which allows it to draw down cash of up to 95% of the value of the debt. The sale of these debts is non-recourse up to the credit limit provided by the insurance provider subject to a 10% deductible. As a result the Company has transferred a proportion of the risks and rewards of ownership of the financial asset and therefore only recognises the asset to the extent it continues to be exposed to the changes in value in accordance with FRS 102. The Company continues to carry the risks associated with trade debtors above the credit limit and consequently these debtors are recognised in the Balance Sheet.
Amounts advanced by the factor that could become repayable under the terms of the agreement are presented as secured borrowing. Cash that has not been advanced in respect of non-recourse debts sold to the factor is shown within other debtors.
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand. Whilst amounts owed by group undertakings are repayable on demand, £1,384,000
 (2022: £1,466,000) is not expected to be repaid within one year.
* See Note 7 for details of the prior year restatement.

Page 23

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Cash and cash equivalents

2023
2022
£'000
£'000

Cash at bank and in hand
133
116

133
116



13.


Creditors: Amounts falling due within one year

2023
2022
£'000
£'000

Invoice discounting and factoring
  
40
201

Trade creditors
  
82
106

Amounts owed to group undertakings
 22 
791
452

Other taxation and social security
  
281
240

Obligations under finance lease and hire purchase contracts
 15 
5
5

Other creditors
  
7
8

Accruals and deferred income
  
86
127

  
1,292
1,139


Amounts owed to group undertakings are unsecured, interest free and are repayable on demand.


14.


Creditors: Amounts falling due after more than one year

2023
2022
£'000
£'000

Net obligations under finance leases and hire purchase contracts
 15 
-
15

  
-
15


Page 24

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£'000
£'000


Within one year
 13 
5
5

Between 1-5 years
 14 
-
15

  
5
20

Page 25

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Deferred taxation




2023
* As restated
2022


£'000

£'000






Deferred tax asset at 1 January
229
347


Charged to profit or loss
(11)
(118)



Deferred tax asset at 31 December
218
229

The deferred tax asset is made up as follows:

As restated
2023
2022
£'000
£'000


Accelerated capital allowances
192
219

Other timing differences
26
10

218
229

The Company has unrecognised deferred tax assets in respect of losses carried forward of £736k (2022: £436k).
* See Note 7 for details of the prior year restatement.


17.


Provisions




Dilapidation's

£'000





At 1 January 2023
10



At 31 December 2023
10

The provision relates to estimated dilapidation's for rental properties.

Page 26

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Share capital

2023
2022
£'000
£'000
Allotted, called up and fully paid



40,000 (2022: 40,000) Ordinary shares of £1.00 each
40
40



19.


Reserves

Profit and loss account

The profit and loss account represents the accumulation of retained profits, net of dividends, which are in the form of distributable reserves.


20.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company  in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £34,000 (2022: £50,000).


21.


Commitments under operating leases

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

2023
2022
£'000
£'000


Not later than 1 year
116
87

Later than 1 year and not later than 5 years
111
-

227
87

Page 27

 
RHAPSODY LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Related party transactions

The Company has taken advantage of the exemption in Section 33.1A in FRS 102 from the requirement to disclose transactions entered into between wholly owned members of the Group.
Amounts owed by/(to) group undertakings are disclosed below.
The Company has no other related party transactions to report.


2023
Debtors
2023
Creditors
2022
Debtors
2022
Creditors
£'000
£'000
£'000
£'000

Amounts owed by/(to) parent entities
  
-
(476)
-
(307)
Amounts owed by/(to) fellow subsidiaries
  
1,384
(315)
1,466
(145)
 11,13 
1,384
(791)
1,466
(452)


23.


Controlling party

At 31 December 2023 the Company’s immediate parent company is Rhapsody Group Limited, a company registered in England and Wales (company registered number 08703086).  The Company's intermediate parent company is Walstead Group Limited, a company registered in England and Wales (company registered number 09927306).  Walstead Group Limited is the smallest group for which consolidated financial statements are drawn up and these financial statements are available from Companies House.
The ultimate holding company is Walstead Holdings Limited, a company registered in England and Wales (company registered number 09927148).  Walstead Holdings Limited forms the largest group for which consolidated financial statements are drawn up and these financial statements are available from Companies House.  The registered office for Walstead Holdings Limited is 18 Westside Centre, London Road, Stanway, Colchester, Essex, England, CO3 8PH.
The ultimate controlling party is Rutland Partners LLP.  Rutland Partners LLP is held by multiple partners and is diversified.  It is not significantly influenced by a single person.

Page 28