Company registration number: 03673102
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their Annual Report and financial statements for the year ended 31 March 2023.
This report has been prepared by the directors in accordance with the requirements of section 414 of the Companies Act 2006. The company’s independent auditor is required by law to report on whether the information given in the Strategic Report is consistent with the financial statements. The auditor’s report is set out further in the document.
The principal activity of the Company is that of an IT Recruitment Agency and Business to UK and international clients.
The Company operates from the UK in the IT technical, Telco and SAP arena, providing its clients with recruitment solutions for their temporary / contract projects as well as proving them with permanent IT resources. The Company works with large global businesses, looking to partner with them for their IT resourcing requirements in whatever geographical location they operate in.
The strategy of driving the business forward through robust cost controls and increased contact and permanent recruitment solutions for our global clients remains in place. The Company operates in a challenging environment and the impact of the war in Ukraine added an element of complexity to the market dynamics.
Results for the year ending March 2023 saw a 31.2% fall in turnover to £5.17m (2022: £7.52m). Gross margin declined by 32.54% to £0.85m (2022: £1.26m) with gross margin percentage decrease to 16.4% (2022: 16.7%). Tight cost controls resulted in administration expenses of £0.47m, down 35.7% on the prior year (2022: £0.73m) returning on operating profit of £372,000 for the year (2022: £517,000). Profit before tax was £277,000 (2022: £434,000). As a result of the above, net liabilities decreased to £2.03m (2022: £2.30m). The brand remains strong and the Company has the full support and backing from its parent company, ITHR Group Plc.
The Company supplies clients globally, with turnover widely spread geographically, minimising its risk from regional, national and international slow-downs. Turnover is derived 35.8% UK (2022: 46.9%), 55.2% European (2022: 43.2%) and 9% the rest of the world (2022: 9.9%).
Non-financial KPIs are not produced in this report due to the nature of the business and the Board are of the opinion that the omission of such KPIs does not detract from the understanding of the Company’s performance.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The Company will continue to increase its sales capability by attracting, developing and retaining talented and experienced sales consultants and managers to provide a first-class recruitment service to its clients and candidates alike.
Principal Risks and Uncertainties
The Company has in place adequate working capital solutions to enable it to grow its turnover and gross margin for the foreseeable future and the Board see’s no reason as to why such growth and continued profitability in the coming year will not be achieved. Directors Statement of Compliance with duty to promote the success of the Company Section 172 of the Companies Act 2006 requires Directors to take into consideration the interest of stakeholders and other matters in their decision making. The Board considers that the decision they have made during the financial year and the way they have acted has been in the best interest or stakeholders and related parties, having regard for matters set out in s172(1) (a-f) of the Act. The Board acts in good faith and in a manner that they consider promotes the success of the business for the benefit of its members and stakeholders. The Company’s key stakeholders are internal staff, candidates, clients and suppliers. The Company engages with its employees, clients, candidates and suppliers through a variety of means including: Employees: internal updates on the Company’s development Clients: proving support and advice to help build strong long-term relationships which helps them achieve their project goals and objectives. Suppliers and candidates: Effective and consistent communication and updates on contracts to develop long-term business relationships.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their report and the financial statements for the year ended 31 March 2023.
The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £276,663 (2022 - £433,983).
The directors do not recommend the payment of a dividend (2022 - £nil)
The directors who served during the year were:
The planned future developments of the business are disclosed in detail in the financial statements of the parent company, ITHR Group Plc.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
There have been no significant events affecting the Company since the year end.
The auditors, Menzies LLP, will be proposed for reappointment in accordance with section 489 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IT HUMAN RESOURCES PLC
We have audited the financial statements of IT Human Resources Plc (the 'Company') for the year ended 31 March 2023, which comprise the Statement of comprehensive income, the Statement of financial position, the 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 Company 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 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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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IT HUMAN RESOURCES PLC (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
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 Directors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IT HUMAN RESOURCES PLC (CONTINUED)
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 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:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙The Companies Act 2006
∙Financial Reporting Standard 102
∙UK tax legislation
∙UK employment legislation
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of relevant documentation. The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. No issues were identified in this area. We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
∙Posting of unusual journals and complex transactions; or
∙The use of management override of controls to manipulate results, or to cause the Company to enter into transactions not in its best interest.
As a result of the above, the audit procedures performed by the engagement team included:
∙Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IT HUMAN RESOURCES PLC (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Lynton House
7-12 Tavistock Square
London
WC1H 9LT
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
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STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 12 to 19 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
IT Human Resources Plc (the "Company") is a public company limited by shares and is incorporated and domiciled in England and Wales. Its registered office is 48 Warwick Street, London, W1B 5NL.
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 management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of ITHR Group plc as at 31 March 2023 and these financial statements may be obtained from Companies House.
The Company made a profit before tax of £276,663 (2022 - profit of £433,983) and has net liabilities of £2,025,240 (2022 - £2,301,903). The financial statements have been prepared on a going concern basis which the directors believe to be appropriate for the following reason. The Company is reliant for its working capital on funds provided to it by the Company’s ultimate parent company, ITHR Group Plc, which has provided the Company with an undertaking that it will, for at least 12 months from the date of approval of these financial statements, continue to make such funds as are needed by the company. This should enable the Company to continue in operational existence for the foreseeable future by meeting its liabilities as and when they fall due for payment. In addition, the ultimate parent company, ITHR Group plc has given an undertaking not to call on the outstanding intercompany balance until such time as the company has the ability to make such a repayment. Based on this undertaking the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Permanent introduction fees are recognised for each placement with due regard to the point when a candidate starts their employment and in conjunction with milestones agreed to with the client. These milestones generally relate to the candidate’s length of service at their placement. The turnover shown in the profit and loss account represents amounts receivable for services provided during the year in the normal course of business, net of trade discounts, VAT and other sales and related taxes.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Significant judgements The Company’s and client imposed terms and conditions for the permanent placement of candidates allow the entity to only invoice the client on the start date of the candidate. It is the Company's policy to therefore recognise income on start date and not any earlier date between the candidate accepting a permanent position and their start date. Recoverability of intercompany balances Management regularly assess balances due from other entities within the group and whether these are recoverable. Where it is considered that the future cashflows of these debts are less than the carrying value in the books, appropriate provisions are made against these balances to reflect the recoverability of the asset. See note 11.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
During the year some of the Directors were remunerated by the Company's parent ITHR Group Plc.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
9.Taxation (continued)
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2021 on 10 June 2021. These include increment of the rate of corporation tax to 25 percent from 19 percent from April 2023.
Deferred tax assets in respect of tax losses carried forward of £3,291,198 (2022: £3,615,641) have not been recognised in the financial statements due to uncertainty over the timing of future profits. Unrecognised deferred tax amounts to £822,800 (2022: £903,910).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Share premium account
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The largest and smallest group in which the results of the Company are consolidated is that headed by ITHR Group Plc, incorporated in the UK. The consolidated financial statements of these groups are available to the public and may be obtained from Companies House. The ultimate controlling party is considered to be Mr S Gallagher, by virtue of his shareholding in ITHR Group Plc.
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