Company Registration No. 06497135 (England and Wales)
GR8 SECURITY LIMITED
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
30 JUNE 2023
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
GR8 SECURITY LIMITED
CONTENTS
Page
Company information
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
GR8 SECURITY LIMITED
COMPANY INFORMATION
Directors
R E Baldacci
J E Wakerley
S Giles
(Appointed 1 March 2023)
Company number
06497135
Registered office
6 North Street
Oundle
Peterborough
PE8 4AL
Auditor
TC Group
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
GR8 SECURITY LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2023
- 1 -
The directors present the strategic report for the Period ended 30 June 2023.
Fair review of the business
2023 has been a very positive year for the business in that there has been a significant level of investment and re-organisation setting the business on a strong course for the future.
The investments have included the recruitment and formation of a new executive team, sourced from within the security industry, who bring with them many years of experience in growing and developing facilities and security companies.
As of the 30th June 2023 the trade, assets and business of the company has been hived across into City Group Security Ltd. This is part of the strategy of the overall group to have brought all the businesses into one trading company and for that to be relaunched. This in the opinion of the directors gives an extremely strong base, nationwide, for the business to expand in 2024.
The relaunch and rebranding were as of the 30th June and this has been extremely well received by customers, team members and the broader market. As a result significant levels of new business has been won since that time.
The company traditionally has had a significant number of contracts with variable hours on which the gross margin achieved is higher. These have performed especially well in the period, hence the gross profit margin achieved was 14.2% compared to 9.9% in the prior financial period.
The strategy of the business remains providing an industry leading level of customer service, whilst focussing on solving customer problems through an integrated mix of personnel and system solutions.
The directors have full confidence in the abilities of the new executive team to deliver this strategy and expect this to be born out in the results presented in following years within City Group Security Limited.
The company's key financial and other performance indicators during the year were as follows:
Unit 2023 2021
Turnover £ 14,807,154 16,020,341
Gross Profit £ 2,100,613 1,594,071
Profit before tax £ 569,457 162,037
Shareholders funds £ 3 1,662,730
Principal risks and uncertainties
The most significant risk facing the company are the general uncertainty and challenging economic factors facing the country and our customers as a whole. This will put cost pressures on our customers which may push them to reassess some of their security needs. In addition the recruitment of staff will remain very challenging in a period of low unemployment and rising wages.
We will continue to offer competitive salaries, benefits and training to attract and retain the best staff across our business.
S Giles
Director
6 March 2024
GR8 SECURITY LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 JUNE 2023
- 2 -
The directors present their annual report and financial statements for the Period ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of Security Systems service activities.
Results and dividends
The results for the Period are set out on page 9.
Ordinary dividends were paid amounting to £2,116,488. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the Period and up to the date of signature of the financial statements were as follows:
R E Baldacci
J E Wakerley
S Giles
(Appointed 1 March 2023)
Financial instruments
Objectives and policies
The company’s main financial instruments are bank working capital facilities, bank loan, trade creditors and trade debtors. The bank loans have generally been used to fund company acquisitions within the group. The loans have covenants and charges against the company’s assets. These could be exercised if the company fails to meet its obligations and generate sufficient profits as determined by the banks covenants.
Price risk, credit risk, liquidity risk and cash flow risk
The credit risk to the company is the failure of customers to fulfil their financial obligations to the company. This exposure is reduced due to the large number of customers, and managed by close credit controls and the terms and conditions of credit. The majority of contracts allow the company to pass on statutory wage increases through price increases therefore mitigating the risk of margin loss.
Liquidity and cash flow risk is the risk the company will be unable to generate enough cash resources in order to meet its financial obligations. The company manages this risk by ensuring that cash resources are generated and maintained sufficiently in order to meet the required payments when they fall due. The bank working capital facility is used to manage company liquidity and cash flow.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
GR8 SECURITY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 3 -
On behalf of the board
S Giles
Director
6 March 2024
GR8 SECURITY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2023
- 4 -
The directors are responsible for preparing the annual report 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). 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;
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.
GR8 SECURITY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GR8 SECURITY LIMITED
- 5 -
Opinion
We have audited the financial statements of GR8 Security Limited (the 'company') for the year ended 30 June 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, and 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2023 and of its profit for the Period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
GR8 SECURITY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GR8 SECURITY LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial Period 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
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 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 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
GR8 SECURITY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GR8 SECURITY LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to 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; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-forauditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.
GR8 SECURITY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GR8 SECURITY LIMITED
- 8 -
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.
John Grant (Senior Statutory Auditor)
For and on behalf of TC Group
15 March 2024
Statutory Auditor
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
GR8 SECURITY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 JUNE 2023
- 9 -
Period
Year
ended
ended
30 June
31 December
2023
2021
Notes
£
£
Turnover
2
14,807,154
16,020,341
Cost of sales
(12,706,541)
(14,426,270)
Gross profit
2,100,613
1,594,071
Administrative expenses
(1,324,239)
(1,381,582)
Other operating income
80,076
Operating profit
3
776,374
292,565
Interest receivable and similar income
5
4
Interest payable and similar expenses
6
(206,917)
(130,532)
Profit before taxation
569,457
162,037
Tax on profit
7
(115,696)
(34,622)
Profit for the financial Period
453,761
127,415
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GR8 SECURITY LIMITED
BALANCE SHEET
AS AT 30 JUNE 2023
30 June 2023
- 10 -
2023
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
7,510
Current assets
Debtors
10
312,515
6,388,586
Cash at bank and in hand
381,712
312,515
6,770,298
Creditors: amounts falling due within one year
11
(83,328)
(4,439,501)
Net current assets
229,187
2,330,797
Total assets less current liabilities
229,187
2,338,307
Creditors: amounts falling due after more than one year
12
(229,184)
(675,577)
Net assets
3
1,662,730
Capital and reserves
Called up share capital
16
1
1
Capital redemption reserve
2
2
Profit and loss reserves
17
1,662,727
Total equity
3
1,662,730
The financial statements were approved by the board of directors and authorised for issue on 6 March 2024 and are signed on its behalf by:
S Giles
Director
Company Registration No. 06497135
GR8 SECURITY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2023
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
1
2
1,535,312
1,535,315
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
127,415
127,415
Balance at 31 December 2021
1
2
1,662,727
1,662,730
Period ended 30 June 2023:
Profit and total comprehensive income for the period
-
-
453,761
453,761
Dividends
8
-
-
(2,116,488)
(2,116,488)
Balance at 30 June 2023
1
2
3
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2023
- 12 -
1
Accounting policies
Company information
GR8 Security Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6 North Street, Oundle, Peterborough, PE8 4AL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the directors have undertaken a strategic initiative wherein the trade and assets of trueGR8 Security Limited have been successfully hived across to its group company, City Group Security Limited. Consequently, the directors believe that this transfer will enhance the operational efficiency and financial position of the Company.
In light of this restructuring, the directors of the parent company, WBW City Holdings Limited confirm their commitment to financially support GR8 Security Limited to ensure its continued operational existence as a going concern. The directors of the company have a reasonable expectation that, with the financial support of the parent company, GR8 Security Limited has adequate resources to continue in operational existence for the foreseeable future.
1.3
Reporting period
In consideration of significant transactions transpiring across the group, the company opted to extend its reporting period from 31 December 2022 to 30 June 2023. Consequently, the financial statements and corresponding notes provided herein reflect an 18-month period, rendering comparative amounts not entirely comparable. The decision to adjust the reporting period has been made in accordance with prudent accounting practices to ensure a more accurate representation of the financial affairs of the Company.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25% reducing balance
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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 the revision and future periods where the revision affects both current and future periods.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 18 -
1.16
The company has taken advantage of the exemption included within FRS 102 from the requirement to prepare a cashflow statement on the basis it is consolidated within accounts of the parent group in which a cashflow statement is prepared.
2
Turnover and other revenue
2023
2021
£
£
Turnover analysed by class of business
Rendering of services
14,807,154
16,020,341
2023
2021
£
£
Other significant revenue
Interest income
-
4
Grants received
-
80,076
3
Operating profit
2023
2021
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
-
(80,076)
Fees payable to the company's auditor for the audit of the company's financial statements
Depreciation of owned tangible fixed assets
1,862
2,476
Operating lease charges
3,356
1,728
4
Employees
The average monthly number of persons (including directors) employed by the company during the Period was: 89
2023
2021
Number
Number
Administration and support
6
5
Other departments
83
139
Total
89
144
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
4
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2023
2021
£
£
Wages and salaries
3,475,111
3,265,991
Social security costs
296,273
21,593
Pension costs
71,618
52,981
3,843,002
3,340,565
5
Interest receivable and similar income
2023
2021
£
£
Interest income
Interest on bank deposits
4
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
4
6
Interest payable and similar expenses
2023
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
78,841
80,855
Other interest on financial liabilities
127,904
47,882
206,745
128,737
Other finance costs:
Interest on finance leases and hire purchase contracts
172
1,795
206,917
130,532
7
Taxation
2023
2021
£
£
Current tax
UK corporation tax on profits for the current period
115,696
34,622
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
7
Taxation
(Continued)
- 20 -
The actual charge for the Period can be reconciled to the expected charge for the Period based on the profit or loss and the standard rate of tax as follows:
2023
2021
£
£
Profit before taxation
569,457
162,037
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2021: 19.00%)
113,891
30,787
Tax effect of expenses that are not deductible in determining taxable profit
1,271
3,651
Permanent capital allowances in excess of depreciation
534
Deferred tax adjustments in respect of prior years
184
Taxation charge for the period
115,696
34,622
8
Dividends
2023
2021
£
£
Final paid
2,116,488
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 21 -
9
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 January 2022
14,806
15,779
30,585
Disposals
(14,806)
(15,779)
(30,585)
At 30 June 2023
Depreciation and impairment
At 1 January 2022
12,567
10,508
23,075
Depreciation charged in the Period
544
1,318
1,862
Eliminated in respect of disposals
(13,111)
(11,826)
(24,937)
At 30 June 2023
Carrying amount
At 30 June 2023
At 31 December 2021
2,239
5,271
7,510
Leased assets
Included within the net book value of tangible fixed assets is £Nil (2021 - £5,271) in respect of assets held under finance leases and similar hire purchase contracts. Depreciation for the year on these assets was £1,318 (2021 - £1,757).
Restriction on title and pledged as security
Assets held as security with a carrying amount of £Nil (2021 - £7,510) have been pledged as security for bank loans, overdrafts and obligations under finance and hire purchase leases.
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 22 -
10
Debtors
2023
2021
Amounts falling due within one year:
£
£
Trade debtors
2,941,041
Amounts owed by group undertakings
312,515
2,565,776
Other debtors
47,478
Prepayments and accrued income
834,291
312,515
6,388,586
Trade debtors at 30 June 2023 include £Nil (2021 - £1,771,396) pledged as security against amounts advanced in respect of the 'with recourse' Invoice Discounting Agreement.
11
Creditors: amounts falling due within one year
2023
2021
Notes
£
£
Bank loans
13
83,328
55,858
Obligations under finance leases
14
2,645
Other borrowings
13
1,811,730
Trade creditors
966,765
Amounts owed to group undertakings
135,000
Corporation tax
34,622
Other taxation and social security
334,487
Other creditors
456,581
Accruals and deferred income
641,813
83,328
4,439,501
12
Creditors: amounts falling due after more than one year
2023
2021
Notes
£
£
Bank loans and overdrafts
13
229,184
374,251
Obligations under finance leases
14
4,288
Other borrowings
13
297,038
229,184
675,577
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
12
Creditors: amounts falling due after more than one year
(Continued)
- 23 -
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
99,833
13
Loans and overdrafts
2023
2021
£
£
Bank loans
312,512
430,109
Other loans
2,108,768
312,512
2,538,877
Payable within one year
83,328
1,867,588
Payable after one year
229,184
671,289
The bank loans are secured by a fixed and floating charge over all assets of the company dated 19/03/2021.
The bank loans are secured by a joint and several personal gaurantee from J E Wakerley and R E Baldacci limited to £100,000.
14
Finance lease obligations
2023
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
2,645
In two to five years
4,288
6,933
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 24 -
15
Retirement benefit schemes
2023
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
71,618
52,981
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Share capital
2023
2021
2023
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 50p each
3
3
1
1
17
Profit and loss reserves
Share Capital
Represents the nominal value of shares that have been issued.
Profit and loss account
Includes all current and prior period retained profits and losses, inclusive of cumulative unrealised gains and losses for assets shown at fair value at the balance sheet date.
18
Related party transactions
The company has taken advantage of exemption, under the terms of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
Summary of transactions with key management
During the year key management received advances totalling £Nil (2021 - £2,353) and made repayments of £Nil (2021 - £Nil). At the balance sheet date balances due to key management totalled £Nil (2021 - £Nil). At the balance sheet date balances due from key management totalled £NIL(2021 - £2,353). There was no remuneration with key management. There are no members of key management other than directors.
Summary of transactions with entities with joint control or significant interest
During the year sales totalling £59,029 (2021 - £82,445) were made to entities with joint control or significant interest. Purchases totalling £406,217 (2021 - £369,333) were made from entities with joint control or significant interest. At the balance sheet date the amount due from entities with joint control or significant interest was £Nil (2021 - £Nil). At the balance sheet date the amount due to entities with joint control or significant interest was £Nil (2021 - £73,721).
GR8 SECURITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2023
- 25 -
19
Ultimate controlling party
The company's immediate parent is WBW City Holdings Limited, incorporated in England & Wales.
The most senior parent entity producing publicly available financial statements is WBW City Holdings Limited. These financial statements are available upon request from its registered office address 6 North Street, Oundle, Peterborough, United Kingdom, PE8 4AL.
The ultimate controlling party is J Wakerley and R Baldacci.
20
Hive across
On the 30 June 2023 the directors undertook a strategic initiative wherein the trade and assets of GR8 Security Limited were successfully hived across to City Group Security Limited.
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