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COMPANY REGISTRATION NUMBER:
02511140
Right Digital Solutions Limited |
|
Right Digital Solutions Limited |
|
Year ended 31 December 2022
Independent auditor's report to the members |
8 |
|
|
Statement of comprehensive income |
12 |
|
|
Statement of financial position |
13 |
|
|
Statement of changes in equity |
14 |
|
|
Notes to the financial statements |
15 |
|
|
Right Digital Solutions Limited |
|
Year ended 31 December 2022
The Directors present the Strategic report and financial statements for the year ended 31 December 2022. Review of the business Right Digital Solutions (RDS) has been helping customers manage and optimise their business document, IT, and communication processes for over 30 years. The Company's principal activities continue to be the provision of manufacturer independent, best-of-breed products along with nationwide Managed Technology Services including Managed Print, Managed IT, Workplace communications and Data. Our core objective is to grow sales, contracted service revenues and profits whilst retaining our industry leading customer renewal levels by having the right people with the right skillset to engage, manage and support our customers ensuring we are viewed as a value-added partner who consistently delivers service excellence. We seek to minimise both our and our customers' environmental impact and to invest in new services, expansion and in staff development and training to ensure we differentiate ourselves from our competition. We completed a Management Buy Out (MBO) on 1 November 2022 together with an Enterprise Management Initiative (EMI) share option scheme for mid and senior management which now sees the Company majority owned by its management team allowing those that significantly contribute to driving the business forward to share in its future growth and long-term value. In addition, we have strengthened our Board with the addition of Colin Rutherford as a non-executive director. Colin is an experienced Chairman and CEO of both public and private companies and who was previously Chairman of RDS between 2008 and 2011, during a period of significant growth. The Company continues to be financially strong, and we are pleased to report an increased turnover of £17.89m for the year to 31 December 2022, along with a significant uplift in Earnings before interest, tax, depreciation, and amortisation (EBITDA) to £2.55m which is more than acceptable given the continued challenging UK economy and global technology supply chain issues which have hampered the wider Managed Technology market.
Key performance indicators Key financial performance indicators are used to monitor performance of all aspects of the business. The directors consider Turnover, EBITDA and Gross Margin percentage as the key measures of the organisation's performance: 2022 2021 Change £'000 £'000 % Turnover 17,890 17,347 +3.1 EBITDA 2,549 2,192 +16.3 Gross Margin percentage 53.5% 52.4% +1.1
Principal risks and uncertainties The Company is subject to various risks and uncertainties during the ordinary course of its business many of which result from factors outside of its control. The Company's risk management framework provides reasonable (but cannot provide absolute) assurance that significant risks are identified and addressed. An active risk management process identifies, assesses, mitigates and reports on strategic, financial, operational and compliance risk. The principal themes of risk for the Company are: - Strategic: changes in economic and market conditions such as contract pricing and competition. - Financial: significant failures in internal systems of control and lack of corporate stability. - Operational: including recruitment and retention of staff, maintenance of reputation and strong supplier and customer relationships, operational IT risk, and failures in information security controls. - Compliance: non-compliance with laws and regulations. The Company must comply with an extensive range of requirements that govern its business. To mitigate the effect of these risks and uncertainties, the Company adopts a number of systems and procedures, including: - Regularly reviewing trading conditions to be able to respond quickly to changes in market conditions. - Applying procedures and controls to manage compliance, financial and operational risks, including adhering to an internal control framework.
Conflict in Ukraine The directors have considered the impact of the events in Ukraine with particular reference to how this may disrupt their business model, strategy and operations. It is noted that the company has no dealings with either Ukraine or any nation or individual currently experiencing sanctions as a result of the events in Ukraine. The directors have liaised with suppliers and customers and similarly they have no dealings that will impact the company's supply chain, recoverability of debt and credit. It is clear that there is a worldwide impact on the cost of particular goods, to include fuel, which in turn has increased the base costs of consumables in the business. The directors have calculated the effect and believe that this will not significantly impact the ability to trade or going concern.
Future Plans The Company believes it is well positioned to supply and support existing and new customers with a growing portfolio of digital technologies enabling them to effectively outsource the management and provision of these non-core activities to RDS as a trusted partner delivering best of breed solutions across Managed Print, Managed IT, Workplace communications and Data. The ongoing significant investment into our professional services division continued in year and this fast-growing part of our business has resulted in several new nationwide Managed Technology customer wins. During the year, the Company has continued to develop tailored servicing arrangements to enhance customer productivity, lowering both cost base and environmental impact. These evolving services will help ensure we maintain and grow our key customer long-term relationships and are well positioned to capture future growth opportunities within them as well as winning new customers.
Environmental, social and governance (ESG) RDS is committed to conducting our business operations responsibly and sustainably. We recognise the importance of Environmental, Social, and Governance factors (detailed below) in achieving long-term value for our stakeholders, and we strive to integrate these principles into our decision-making processes and practices. 1. Environmental Responsibility: We are dedicated to minimising our environmental impact and promoting sustainability. We aim to reduce our carbon footprint by implementing energy-efficient measures, optimising resource usage, and investing in renewable energy sources. Additionally, we actively manage our waste generation, promote recycling initiatives, and seek to minimise pollution in our operations. RDS has maintained and invested in achieving the ISO 14001 standard and has set objectives to manage and reduce our carbon footprint; - Vehicles - All company vehicles are hybrid or fully electric. - Fuel - In 2022 our service team invested in advanced scheduling tools and pre-emptive fault diagnosis to significantly improve the routing of engineers which resulted in a reduction in net fuel consumption of 23%. - Through upgrades to heating and lighting systems and awareness with employees, we have achieved a year-on-year reduction in CO2 of 28% at our main Birmingham logistics and service centre. - Product packaging - working with key suppliers the team has reduced non-recyclable waste by 32% with a target in 2023 for a further reduction of 24%. - RDS has already provided for the carbon offsetting of over 5 million sheets of paper for internal use and several customers. - RDS continue to choose suppliers who commit to net neutral manufacturing by 2030. - With our commitment to offering sustainable and economically feasible solutions for IT product utilisation in the workplace, bolstered by three decades of technical expertise and extensive financial knowledge, we deliver cutting-edge technology to all our customers through our asset refresh model. A key aspect of our model is ensuring that discarded devices undergo thorough data erasure and are repurposed instead of being needlessly destroyed, thereby mitigating the substantial environmental harm associated with such practices. 2. Social Impact: Social Engagement: We prioritize the well-being and development of our employees, customers, and the communities in which we operate. We maintain a safe and inclusive working environment, fostering diversity, equal opportunities, and respect for human rights. We are committed to supporting local communities through initiatives that enhance education, healthcare, and social welfare. - We are accredited to the Real Living Wage as a minimum and support all our divisional teams with benefits such as the Employee Assistance Program, mental health awareness, and 360 feedback sessions. - We also continue to invest in our employees' further education and training along with the national apprenticeship scheme, covering finance, project management and technical, focusing on Azure infrastructure training. - During 2022 we further developed our Diversity and Inclusion policy to ensure we are aligned with the needs and expectations of all our team members. - Encouraging employees to work together on events raising funds for both national and local charities. - During 2022 we introduction of a new operational board to ensure all teams were represented at a leadership level and consistency in communication across the teams. 3. Good Governance: We uphold the highest standards of corporate governance, transparency, and ethical behaviour. Our board of directors provides effective oversight and guidance to ensure accountability, integrity, and responsible decision-making. We promote a culture of integrity, fairness, and respect, both within our organisation and in our interactions with suppliers, partners, and stakeholders. RDS provides internal and external resource to ensure our polices and working practices are in line with best practice. All teams feed into monthly KPI's set, reviewed by the management team and our external stakeholders, including LRQA (Lloyds Register) who monitor all our ISO standards. Quarterly customer reviews utilising Right Insight a powerful business tool providing granular information on service and performance KPI's as well as product and services utilisation. 4. Stakeholder Engagement: We value our relationships with our stakeholders, including shareholders, customers, suppliers, and regulatory bodies. We engage in transparent and open communication, actively seeking feedback and incorporating it into our decision-making processes. We strive to maintain strong governance practices, ensuring accountability, ethical conduct, and compliance with relevant laws and regulations. We have introduced a continuous feedback process for service, measuring the Net Promoter Score (NPS) of all aspects of delivery and preventive maintenance, and continue to present industry-leading scores. During 2022 we increased the number of shareholders and share option holders to a total of 11 and plan to develop and broaden this further in coming years. We view our suppliers as key partners in the end-to-end provision of product and services, our management teams meeting monthly and board members quarterly to ensure all parties continue to provide exceptional service and are aligned strategically with the ethos of RDS. 5. Reporting and Disclosure: We are committed to transparently reporting our ESG performance and progress. We regularly monitor and measure our ESG initiatives, setting clear targets and striving for continuous improvement, fully documenting our goals through ISO standards 9001/ 14001 and 27001. We are supporters of the Better Business Act in bringing section 172 Companies Act 2006 to all UK businesses and we will continue to develop our reporting alongside nationally recognised frameworks and guidelines, to ensure the accuracy, reliability, and comparability of our disclosures. By embracing these ESG principles, we aim to create long-term value for our shareholders, employees, customers, and society at large. Our commitment to sustainability and responsible business practices is an integral part of our strategy, and we continuously seek to evolve and innovate to meet the challenges and opportunities of a changing world.
Employees We are committed to achieving the real living wage as a minimum and support all our divisional teams with benefits such as, the Employee Assistance Program, mental health awareness and 360 feedback sessions. We also continue to invest in our employees' further education and training along with the national apprenticeship scheme.
This report was approved by the board of directors on 30 June 2023 and signed on behalf of the board by:
Registered office: |
C/O Brodies LLP |
90 Bartholomew Close |
London |
United Kingdom |
EC1A 7BN |
|
Right Digital Solutions Limited |
|
Year ended 31 December 2022
The directors present their report and the financial statements of the company for the year ended
31 December 2022
.
Directors
The directors who served the company during the year were as follows:
I H Jones |
|
V Peters |
|
I Seeley |
|
P M Gillett |
|
N D Jones |
|
C Rutherford |
(Appointed
1 November 2022) |
T G Hubbard |
(Resigned
17 June 2022) |
|
|
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 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 the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on
30 June 2023
and signed on behalf of the board by:
Registered office: |
C/O Brodies LLP |
90 Bartholomew Close |
London |
United Kingdom |
EC1A 7BN |
|
Right Digital Solutions Limited |
|
Independent Auditor's Report to the Members of
Right Digital Solutions Limited |
|
Year ended 31 December 2022
Opinion
We have audited the financial statements of Right Digital Solutions Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of 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: - give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered; the nature of the industry, control environment and business performance with particular reference to the Company's remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets. We also consider the results of our enquiries of management, relating to their own identification and assessment of the risks of irregularities and possible related fraud. This includes reviewing available documentation on their policies and procedures and performing tests of controls to evidence their effectiveness. Throughout the audit testing we are considering the incentives that may exist within the organisation for fraud. Key areas include timing of recognising income around the year end, posting of unusual journals and manipulating the Company's performance measures to meet remuneration targets and bank covenants. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We ensure we have an understanding of the relevant laws and regulations and remain alert to possible non-compliance throughout the audit. Despite proper planning and audit work in accordance with auditing standards there are inherent limitations and unavoidable risk that we may not detect some irregularities and material misstatements in the financial statements. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 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.
Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Colin Reid |
(Senior Statutory Auditor) |
|
For and on behalf of |
Burgess Hodgson LLP |
Chartered accountants & statutory auditor |
Camburgh House |
27 New Dover Road |
Canterbury |
Kent |
CT1 3DN |
|
30 June 2023
Right Digital Solutions Limited |
|
Statement of Comprehensive Income |
|
Year ended 31 December 2022
|
2022 |
2021 |
Note |
£ |
£ |
Turnover |
4 |
17,889,698 |
17,347,131 |
|
|
|
|
Cost of sales |
(
8,321,783) |
(
8,254,707) |
|
------------- |
------------- |
Gross profit |
9,567,915 |
9,092,424 |
|
|
|
Administrative expenses |
(
7,063,788) |
(
7,330,970) |
Other operating income |
5 |
– |
380,058 |
|
|
------------ |
------------ |
Operating profit |
6 |
2,504,127 |
2,141,512 |
|
|
|
|
Other interest receivable and similar income |
10 |
59,491 |
8,739 |
|
------------ |
------------ |
Profit before taxation |
2,563,618 |
2,150,251 |
|
|
|
|
Tax on profit |
11 |
(
455,325) |
(
410,293) |
|
------------ |
------------ |
Profit for the financial year and total comprehensive income |
2,108,293 |
1,739,958 |
|
------------ |
------------ |
|
|
|
|
All the activities of the company are from continuing operations.
Right Digital Solutions Limited |
|
Statement of Financial Position |
|
31 December 2022
Fixed assets
Tangible assets |
13 |
|
127,901 |
159,649 |
|
|
|
|
|
Current assets
Stocks |
14 |
1,970,642 |
|
1,976,099 |
Debtors |
15 |
2,839,571 |
|
1,982,625 |
Cash at bank and in hand |
2,398,962 |
|
10,897,012 |
|
------------ |
|
------------- |
|
7,209,175 |
|
14,855,736 |
|
|
|
|
|
Creditors: amounts falling due within one year |
16 |
5,668,415 |
|
3,955,017 |
|
------------ |
|
------------- |
Net current assets |
|
1,540,760 |
10,900,719 |
|
|
------------ |
------------- |
Total assets less current liabilities |
|
1,668,661 |
11,060,368 |
|
|
------------ |
------------- |
Net assets |
|
1,668,661 |
11,060,368 |
|
|
------------ |
------------- |
|
|
|
|
|
Capital and reserves
Called up share capital |
20 |
|
25,000 |
25,000 |
Capital redemption reserve |
21 |
|
25,000 |
25,000 |
Profit and loss account |
21 |
|
1,618,661 |
11,010,368 |
|
|
------------ |
------------- |
Shareholders funds |
|
1,668,661 |
11,060,368 |
|
|
------------ |
------------- |
|
|
|
|
|
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the
board of directors
and authorised for issue on
30 June 2023
, and are signed on behalf of the board by:
Company registration number:
02511140
Right Digital Solutions Limited |
|
Statement of Changes in Equity |
|
Year ended 31 December 2022
|
Called up share capital |
Capital redemption reserve |
Profit and loss account |
Total |
|
£ |
£ |
£ |
£ |
At 1 January 2021 |
25,000 |
25,000 |
9,270,410 |
9,320,410 |
|
|
|
|
|
Profit for the year |
|
|
1,739,958 |
1,739,958 |
|
-------- |
-------- |
------------ |
------------ |
Total comprehensive income for the year |
– |
– |
1,739,958 |
1,739,958 |
|
|
|
|
|
At 31 December 2021 |
25,000 |
25,000 |
11,010,368 |
11,060,368 |
|
|
|
|
|
Profit for the year |
|
|
2,108,293 |
2,108,293 |
|
-------- |
-------- |
------------- |
------------- |
Total comprehensive income for the year |
– |
– |
2,108,293 |
2,108,293 |
|
|
|
|
|
Dividends paid and payable |
12 |
– |
– |
(
11,500,000) |
(
11,500,000) |
|
---- |
---- |
------------- |
------------- |
Total investments by and distributions to owners |
– |
– |
(
11,500,000) |
(
11,500,000) |
|
|
|
|
|
|
-------- |
-------- |
------------- |
------------- |
At 31 December 2022 |
25,000 |
25,000 |
1,618,661 |
1,668,661 |
|
-------- |
-------- |
------------- |
------------- |
|
|
|
|
|
|
Right Digital Solutions Limited |
|
Notes to the Financial Statements |
|
Year ended 31 December 2022
(continued)
1.
General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is C/O Brodies LLP, 90 Bartholomew Close, London, United Kingdom, EC1A 7BN.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Right Group Holdings Limited which can be obtained from Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company. (b) Disclosures in respect of share-based payments have not been presented.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: In determining the amount of revenue to record, and related balance sheet items (such as trade receivables, accrued income and deferred income) to recognise in the period, management is required to form a number of judgements and assumptions. These judgements are inherently subjective and may cover future events. In addition, for certain contracts, key assumptions are made concerning contract extensions and amendments. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: In determining the value of stock in field, some estimates are required to be included in calculations. Such stock is valued in the accounts using the average purchase price for the year. Quantity of stock on shelves is calculated by reviewing records held on customer stock levels and applying an average across all devices. Quantity of stock in machines is determined using remote access software by taking readings on the actual levels directly from the equipment, and using the average of these readings for equipment which is not connected to the software.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Long leasehold property |
- |
Over the period of the lease |
|
Short leasehold property |
- |
Over the period of the lease |
|
Fixtures and fittings |
- |
33% straight line |
|
Equipment |
- |
20% - 33% straight line |
|
|
|
|
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Government grants
Government grants are recognised using the accrual model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangements entered into. Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses. Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment. If an arrangement constitutes a finance transaction it is measured at present value.
Defined contribution pension plans
Contributions to defined contribution pension plans are recognised as an expense in the period in which the related service is provided.
4.
Turnover
Turnover arises from:
|
2022 |
2021 |
|
£ |
£ |
Rendering of services |
17,889,698 |
17,347,131 |
|
------------- |
------------- |
|
|
|
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5.
Other operating income
|
2022 |
2021 |
|
£ |
£ |
Government grant income |
– |
380,058 |
|
---- |
--------- |
|
|
|
6.
Operating profit
Operating profit or loss is stated after charging/crediting:
|
2022 |
2021 |
|
£ |
£ |
Depreciation of tangible assets |
44,399 |
50,501 |
Impairment of trade debtors |
3,201 |
(73,723) |
|
-------- |
-------- |
|
|
|
7.
Auditor's remuneration
|
2022 |
2021 |
|
£ |
£ |
Fees payable for the audit of the financial statements |
14,550 |
13,250 |
|
-------- |
-------- |
|
|
|
Fees payable to the company's auditor and its associates for other services:
Other non-audit services |
6,450 |
3,750 |
|
-------- |
-------- |
|
|
|
8.
Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
|
2022 |
2021 |
|
No. |
No. |
Administration |
13 |
12 |
Sales |
25
|
30
|
Service |
60
|
68
|
|
---- |
---- |
|
98 |
110 |
|
---- |
---- |
|
|
|
The aggregate payroll costs incurred during the year, relating to the above, were:
|
2022 |
2021 |
|
£ |
£ |
Wages and salaries |
4,701,808 |
5,057,861 |
Social security costs |
518,923 |
491,807 |
Other pension costs |
105,018 |
118,353 |
|
------------ |
------------ |
|
5,325,749 |
5,668,021 |
|
------------ |
------------ |
|
|
|
9.
Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
|
2022 |
2021 |
|
£ |
£ |
Remuneration |
425,581 |
464,936 |
Company contributions to defined contribution pension plans |
15,521 |
15,719 |
|
--------- |
--------- |
|
441,102 |
480,655 |
|
--------- |
--------- |
|
|
|
The number of directors who accrued benefits under company pension plans was as follows:
|
2022 |
2021 |
|
No. |
No. |
Defined contribution plans |
4 |
4 |
|
---- |
---- |
|
|
|
Remuneration of the highest paid director in respect of qualifying services:
|
2022 |
2021 |
|
£ |
£ |
Aggregate remuneration |
145,390 |
135,876 |
Company contributions to defined contribution pension plans |
6,750 |
6,750 |
|
--------- |
--------- |
|
152,140 |
142,626 |
|
--------- |
--------- |
|
|
|
10.
Other interest receivable and similar income
|
2022 |
2021 |
|
£ |
£ |
Interest on loans and receivables |
59,491 |
8,739 |
|
-------- |
------- |
|
|
|
11.
Tax on profit
Major components of tax expense
Current tax:
UK current tax expense |
436,844 |
382,186 |
Adjustments in respect of prior periods |
– |
1,141 |
Payments for tax losses utilised by group relief |
33,981 |
– |
|
--------- |
--------- |
Total current tax |
470,825 |
383,327 |
|
--------- |
--------- |
|
|
|
Deferred tax:
Origination and reversal of timing differences |
(
48,163) |
26,966 |
Impact of change in tax rate |
32,663 |
– |
|
-------- |
-------- |
Total deferred tax |
(
15,500) |
26,966 |
|
--------- |
--------- |
Tax on profit |
455,325 |
410,293 |
|
--------- |
--------- |
|
|
|
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2021: higher than) the
standard rate of corporation tax in the UK
of
19
% (2021:
19
%).
|
2022 |
2021 |
|
£ |
£ |
Profit on ordinary activities before taxation |
2,563,618 |
2,150,251 |
|
------------ |
------------ |
Profit on ordinary activities by rate of tax |
487,087 |
408,548 |
Adjustment to tax charge in respect of prior periods |
– |
1,141 |
Effect of expenses not deductible for tax purposes |
1,626 |
1,996 |
Effect of capital allowances and depreciation |
(
33,386) |
(
1,392) |
Rounding on tax charge |
(
2) |
– |
|
------------ |
------------ |
Tax on profit |
455,325 |
410,293 |
|
------------ |
------------ |
|
|
|
12.
Dividends
|
2022 |
2021 |
|
£ |
£ |
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year ) |
11,500,000 |
– |
|
------------- |
---- |
|
|
|
13.
Tangible assets
|
Long leasehold property |
Short leasehold property |
Fixtures and fittings |
Equipment |
Total |
|
£ |
£ |
£ |
£ |
£ |
Cost |
|
|
|
|
|
At 1 January 2022 |
88,088 |
– |
2,780 |
264,726 |
355,594 |
Additions |
– |
– |
– |
12,651 |
12,651 |
Transfers |
(
88,088)
|
88,088 |
– |
– |
– |
|
-------- |
-------- |
------- |
--------- |
--------- |
At 31 December 2022 |
– |
88,088 |
2,780 |
277,377 |
368,245 |
|
-------- |
-------- |
------- |
--------- |
--------- |
Depreciation |
|
|
|
|
|
At 1 January 2022 |
88,088 |
– |
2,780 |
105,077 |
195,945 |
Charge for the year |
– |
– |
– |
44,399 |
44,399 |
Transfers |
(
88,088)
|
88,088 |
– |
– |
– |
|
-------- |
-------- |
------- |
--------- |
--------- |
At 31 December 2022 |
– |
88,088 |
2,780 |
149,476 |
240,344 |
|
-------- |
-------- |
------- |
--------- |
--------- |
Carrying amount |
|
|
|
|
|
At 31 December 2022 |
– |
– |
– |
127,901 |
127,901 |
|
-------- |
-------- |
------- |
--------- |
--------- |
At 31 December 2021 |
– |
– |
– |
159,649 |
159,649 |
|
-------- |
-------- |
------- |
--------- |
--------- |
|
|
|
|
|
|
14.
Stocks
|
2022 |
2021 |
|
£ |
£ |
Raw materials and consumables |
1,970,642 |
1,976,099 |
|
------------ |
------------ |
|
|
|
15.
Debtors
|
2022 |
2021 |
|
£ |
£ |
Trade debtors |
2,201,782 |
1,434,510 |
Deferred tax asset |
136,095 |
120,595 |
Prepayments and accrued income |
343,643 |
389,856 |
Directors loan account |
28,196 |
– |
Other debtors |
129,855 |
37,664 |
|
------------ |
------------ |
|
2,839,571 |
1,982,625 |
|
------------ |
------------ |
|
|
|
Included within the deferred tax asset balance in debtors is an amount of £14,269 (2021: £14,947) which is reversible after one year.
16.
Creditors:
amounts falling due within one year
|
2022 |
2021 |
|
£ |
£ |
Trade creditors |
1,179,495 |
754,094 |
Amounts owed to group undertakings |
610,816 |
500,000 |
Accruals and deferred income |
3,128,682 |
1,496,189 |
Corporation tax |
200,030 |
382,186 |
Social security and other taxes |
476,532 |
785,220 |
Other creditors |
72,860 |
37,328 |
|
------------ |
------------ |
|
5,668,415 |
3,955,017 |
|
------------ |
------------ |
|
|
|
17.
Deferred tax
The deferred tax included in the statement of financial position is as follows:
|
2022 |
2021 |
|
£ |
£ |
Included in debtors (note 15) |
136,095 |
120,595 |
|
--------- |
--------- |
|
|
|
The deferred tax account consists of the tax effect of timing differences in respect of:
|
2022 |
2021 |
|
£ |
£ |
Accelerated capital allowances |
136,095 |
120,595 |
|
--------- |
--------- |
|
|
|
18.
Employee benefits
Defined contribution pension plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
105,018
(2021: £
118,353
).
19.
Government grants
The amounts recognised in the financial statements for government grants are as follows:
Recognised in other operating income:
Government grants recognised directly in income |
– |
380,058 |
|
---- |
--------- |
|
|
|
20.
Called up share capital
Issued, called up and fully paid
|
2022 |
2021 |
|
No. |
£ |
No. |
£ |
Ordinary shares of £ 1 each |
25,000 |
25,000 |
25,000 |
25,000 |
|
-------- |
-------- |
-------- |
-------- |
|
|
|
|
|
21.
Reserves
Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company. Profit and loss account - This reserve records retained earnings and accumulated losses.
22.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
2022 |
2021 |
|
£ |
£ |
Not later than 1 year |
– |
109,250 |
|
---- |
--------- |
|
|
|
23.
Directors' advances, credits and guarantees
During the year advances of £28,196 (2021: £nil) were made to a director and repayments of £nil (2021: £nil) were received by the company. During the year interest of £nil (2021: £nil) was charged to the director. At the year end the director owed the company £28,196 (2021: £nil).
24.
Controlling party
The company's immediate parent is Right Group Holdings Limited a company registered in England and Wales. The registered office address is C/O Brodies LLP, 90 Bartholomew Close, London, United Kingdom, EC1A 7BN. This is the parent of the smallest group which draws up consolidated financial statements. The company's ultimate controlling party is
Right Topco Limited
a company registered in England and Wales. The registered office address is C/O Brodies LLP, 90 Bartholomew Close, London, United Kingdom, EC1A 7BN
. This is the parent of the largest group which draws up consolidated financial statements.