ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
For the year ended
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Frontline Consultancy and Business Services Limited
Company Information
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Frontline Consultancy and Business Services Limited
Contents
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Frontline Consultancy and Business Services Limited
Strategic Report
For the year ended 31 December 2019
The directors present the Strategic Report for the year ended 31 December 2019.
The company sells hardware, SAP Business one software licences and consultancy services, managed services (hosting, service desk and consultancy) plus IBM AS/400 development and other consultancy.
Our SAP Business One and Managed Services businesses continues to grow, and we are planning on growing them both further with investment in sales, service desk, data centres and our staff.
The Board is aware of its responsibility to manage the risks within the business. Risk management is reviewed regularly with improvements implemented in a timely fashion.
Frontline is a software reseller for SAP. If one of these companies got into financial difficulties it could have a detrimental effect of the financial performance of the business. We mitigate this risk by having a diverse range of businesses including our bespoke development division and our Managed Services business.
The financial key performance indicators of the company are considered to be growth in turnover, gross profit, earnings before interest, tax, depreciation and amortisation (EBITDA) and net assets.
Turnover for the company increased by 8% to £11.3m for the 12 months ended 31 December 2019. Gross profit decreased from 37% to 34%. Earnings before interest, tax, depreciation and amortisation increased from £1.3m to £1.5m. The balance sheet shows an increase in net assets of £0.6m to £2.8m.
This report was approved by the board and signed on its behalf.
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Frontline Consultancy and Business Services Limited
Directors' Report
For the year ended 31 December 2019
The directors present their report and the financial statements for the year ended 31 December 2019.
The directors are responsible for preparing the strategic report, 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 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;
∙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 to 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.
The profit for the year, after taxation, amounted to £802,706 (2018 -£728,606).
Dividends of £264,000 (2018 - £164,000) were paid in the year.
The directors do not recommend any further dividends.
The directors who served during the year were:
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Frontline Consultancy and Business Services Limited
Directors' Report (continued)
For the year ended 31 December 2019
We are introducing a number of new product and service offering as part of our Managed Services business and retraining some of our Core software team in SAP business One.
Research and development activities The company continues to carry out research and development activities into innovative new products and services.
Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
Covid-19 has had a negative impact on the business, particularly in software and consultancy sales. Our cash position remains strong and the company is expected to be cash generative going forward despite the challenges the business is facing.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Frontline Consultancy and Business Services Limited
Independent Auditors' Report to the Members of Frontline Consultancy and Business Services Limited
We have audited the financial statements of Frontline Consultancy and Business Services Limited (the 'company') for the year ended 31 December 2019, which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows, the 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditors' report thereon. 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.
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Frontline Consultancy and Business Services Limited
Independent Auditors' Report to the Members of Frontline Consultancy and Business Services Limited (continued)
We have nothing to report in this regard.
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.
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:
As explained more fully in the directors' responsibilities statement 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, 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.
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 auditors' 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
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Frontline Consultancy and Business Services Limited
Independent Auditors' Report to the Members of Frontline Consultancy and Business Services Limited (continued)
This report is made solely to the company's members 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 auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Cheshire
SK1 1TD
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Frontline Consultancy and Business Services Limited
Statement of Comprehensive Income
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Registered number: 02643915
Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 25 form part of these financial statements.
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Frontline Consultancy and Business Services Limited
Statement of Changes in Equity
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Statement of Cash Flows
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Analysis of Net Debt
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
Frontline Consultancy and Business Services Limited is a private company limited by share capital incorporated in England, number 02643915. The address of the registered office and principal place of business is Frontline House, Epsom Avenue, Brooke Park Estate, Handforth, Wilmslow, Cheshire, SK9 3PW.
The nature of the company's operation and its principal activity is the provision of consultancy, hardware and software services.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
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:
The Covid-19 virus outbreak has had a significant impact on the majority of UK businesses. Since lockdown restrictions were implemented by the UK Government in March 2020, the directors have carried out a variety of actions, including applying for applicable Government support (including utilisation of the Coronavirus Job Retention Scheme 'CJRS' for some employees) and deferring or cancelling costs where appropriate.
Management have prepared forecasts to 31 December 2021 which show the company will be able to realise its assets and discharge its liabilities in the normal course of business. Accordingly, the directors believe it is appropriate to prepare the financial statements to 31 December 2019 on a going concern basis and there will be no adverse impact on solvency for more than 12 months after the date of approval of the financial statements.
Functional and presentation currency
The company's functional and presentational currency is GBP. 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. 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 the statement of comprehensive income.
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue 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 revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
Rendering of services
Revenue 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:
Rentals paid under operating leases are charged to the statement of comprehensive income on a straight line basis over the lease term.
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the statement of comprehensive income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
2.Accounting policies (continued)
Development costs are capitalised within intangible assets where they can be identified with a specific product or project anticipated to produce future benefits, and are amortised on the straight line basis over the anticipated life of the benefits arising from the completed product or project.
Deferred research and development costs are reviewed annually, and where future benefits are deemed to have ceased or to be in doubt, the balance of any related research and development recognised as an expense in the statement of comprehensive income.
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 the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the company in independently administered funds.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the statement of financial position date, except that:
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 reporting date.
Development costs capitalised within intangible assets are amortised on a straight line basis in line with the research and development policy.
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
2.Accounting policies (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:
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 the statement of comprehensive income.
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of comprehensive income.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
The key sources of estimation, uncertainty and critical accounting judgements in applying the company's policies are discussed below.
Provision for impairment loss on trade receivables and accrued income The management of the company exercises judgement in providing for impairment loss on trade receivables and accrued income. Other estimates and judgements Management of the company also exercises significant judgement in estimating the useful life of intangible assets, property, plant and equipment. Should these estimates vary, the profit or loss and balance sheet of the following years could be impacted.
The whole of the turnover is attributable to the principal activity of the business.
Analysis of turnover by geographical location:
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
Page 20
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
Share premium account
Capital redemption reserve
Profit and loss account
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Frontline Consultancy and Business Services Limited
Notes to the Financial Statements
For the year ended 31 December 2019
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 £131,690 (2018 - £129,005). Contributions totalling £54,084 (2018 - £66,496) were payable to the fund at the balance sheet date and are included in creditors.
During the year advances of £654,430 (2018 - £307,000) were made to W Milligan. Repayments of £264,000 (2018 - £164,000) were made to the company during the year. The amount owed to the company by W Milligan at the year end was £734,611 (2018 - £344,181).
During the year advances of £9,500 (2018 - £nil) were made to C Fearn. Repayments of £8,550 (2018 - £nil) were made to the company during the year. The amount owed to the company by C Fearn at the year end was £950 (2018 - £nil). C Glithero was appointed director on 20 December 2019 at which time he owed the company £76,100 which remained outstanding as at 31 December 2019. No interest is being charge on these amounts which are repayable on demand.
The controlling party is W Milligan by virtue of a majority shareholding.
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