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Registered number: 01449046
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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CONTENTS
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Independent auditors' report
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Consolidated statement of comprehensive income
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Consolidated statement of financial position
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Company statement of financial position
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Notes to the financial statements
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Montreal Associates (Systems) Limited and its subsidiary companies provide specialist Contract and Permanent recruitment services across Europe.
Contract business fees are charged monthly as a mark-up on the contractors’ rates, whilst permanent fees are typically charged at the start of employment as a percentage of the salary of the candidate placed.
The slowdown in IT projects and staffing identified in 2020 continued into 2021. Montreal Associates mitigated some of this impact by changing the business to more permanent revenues. This has the effect of increasing our gross profit margin from 16.4% in 2020 to 19.1% in 2021.
During the year we started a project to transform our IT infrastructure with significant investment into building new front and back-office systems. Whilst this significant investment will have a negative impact on short term profitability, we believe that it will materially improve our profitability in the future. The board believes that the business has exited the pandemic in reasonable shape and is confident of the future prospects of the business.
Principal risks and uncertainties
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The principal risks associated to the international specialist recruitment market are:
• Macroeconomics, business confidence and investment in technology
• Foreign exchange rates fluctuation
• Changes in local, national and foreign market employment laws and compliance regulations
• Changes to the UK’s relationship with the EU may result in us having to change our business model
• Effects of the Pandemic on staff, customers and candidates
Financial key performance indicators
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The Group uses a range of performance measures to monitor and manage the business effectively. These are both financial and non financial, and the most significant of which are the key performance indicators (KPl's).
The KPl's for the period ended 31 December 2022, with comparatives for the period ended 31 December 2021, are set out below:
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Average trade debtor days
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
The challenging conditions that the group saw in 2021 continued into 2022, with lower levels of both candidate and client confidence resulting in a reduction in contractor numbers across the group. Reflecting the uncertain macro-economic conditions, the group made significant reductions to its cost base to ensure that the Group has a cost base reflecting the prevailing market conditions.
The group also took the opportunity to invest significantly in new software systems and processes which will further improve the efficiency of the business.
The Board is pleased that these actions have contributed to the group returning to profitability at EBITDA level.
The Board believes that Contract and Permanent revenue teams are still well placed to take advantages of market improvements as well as new market opportunities as a result of our targeted territory and customer focus.
We remain confident that the business is well placed to take advantage of its key markets.
This report was approved by the board and signed on its behalf.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group 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 for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the company continued to be that of the recruiting of computer software consultants.
The loss for the year, after taxation, amounted to £659,633 (2021 - profit £50,486).
Based on the results for the year a dividend of £nil was recommended (2021: £nil)
The directors who served during the year were:
The future developments for the Group have been discussed in the Group strategic report.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditors, Xeinadin Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 3 October 2023 and signed on its behalf.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTREAL ASSOCIATES (SYSTEMS) LIMITED
We have audited the financial statements of Montreal Associates (Systems) Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2022, which comprise the Group Statement of comprehensive income, the Group and Company Statements of financial position, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's loss 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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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 or the 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.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTREAL ASSOCIATES (SYSTEMS) LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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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 Group strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept 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.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTREAL ASSOCIATES (SYSTEMS) LIMITED (CONTINUED)
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement set out on page 3, 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 Group's and 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTREAL ASSOCIATES (SYSTEMS) LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙Enquiry of management and those charged with governance around actual and potential litigation and claims and to identify any instances of non-compliance with laws and regulations;
∙Reviewing minutes of meetings of those charged with governance;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appriopriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
Because of inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MONTREAL ASSOCIATES (SYSTEMS) LIMITED (CONTINUED)
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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Karanjit Gill FCCA (Senior statutory auditor)
for and on behalf of
Xeinadin Audit Limited
Chartered Accountants
Statutory Auditor
8th Floor
Becket House
36 Old Jewry
London
EC2R 8DD
3 October 2023
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
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Interest payable and similar expenses
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(Loss)/profit for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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(Loss)/profit for the year attributable to:
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Owners of the parent Company
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There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.
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The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
REGISTERED NUMBER:01449046
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
REGISTERED NUMBER:01449046
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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Equity attributable to owners of parent Company
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Currency translation differences
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Currency translation differences
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Shares issued during the year
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The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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Comprehensive income for the year
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Other comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the year
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Total transactions with owners
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The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
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Comprehensive income for the year
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Other comprehensive income for the year
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Total transactions with owners
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The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Cash flows from operating activities
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Loss for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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(Increase)/decrease in debtors
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Government grants received
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Net cash from investing activities
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Cash flows from financing activities
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Movements on invoice discounting
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Net cash used in financing activities
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Net (decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 17 to 37 form part of these financial statements.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Montreal Associates (Systems) Limited is a private company limited by shares incorporated in England and Wales. The address of the registered office is: 1 Fore Street Avenue, London, United Kingdom, EC2Y 9DT.
The principal activity of the company continued to be that of the recruiting of computer software consultants.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Group's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the Group 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.
Revenue is recognised on a monthly basis for contract work. This is when a service has been provided and company receives the relevant authorised documentation from its client that the service was completed for the month and can be invoiced. Where contracts are in progress at the year-end, revenue and profit is recognised on the work performed by the contractors at the balance sheet date.
Revenue for placement of permanant consultants is recognised at the commencement of employment.
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|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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|
|
Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Grants are accounted under the accruals model as permitted by FRS 102. Grants of a revenue nature are recognised in the Consolidated profit and loss account in the same period as the related expenditure.
In the prior year the Group benefited from taking advantage of government support in the form of the Coronavirus Job Retention Scheme (CJRS) (see note 5).
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
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 Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.
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|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
|
|
|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Amortisation on capitalised development costs begins to be recognised once the developed product or service comes into use.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
|
|
|
Tangible fixed assets (continued)
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line method or on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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|
Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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|
Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
The Group has issued share options to certain directors and employees. These must be measured at fair value and recognised as an expense in the profit and loss account with a corresponding increase in equity. The fair value of the options was estimated at the date of grant using Black-Scholes option-pricing model. The fair value will be charged as an expense in the profit and loss account over the vesting period. The change is adjusted each year to reflect the expected and actual level of vesting.
Where trade debtors are used as security to obtain cash advance, the gross amount is included within trade debtors with the advances being shown as liability.
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|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
Judgments in applying accounting policies and key sources of estimation uncertainty
|
Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made are as follows:
Determining whether there are indicatiors of impairment of the Group's tangible and intangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performances of the assets.
Determining whether software development costs should be capitalised or expensed. Software development costs have been capitalised where future economic benefit is expected to be derived from the investment.
Estimating the useful life of tangible and intangible fixed assets for calculating depreciation and amortisation.
Analysis of turnover by country of destination:
|
|
Other operating income - Government grants receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coronavirus Job Retention Scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The operating loss is stated after charging:
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
Other operating lease rentals
|
|
|
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
|
|
|
|
|
Fees payable to the Company's auditors for non audit services
|
|
|
|
|
|
|
|
Staff costs, including directors' remuneration, were as follows:
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|
|
|
|
|
|
|
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|
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|
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|
|
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|
|
Cost of defined contribution scheme
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
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|
Management and Administration
|
|
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|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
|
|
|
|
|
Group contributions to defined contribution pension schemes
|
|
|
|
|
|
|
|
|
|
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|
|
During the year retirement benefits were accruing to 1 director (2021 - 2) in respect of defined contribution pension schemes.
|
|
|
The highest paid director received remuneration of £332,441 (2021 - £275,843).
|
|
|
The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £12,600 (2021 - £220).
|
|
|
There were no members of key management personnel other than the directors.
The company has a share option scheme, details of which are disclosed in note 21 of the accounts.
During the year 249,999 share options with an exercise price of £1.00 were issued to director D Thuillier and 150,000 of these were exercised during the year.
After the year end, the remaining 99,999 share options were exercised on 27 March 2023 by director D Thuillier.
|
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|
Interest payable and similar expenses
|
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|
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|
|
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
|
|
|
|
|
Current tax on profits for the year
|
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|
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Origination and reversal of timing differences
|
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Adjustments in respect of prior periods
|
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|
|
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|
|
|
|
Taxation on loss on ordinary activities
|
|
|
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
11.Taxation (continued)
|
|
Factors affecting tax charge for the year
|
|
|
The tax assessed for the year is the same as (2021 - the same as) the standard rate of corporation tax in the UK of 19% (2021 - 19%) as set out below:
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Loss on ordinary activities before tax
|
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|
|
Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
|
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|
|
|
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|
|
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
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|
|
Capital allowances for year in excess of depreciation
|
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Adjustments to tax charge in respect of prior periods
|
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|
Other tax charge differences
|
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|
|
|
Remeasurement of deferred tax for changes in tax rates
|
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|
|
Total tax charge for the year
|
|
|
|
|
Factors that may affect future tax charges
|
The rate of corporation tax has been increased from 19% to 25% with effect from 1 April 2023. Deferred tax assets and liabilities have therefore been remeasured at 25%.
|
|
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|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
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|
Foreign exchange movement
|
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|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
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Charge for the year on owned assets
|
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|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
13.Tangible fixed assets (continued)
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|
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|
|
Charge for the year on owned assets
|
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|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
Investments in subsidiary companies
|
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The following were subsidiary undertakings of the Company:
|
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|
|
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|
|
Montreal Associates (Overseas) Limited
|
Warnford Court, 29 Throgmorton Street, London, United Kingdom, EC2N 2AT
|
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|
|
An der Welle 4, 60322 Frankfurt am Main, Germany
|
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|
|
|
Montreal Associate (Systems) S.I.
|
Plaça Catalunya 20
Planta 5
Barcelona
08002
|
|
|
|
|
|
The aggregate of the share capital and reserves as at 31 December 2022 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
|
|
|
|
Aggregate of share capital and reserves
|
|
|
|
|
|
|
|
|
Montreal Associates (Overseas) Limited
|
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|
|
|
|
|
|
|
|
Montreal Associate (Systems) S.I. *
|
|
|
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
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|
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|
|
Amounts owed by group undertakings
|
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|
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|
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|
|
Prepayments and accrued income
|
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|
Cash and cash equivalents
|
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|
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Creditors: Amounts falling due within one year
|
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|
|
Amounts owed to group undertakings
|
|
|
|
|
|
|
|
|
|
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|
|
Other taxation and social security
|
|
|
|
|
|
|
Proceeds of factored debts
|
|
|
|
|
|
|
|
|
|
|
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|
|
Accruals and deferred income
|
|
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|
|
|
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|
|
HSBC Bank Plc and HSBC Invoice Finance (UK) Limited each hold a fixed charge over the company's assets for arranging the invoice financing facility.
The Wardens and Society of the Mistery or Art of the Leathersellers of the City of London hold a charge over the company relating to a rent deposit.
Speedgrey Limited hold a charge over the company relating to a rent deposit.
|
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
|
|
|
|
|
|
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|
|
Charged to profit or loss
|
|
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|
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|
|
Charged to profit or loss
|
|
|
|
|
|
|
Fixed asset timing differences
|
|
|
|
|
|
|
Losses and other deductions
|
|
|
|
|
|
|
Short term timing differences
|
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|
Allotted, called up and fully paid
|
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|
|
|
|
|
|
|
1,176,882 (2021 - 1,026,882) Ordinary shares of £1.00 each
|
|
|
During the year, 150,000 share options were exercised by a director, at a nominal value of £1 per share, for a total nominal value of £150,000.
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Other reserves
This represents a share based payment reserve. Includes the fair value of share options expected to vest less the fair value of exercised share options.
Profit and loss account
Includes all current and prior period retained profits and losses.
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The company have two share option schemes for eligible employee selected at the discretion of its Board of directors. Options are exercisable at a price equal to the market value of the shares at the time the shares were granted.
The options may only be exercised in the event of the entire issued share capital being acquired by a third party, the company being floated on a recognised stock exchange, or on target related profit before taxation conditions.
The options expire if they remain unexercised after a period of ten years from the date they were granted. Options are forfeited if the employee leaves the company on their own accord. There are other permutations for an employee leaving on other grounds. All options granted relate to Ordinary shares of £1 each.
A reconciliation of option movements over the period to 31 December 2022 is shown below:
|
|
Outstanding at the beginning of the year
|
|
|
|
|
Share options issued during the year
|
|
|
|
|
Share options exercised during the year
|
|
|
|
|
Shares lapsed during the year
|
|
|
|
|
Outstanding at the end of the year
|
|
|
|
|
|
|
|
|
|
Weighted average exercise price
|
|
|
|
|
Weighted average contractual life (year)
|
|
|
|
|
Weighted average expected life (years)
|
|
|
|
|
After the year end, the remaining 99,999 share options were exercised on 27 March 2023 by director D Thuillier.
|
|
|
|
|
|
MONTREAL ASSOCIATES (SYSTEMS) LIMITED
|
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £30,912 (2021: £31,784). Contributions totalling £5,457 (2021: £3,077) were payable to the fund at the balance sheet date.
|
|
Commitments under operating leases
|
|
|
At 31 December 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
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Later than 1 year and not later than 5 years
|
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|
|
Transactions with directors
|
During the year the company had a loan account with the director J F Bowyer. Advances totalled £14,202 (2021: £127,817) and repayments totalled £58,829 (2021: £11,867). At the year end J F Bowyer owed the Company £111,000 (2021: £66,373) .
During the year the company had a loan account with the director D Thuillier. Advances totalled £11,284 (2021: £4,239) and repayments totalled £155,788 (2021: £8,700). At the year end the company owed D Thuillier £1,410 (2021: £143,094).
During the year the company had a loan account with the director A Blomet. Advances totalled £4,510 (2021: £Nil) and repayments totalled £2,041 (2021: £8,560). At the year end A Blomet owed the company £23,618 (2021: £26,088).
During the year the company had a loan account with the director S J Vollmer. Advances totalled £Nil (2021: £Nil) and repayments totalled £Nil (2021: £Nil). At the year end S J Vollmer owed the company £262 (2021: £262).
|
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MONTREAL ASSOCIATES (SYSTEMS) LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Related party transactions
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Montreal Associates (Systems), S.L, a fellow group company, owed the Company £Nil (2021: £1,945,852) as at the year end. Montreal Associates (Systems), S.L, were owed £Nil- (2021: £1,800,778) by the Company as at the year end. These balances are in relation to the trade of the companies.
As at the year end, Montreal Associates (Systems) Ltd owed Montreal Associates (Systems) S.L £3,064,567 (2021: £107,831). This balance relates to an intercompany loan account.
Montreal Associates GmbH, a fellow group company, owed the Company £Nil (2021: £1,128) as at the year end. Montreal Associates GmbH, were owed £Nil- (2021: £98,933) by the Company as at the year end. These balances are in relation to the trade of the companies.
As at the year end, Montreal Associates (Systems) Ltd was owed £189,703 (2021: £386,012) from Montreal Associates GmbH. This balance relates to an intercompany loan account.
The Group has taken the exemption available to not disclose transactions within the year, between wholly owned subsidiaries.
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Post balance sheet events
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The directors have concluded that no other material events have occurred since the date of approval of these financial statements that would affect the financial statements of the Company.
The ultimate controlling party is J F Bowyer by virtue of his shareholding.
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