REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2022 |
FOR |
SSGC LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2022 |
FOR |
SSGC LIMITED |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 9 |
Report of the Independent Auditors | 10 |
Income Statement | 14 |
Other Comprehensive Income | 15 |
Statement of Financial Position | 16 |
Statement of Changes in Equity | 17 |
Statement of Cash Flows | 18 |
Notes to the Statement of Cash Flows | 19 |
Notes to the Financial Statements | 20 |
SSGC LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MAY 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants & Statutory Auditors |
Old Station House |
Station Approach |
Swindon |
Wiltshire |
SN1 3DU |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
The board present their Strategic Report for SSGC Ltd the year ended 31 May 2022. SSGC Ltd is a wholly owned subsidiary of SGTS Holdings Ltd. |
PRINCIPAL ACTIVITY |
SSGC provides ACS accredited security services to public and private security users across the UK. SSGC has a place on the Crown Commercial Services RM6257 Framework for direct tier 1 government work. |
The board remains focused on a core vision - to be recognised as the best in class tier 1 security provider in the UK through the investment in and deployment of new to industry technology. |
We have developed over many years bespoke end-end application software to allow us to manage the entire security delivery process from order management through account mobilisation, product configuration, staff recruitment, staff vetting, attendance monitoring, supply chain management and ultimately through to integrated payment and billing solutions. |
This technology and staff focus sits at the core of all we do and enables us to configure and deliver upon our client service level agreements. |
GROWTH STRATEGY |
The strategy of the business remains to achieve sustainable and profitable growth through continuing to develop our technology, products and people through focusing on innovation and opening up new distribution channels and market sectors. |
During 2022 the business focused considerable efforts on delivering for tier 1 government suppliers operating on the RM3830 CCS Framework and also for tendering a place on the governments strategic procurement initiative RM6257. SSGC was successful in that tender and now holds a coveted place on RM6257 placing it in an exceptional position for growth forward. |
RM6257 is a government initiative to move away from government procuring security services using generalist outsources as tier 1 suppliers with security specialists as tier 2 suppliers and so creating a margin- on-margin position on what is a core government product. The SSGC investment in tendering for RM6257 was successful with SSGC being award a coveted place on the framework. The framework is now active, and first tenders are progressing. |
The growth rate sustained this period has acted as a practical demonstration of the power of our technology and staff sourcing capability in being robust under stress whilst maintaining quality standards. Our ability to secure and mobilise at pace large government contract requirements is now proven and will be built upon for the strategy forward. |
Strategic initiatives have been started in this reporting period to develop our bid management capability; to secure direct access to government procurement frameworks and to broaden our product and client reach through an acquisition project. |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
REVIEW OF BUSINESS |
The business secured three significant contract wins reported upon in these results under the government Covid-19 programme procured through RM3830 from Mitie, Sodexo and Serco. These contracts performed to terms for Mitie and Sodexo. |
In September 2022 SSGC met with Serco and established that Serco sought to withhold around £4.1m. This has reduced to £3.6m at the time of this report and mediation is under discussion. The accounts are reflected appropriately. The board is disappointed in having to present this set of results containing a provision for a substantial withholding on payment by Serco. |
The board wishes to bring user particular attention and emphasis to this matter which is explained in detail in the risk and board decision sections of this report and clearly represent a material uncertainly of recovery. The boards view was that the appropriate way to deal with that uncertainty was to provide for the underpayment in this years report. The comparative KPI position is shown for better user understanding. |
SSGC is proud to have been raising standards for this and many prior years across the industry and constantly innovating our service offering to meet the increasing joint demands around commercial terms, compliance and service quality. |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The Directors remain alert to the risks prevalent in a commercial environment and continue to take steps to minimise or mitigate these risks. A process of risk identification is undertaken at Board level. |
The identified risks, are regularly reviewed at Board level to ensure adequate risk mitigation pertinent to each risk is introduced and maintained. Identified risks are highlighted below along with the associated mitigation plan. |
RISK | DETAILS | MITIGATING ACTIONS/FACTORS |
CCS Tier 1 Serco Payment |
SSGC worked for three of the four UKHSA allocated suppliers. SSGC was fully paid up on its contracts to Mitie and Sodexo.++The largest contract with Serco remains materially unpaid. Serco claim attendance gaps as measured by their electronic site attendance system ('Shopworks'). We await further Serco details of their claim from site paper timesheets Serco collected.++Serco assessed SSGC attendance compliance as 0.1% (2020) and 0.12% (Q1,21). Post Sercos introduction of Shopworks (Q2, 21 - Q2 22) Serco assess SSGC attendance compliance as 6.5%.++SSGC understand that Serco may have held a fixed price government agreement for these works. SSGC has requested government oversight.++SSGC has proposed mediation.++SSGC are owed at least £870k that Serco have included in their high level claim despite these being delivered to Serco by a third party. |
CCS contracts require a flow through provision for all compliance matters. As such all downstream sub-suppliers from SSGC that are subject to the Serco claims are unpaid, this essentially being a dispute between Serco and those suppliers (including SSGC) and the circa 2,500 staff that Serco claim do not appear fully in their records.++SSGC allowed Serco unfettered audit access to SSGC service and billing systems. That Serco audit completed May 22. Serco have not reported any adverse finding under that audit.++SSGC contracted PwC to review its 'Shopworks' data and provided that result to Serco in July 22.++Given the potential conflict of interest in Serco being awarded a fixed price agreement and benefiting from supplier non-payment SSGC have requested the CCS, UKHSA and Cabinet office provide oversight under the government's 'Supplier Code of Conduct' . The multiple affected sub-suppliers are currently raising fresh complaints requesting oversight.++Parties are discussing mediation.++We await Serco's clarification as to why these are monies are withheld and included in their attendance claim. We include the provision in our fiscal report and reclaim has not been assumed in our going concern assessment. |
Covid-19 Scaling / Descaling |
Covid-19 has resulted in strong growth over the period. Demobilisation of cost centres and account functions will represent a dynamic and ongoing challenge. |
A fully integrated three way cost modelling solution has been implemented. This models each functional cost and allows for each cost centre to have and be measured against target budget relative to revenue. |
Account Over Concentration (Scale, Sector, Product) |
An over concentration has occurred through the Covid mobilisation programme on the Facilities Management manpower sector and specific government tier 1 suppliers. |
The growth strategy targeted RM6257 and SSGC was successful. Multiple new contract wins and strategic acquisitions in new sectors have rebalanced the client, sector and product mix. |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
DoS / Extortion Cyber-attack |
We reply heavily on technology, an unmitigated attack could hamper payroll processes and other critical financial processes if at critical process points in monthly cycles. |
All our application software and data are held off site under the care of best in class service providers with full recovery protocols from such attacks thus minimising downtime. A short gap month end to payroll ensures prior month staff pay data is still available under attack conditions. Cyber insurance in place. |
Loss or theft of, or prevention of access to, data which contains intellectual property or privacy of Data Subjects causes a breach of the DPA 2019. |
Multiple unmanaged requests for data from the tier 1 corporate client environment without lawful use, scope, delivery and management protocols being followed. Refusals for non compliment delivery causing contract risk. |
Strict adherence to GDPR / DPA 2019 protocols. No delivery without a full DSA in place and agreed with parties. DSA creation by external GDPR expert law firm. |
SECTION 172(1) STATEMENT |
S172(1) of the Companies Act requires Directors of a Company to act in the way they consider, in good faith, would be the most likely to promote the success of the Company for the benefit of its members as a whole, taking into account: |
- The likely consequences of any decision in the long term |
- The interests of the Company's employees |
- The need to foster the Company's business relationships with suppliers, customers and others |
- The impact of the Company's operations on the community and environment |
- The desirability of the Company maintaining a reputation for high standards of business conduct; and |
The nature of the business means we have a continuous dialogue with a wide group of stakeholders and the views of our stakeholders are taken into account before decisions are put to Board for a decision. |
The disclosures set out below are some examples of how the Directors have had regard to the matters set out in s172 (1) (a) to (f) when discharging their duties. |
Please also refer to information on pages 6 - 8 in the Strategic Report and page 9 in the Directors' Report regarding information about the environment, sustainability, the community and employees, including matters in relation to anti-corruption, bribery and modern-day slavery. All being matters where the Board of Directors have had regard to when performing their duties. |
Board Decision | Application of s172 |
To work with Serco as strategic security partner and mobilise the government RM3830 'rebid' tender starting on orders for Covid 19 test sites despite Serco walking back their agreements reached under Heads of Term with SSGC for rebid. |
The Board considered the social need to deliver test sites and the medium and long-term benefits that would be derived for employees, suppliers and the public in mobilising despite no contract availability. Being satisfied with the perceived benefits to all stakeholders the Board approved the order processing. |
To continue to work with Serco despite SSGC concerns around the capability of Serco to accurately implement a large scale electronic billing system for the Covid-19 project. This risk was highlighted in last years report. |
While the company extended considerable effort outlining concerns around data efficacy and likely service impact the board ultimately took the view that given the social need to fulfil government orders the impact to staff and suppliers could be managed and that the medium-term benefits to staff and suppliers of ongoing service delivery outweighed the alternative managed exit. |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
KEY PERFORMANCE INDICATORS |
The board continue to use both financial and non-financial key performance indicators to manage the business. The business maintains a strong management information function which is focused on real time and accurate reporting. Such reporting sees particular focus on client and staff satisfaction levels, contract delivery metrics, account profitability and cash flow. |
The key financial performance indicators used to review and monitor the Company are shown below: |
Metric | 2022 | [2022]* | 2021 |
Revenue (£) | 80.18m | 80.18m | 104.30m |
Gross Profit (£) | 6.58m | 6.58m | 13.47m |
Gross Profit % | 8.2 | 8.2 | 12.9 |
Net Assets (£) | 1.66m | 3.86m | 5.58m |
The 2022 figures are prepared on the basis that the third party shifts listed by Serco and not being under contract dispute will be resolved and are therefore included in results. Some partial allowance for Serco collection on the remainder is also included based on Serco's agreement to mediate but in the main the remaining debt due is provided for as it remains uncertain and only appears in the 2022* table results for clarity and not in the reported 2022 financial results. |
*These figures represent the same KPI set without the outstanding Serco compliance matter for comparison purposes only. |
The key non-financial performance indicators used to review and monitor the Company are shown below: |
Unable to Cover (UTC) % - The highest level SLA aligned customer delivery KPI result. Used in our bids and performance data available for existing clients only |
Staff Survey Scores - tracking scores across multiple performance categories |
GOING CONCERN AND DEVELOPMENT |
Note 2 to the accounts gives a full explanation of the board's assessment of going concern and the post year end net current liabilities position which is significantly linked to the Serco issues set out above. |
The board remain optimistic in the continued underlying growth of the business. The going concern forecast and review work for this years report is based on current Order Book forecasts alone and the associated profitability and cashflow forecasts. No collection of the outstanding debt associated with the Serco matter are assumed. |
Post year end, the trading structure of the business has evolved and the company has rationalised its workforce and assets as a result of the end of the COVID contracts, which accounted for approximately 90% of the company's revenue. This has enabled the company to synchronize its workforce and costs in line with the new contracts and tenders that it has won and submitted. |
At the date of this report, the business development pipeline is currently over £50m and growing each quarter. |
In addition, the acquisition within the group has performed exceptionally. This is however reported elsewhere. |
ENVIRONMENTAL ACTIONS STATEMENT AND SECR |
The Board believes good environmental practices, such as recycling, minimising waste and energy conservation, support strategy by our enhancing reputation. However, due to the nature of our activities generally, we do not have a significant environmental impact. |
Efficiency Actions Taken |
The following actions have been taken by the Company in the year: |
- Increased use of electric vehicles |
- Widespread use of a paperless approach wherever possible |
- Mothballing of the unutilised head office areas |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
SOCIAL MATTERS, CHARITIES AND COMMUNITY |
The Board believes running a profitable and growing business, which creates jobs and contributes to the economic success of the areas in which it operates, is a platform for good corporate social responsibility. We have a long-standing commitment to support our staff in developing themselves through providing free security academy training available to all and working with and providing donations to charities aligned to our staff centric mission. |
Over then Covid 19 test programme mobilisation we benefited from our strong relationships with veterans networks. Our primary charitable donation for the year was a charity focused on giving veterans a helping hand back into long term work. An example of the work undertaken by the charity being work placements the annual Race of Remembrance. |
SUSTAINABILITY |
To deliver strong, sustainable results over the long term we recognise we need to operate in a sustainable manner and have therefore adopted core principles to business operations which provide a framework for both managing risk and maintaining its position as a good corporate citizen. |
DEVELOPING OUR PEOPLE |
The Company continues to grow and create opportunities for staff at all levels. Our success in developing people is based on finding the right blend of learning on the job, through engaging and challenging tasks, learning from colleagues through collaboration, coaching and mentoring, and formal learning through structured training, education and development programmes. |
The Company will continue to provide opportunities through growth to those that want to advance whilst also respecting that for many a fulfilling role is doing their current work to the best of their abilities in a supportive environment. |
DIVERSITY AND INCLUSION |
SSGC practice equal opportunities and welcome diversity in all its forms, recognising the value of diversity in the workplace and its rewards of encouraging creativity, broader cultural understanding and access to a wider pool of talent. |
DISABLED EMPLOYEES |
The Company gives full consideration to applications for employment from disabled persons where the requirements for the job can be adequately fulfilled by a disabled person. Where existing employees become disabled, it is the Company's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate. |
EMPLOYEE CONSULTATION |
The Company places considerable value on the involvement of its employees and making sure that employees feel involved in the Company and are committed to its goals. If we are to keep them engaged, communication must be a two-way culture that encourages employee feedback. To that end we formalise the staff feedback process through regular surveys and publish transparently the results, using these are sources for our development planning. |
POLITICAL DONATIONS |
The Company made no political donations in the year (2021: nil) |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MAY 2022 |
MODERN SLAVERY |
SSGC is committed to preventing acts of modern slavery and human trafficking from occurring within its business and supply chain and expects its suppliers to adopt the same high standards. As part of our commitment to combating modern slavery, we have adopted a policy which covers our appointment of suppliers. We expect all of our suppliers to adhere to our Anti-Slavery Policy and will not tolerate slavery and human trafficking within our supply chains. |
ANTI-BRIBERY POLICY |
We value our reputation for ethical behaviours and upholding the utmost integrity in our business. SSGC does not tolerate bribery and corruption and we ensure all our employees and suppliers are aware of our approach. We have clear and unambiguous policies, provide training to staff and encourage the reporting of suspicious matters. |
ON BEHALF OF THE BOARD: |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 MAY 2022 |
The directors present their report with the financial statements of the company for the year ended 31 May 2022. |
DIVIDENDS |
No interim dividend was paid during the year. The directors recommend a final dividend of £ |
The total distribution of dividends for the year ended 31 May 2022 will be £ |
DIRECTORS |
Other changes in directors holding office are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SSGC LIMITED |
Opinion |
We have audited the financial statements of SSGC Limited (the 'company') for the year ended 31 May 2022 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, 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 company's affairs as at 31 May 2022 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 |
We draw attention to Note 2 in the financial statements, which indicates that the company's post balance sheet date results reflect that its current liabilities exceeded its total assets. |
As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. |
Our opinion is not modified in respect of this matter. |
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. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Emphasis of matter |
We draw attention to Note 12 to the financial statements which details the value of the bad debt provision included within the financial statements. |
The matter is detailed fully within the principal risks and uncertainties section of the Strategic Report. |
The matter is ongoing however the latest information at the date of this report has been included by the Directors. |
Our opinion is not modified in respect of this matter. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SSGC LIMITED |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
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 or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the 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. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page nine, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SSGC LIMITED |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We obtained an understanding of the legal and regulatory framework applicable to both the company itself and the industry in which it operates. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the directors and other management. The most significant were identified as the Companies Act 2006, UK GAAP (FRS102) and relevant tax legislation. |
We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements. Our audit procedures included: |
- making enquires of directors and management as to where they consider there to be a susceptibility to fraud and whether they have any knowledge or suspicion of fraud; |
- obtaining an understanding of the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; |
- assessing the design effectiveness of the controls in place to prevent and detect fraud; |
- assessing the risk of management override including identifying and testing journal entries; |
- challenging the assumptions and judgements made by management in its significant accounting estimates. |
Despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity likely involve collusion, forgery, intentional misrepresentations, or the override of internal controls. |
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 Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
SSGC LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants & Statutory Auditors |
Old Station House |
Station Approach |
Swindon |
Wiltshire |
SN1 3DU |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 MAY 2022 |
31/5/22 | 31/5/21 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
337,078 | 8,915,055 |
Other operating income |
OPERATING PROFIT | 4 |
Interest receivable and similar income |
343,541 | 8,936,533 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 MAY 2022 |
31/5/22 | 31/5/21 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STATEMENT OF FINANCIAL POSITION |
31 MAY 2022 |
31/5/22 | 31/5/21 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 MAY 2022 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 June 2020 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 May 2021 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 May 2022 |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 MAY 2022 |
31/5/22 | 31/5/21 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Interest paid | ( |
) | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Interest received |
Net cash from investing activities | ( |
) |
Cash flows from financing activities |
Amount introduced by directors | 17,999 | 206,000 |
Amount withdrawn by directors | (2,000 | ) | (205,628 | ) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
226,413 |
Cash and cash equivalents at end of year |
2 |
( |
) |
8,092,196 |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 MAY 2022 |
1. | RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS |
31/5/22 | 31/5/21 |
£ | £ |
Profit for the financial year |
Depreciation charges |
Finance costs | 130,943 | 75,469 |
Finance income | (6,463 | ) | (4,469 | ) |
Taxation |
494,952 | 9,075,657 |
Decrease/(increase) in stocks | ( |
) |
Decrease/(increase) in trade and other debtors | ( |
) |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 May 2022 |
31/5/22 | 1/6/21 |
£ | £ |
Cash and cash equivalents | 1,313,697 | 8,092,196 |
Bank overdrafts | ( |
) |
(499,241 | ) | 8,092,196 |
Year ended 31 May 2021 |
31/5/21 | 1/6/20 |
£ | £ |
Cash and cash equivalents | 8,092,196 | 226,413 |
3. | ANALYSIS OF CHANGES IN NET FUNDS/(DEBT) |
At 1/6/21 | Cash flow | At 31/5/22 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 8,092,196 | (6,778,499 | ) | 1,313,697 |
Bank overdrafts | - | (1,812,938 | ) | (1,812,938 | ) |
8,092,196 | ( |
) | (499,241 | ) |
Total | 8,092,196 | (8,591,437 | ) | (499,241 | ) |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2022 |
1. | STATUTORY INFORMATION |
SSGC Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. |
Critical accounting judgements and key sources of estimation uncertainty |
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. |
Bad debt provision |
At the date of this report Serco are withholding in the region of £3.6m of unpaid invoices. In these accounts, management have provided for £2.2m of bad debts in respect of this matter. |
Management anticipate resolution on two material matters in relation to the current Serco withholding of £3.6m. |
Firstly, management have not provided for £870k of the unpaid Serco debt as this sits entirely outside of the Serco disputed contract and it is unclear why Serco continue to hold these 'off contract' monies. |
In relation to the remaining £2.7m which does sit inside the Serco disputed contract, management have not provided for £500k and have provided for the remaining £2.2m. The amount not provided for reflects current discussions on settlement. While £500k is not acceptable to SSGC, it represents managements current knowledge. Mediation is currently being discussed and management anticipate either a successful outcome or a move to litigation. |
Related liabilities |
The £2.7m 'in contract' Serco dispute affects around twenty sub-suppliers for whom SSGC was simply the contracting intermediary, some being at Serco's direct request. |
Serco dispute in the region of 2,500 specific staff did not attend shifts, the bulk being with these sub-suppliers. These sub-suppliers are owed £1.9m of the £2.7m Serco dispute, and this dispute is flowed through to the affected sub-suppliers. Management have retained the full £1.9m liability in accounts. |
If a mediated settlement is pursued it is anticipated that the carried liability would materially change. Conversely, for this reason a mediated settlement may be complex to secure, involving practically these sub-suppliers. |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
2. | ACCOUNTING POLICIES - continued |
Going concern |
The accounts have been prepared on a going concern basis. |
Post year end, the company's current liabilities exceed its current assets. The current liabilities include the full £1.9m supplier liability and all associated tax liabilities related to the carrying value of the disputed Serco contract. Current assets exclude £2.2m, being a provision against the disputed Serco debt, as detailed in the Strategic Report and the critical accounting judgements and key sources of estimation uncertainty accounting policy. Management is unable to determine, with any certainty, the timing and value of the cash outflow to the suppliers directly linked to the Serco contract dispute. |
The dispute with Serco, under certain circumstances, is flowed through to suppliers who delivered directly to Serco operated sites, the company being a contracting intermediary. The company is currently intending to pursue Serco for contract resolution under mediation on behalf of all affected suppliers and itself. At the point of report, we expect resolution within twelve months through mediation, and have therefore included the full amount owed to suppliers in current liabilities while accounting for a bad debt provision on the trade debtor balance. The mediation process is currently under discussion. If mediated successfully, the supplier liabilities of £1.9m are expected to be realigned to the payment secured under mediation from Serco. If the company is not satisfied with mediation and litigation is required to progress matters by either the company and/or the suppliers, then matters are expected to take in excess of the twelve months considered under going concern. |
The company expects to resolve the Serco tax related matter in 2024 as the wider Serco matter resolves. If the Serco claim is validated, a substantial overpayment of wages and associated taxes has occurred which will require correction. Conversely, if the claim is settled, funds for settlement of tax matters will have been secured. |
On the back of securing the RM6257 government procurement award, the company is pursuing debt and equity fund-raising opportunities and expects substantial additional cash to be available in 2024, but has not allowed for this in its going concern assessment. Only the contractual order book has been used for forecasts and going concern assessment resulting trading income. |
The company has secured substantial new orders that mobilise into April 2024, at which point they are highly cash generative. Outside of the order book, the company has a sales work in progress pipeline of £52m that we expect to secure a significant portion of during 2024 and which, if secured, will deliver substantial additional cash reserves. |
As a result, the Directors resolved that the going concern basis is appropriate. |
The Directors recognise that there is a material uncertainty related to the above events and conditions that may cast significant doubt on the Company's ability to continue as a going concern, and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. |
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. |
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. |
Goodwill |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
2. | ACCOUNTING POLICIES - continued |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Computer equipment | - |
Financial instruments |
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non-puttable 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 payables or receivables, 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 financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income. |
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. |
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Related party transactions |
The company discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with its parent or with members of the same group that are wholly owned. |
3. | EMPLOYEES AND DIRECTORS |
31/5/22 | 31/5/21 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31/5/22 | 31/5/21 |
Staff |
31/5/22 | 31/5/21 |
£ | £ |
Directors' remuneration |
Information regarding the highest paid director for the year ended 31 May 2022 is as follows: |
31/5/22 |
£ |
Emoluments etc |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
4. | OPERATING PROFIT |
The operating profit is stated after charging: |
31/5/22 | 31/5/21 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Goodwill amortisation |
Computer software amortisation |
Foreign exchange differences |
Formation costs | - | 755 |
5. | AUDITORS' REMUNERATION |
31/5/22 | 31/5/21 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's financial statements |
88,414 |
47,870 |
Auditors' remuneration for non audit work |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31/5/22 | 31/5/21 |
£ | £ |
Bank interest |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31/5/22 | 31/5/21 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax | ( |
) |
Tax on profit |
In the Budget 2020, the government announced that the corporation tax main rate (for all profits except ring fence profits) for the years starting 1 April 2020 and 2021 would remain at 19%. In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19%, as previously enacted). This new law was substantively enacted on 24 May 2021. |
In the Autumn Statement in November 2022, the government confirmed the increase in corporation tax rate to 25% from April 2023. |
8. | DIVIDENDS |
31/5/22 | 31/5/21 |
£ | £ |
Ordinary shares of 1 each |
Final |
Interim |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
9. | INTANGIBLE FIXED ASSETS |
Computer |
Goodwill | software | Totals |
£ | £ | £ |
COST |
At 1 June 2021 |
and 31 May 2022 |
AMORTISATION |
At 1 June 2021 |
Amortisation for year |
At 31 May 2022 |
NET BOOK VALUE |
At 31 May 2022 |
At 31 May 2021 |
10. | TANGIBLE FIXED ASSETS |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 June 2021 |
Additions |
At 31 May 2022 |
DEPRECIATION |
At 1 June 2021 |
Charge for year |
At 31 May 2022 |
NET BOOK VALUE |
At 31 May 2022 |
At 31 May 2021 |
11. | STOCKS |
31/5/22 | 31/5/21 |
£ | £ |
Work-in-progress |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31/5/22 | 31/5/21 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Directors' current account | 105,906 | 123,905 |
Deferred tax asset |
Prepayments and accrued income |
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand. |
Trade debtors are stated after provisions for impairment of £2.2m. The Directors review of the matter is detailed in the KPI table in the Strategic Report. |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31/5/22 | 31/5/21 |
£ | £ |
Bank loans and overdrafts (see note 14) |
Trade creditors |
Tax |
Social security and other taxes |
VAT | 887,110 | 4,422,540 |
Other creditors |
Directors' current account | 2,000 | 2,000 |
Accruals and deferred income |
14. | LOANS |
An analysis of the maturity of loans is given below: |
31/5/22 | 31/5/21 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank overdrafts |
15. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
31/5/22 | 31/5/21 |
£ | £ |
Within one year |
Between one and five years |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
31/5/22 | 31/5/21 |
£ | £ |
Invoice discounting & finance | 1,812,938 | 43,750 |
Invoice discounting & financing is secured by way of fixed and floating charges over the assets and undertaking of the company. |
17. | DEFERRED TAX |
£ |
Balance at 1 June 2021 | ( |
) |
Provided during year |
Balance at 31 May 2022 | ( |
) |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31/5/22 | 31/5/21 |
value: | £ | £ |
Ordinary | 1 | 300 | 300 |
19. | RESERVES |
Retained |
earnings |
£ |
At 1 June 2021 |
Profit for the year |
Dividends | ( |
) |
At 31 May 2022 |
20. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to a director subsisted during the years ended 31 May 2022 and 31 May 2021: |
31/5/22 | 31/5/21 |
£ | £ |
Balance outstanding at start of year |
Amounts advanced |
Amounts repaid | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
SSGC LIMITED (REGISTERED NUMBER: 04494633) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2022 |
20. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES - continued |
31/5/22 | 31/5/21 |
£ | £ |
Mr G K Dungworth |
Balance outstanding at start of year | (2,000 | ) | - |
Amounts advanced | - | - |
Amounts repaid | - | (2,000 | ) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | (2,000 | ) | (2,000 | ) |
21. | RELATED PARTY DISCLOSURES |
During 2022 the company purchased £985 of services from Tutandos Limited, a company owned by Mr G Dungworth and Mr D Stubbs, directors of the company. No amounts were outstanding at the year-end. |
At the year end, a loan balance of £120,209 (2021: £20,856) was owed to the company by Tutandos Limited. This loan is unsecured, interest free, has no fixed date of repayment and is repayable on demand. |
At the year end, a loan balance of £144,859 (2021: £105,212) was owed to the company by Instaeng Limited, a company owned by Mr G Dungworth and Mr D Stubbs, directors of the company. This loan is unsecured, interest free, has no fixed date of repayment and is repayable on demand. |
22. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is |
SGTS Holdings Limited is a company registered in the UK, company number 13007666, registered address Unit 19 Ergo Business Park, Kelvin Road, Swindon, United Kingdom, SN3 3JW. |