VENESKY-BROWN_RECRUITMENT - Accounts

The directors present the strategic report for the year ended 30 September 2022.

The directors are pleased with the performance of the company, increasing market share in line with the investment made in new staff and technology resource. Even with a slowdown in the economy our robust business plan allowed us to make another year of record turnover. We are now well on track with our strategic plan, and still well placed to exploit market opportunities as they become available using our existing reputation, experienced staff and improved back-office infrastructure.

We have continued with our technology strategy, identifying additional integrated Apps and software that have enhanced our CRM system. This investment has continued to improve the client/operative experience and has allowed us to continue to offer a fantastic recruitment service at great value.

We have continued with our employee engagement surveys which continue to provide us with useful information on implementing best working practices. One major consideration in our surveys was working from home. The employee engagement surveys allowed us to put together a strategy that was best for our employees and the business. We now have a hybrid strategy that allows each department to co-ordinate their own office/home working activities.

In March 2022 one of the Venesky Brown Recruitment’s largest clients, Roadbridge (UK) Ltd and Roadbridge Ltd, went into liquidation. Although the amount outstanding was significant the company policy of keeping all debt within insured limits, meant that the amount lost was kept to a minimum. The company have provided for £318,000 in the accounts to 30th Sep 2022.

Other commercial highlights in the year include our continued growth in the construction sector helping to further build our presence and footprint south of the border. We continue to stand alongside longer established recruitment business on these Labour Desks. We are pleased that over 90% of our clients in the construction sector are now tier 1 clients.

Our progress on the Scottish Government Framework (IT and Professional Services) is nothing short of sensational, continuing to fill a greater proportion of the vacancies. We are a key player in Scottish Government recruitment, and we see ourselves as a key partner in their recruitment process. We have also made excellent inroads into other white-collar recruitment out with the Framework which made an excellent contribution to our turnover.

Both our Construction and IT/Professional Services have increased their turnover contribution to the business, this has allowed us to add additional senior expertise to the team with some key internal recruitment as well as supporting the build out of our support team.

Recognising the risk that Cyber Crime is to a business that holds personal information on our workers we have also invested heavily in Cyber Security and internal training to ensure we have market leading systems and controls in place to protect all our stakeholders. This includes our Cyber Essentials Plus accreditation and the implementation of recurring annual refresher training for all staff on Cyber Risks. On a similar note, we continue to value the insight and feedback we get from our Quality Management System and external accreditations as we maintained our ISO 9001, 45001 and 14001 accreditations. In addition to these we also maintained our CHAS, RISQS, Achilles Building Confidence, Builder’s Profile, CIRAS and REC memberships.

Our ESG strategy was a focus during the year and continues to develop and improve. Internally we have a more diverse workforce than ever but continue to look to improve what we offer employees by acting on all feedback received through formal forums such as our employee engagement survey and less formal sources. We now have a ratio of 50:50 male to female and we continue to specifically recruit female members into our construction team. We truly value the benefits of diversity of thought and continue to work on the insights and feedback we received from our Investors in Diversity accreditation which shows there are still areas we can improve on to drive our FREDI (Fairness, Respect, Engagement, Diversity and Inclusion) strategy. From a Sustainability perspective the first steps on our Carbon Reduction Plans are underway and we will publish our Carbon Footprint in 2023 on our website which will describe the steps and our planned journey to Net Zero.

Principal risks and uncertainties

Competition and Pricing

As for many businesses of our size, the business environment in which we operate continues to be challenging and highly competitive. New competitors attempting to gain access to our markets through lowering prices and margins can be detrimental to all involved in the sector. We look to maintain our margins by driving cost efficiencies along with improved processes, therefore providing a higher quality of candidate and service that support and sustain our margins.

Compliance, Health & Safety & Regulatory Risks

Recruitment as a sector continues to be highly regulated with legislation on right to work, tax status and employment rights continuing to develop and change year on year. IR35 is still extremely relevant for many of our clients, so we work closely with them to ensure they understand the implications of it, and support with the transition to PAYE contracts if required. We continue to monitor the changing legislative landscape and use our partnering consultants to guide us through it. Similarly, more relevant to our construction and civil engineering division, the requirements around compliance and health & safety are as important as ever. We seek to deliver on more than the minimum in this area to give further confidence to our clients on the standards a Venesky Brown worker upholds.

Skills shortages

The lack of talent and the competition for good talent is still a challenge for both our divisions. This highlights the requirement for the improved recruitment processes we have been working on over the last 18 months. That said skills shortages and the so called ‘war for talent’ also provide an opportunity for the business, as this competition is driving wage inflation, therefore encouraging more businesses to look for specialist support for their resourcing requirements as opposed to managing their own recruitment programmes.

Digital recruitment technologies

The recruitment market is ever changing with an increased use of digital technologies changing the recruitment landscape. There is a growing trend towards insourced and outsourced recruitment models to which we continually assess Venesky Brown’s offering, and ensure we have a solution should our clients wish to take a different approach. We continue to cost benefit both models. Social media, job boards and other digital advertising sources are extremely important to us, and we continue to monitor that the cost-value proposition stacks up and we are utilising the best technology and medias the market has to offer.

Customer Concentration

General decline in a particular industry, market or loss of a key contract or customer could result in a significant reduction to revenue and gross profit. In cyclical markets such as construction, this has been known to have a sharp and detrimental impact. In addition, much of our Professional Services, Digital and IT revenue is tender driven. With this in mind we continue to increase both our customer base in construction and our IT, Digital and Professional Services division.

The Company views turnover, gross profit and operating profit as the principal indicators of performance. The Company has reported its best turnover ever for a 12 month period of £41,915,712 giving a gross profit of £3,398,705 for the year ended 30 September 2022, this compares to the previous period (12 months) of £39,010,436 turnover and £3,372,353 gross profit. This equated to an operating profit of £817,659 compared to the previous period £1,123,131. The operating profit this year would have been much higher had it not been for the provision made of £318,000 for the Roadbridge entities going into liquidation.

We look at our Lost Time Injury Rate (LTIR) in our Construction and Civil Engineering Business Health & Safety. LTIR is a metric used to record the average number of incidents leading to an employee being unable to work for a minimum of one day. It gives both our customers and our employees confidence that Venesky-Brown is a safe place to work, and that our culture and training is making everyone safer.

Human Resources, Engagement with Employees and Disabled Employees

During the period, we completed our 3rd annual Employee Engagement Survey for our head office staff, whilst rolling out a new feedback form for our employees based with our clients. A number of themes were apparent in our Employee Engagement Survey, namely the desire for access to more training, improved working relationships and communication, mental health, and general well-being support.

As a response to these themes, we specifically addressed every area of concern highlighted, including the introduction of an employee wellbeing program, which focuses on the four topics of mental, physical, social, and financial well-being, an increased budget for training with an internal target of doubling our training hours in the calendar year and a number of new communication channels and forums lead through our internal communication platform VB Connect. Information and interactive sessions in relation to each of these topics are delivered to the business on a monthly basis through new ‘lunch and learn’ sessions and quarterly business updates. At the time of writing, we are well on course to have implemented all of our targets by the end of 2023.

As part of our remuneration packages, all Head Office staff are eligible for a bonus scheme that is aligned to the company’s performance through the achievement of personal objectives aligned to the company’s annual strategic goals whilst sales and delivery staff are rewarded for the number of workers have placed with our clients.

As mentioned above our quarterly business updates are now a key fixed element of our company communications. As well as updates on performance, the directors and senior management team use these calls to discuss the financial and economic factors affecting the performance of the company as well as the principal risks that may impact our ability to achieve our targets. Employees are invited to share their ideas and ask questions about all aspects of our future strategy.

Venesky Brown is committed to the employment of disabled persons. We actively monitor Equality, Diversity, and Inclusion statistics (EDI) on a monthly basis and proactively seek out opportunities to place disabled persons which also aligns with many of our client's goals. Wherever necessary we provide the additional support required to ensure as many roles as possible are open to disabled persons whether through improved access, additional equipment, or different ways of working. We are also a Disability Confident employer.

Business Outlook

We have strong exposure to long term structural growth markets in both sides of our business. In the UK our future growth, in the construction sector, has been strengthened by the multi-decade public infrastructure projects the government has committed to, and our ability to be appointed to the major preferred supplier lists supporting these.

Our IT, Digital and Professional Services team support a wide variety of sectors looking for both temporary and permanent skills for Industry and the digital revolution underway. Our strength in this side of the business has been underpinned by, in Jan 23, being awarded first rank on both IT and Professional Service Scottish Government Frameworks. We are now recognised as specialists particularly for the recruitment of Digital and IT professionals and given our appointment as first rank, we expect this part of the business to grow significantly.

As well as being awarded first rank on IT and Professional Service Scottish Government Frameworks, in Jan 23, we were also awarded first rank on the Admin and Catering Scottish Government Framework. This will have a further positive impact on the growth of our business.

We finished the financial year with positive momentum and are very well placed again to meet and exceed our financial and strategic targets for Venesky Brown, despite some setbacks with particular construction clients out with our control. Our balance sheet is strong and there is cash available to invest in the future.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 September 2022.

The principal activity of the company continued to be that of recruitment consultants and employment intermediaries.

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

Ordinary dividends were paid amounting to £540,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

The auditor, The A9 Partnership Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     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.

We have audited the financial statements of Venesky-Brown Recruitment Ltd. (the 'company') for the year ended 30 September 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 30 September 2022 and of its profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

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.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

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. Based on our understanding of the company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation, pensions legislation, employment regulation and health and safety regulation, anti-bribery, corruption and fraud and money laundering and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006 and FRS 102.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates. Also, there is the risk of fraudulent misappropriation of cash or other assets.

Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included, but were not limited to:

• Discussing with management their policies and procedures regarding compliance with laws and regulations.

• Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and

• Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

• Reviewing legal fees incurred in the year for indications of non-compliance or litigation.

Our audit procedures in relation to fraud included, but were not limited to:

• Making enquiries of management on whether they had knowledge of any actual, suspected, or alleged fraud.

• Gaining an understanding of the internal controls established to mitigate risks related to fraud.

• Discussing amongst the engagement team the risks of fraud; and

• Addressing the risks of fraud through management override of controls by performing journal entry testing.

• Performing sales completeness testing and agreeing receipts from sales to subsequent bank lodgement.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulations.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission, or misrepresentation. The primary responsibility for the prevention and detection of irregularities including fraud rests with management.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.

The income statement has been prepared on the basis that all operations are continuing operations.

Venesky-Brown Recruitment Ltd. is a private company limited by shares incorporated in Scotland. The registered office is 4a Rutland Square, Edinburgh, EH1 2AS.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Venesky Brown Ltd. These consolidated financial statements are available from: Companies House, 4th Floor, Edinburgh, Quay 2, 139 Fountainbridge, Edinburgh, EH3 9FF.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Revenue is recognised weekly in arrears based on weekly approved workers' timesheets. Year end adjustments are recorded for opening and closing accrued income.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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

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

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021 - 3).

During the year director's remuneration paid to third parties amounted to £5,600 (2021: £205,360).

The remuneration of the highest paid director during the year amounted to £108,652 (2021: £213,081) in respect of qualifying services and £12,000 (2021: £6,000) in respect of retirement benefits.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Hire purchase debts are secured over the motor vehicles financed.

Hire purchase debts are secured over the motor vehicles financed.

Hire purchase debts are secured over the motor vehicles financed.

Advances from the debt factor are secured by a floating charge over the general assets of the company.

The CBILS loan is secured by a bond and floating charge over the general assets of the company.

The advances from the debt factor are repayable on demand and in accordance with the facility agreement. The arrangement has no fixed end date and is subject to various limits and charges.

The bank loan is repayable in equal monthly instalments over 4 years and carries a headline rate of interest of 4.05% over Bank of England base rate.

A £600,000 CBILS loan was obtained in a prior period. This loan is repayable over 6 years at a rate of interest of 2.34% over Base Rate. No interest or capital repayments are required for the first 12 months. The first 12 months interest and any fees due are funded by the UK Government's Business Interruption Payment scheme.

Hire purchase payments represent rentals payable by the company for motor vehicles. The average term is 3-4 years. All agreements are on a fixed repayment basis.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

It is not possible to reliably measure the amount of the net reversal of deferred tax assets expected to occur during the next reporting period.

There is no expiry date for any of the timing differences.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. All ordinary shares rank equally with regards to the company's residual assets.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

This reserve records retained earnings net of accumulated losses.

The company is taking advantage of the exemption in FRS102 not to disclose transactions with wholly owned group companies.

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

The above amounts are: unsecured, interest free and there are no fixed terms for repayment. During the year loan repayments net of further advances, were received from companies controlled by the directors in the amount of £370,000.

The following director's current account is: unsecured, interest free and there are no fixed terms for repayment.

The company's immediate and ultimate parent company is Venesky Brown Ltd, formerly known as CB Holdings Ltd. This group is the smallest and largest group that the company is a member of. Venesky Brown Ltd's registered office is: 4a Rutland Square, Edinburgh Scotland, EH1 2AS. Copies of the consolidated accounts are available from the address in note 1.1, Accounting Policies.