Registered number:
For the Year Ended
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Back 2 Work Group Limited
Company Information
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Back 2 Work Group Limited
Contents
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Back 2 Work Group Limited
Group Strategic Report
For the Year Ended 31 July 2023
The directors present their strategic report together with the audited financial statements for the year ended 31 July 2023.
The principal activities of the Group during the year continues to be the delivery of training programmes predominately for adult learners, with some training being provided to 16-18 year olds through apprenticeships.
The educational provisions include:
∙Pre-Employment training
∙Upskill programmes to those in work
∙Apprenticeships
∙Bootcamps
Back 2 Work Group Limited continues to focus on the quality of teaching and support, enabling individuals to gain skills and confidence they need to apply for jobs, secure employment, or upskill within their current role.
The acquisition of Just IT Limited in the prior year bought significant expertise in digital training into the Group, delivering digital training in both apprenticeships and bootcamps which has complemented the existing Back 2 Work training offering and principal activities. Back 2 Work Complete Training Limited is directly funded by the Education and Skills Funding Agency (ESFA), the Adult Education Budget (AEB) from devolved combined authorities and a small amount of sub-contracted AEB funding from Further Education colleges and other independent training providers. Just IT Limited is funded by the Education and Skills Funding Agency (ESFA), devolved authorities and directly with corporate clients for training courses and recruitment activities.
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Back 2 Work Group Limited
Group Strategic Report (continued)
For the Year Ended 31 July 2023
The majority of revenue is through funding from the government via ESFA or AEB devolved budgets. Changes to government funding priorities therefore remains the primary risk faced by the Group. We are aware of the upcoming elections, and mindful of potential changes. As far as possible we have taken advice on likely policy changes to help us plan through different scenarios. We believe we are well placed to react quickly to any changes due to our experienced management team, structures, and stakeholder relationships.
The Group has had significant success in recent retenders, and in new funding opportunities during the year, which has put us in a strong position as we enter the next financial year. The principal financial instruments used by the Group are cash, trade debtors and trade creditors. The management of these instruments provides finance for the Group’s operations. The main risks arising from the Group’s financial instruments are price risk, credit risk, liquidity risk and interest rate risk. The directors review and agree policies for managing these risks as outlined below: Price risk The Group closely monitors changes to price across its operation and reacts appropriately and on a timely basis where appropriate. Credit risk The Group’s principal financial assets are cash and debtors. The directors review the debtor position regularly and ensure compliance with funding rules to mitigate risk. Given the nature of our customers and their credit worthiness, the risk of bad debt is considered to be low. Liquidity risk The Group manages cash closely with regular review of actual and forecast cashflows monthly, supplemented by weekly cash reporting, ensuring liquidity available to meet needs.
Financial key performance indicators
The Group uses a number of financial key performance indicators to monitor business performance:
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Back 2 Work Group Limited
Group Strategic Report (continued)
For the Year Ended 31 July 2023
The desirability of the Group maintaining a reputation for high standards of business conduct
Delivering high standards of business conduct and maintaining a positive reputation with our commissioners, stakeholders and service users is fundamental to the success of our business. When making decisions, the directors consider the insights obtained through engagement activities with these groups and best industry practice, and are cognisant of the importance of maintaining our reputation for high standards of business conduct. The directors provide the systems, processes, and people to ensure our conduct is driven by our values across the whole organisation, and that all employees understand the part they play in this ambition. Primary board focus and decision making during the year Core focus and strategy in the year has been different within the Group. Back to Work Complete Training's focus has been adjusting its curriculum and delivery in readiness for changing funding rules. These changes have implications for both the funding value and course lengths. Challenges include learner commitment to the longer courses and ensuring financial robustness of the new model given its inherently higher costs to deliver. The board has also been working on strategies to engage with learners that are classed as economically inactive, working with a wider circle of community groups to engage and upskill. Within Just IT Training, the core focus has been on quality and curriculum to support our vision of becoming the number one IT digital training provider. During the year we have invested in key management roles to support this objective and are already seeing great value in the additional knowledge and expertise they have bought. After the successful acquisition of Just IT Training in FY21/22, the board continues to look for further acquisition opportunities that would both complement existing provisions or deliver sector training within growth sectors that we currently do not provide. All potential targets are appraised on numerous factors, primarily being quality, potential growth opportunities, cross group opportunities and financial strength. The need to foster the Group's business relationships with suppliers, customers and others The Group is committed to fostering good business relationships with suppliers, customers and other stakeholders which are fundamental to our business model. The business is operated in an ethical and responsible way with high standards of business conduct, driven by the senior management team. There are processes and policies in place to ensure that all our customers are treated fairly, and with care and respect. In relation to suppliers, the Group procurement and outsourcing policies ensure that any tender processes are fair and transparent and suppliers receive constructive feedback. The Group has been in frequent communication with both suppliers and customers throughout the year ensuring any potential issues are identified early and managed effectively. Staff wellbeing and engagement The Group is a “mission driven” organisation guided by a strong set of established values. Through ongoing communication and monthly business updates the full workforce is kept informed of business performance, market conditions and strategic direction as determined by Senior Leadership. The Group prides itself on a robust wellbeing and support offer for its workforce including trained mental health champions, access to funded counselling and medical support, HR policies supporting flexible working and a general positive approach to engaging with staff regarding any challenges they face, work related or not.
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Back 2 Work Group Limited
Group Strategic Report (continued)
For the Year Ended 31 July 2023
The Group recognises its impact on communities in which we operate, and regularly engages with employers, local government, community groups, representative bodies and individuals across England to deliver government funded education, training and employment support to residents who have the need to increase their knowledge and skills or require support to access employment. We gain their feedback through formal and informal processes and use this insight to evolve and improve our services to futureproof our provision.
The Group recognises the need to consider the environmental impact of our operations and we review our delivery regularly to ensure we minimise our impact and positively deliver against our carbon reduction plan. As well as corporate level initiatives, staff training ensures environmental impact is considered in our everyday decision making and service design.
This report was approved by the board and signed on its behalf.
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Back 2 Work Group Limited
Directors' Report
For the Year Ended 31 July 2023
The directors present their report and the financial statements for the year ended 31 July 2023.
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.
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 judgements 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 loss for the year, after taxation, amounted to £2,171,554 (2022 - loss £2,180,169).
No dividends have been recommended for payment in the financial year.
The directors who served during the year were:
The Group maintains a robust financial position and with the support of Palatine Private Equity LLP, will continue to deliver government funded education and training programmes to both unemployed and in-work learners.
The directors have chosen to set out disclosures relating to engagement with employees in the strategic report.
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Back 2 Work Group Limited
Directors' Report (continued)
For the Year Ended 31 July 2023
The directors have chosen to set out the disclosures relating to financial risk objectives & policies and information on exposure to price risk, credit risk, liquidity risk, and cash flow risk in the strategic report.
Post year end, Back 2 Work Holdings Limited has acquired 100% of the share capital in both Bespoke Professional Development and Training Limited and Greendale Limited.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Back 2 Work Group Limited
Independent Auditors' Report to the Members of Back 2 Work Group Limited
We have audited the financial statements of Back 2 Work Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 July 2023, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, 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).
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.
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.
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.
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Back 2 Work Group Limited
Independent Auditors' Report to the Members of Back 2 Work Group Limited (continued)
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.
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.
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:
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Back 2 Work Group Limited
Independent Auditors' Report to the Members of Back 2 Work Group Limited (continued)
Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual suspected, or alleged fraud.
∙Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Antibribery and Corruption, compliance with Education and Skills Funding Agency "ESFA" and Adult Education Budget "AEB" funding regulations.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluating and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments. We have used data analytics to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
∙Challenging assumptions made by management in their significant accounting estimates, and assesing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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Back 2 Work Group Limited
Independent Auditors' Report to the Members of Back 2 Work Group Limited (continued)
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatements 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.
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.
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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
SK1 1TD
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Back 2 Work Group Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Registered number: 12872639
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 37 form part of these financial statements.
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Back 2 Work Group Limited
Registered number: 12872639
Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 37 form part of these financial statements.
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Back 2 Work Group Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Company Statement of Changes in Equity
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Consolidated Statement of Cash Flows (continued)
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Consolidated Analysis of Net Debt
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
Back 2 Work Group Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office is Building 4, Universal Square, Devonshire Street North, Manchester, M12 6JH. The company's registered number is 12872639.
The nature of the group's operation and its principal activity is to provide pre and post-employment training throughout the UK. The consolidated financial statements of Back 2 Work Group Limited as at and for the year ended 31 July 2023 comprise the financial statements of Back 2 Work Group Limited and its subsidiaries (together referred to as "the Group"). These subsidiaries are disclosed in the fixed asset investments note of these accounts.
2.Accounting policies
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 judgement 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 Balance Sheet, 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. Rendering of services Revenue from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Revenue is only recognised to the extent of recoverable expenses when the outcome of the contract cannot be estimated reliably.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
2.Accounting policies (continued)
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
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.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
2.Accounting policies (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.
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.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
2.Accounting policies (continued)
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 balance sheet 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 Balance Sheet.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
2.Accounting policies (continued)
Revenue recognition and work in progress The management of the Group exercise significant judgement in making an assessment of the stage of completion of a contract at the year-end and the appropriate amount of revenue and attributable profit to recognise. The Group has recognised amounts recoverable on contract with a carrying value of £4,059,558 (2022: £3,049,686) and deferred income with a carrying value of £279,429 (2022: £560,777). Goodwill Goodwill acquired on business combinations is capitalised on the balance sheet and amortised over its expected useful economic life or ten years, whichever is shorter. At 31 July 2023, the carrying value of goodwill was £17,527,127 (2022: £19,660,721). Should these estimates vary, the profit or loss and balance sheet of the following years could be significantly impacted. There are no other significant estimates or judgements.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
There were no factors that may affect future tax charges.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
Loan A totals £2,550,000, with a related interest rate of Base Rate + 3.5% until September 2025. The loan is repayable on a quarterly basis. The loan is secured by way of a fixed and floating charge over all property or undertaking of the Group.
Loan B totals £1,250,000, and is a bullet loan, with the full capital amount due in full in September 2025. The loan is secured by way of a fixed and floating charge over all property or undertaking of the Group. Debenture loans totalling £16,485,041 are entitled to interest at 10% per annum. They are redeemable at par along with any unpaid interest five years from the date of issue, which is 22 October 2025. The loan notes are secured on a fixed and floating charge over all property or undertaking of the company. Debenture loans totalling £2,000,000 attract interest of 10% per annum, and are redeemable at par five years from the date of issue, which is 8 June 2027.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
A debt-to equity swap took place in the year at £1 per share, leading to 6,175 new A ordinary shares being issued at a nominal value of £0.01 each, with a share premium of £0.99.
3,000 C ordinary shares were issued in the year at £0.38 per share with a nominal value of £0.01, with a share premium of £0.37 each. 1,000 of these C ordinary shares were later repurchased and cancelled. 1,000 D3 ordinary shares were issued in the year at par with a nominal value of £0.01.
Share premium account
Capital redemption reserve
Profit and loss account
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 during the year and amounted to £238,766 (2022: £167,157). Contributions totalling £75,564 (2022: £64,403) were payable to the fund at the balance sheet date and are included in other creditors.
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Back 2 Work Group Limited
Notes to the Financial Statements
For the Year Ended 31 July 2023
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