The directors present the strategic report for the year ended 31 March 2023.
Principal activities
The principal activity of the group and JJK Personnel Limited trading as Falcon Green continued to be that of resourcing, assessing, training and supplying site professional and technical staff, skilled operatives, logistics operatives and tradesmen to the building and civil engineering industry. We supply both temporary and permanent staff.
Our reputation has been built on the constant delivery of quality personnel to each project that we undertake. Our dedicated and experienced team ensures that a high quality and reliable service is provided at all times, thus ensuring our valued clients receive a bespoke, tailored service. We have maintained long relationships with our key clients allowing us to move from a general service provider to a partnership status which is built on trust, consultancy and looking out for our mutual best interests.
We continue to work on some of the largest construction and infrastructure projects currently in progress in the United Kingdom. With five UK regional offices (London, Birmingham, Manchester, Brighton and Belfast) and two offices servicing the Irish market (Dublin and Galway). We continue to provide an excellent UK and Ireland nationwide service at competitive rates. We are continuing to build out the business's presence on the European continent with placements in Germany, France and Scandinavia.
Our staff are dedicated, experienced, agile and have an excellent reputation in our sector. We continue to deliver a consistent and efficient service to our longstanding customers and to carry on our profitable business for the foreseeable future. We see the permanent recruitment side of our business growing steadily as a significant percentage of our company turnover during the coming years ahead.
This year we continued building on laying foundations for organic growth and exceeding pre-pandemic levels of sales. We have started seeing the benefits of automation initiatives over the past few years and expect savings to increase with growth. We are continuing to grow market share in the UK and Ireland with key clients as we continue on an upward organic growth curve with our existing key clients and also new clients, predominantly in Ireland.
In FY23 we continued to invest in our staff development and our senior management team are gaining more experience and starting to implement their own initiatives which are strengthening the business.
The principal risks of our group are similar to most entities and industry sectors, namely the state of the economy and related global issues. We are dependent on the general economic environment and on the construction industry sector in which we operate.
In recent years, technology has become an integral part of most businesses. The group has taken a proactive approach to managing cyber security risk. We have implemented numerous measures to upgrade software and bolster security as well as providing training to all staff. We also have insurance cover in place to assist if an attack was to occur.
Financial instruments, credit, liquidity and interest rate risk
The group does not utilise complex financial instruments or hedging mechanisms. Its principal financial instruments comprise of bank balances and other borrowings. The main purpose of these instruments is to finance the group's day to day operations.
The group has a strict credit policy which determines how much credit is extended to clients after carrying out extensive credit checks via approved third party agencies. The group also has a credit insurance policy in place to insure against losses where credit is extended.
The group where possible ensures there is sufficient profit retained within the company to help fund day to day operations as well as forward forecasts to allow the business to assess future cashflow requirements. This allows us to efficiently manage cash and reduces the requirement to borrow additional funds therefore reducing impact of the risk when interest rates increase.
Due to the nature of these financial instruments there is little exposure to financial and liquidity risk other than normal inflationary risk.
Post year end the following dividends have been declared:
4 May 2023, dividends totalling £38,400
9 August 2023, dividends totalling £600,000
8 November 2023, dividends totalling £76,800
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| 2023 | 2022 | 2021 | 2020 |
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Turnover | £'000 | 61,667 | 53,763 | 35,094 | 41,506 |
Operating profit | £'000 | 2,501 | 1,795 | 1,525 | 2,299 |
Balance sheet strength | £'000 | 9,724 | 8,223 | 7,206 | 6,867 |
At Falcon Green, Health & Safety remains at the forefront of our core values with regards to the working conditions and well-being of our operatives. We meet all operatives prior to start of their work assignment. This is part of the Falcon Green induction process where we ensure they are fit, proper and suitable for the role and are properly equipped with appropriate PPE and skills to carry out the relevant assignment. Our staff are qualified to carry out face fit training. Our staff also conduct regular ‘toolbox talks’ on site with our operatives.
We have the following accreditations: Acclaim, Chas - Premium Plus, Constructionline – Gold, SMAS, Supply Chain Sustainability School – Bronze, RISQS, IOS 9001 2015, IOS14001 2015, CCS, REC.
We are in the process of renewing the following accreditation: Builders Profile - Gold.
The group and company has a strong balance sheet with adequate liquidity and a healthy order book from long standing customers. The directors are confident that the group and company can continue to trade successfully for the foreseeable future. Thus, they continue to adopt the going concern basis in preparing the financial statements.
The directors provide the following statement pursuant to the Companies Act 2006 to describe how they have acted in accordance with their duty under Section 172 of the Act (“Section 172”) to promote the success of the Company for the benefit of its member(s) as a whole, and in so doing, how they have had regard to those factors set out in Section 172, (1) (a) to (f) during the financial year:
a. the likely consequences of any decision in the long term,
b. the interests of the company's employees,
c. the need to foster the company's business relationships with suppliers, customers and others,
d. the impact of the company's operations on the community and the environment,
e. the desirability of the company maintaining a reputation for high standards of business conduct, and
f. the need to act fairly between members of the company.
Decision Making
The board operates a forward agenda of standard items appropriate to the Group’s operating and reporting cycles consisting of certain standing items for each meeting, including operational, functional and financial reviews, and Committee updates. Items requiring Board approval or endorsement are defined clearly and management shares information in advance of any decision making. Based on the information provided, the Board holds a robust discussion, challenging the matters at hand, as necessary. The Board considers the impact of its decisions on all its stakeholders, ensuring those who are involved are treated fairly and the decisions effect on the company’s long-term success.
Workforce Engagement
Our workforce is our most valuable asset, therefore, the company invests in training, coaching, and skills development. The health, safety and wellbeing of our employees is one of the primary considerations in the way we conduct business. The board engages the workforce by:
Providing an anonymous feedback mechanism for employees to voice their concerns and suggestions.
Delivering quarterly meetings, where the companies’ directors present and are available to answer any questions.
Implementing employee recognition programs that acknowledge outstanding performance and contributions, including awards or bonuses.
Promoting employee wellbeing through wellness programs, flexible work arrangements, and mental health support.
Our Human Resources function has been reviewed and organised to ensure it is able to continually deliver an efficient and consistent service to our employees.
Supply Chain
The board understands relationships with suppliers, subcontractors and job seekers, goes beyond just cost considerations and focuses on building ethical, sustainable, and mutually beneficial relationships. This contributes to a resilient supply chain to ensure long term sustainability. The board holds regular meetings to develop better understanding, transparency and ensuring all needs are being met.
Customers
Board engagement with clients help the organisation stay responsive to changing market dynamics and customer requirements. Regular meetings are held with clients to understand their current and future talent needs, gather feedback on services provided and discuss ways for improvement.
Financial Institutions
Board engagement with the company’s bank is crucial for ensuring financial stability, regulatory compliance and strategic decision making. The board shares quarterly management information pack with the bank as well as regular calls to review performance, compliance and forward planning to support the Groups requirements.
Communities and Social Responsibilities
Falcon Green is committed to responsible corporate citizenship and our ongoing partnerships with construction companies demonstrate Falcon Green's commitment to making a positive impact on society.
Falcon Green is currently leading the way in the construction industry by actively promoting prisoner inclusion, working closely with local councils, and contributing to charities that share our values. Also, we work collaboratively with non-profit organizations such as schools to promote the importance of the construction sector and the integration of women in it.
In the future, Falcon Green aims to expand its footprint in the construction industry, further advancing prisoner inclusion initiatives, strengthening strategic partnerships with local councils, and increasing our support for charities dedicated to rehabilitation and community well-being as well as increased Equality Diversity and Inclusion visibility.
Environment
Streamlined Energy and Carbon Reporting (SECR) regulations were introduced by the UK Government in 2018 with the intention of increasing organisations’ awareness of energy costs, and providing data to encourage the adoption of energy efficiency measures. The ultimate goal is to reduce organisations’ and companies’ impact upon climate change.
The methodology in preparing the report for the financial year was using the Defra 2022 Conversion Factors in line with Environmental Reporting Guidelines (2019) as the majority of the financial year falls into the calendar year 2022.
The chosen intensity measurement ratio is the most appropriate method for our business and is total gross emissions in kilogram of CO2e per square footage of office occupied.
UK Greenhouse gas emissions and energy use data | Year to Mar 23 |
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Energy consumption used to calculate emissions (kWh) | 104,383.92 |
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Scope 1 |
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Emissions from combustion of gas – office usage (tCO2e) | 9.97 |
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Scope 2 |
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Emissions from purchased electricity – office usage (tCO2e) | 9.63 |
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Scope 3 |
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Business travel in employee-owned vehicles (tCO2e) | 32.41 |
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Total gross emissions (tCO2e) | 52.01 |
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Intensity ratio |
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Overall intensity (kgCO2e per m²) | 231.77 |
Office intensity (kgCO2e per m²) | 87.33 |
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Falcon Green is committed in playing its part in reducing carbon emissions. We have invested in technologies and business processes to focus on reducing carbon. This year we have switched software that provides more automation, reduces paper usage, and reduces the need for staff to drive to sites. We also try to recruit operatives from locations close to our sites to reduced travel.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2023.
The results for the year are set out on page 15.
Ordinary dividends were paid amounting to £420,000. 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:
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.
The group's policy is to consult and discuss with employees, through 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.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
In accordance with the company's articles, a resolution proposing that Verallo be reappointed as auditor of the group will be put at a General Meeting.
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 group and company, and of the profit or loss of the group 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;
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 group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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. It has done so in respect of Principal risks and uncertainties, Subsequent events and Energy and carbon reporting.
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 auditor of the company 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 auditor of the company is aware of that information.
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2023 and of the group's 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 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 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where 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' 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 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 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the companies have established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor%E2%80%99s-responsibilities-for. 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 company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,661,255 (2022 - £1,388,194 profit).
JJK Personnel Limited (08201481) is a private company limited by shares incorporated in England and Wales. The registered office is 322 High Holborn, London, England, WC1V 7PB.
The group consists of JJK Personnel Limited 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 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:
The 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 for parent company information presented within the consolidated financial statements:
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: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company JJK Personnel Limited 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 March 2023. 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 group.
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.
The financial statements have been prepared on a going concern basis, which assumes the group will continue in operational existence, and will be able to meet its liabilities as they fall due, for a period of at least twelve months from the date of approval of the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and 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. The following criteria must also be met before revenue is recognised.
Turnover from temporary placements for staff sourced is recognised in the period in which the services are provided, in accordance to the company’s terms of business or agreed contract with the client and when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
Turnover from permanent placements for staff sourced is recognised in the period in which the services are provided in accordance to the company’s terms of business or agreed contract with the client and when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the candidate placed has commenced the role with the client.
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 recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
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.
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 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 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 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 and bank loans 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.
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.
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’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.
The directors review the bad debt provision on a monthly basis and apply professional judgement, combined with customer knowledge to quantify a bad debt provision. The provision continues to be reviewed on a monthly basis, with variances being released to the profit and loss as they arise.
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 (2022 - 3).
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:
As of 1 April 2023 the corporation tax rate in the UK increased to 25% (rather than remaining at 19% as previously enacted). The 25% main rate of corporation tax and marginal relief will be relevant for any asset sales or timing differences expected to reverse on or after 1 April 2023.
Details of the company's subsidiaries at 31 March 2023 are as follows:
The address of the registered office of the subsidiaries is Unit 3B, Plato Business Park, Damastown, Dublin 15, Dublin, D15 CV0D, Ireland.
The principal activity of both subsidiaries was that of the provision of recruitment solutions.
As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.
An invoice financing facility was entered into on 26 November 2012 with Lloyds Bank PLC. The facility is secured on fixed and floating charges over all assets of the company. On 21 February 2023 this agreement came to an end.
On 21 February 2023, an invoice financing facility was entered into with HSBC Invoice Finance (UK) Limited The facility is secured on fixed and floating charges over all assets of the company including a negative pledge, a cross guarantee from any relevant associated businesses and a combined personal guarantee of £500,000, entered into by K. Nestor, J. O'Connell and J. Sweeney.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
The company has two classes of ordinary shares. The shares rank pari passu, and have the right to receive dividends, return of capital on liquidation and have the right to receive notice of and attend, speak during and vote at any meeting of the shareholders.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Post year end the following dividends have been declared:
4 May 2023, dividends totalling £38,400
9 August 2023, dividends totalling £600,000
8 November 2023, dividends totalling £76,800
On 3 January 2024, 50 B ordinary Shares were transferred into 50 A ordinary shares. This has not affected the ultimate ownership of the Group or Company.
On 9 February 2024, a new subsidiary Deka Outsourcing Ltd, a company registered in England & Wales, company registration number 15477251. The entity is 100% owned by JJK Personnel Limited. The entity is currently dormant.
The remuneration of key management personnel, who are also directors, is disclosed in note 7.
The Group has taken advantage of the exemption available in accordance with Financial Reporting Standards 102. Section 33.1A, "Related Party Disclosures" not to disclose transactions entered and outstanding balances between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
During the year the group paid £50,000 to two of the directors for consultancy services (2022: £50,000). At the year end £18,750 (2022: £12,500) was owed in respect to these transactions. These amounts are included in Directors' remuneration (Note 7).
During the year the group paid £25,000 to a person who was a director during the year, for consultancy services (2022: £nil). Nothing was owed with respect to these transactions at the year-end (2022: £nil).
No individual shareholder holds a majority of voting rights. Therefore, there is no ultimate controlling party by virtue of shareholdings.
During the year dividends totalling £420,000 (2022 - £290,000) were declared and paid in respect of the shares held by the company's directors.
There is a cross guarantee in place with all relevant associated businesses, in relation to the £10,000,000 invoice financing facility with HSBC Invoice Finance (UK) Limited.