Clement May Limited
Annual Report and Financial Statements
For the year ended 31 December 2021
Company Registration No. 07061321 (England and Wales)
Clement May Limited
Company Information
Director
B C Flood
Secretary
B C Flood
Company number
07061321
Registered office
3rd Floor
24 Cornhill
London
EC3V 3ND
Auditor
Moore Kingston Smith LLP
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Clement May Limited
Strategic Report
For the year ended 31 December 2021
Page 1

The director presents the strategic report for the year ended 31 December 2021.

General

Clement May Limited experienced the continuing impact of the COVID pandemic during 2021. Most of the contractors that we supply to our clients operate at the sites of those clients. The continued government-mandated lockdowns, and guidance to work from home where possible, had an impact on our clients and a consequential impact on our performance. While there is no certainty that the pandemic has come to/is coming to an end, the easing of restrictions has allowed our employees to return to the office environment with a similar impact for our clients..

 

Trading performance

 

As a result of the continuing pandemic across 2021, we entered discussions with our clients about how best to resolve the challenges that they faced. Remote working for both our employees and our client-facing contractors became the norm. Our largest client moved certain projects and activities off-shore to Poland, Romania and Malaysia. As a result of this we managed to increase our Turnover and our Gross profit by 4.7% and 37.7% respectively. Clement May Limited’s ultimate parent, Staffing 360 Solutions inc. (Nasdaq: STAF) guarantees the liabilities of the company and there is no intention for this to change in the next twelve months.

Clement May Limited
Strategic Report (Continued)
For the year ended 31 December 2021
Page 2
Principal risks and uncertainties

The company’s ability to retain high performing consultants enables us to build strong relationships with clients and in turn gain a competitive advantage through a developed understanding of their cultures and requirements.

 

Clement May Limited continues to develop its professional recruitment solutions to provide a market leading service to employers. The recruitment of new, and retention of existing experienced consultants along with maximising cost synergies are key to fuelling growth.

 

Recruitment is seen as a barometer for the general state and health of the economy. Clement May Limited and our clients are no different. The company has worked at mitigating the impact of market volatility by furthering its diversification of clients and sectors to those that are resistant to macro-economic trends.

 

Financial risk management

 

The company's operations expose it to a variety of financial risks that include credit, liquidity and interest rate risk.

 

Credit risk

 

The company continues its policy of carrying out credit checks on all potential customers before any services are provided. Significant risks with potential customers are subject to review by senior management.

 

Interest rate risk

 

The company is subject to risk from interest rate increases on its invoice discount facility. The business regularly reviews the cost effectiveness of the facility and deems it a low risk for the forthcoming year.

 

Liquidity risk

 

The company utilises an invoice discount facility that provides short-term working capital. Cash availability and debt collection is continually monitored and managed by the board to ensure the company has sufficient funds available.

 

Business risks

 

The failure to retain high performing employees, and equally the failure to attract new employees with the right skill set, may adversely affect the company's operating and financial performance. To mitigate this risk we continually invest in employee training and development on top of providing a competitive pay and benefits structure. Regular appraisals, performance reviews and incentives take place to motivate and manage consultants effectively.

 

The risk of a further macro-economic downturn, including the continuation of the COVID-19 pandemic, would impact the business and recruitment sector as the industry is largely driven by economic cycles and levels of business confidence. This risk is mitigated through our strategy to operate in various markets as well as contract and permanent type placements.

On behalf of the board

B C Flood
Director
19 August 2022
Clement May Limited
Director's Report
For the year ended 31 December 2021
Page 3

The director presents his annual report and financial statements for the year ended 31 December 2021.

Principal activities

The principal activity of the company continued to be that of labour recruitment and provision of personnel.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

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

B C Flood
Auditor

The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of director's responsibilities

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

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

Statement of disclosure to auditor

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.

Clement May Limited
Director's Report (Continued)
For the year ended 31 December 2021
Page 4
On behalf of the board
B C Flood
Director
19 August 2022
Clement May Limited
Independent Auditor's Report
To the Member of Clement May Limited
Page 5
Opinion

We have audited the financial statements of Clement May Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Balance Sheet, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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.

Material uncertainty related to going concern

In auditing the financial statements, we have concluded that the director's 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 director 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 director is 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.

Clement May Limited
Independent Auditor's Report (Continued)
To the Member of Clement May Limited
Page 6

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Director's 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:

 

Responsibilities of director

As explained more fully in the Director's Responsibilities Statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Clement May Limited
Independent Auditor's Report (Continued)
To the Member of Clement May Limited
Page 7
Auditor's responsibilities for the audit of the financial statements

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

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

Clement May Limited
Independent Auditor's Report (Continued)
To the Member of Clement May Limited
Page 8

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.

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.

Ian Matthews (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
19 August 2022
Chartered Accountants
Statutory Auditor
Betchworth House
57-65 Station Road
Redhill
Surrey
RH1 1DL
Clement May Limited
Statement of Comprehensive Income
For the year ended 31 December 2021
Page 9
2021
2020
Notes
£
£
Turnover
3
17,679,423
16,884,692
Cost of sales
(15,653,029)
(15,413,129)
Gross profit
2,026,394
1,471,563
Administrative expenses
(1,756,808)
(885,000)
Operating profit
269,586
586,563
Interest payable and similar expenses
5
(117,607)
(103,000)
Profit before taxation
151,979
483,563
Tax on profit
6
-
0
-
0
Profit for the financial year
151,979
483,563

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

Clement May Limited
Balance Sheet
As at 31 December 2021
Page 10
2021
2020
Notes
£
£
£
£
Current assets
Debtors
7
8,172,039
5,834,477
Cash at bank and in hand
68,433
19,815
8,240,472
5,854,292
Creditors: amounts falling due within one year
8
(6,987,629)
(4,753,428)
Net current assets
1,252,843
1,100,864
Capital and reserves
Called up share capital
10
200
200
Profit and loss reserves
1,252,643
1,100,664
Total equity
1,252,843
1,100,864
The financial statements were approved and signed by the director and authorised for issue on 19 August 2022
B C Flood
Director
Company Registration No. 07061321
Clement May Limited
Statement of Changes in Equity
For the year ended 31 December 2021
Page 11
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2020
200
617,101
617,301
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
483,563
483,563
Balance at 31 December 2020
200
1,100,664
1,100,864
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
151,979
151,979
Balance at 31 December 2021
200
1,252,643
1,252,843
Clement May Limited
Notes to the Financial Statements
For the year ended 31 December 2021
Page 12
1
Accounting policies
Company information

Clement May Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, 24 Cornhill, London, EC3V 3ND.

1.1
Accounting convention

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:

 

 

The financial statements of the company are consolidated in the financial statements of Staffing 360 Solutions Inc. These consolidated financial statements are available from its registered office, 757 3rd Avenue, 27th Floor, New York, NY 10017, USA or from the website of Staffing 360 Solutions Inc: https://www.staffing360solutions.com/investors.

Clement May Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 13
1.2
Going concern

The Company is reliant on its Parent, Staffing 360 Solutions Limited, to provide administrative services to service Clement May’s customers. At the Balance Sheet date, the Parent Company’s going concern uncertainty generated by the economic reaction to the COVID-19 pandemic raise substantial doubt about the Company’s ability to continue as a going concern.

 

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such it is uncertain the full magnitude that the pandemic will have on the Company’s financial position, liquidity and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry and workforce.

 

In light of the uncertainty, during the year the Parent Company put in a number of measures. The director believes this will provide sufficient liquidity for the business as the economy continues to recover, but reserves the option to consider further financing.

 

The Company itself has no employees, limited fixed costs and is profitable with net current assets.

 

On this basis, the Director believes that the Company has adequate resources to continue in operational existence for the foreseeable future. Therefore these financial statements are prepared on a going concern basis.

1.3
Turnover

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 discounts, rebates, VAT and other sales related taxes. The company derives its turnover in the recruitment consultancy business which comprises of:

 

Turnover from contract placements, which represents amounts billed for the services of contractors. Turnover is recognised as services are rendered and validated by the receipt of an approved time sheet and contractor invoice.

 

Turnover from permanent placements, which is recognised on the candidates first day in their new role.

1.4
Cash at bank and in hand

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.

1.5
Financial instruments

The company only has financial instruments classified as basic and measured at amortised cost. The company has no financial instruments that are classified as 'other' or financial instruments measured at fair value.

Other financial assets

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.

Clement May Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 14
Impairment of financial assets

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.

Derecognition of financial assets

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.

Other financial liabilities

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.

Derecognition of financial liabilities

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

1.6
Equity instruments

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.

Clement May Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 15
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is 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.

3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Recruitment services
17,679,423
16,884,692
2021
2020
£
£
Turnover analysed by geographical market
UK
16,769,404
16,468,325
Europe
894,003
313,157
Rest of world
16,016
103,210
17,679,423
16,884,692
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was: nil (2020: nil).

5
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
117,607
103,000
Clement May Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 16
6
Taxation

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:

2021
2020
£
£
Profit before taxation
151,979
483,563
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
28,876
91,877
Group relief
(28,876)
(91,877)
Taxation charge for the year
-
-
7
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
6,635,122
2,916,351
Amounts owed by group undertakings
976,421
481,424
Prepayments and accrued income
560,496
2,436,702
8,172,039
5,834,477
8
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans and overdrafts
9
4,018,096
2,560,170
Trade creditors
2,637,149
501,224
Accruals and deferred income
332,384
1,692,034
6,987,629
4,753,428
Clement May Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 17
9
Loans and overdrafts
2021
2020
£
£
Bank loans
4,018,096
2,534,078
Bank overdrafts
-
0
26,092
4,018,096
2,560,170
Payable within one year
4,018,096
2,560,170

The above bank loan is the invoice factoring facility. There is a fixed and floating charge over the assets of the company.

10
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
200
200
200
200
11
Financial commitments, guarantees and contingent liabilities

The company has provided security under an unlimited multilateral cross guarantee for a bank pooling facility covering a number of companies under the control of Staffing 360 Solutions, Inc. for a flexible loan facility of £1,000,000. There is a fixed and floating charge over all assets of the company. The facility is due for review in June 2022. Clement May has access to a group facility comprising of an overdraft facility of £110,000 and a foreign bills of negotiation facility of £137,500.

 

12
Related party transactions

The company has taken the exemption in accordance with FRS 102 - section 33 ''Related Party Disclosures'', from disclosing related party transactions entered into between members of a group, provided that any subsidiary who is party to the transaction is wholly owned by such a member.

13
Ultimate controlling party

The Company's immediate parent undertaking is Staffing 360 Solutions Limited, an entity registered in the United Kingdom, by virtue of its holding 100% of the Company's issued share capital.

The Company's ultimate parent undertaking is Staffing 360 Solutions, Inc., an entity registered in the United States of America, by virtue of its holding 100% of the issued share capital of Staffing 360 Solutions (Holdings) Limited, the immediate parent of Staffing 360 Solutions Limited.

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