The directors present the strategic report and financial statements for the year ended 30 April 2023.
The activity of the company is the provision of services and various technical functions to Moore Kingston Smith LLP and associated businesses. Moore Kingston Smith Group Services Limited is a wholly owned subsidiary of Moore Kingston Smith LLP.
The level of activity is dependent on the activities of Moore Kingston Smith LLP and associated businesses. The company charges its costs to Moore Kingston Smith LLP and associated businesses at cost plus a mark up margin, the amount of which is dependent on the nature of the service provided.
Moore Kingston Smith LLP saw a period of growth in the year under review, leading to significant additional resource requirements to service the increased demand. Following a review of the commercial mark up rate charged by the service company for both the supply of professional client facing and business support people, both parties agreed an unchanged rate was appropriate for the year.
The company's profit before tax increased to £1,840,919 (2022: £1,507,924)
The company is expected to continue to trade profitably.
The company's risk management processes are designed to identify, assess, monitor, report, manage and mitigate each of the various types of risk and uncertainty. These risks include the impact of any change in the general economic and business activity within the UK.
The company's main risk is talent management, recruitment, development and retention of good calibre people to service the needs of its customers in this fast changing environment for professional services firms. In addition market pressure on salaries has to be closely managed and monitored.
The Directors, in line with their duties under s172 of the Companies Act 2006, act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its member, and in doing so have regard, amongst other matters, to the:
· Likely consequences of any decision in the long term
· Interests of the company's employees
· Need to foster the company's business relationships with suppliers, customers and others
· Impact of the company's operations on the community and the environment
· Desirability of the company maintaining a reputation for high standards of business conduct
· Need to act fairly as between members of the company
The Directors’ regard to these matters is embedded in their decision-making process, through the Company’s business strategy, culture, governance framework, management information flows and stakeholder engagement processes. The Company’s business strategy is focused on achieving success for the Company in the long-term. In setting this strategy, the Board takes into account the impact of relevant factors and stakeholder interests on the Company’s performance. The Board also identifies principal risks facing the business and sets risk management objectives. The Board promotes a culture of upholding the highest standards of business conduct and regulatory conduct. The Board ensures these core values are communicated to the Company’s employees and embedded in the Company’s policies and procedures, employee induction and training programmes and its risk control and oversight framework. The Board recognises that building strong and lasting relationships with our stakeholders will help us to deliver our strategy in line with our long-term values, and operate a sustainable business.
The Directors are supported in the discharge of their duties by:
A continuing professional development programme to further their understanding of their duties and obligations under applicable law and regulations
A process which ensure the provision of timely management information and escalation through reporting lines to the Board
Agenda planning for Board and Committee meetings to provide sufficient time for the consideration and discussion of key matters.
The Board understands the importance of engagement with all of its stakeholders and gives appropriate weighting to the outcome of its decisions for the relevant stakeholder in weighing up how best to promote the success of the Company. The Board regularly discusses issues concerning employees, clients, suppliers, community and environment, regulators and its shareholder, which it takes into account in its discussions and in its decision-making process. In addition to this, the Board seeks to understand the interests and views of the Company’s stakeholders by engaging with them directly when required. The below summarises the key stakeholders and how we engage with each:
Employees
Our employees contribute to a positive working culture and healthy working environment. Employees are key to the success of our business. In addition to aiming to be a responsible employer in our approach to pay and benefits, we continue to engage with our team to ascertain which training and development opportunities should be made available to improve our team’s productivity and our individual employees’ potential within the business. We continually invest in employee development and wellbeing to create and encourage an inclusive culture within the organisation. Our employee appraisal programme encourages employee feedback and facilities the opportunity for both employees and directors to set performance goals on an annual basis. Our culture invites different perspectives, new ideas and opportunities for growth. We work hard to ensure employees feel welcome and are valued and recognised for their hard work.
Clients and Introducers
Clients and introducers are at the centre of our business. We aim to build lasting relationships with current and potential clients to understand their objectives and requirements. We are in regular contact with clients in order to meet their needs. We regularly host and engage in webinars for clients on topical issues relevant to M&A. We also host regular face-to-face client and introducer events and seminars. We take a consultative approach with clients focused on building long-term relationships and providing best advice.
Suppliers
We work with a wide range of suppliers and remain committed to being fair and transparent in our dealings with all of our suppliers. Suppliers are generally relevant to the whole group and the group has, where relevant, procedures in place requiring due diligence of suppliers as to their internal governance, including for example, their anti-bribery and corruption practices, data protection policies and modern slavery matters. The group has systems and processes in place to ensure suppliers are paid in a timely manner.
Community and The Environment
The Board’s approach to social responsibility, diversity & the community is of high importance. Our parent company has a focused strategy in this area which we are part of. Corporate social responsibility principles are part of our culture and decision making process. Diversity and Inclusion is a key pillar for the whole Moore Kingston Smith group. The Board have continued to support various group events through our partnership with Mind to promote wellness in the workplace.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2023.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £1,500,000 (2022: £1,275,000) . The directors do not recommend payment of a final dividend.
The auditor, Price Bailey LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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.
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
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.
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.
The income statement has been prepared on the basis that all operations are continuing operations.
Moore Kingston Smith Group Services Limited is a company limited by shares domiciled and incorporated in England and Wales. The registered office 9 Appold Street, London, EC2A 2AP.
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 pound.
The company has taken advantage of the following exemptions under the provisions of FRS 102:
(i) The requirements of Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation paragraph 3.17 (d) to prepare a statement of cash flows on the basis that the company is a qualifying entity and the company's ultimate parent, Moore Kingston Smith LLP, includes the company's cash flows in its consolidated financial statements;
(ii) The requirements of Section 11 paragraphs 11.39 to 11.48(a) and Section 12 paragraphs 12.26 to 12.29A, regarding disclosures for financial liabilities and assets, as the equivalent disclosures required by FRS 102 are included in the consolidated financial statements of the group in which the entity is consolidated; and
(iii) From disclosing the company key management personnel compensation, as required by paragraph 33.7.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
There are no critical accounting estimates or judgements applied by the directors which have a significant impact on the amounts disclosed in the financial statements.
An analysis of the company's turnover is as follows:
The average number of persons employed by the company during the year was:
Employment costs
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:
Other creditors include £271,836 pension contributions payable to the pension scheme at 30 April 2023 (2022: £238,713).
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The company has taken advantage of the exemptions in FRS 102 regarding additional disclosure of information on related party transactions with undertakings that are wholly owned by a member of the Moore Kingston Smith LLP group. The transactions in the year and year end balances between the company and non wholly owned undertakings of the Moore Kingston Smith LLP group were as follows:
As at 30 April 2023 in the directors' opinion, the company's ultimate parent undertaking and controlling party was Moore Kingston Smith LLP.
At 30 April 2023 the company was a wholly owned subsidiary of Moore Kingston Smith LLP and is included in their consolidated financial statements which are publicly available from the LLP's registered office. Consequently, the company is exempt under the terms of FRS 102 from disclosing related party transactions with entities that are part of the Moore Kingston Smith LLP group.
Subsequent to the year end, following investment from Waterland BV, Manneken UK Holdco Limited, became the ultimate parent undertaking and controlling party on 30 June 2023.