The directors present the strategic report for the year ended 31 May 2022.
REVIEW OF BUSINESS
Financial performance
Gross profit was £ 7, 758(2021 - £6,391) and profit before taxation was £2,814 (2021 - £2,125k). Gross Margin reflects the growth in the average number of contractors, partly offset by a reduction in average margin per contractor.
Other Operating Income for the year amounts to £1,034k and consists of:
the net of government grants and Giant's employee salary costs relating to the Coronavirus Job Retention Scheme
recharge of management costs to other associate companies
We continue to focus on quality led technology, processes and support services to fulfil our strategy across the Giant group of companies of providing compliance driven global workforce solutions via our cloud-based, end to end proprietary software and managed services.
|
2022 £ |
2021 £ |
Turnover |
689,549,257 |
479,380,475 |
Profit Before Taxation |
2,813,713 |
2,124,976 |
EBITDA* |
2 , 740 , 077 |
2,129,023 |
Average number of workers on assignment
*Earnings before Interest, Taxation, Depreciation and Amortisation |
7,920 |
6,984 |
The company achieved overall service level and performance standards set at the start of the year. An associated company had an IT incident in September 2021 that impacted performance for 7 days.
Through continuous innovation of services, knowledge of clients and the market Giant continues to offer a straightforward, compliant service to all clients.
Company is following ISO 27001 that assures sensitive data is secure, GDPR-compliant and providing protection from financial and reputational risk. We also adhere to ISO 9001 – international quality standard and ISO 14001 – environmental management. Compliance audit was last completed in December 2021.
Margin and contractor employees are the business key performance indicator together with the cash balances and trade debtors’ management.
Worker tenure and pay rates positively contributed to improved revenues and margins for the year. Margin management and overhead cost control continue to be the main themes for the success of the business as well as the focus on customer service and technology.
Investment in our business
We continue to invest in our business in line with changes in tax and employment legislation, client requirements and continual improvement of our information technology capability.
Investment in our communities
Our company remains committed to supporting our communities where we can either via our key customers or suppliers or from our contacts within the local business community.
The year ahead .
Our strategy across the Giant group of companies continues to be providing a mix of software and services to help companies manage their workforce.
Government legislation with regards to Off Payroll Working (IR35) with effect from Apr 21 in the private sector has presented significant opportunities across giant group of companies. This matches our theme of innovation and best value customer service and aligns with our strategy seeking growth.
As per latest pronouncements in mini budget presented by the new government, we foresee changes in our strategical planning of services offered by giant group of companies.
Our matrix of meetings at various management levels across the business continue to operate and be effective for decision making and evaluate key business risks. All risks are assessed against the strategic objectives in place.
Our market sectors, competitors, partnerships, and the impact of political decisions may have an effect on our trading activity and therefore primary sources for risk assessments.
GOING CONCERN AND COVID-19
The business made use of the Coronavirus Job Retention Scheme (CJRS) until 31 st July 2021 primarily for it’s contractor employees.
There was no significant impact from Covid-19 in this reporting period. Cash flow forecasts were monitored on a weekly basis as part of our key business metrics over this period.
The Board are satisfied that the cash flow forecasts for the period of 12 months from the date of signing the financial statements show that the Company can meet its liabilities as they fall due.
BUSINESS RELATIONSHIPS
The Directors and Operational Board regularly review how the Group maintains positive relationships with all its stakeholders including suppliers, customers and others. The Group has established a strong reputation for customer service and active engagement with our partners.
Our people and their welfare
Being a privately owned and managed business ensures that the right people principles and culture remains key to our success. We provide a helpline (Employee Assistance Programme) for any additional support that may be required but find our "open door" policy together with being straightforward and clear in our communication the best process.
Employee voice and communication
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests. Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Diversity
The company continues to attract and employ regardless of ethnic, religious, culture or gender background. This is reflected in all levels of management and teams across the company.
Disability
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Price risk
The Company operates in a competitive industry and manages the risk this poses through continued investment in people, equipment, and service offering.
Credit risk
Though minimal for this business due to the business model that is in operation credit sales remains the key credit risk. It is company policy that all new customers are reviewed for creditworthiness and appropriate credit limits are established at the outset of any new customer relationship. Any credit provided outside of standard terms are not provided unless a relevant credit insurance plan is in place.
Liquidity risk
The company manages all aspects of its cash requirements to ensure the company has sufficient liquid resources to meet the operating needs of the business.
Cash flow risk
The Company finances its operations through a mixture of retained profits and cash balances. It operates a treasury function appropriate for the sale and complexity of its business, which is responsible for managing the regulatory, liquidity and credit risks.
Foreign currency risk
There is a minimum level of exchange risk for the company as trading is predominately in pounds sterling.
The Company is committed to achieving net zero carbon emissions by 2050, in line with the UK Government's overall target. The Company will deliver this by building on our track record of innovation. underpinned by our model of self-delivery.
Managing environmental impacts
The company operates as effectively and positively as it can to consider the office environment within it operates and the expectations of its people.
Reporting boundary
The reporting boundary is the financial year 2021/22 and covers the operations of the Company. The measure below relates to the consumption charged to giant group plc, but as a shared resourced across giant group subsidiaries and associated companies.
Energy consumption derives from the following fuel types:
Electricity alone. Based on current lease agreements in place where our offices are located.
|
2022 |
2021 |
Total energy consumption |
83,185.8 kWh |
85,463.6 kWH |
Associated GHG emissions |
19,382.29 tCO2e |
21,878.68 tCO2e |
Turnover 2021/22 |
£1273 million |
£683 million |
Intensity ration (tCO2e per 1 million t/o) |
15 |
32 |
Methodology
The carbon emissions have been calculated in accordance with the Greenhouse Gas (GHG) Protocol. Conversion factors to convert the raw energy and transport figures to Tonnes CO2 Greenhouse Gas Emissions are taken from the most recent (2019) Department for Business, Energy and Industrial Strategy publication:
https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting
The Company holds ISO 14001 certification demonstrating its commitment to reducing its impact on the environment and providing assurance to management and employees as well as external stakeholders that its environmental impact is being measured and improved.
Charitable donations
The Company has continued with "giant giving" - our charitable initiative. The primary chosen charity is the Great Ormond Street Hospital.
This section of the Strategic report describes how the directors have had regard to the matters set out in Section 172 (1) of the Companies Act 2006 (“s172”) when performing their duty to promote the success of the Company for the benefit of its shareholders. The Board is aware of its responsibilities to promote the success of the company as set out in s172.
The business continues to take a long term view when developing and implementing strategies and the board regularly meets to review and devise said strategies.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 May 2022.
The results for the year are set out on page 13.
Ordinary dividends were paid amounting to £1500000. 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:
S affery Champness LLP have expressed their willingness to continue in office .
Published by the Financial Reporting Council (FRC) in December 2018, the Wates Corporate Governance Principles for large private companies has been applied by Giant Professional Limited for the period ending 31st May, 2021. The company has also applied the Wates principles as an appropriate framework when making disclosure regarding corporate governance arrangements. The company has applied these principles through:
Remuneration
The company adopts clear remuneration structures that are aligned with the company's purpose, values and culture as well as the delivery of strategy to support long-term sustainable success. Our policies include robust consideration of the reputational and behavioural risks to the company that can result from inappropriate incentives and excessive rewards.
Culture
The Company people values form the principles of the culture, and are used by the Board, acting as a guiding framework for decision making. Good governance and effective communication are essential to ensuring business decisions and conduct are of a high standard. This assists with the delivery of our purpose, whilst at the same time protecting the Company's reputation.
Training
There remains continuous training and development plans to ensure that director awareness of standards, policies and company strategy are understood.
Staff
Working from home continues to be the business and its employees preferred option. Individuals have the flexibility to work from the office where there is a business or personal need. There are regular one-to-ones to set clear goals, and regular company-wide management briefings. Our Wellness sessions for all employees with an external provider continued throughout the year and are still ongoing.
Opportunity and risk
As noted in our strategic report, our matrix of meetings at various management levels across the business continue to operate and be effective for decision making and evaluate key business risks. All risks are assessed against the strategic objectives in place. Our rigorous international security standard ISO 27001 assures that sensitive data is secure and GDPR-compliant, providing protection from financial and reputational risk. We also adhere to ISO 9001 - international quality standard and ISO 14001 - environmental management. Compliance audit was last completed in December 2021.
Stakeholder relationships
Giant Professional Limited is a wholly owned subsidiary of Giant Group Plc. Both Directors of the company are also directors of Giant Group Plc and members of the board.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Through continuous innovation of services, knowledge of clients and the market the company vision is to offer a straightforward, compliant service to all clients as well as providing continuous development opportunities to our employees. The fundamental approach to making effective decisions remains the need to consider the interests of the company employees together with the business relationships of our customers and suppliers.
This comprises of the Group Chief Technical Officer and the Group Financial Officer who are also directors of the company. In addition, both the CEO and Group Client Services Director sit on the board as well as there being representation from Directors from associated companies.
The Company holds Board meetings throughout the year and is supported by management and various departmental divisions providing timely and detailed information in support of the Board's decision making. The Board operates an agenda of items appropriate to the size and complexity of the business.
We have audited the financial statements of Giant Group PLC (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2022 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
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 group and parent 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 group’s and parent 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 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 auditor’s 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.
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' r eport 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 group and the parent company and their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport .
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
As explained more fully in the directors' r esponsibilities s tatement, as set out on page 9, 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 parent 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 parent 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 .
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below.
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.
Further the company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements; through a significant fine, litigation or restrictions on the company’s operations. We identified the most significant laws and regulations to be those related to employment, for example National Minimum Wage Regulations.
Audit response to risks identified :
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 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.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £1,497,645 (2021: £18,484 profit).
Giant Group PLC (“the company”) is a private limited company domiciled and incorporated in England and Wales . The registered office is 7th Floor, 3 Harbour Exchange Square, London, E14 9TQ.
The group consists of Giant Group PLC and all of its subsidiaries.
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 a mounts 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.
The consolidated group financial statements consist of the financial statements of the parent company Giant Group PLC together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates .
All financial statements are made up to 31 May 2022 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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 to the extent that the company obtains the right to consideration in exchange for its performance. Revenue is measured at fair value of the consideration received excluding discounts, rebates, VAT and other sales taxes.
Turnover is recognised when the agency approves the timesheets submitted by the worker. This is done either by receipt of a payment file, or when the invoice containing the relevant timesheet data is settled by the agency. All unpaid invoices and unapproved timesheets are recognised as deferred income.
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 recognised in the profit and loss account .
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss .
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the g roup’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent c ompany financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities .
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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 m ethod 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.
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 group 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 paymen ts 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.
Equity instruments issued by the group 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 group.
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’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 profit and loss account , except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
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 lease d asset are consumed.
The average monthly number of persons (including directors) employed by the group and 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).
Investment income includes the following:
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:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
Details of the company's subsidiaries at 31 May 2022 are as follows:
1. 7th Floor, 3 Harbour Exchange Square, London, United Kingdom, E14 9TQ.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is expected to reverse within 12 months and relates to fixed asset timing differences and short term timing differences.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
This represents cumulative profits or losses net of distributions to owners and other adjustments.
This reserve records the nominal value of shares repurchased by the company.
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:
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date: