Company Registration No. 06972871 (England and Wales)
Meet Recruitment Limited
Annual report and financial statements
for the year ended 31 December 2023
Meet Recruitment Limited
Company information
Directors
Hannah Haigh
Stephen Herniman
Secretary
Stephen Herniman
Company number
06972871
Registered office
Irongate House
30 Dukes Place
London
EC3A 7LP
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Meet Recruitment Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Income statement
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 31
Meet Recruitment Limited
Strategic report
For the year ended 31 December 2023
1
The directors present the strategic report for the year ended 31 December 2023.
Principal activity
The principal activity of the company continues to be that of specialist recruitment consultants providing both interim (contract) and permanent staff within the Life Sciences industry.
Fair review of the business
Although both turnover and gross profit have decreased compared to the prior period, it is acknowledged that the challenging macro-economic conditions impacted client appetite to hire and this relatively pleasing performance is very much considered in line with Meet’s competitors in the Life Sciences recruitment space.
As of June 2024, the company employs over 50 staff out of its London office and is the operational headquarters of Meet Group Limited.
A full breakdown of the 2023 performance can be seen under “Key Performance Indicators” below.
Future development
The company forecasts a return to the GP growth pattern as shown in prior periods, whilst maintaining control over the groups cost base leading to further increases in EBITDA as a consequence. The company does not expect to have further offices in the short term, instead increasing headcount in its existing location and taking advantage of the high-quality talent currently available in the industry.
Key performance indicators
The company’s key performance indicators are turnover, gross profit/net fee income, operating profit and EBITDA. The Directors provide below a summary of these key performance indicators as well as adjusted results for 2023 based on factors which the Directors consider to be one-off and non-recurring (share-based payment expense and restructuring fees).
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EBITDA (Operating Profit plus depreciation) | | | | |
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The split at the GP level between the contract and permanent business in 2023 was 62% and 38% (2022: 54% and 46%) respectively, which allows the company to invest in its staff and infrastructure to work towards being the leading provider of recruitment solutions in the life sciences industry.
The company’s strategic objective is to further develop its global contract offering and continues to invest in key personnel to deliver on this.
Meet Recruitment Limited
Strategic report (continued)
For the year ended 31 December 2023
2
Principal risks and uncertainties
The company operates within multiple currencies and is, therefore, exposed to foreign exchange risk. However, this exposure is monitored by continually reviewing foreign exchange rates, and any conversions are done at the smallest spread available.
The company has bank accounts in all currencies in which we transact, and all contractors are paid and billed in the same currency to create a natural hedge.
Liquidity
With ongoing economic uncertainty having macro-economic consequences across the reporting period, there was a risk that clients may have held on to cash longer than usual hence leading to a cash-flow squeeze as we continue to pay our contractors in a timely manner. This expected downturn, however, did not materialise and strong credit control measures were implemented. Furthermore, the company is continuing to trade profitability.
Hannah Haigh
Director
12 July 2024
Meet Recruitment Limited
Directors' report
For the year ended 31 December 2023
3
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of provider of interim (contract) and permanent staff within the Life Sciences industry.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Hannah Haigh
Stephen Herniman
Auditor
Saffery LLP have expressed their willingness to continue in office.
Statement of directors' responsibilities
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement 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.
Meet Recruitment Limited
Directors' report (continued)
For the year ended 31 December 2023
4
On behalf of the board
Hannah Haigh
Director
12 July 2024
Meet Recruitment Limited
Independent auditor's report
To the members of Meet Recruitment Limited
5
Opinion
We have audited the financial statements of Meet Recruitment Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including 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 101, Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice including FRS 101; 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the 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.
Meet Recruitment Limited
Independent auditor's report (continued)
To the members of Meet Recruitment Limited
6
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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 set out on page 2, 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
Meet Recruitment Limited
Independent auditor's report (continued)
To the members of Meet Recruitment Limited
7
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 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.
Richard Collis (Senior Statutory Auditor)
For and on behalf of Saffery LLP
12 July 2024
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Meet Recruitment Limited
Income statement
For the year ended 31 December 2023
8
2023
2022
as restated
Notes
£
£
Revenue
3
20,283,681
23,440,375
Cost of sales
(15,489,297)
(17,314,397)
Gross profit
4,794,384
6,125,978
Administrative expenses
(6,695,864)
(6,886,347)
Other operating income
2,338,305
2,094,647
Operating profit
4
436,825
1,334,278
Finance costs
7
(39,256)
(59,309)
Profit before taxation
397,569
1,274,969
Tax on profit
8
(72,416)
(362,994)
Profit and total comprehensive income for the financial year
325,153
911,975
Meet Recruitment Limited
Statement of financial position
As at 31 December 2023
9
2023
2022
as restated
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
9
525,203
1,039,021
Current assets
Deferred tax asset
14
1,169,543
1,241,959
Trade and other receivables
10
6,828,525
6,164,464
Cash and cash equivalents
1,127,932
1,033,929
9,126,000
8,440,352
Current liabilities
11
(5,358,127)
(4,579,315)
Net current assets
3,767,873
3,861,037
Total assets less current liabilities
4,293,076
4,900,058
Non-current liabilities
11
(47,193)
(599,352)
Net assets
4,245,883
4,300,706
Equity
Called up share capital
19
1,250
1,250
Share premium account
20
2,250
2,250
Capital contribution
21
481,168
861,144
Retained earnings
3,761,215
3,436,062
Total equity
4,245,883
4,300,706
The financial statements were approved by the board of directors and authorised for issue on 12 July 2024 and are signed on its behalf by:
Stephen Herniman
Director
Company Registration No.06972871
Meet Recruitment Limited
Statement of changes in equity
For the year ended 31 December 2023
10
Share capital
Share premium account
Capital contribution
Retained earnings
Total
Notes
£
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
1,250
2,250
562,882
2,598,714
3,165,096
Transition adjustments
-
-
-
(74,627)
(74,627)
As restated
1,250
2,250
562,882
2,524,087
3,090,469
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
911,975
911,975
Transactions with owners in their capacity as owners:
Transfer to other reserves
21
-
-
298,262
298,262
Balance at 31 December 2022
1,250
2,250
861,144
3,436,062
4,300,706
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
325,153
325,153
Transactions with owners in their capacity as owners:
Transfer to other reserves
21
-
-
(379,976)
-
(379,976)
Balance at 31 December 2023
1,250
2,250
481,168
3,761,215
4,245,883
Meet Recruitment Limited
Notes to the financial statements
For the year ended 31 December 2023
11
1
Accounting policies
Company information
Meet Recruitment Limited is a private company limited by shares incorporated in England and Wales. The registered office is Irongate House, 30 Dukes Place, London, EC3A 7LP.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
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. The principal accounting policies adopted are set out below.
The company meets the definition of a qualifying entity under FRS 101 Reduced Disclosure Framework. These financial statements for the year ended 31 December 2023 are the first financial statements of Meet Recruitment Limited prepared in accordance with FRS 101. The company transitioned from FRS 102 to FRS 101 for all periods presented and the date of transition to FRS 101 was 1 January 2022.
An explanation of how transition to FRS 101 has affected the reported financial position and financial performance is given in note 24.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
a reconciliation of the number and weighted average exercise prices of share options, how the fair value of share-based payments was determined and their effect on profit or loss and the financial position;
comparative narrative information;
related party disclosures for transactions with the parent or wholly owned members of the group.
As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share based payments, financial instruments, capital management, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective, impairment of assets, business combinations, discontinued operations and related party transactions
Where required, equivalent disclosures are given in the group accounts of Project Panda Topco Limited. The group accounts of Project Panda Topco Limited are available to the public and can be obtained as set out in note 23.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
12
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Company is expected to be entitled in exchange for transferring services to a customer. For each contract with a customer, the Company:
identifies the contract with a customer;
identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time value of money;
allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the services promised.
At contract inception, an assessment is completed to identify the performance obligations in each contract. Performance obligations in a contract are services that are distinct, or part of a series of distinct goods and services that are substantially the same and have the same pattern or transfer to the customer.
Turnover is measured at the fair value of the consideration received or receivable at the point in time and represents amounts sales-relate receivable for services provided in the normal course of business, net of discounts, VAT and other taxes.
Revenue recognition
Performance obligation identification
Although the specific services and method of delivery vary based on the terms of each contract, management has identified the main performance obligations present in the Company’s contracts with customers.
The Company satisfies its performance obligations upon completion of the services as outlined in the contracts and in providing permanent and temporary candidates into the third party entity.
Turnover arising from the placement of permanent candidates, is recognised at the point in time the candidate commences full-time employment. Turnover arising from temporary contractor placements, is recognised in the month of the work being performed by the contractor through the duration of the placement. Turnover arising from the RPO (Recruitment Process Outsourcing agreement) is recognised on a monthly basis with regards to the monthly fee invoiced and subsequently recognised when a hire is made.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
13
Management have concluded that the services provided are not distinct i.e. the client is not able to benefit from the services on their own and the Company will not be able to fulfil its promise by transferring these separately - i.e. all of the services are significantly affected by each other. Therefore there is considered to be one performance obligation and the total transaction price is allocated to this performance obligation.
Once the invoices have been raised, these have standard credit terms for trade receivables are 30-60 days from invoice date, although certain credit terms are contract specific.
Transaction Price Determination
After identifying the performance obligations, the Company determines the amount of consideration it expects to be entitled to for providing the services under the contracts based on the consideration specified in the customer arrangement.
The revenue recognised from a permanent placement is typically based on a percentage of the candidate’s remuneration package. The turnover arising from temporary placements is typically based on a percentage of the placement’s hourly rate less employment taxes. Turnover arising from the RPO (Recruitment Process Outsourcing agreement) is recognised on an agreed monthly fee and subsequently an additional fee is raised when a hire is made.
As the majority of the Company’s contracts are for a term of 12 months or less, the Company is not required to adjust the promised amount of consideration for effects of a significant financing component. All amounts are allocated for the transaction price as all performance obligations would be satisfied at the point of invoice. In some cases, the customer is entitled to a rebate percentage of the fee if the candidate’s employment comes to an end within the first few weeks of the contract.
In some cases the customer is entitled to a rebate percentage of the fee if the candidate's employment comes to an end within the first few weeks of the contract.
1.4
Property, plant and equipment
Property, plant and equipment 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:
Leasehold improvements
100% straight line
Fixtures and fittings
25% reducing balance
Computers
33% straight line
Right-of-use assets
Over the life of the lease
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14
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 recognised in the income statement.
Right-of-use assets
All leases are accounted for by recognising a right-of-use asset and a lease liability.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the Company's incremental borrowing rate on commencement of the lease is used.
Identifying leases
The Group accounts for a contract, or a portion of a contract, as a lease when it conveys the right to use an asset for a period of time in exchange for consideration. Leases are those contracts that satisfy the following criteria:
(a) There is an identified asset;
(b) The Group obtains substantially all the economic benefits from use of the asset; and
(c) The Group has the right to direct use of the asset.
The Group considers whether the supplier has substantive substitution rights. If the supplier does have those rights, the contract is not identified as giving rise to a lease.
In determining whether the Group obtains substantially all the economic benefits from use of the asset, the Group considers only economic benefits that rise use of the asset, not those incidental to legal ownership or other potential benefits.
In determining whether the Group has the right to direct use of the asset, the Group considers whether it directs how and for what purpose the asset is used throughout the period of use. If there are no significant decisions to be made because they are pre-determined due to the nature of the asset, the Group considers whether it was involved in the design of the asset in a way that predetermined how and for what purpose the asset will be used throughout the period of use. If the contract or portion of a contract does not satisfy these criteria, the Group applies other applicable IFRSs rather than IFRS 16.
On initial recognition, the carrying value of the lease liability also includes:
amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.
Right of use assets re initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset.
Subsequently, lease liabilities increase as a right of the interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right of use assets are depreciated on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
1.5
Impairment of tangible and intangible assets
If any indication that non-current assets have suffered an impairment loss exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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 Group 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.
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.
1.6
Cash and cash equivalents
Cash and cash equivalents 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.
1.7
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price as disclosed in the section 'Revenue recognition'.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
Financial assets held at amortised cost
For purposes of subsequent measurement, financial assets are classified in two categories:
The Company's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows, which will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. All other assets are classified and measured at fair value through profit or loss.
All financial assets, other than cash and cash equivalents and derivatives, are classified and measured at 'amortised cost'. The amortised cost of a financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest rate method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance. Interest income is recognised using the effective interest rate method for financial assets subsequently measured at amortised cost. For financial assets other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired.
Impairment of financial assets
Where there has not been a significant increase in exposure to credit risk since initial recognition, a lifetime credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of the expected credit loss recognised is adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
For trade receivables the Company applies a simplified approach in calculating expected credit losses ("ECLs"). Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. This is further enhanced with specific provisions where this is deemed appropriate by management.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 to 90 days.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
1.8
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Trade and other payables
Trade and other payables represent liabilities for services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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 income statement 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.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
18
Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
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 inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
A termination benefit liability is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Post-employment obligations
The Group operates a defined contribution pension plan. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
19
1.13
Share-based payments
Cash-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the instruments granted using the Monte Carlo model. The fair value determined at the grant date is expensed on a straight-line basis over the period of service of key management vesting period, based on the estimate of shares that will eventually vest.
The Company participates in a share-based payment arrangement granted to its management by its ultimate parent Company. The Company has elected to recognise and measure its share-based payment expense on the basis of a reasonable allocation of the expense. The expense in relation to options over the parent Company's shares granted to employees of the Company is recognised by the Company as a capital contribution and presented as an increase in the parent's investment in that subsidiary.
1.14
Leases
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, where the interest rate implicit in the lease cannot be readily determined the lease payments are discounted using the Group's incremental borrowing rate ("IBR"). The lease term is estimated as the non-cancellable period of a lease, plus any option to extend or terminate the lease which is expected to be exercised.
The lease liability is measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the future lease payments or lease term. When a lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
2
Critical accounting judgements and key sources of estimation uncertainty
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements
The critical areas of accounting judgement are outlined as:
Loss allowance on trade receivables
For trade receivables and contract assets, the Company applies a simplified approach in calculating expected credit losses ("ECLs"). The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, Grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each subsidiary. See note 10 for the carrying amount of trade receivables and the allowance for expected credit losses.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Critical accounting judgements and key sources of estimation uncertainty (continued)
20
Revenue from contracts with customers
In connection with the recognition of revenue, the Company makes significant judgments mainly with regards to the identification of performance obligations, the allocation of consideration to each separately identifiable performance obligation.
Share-based payments
Share-based payments are valued at the date of grant using a Monte Carlo pricing model. The key judgements relate to the inputs to the pricing model which include share price volatility, historical and expected dividends and expected future performance of the entity to which the award relates.
3
Revenue
2023
2022
£
£
(as restated)
Revenue analysed by class of business
Temporary placements
18,453,709
20,620,989
Permanent placements
1,829,972
2,819,386
20,283,681
23,440,375
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
70,297
(150,802)
Fees payable to the company's auditor for the audit of the company's financial statements
48,000
43,200
Depreciation of property, plant and equipment
517,577
466,691
Share-based payments
(379,976)
298,262
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
71
73
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
5
Employees (continued)
21
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,394,660
4,189,397
Social security costs
551,256
567,070
Pension costs
60,847
49,411
5,006,763
4,805,878
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
478,252
513,640
Company pension contributions to defined contribution schemes
7,000
7,000
485,252
520,640
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
252,773
294,890
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3. The directors are paid for their services through a 100% subsidiary located in England and Wales.
7
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
85
50
Interest on lease liabilities
39,171
59,259
39,256
59,309
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of temporary differences
72,416
276,941
Changes in tax rates
86,053
72,416
362,994
On 1 April 2023 the corporation tax rate for the UK increased from 19% to 25%.
The charge for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£
£
Profit before taxation
397,569
1,274,969
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
93,508
242,244
Effect of expenses not deductible in determining taxable profit
70,384
17,586
Income not taxable
(89,327)
Effect of change in UK corporation tax rate
5,501
86,053
Permanent capital allowances in excess of depreciation
1,810
(2,593)
Other permanent differences
-
26,992
Movement in deferred tax not recognised
(9,460)
(19,748)
Effect of IFRS transition
-
12,460
Taxation charge for the year
72,416
362,994
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
23
9
Property, plant and equipment
Leasehold improvements
Fixtures and fittings
Computers
Right-of-use assets
Total
£
£
£
£
£
Cost
At 1 January 2023
51,241
4,186
223,514
1,464,787
1,743,728
Additions
3,759
3,759
At 31 December 2023
51,241
4,186
227,273
1,464,787
1,747,487
Accumulated depreciation and impairment
At 1 January 2023
21,351
678
133,383
549,295
704,707
Charge for the year
29,890
877
47,374
439,436
517,577
At 31 December 2023
51,241
1,555
180,757
988,731
1,222,284
Carrying amount
At 31 December 2023
2,631
46,516
476,056
525,203
At 31 December 2022
29,890
3,508
90,131
915,492
1,039,021
10
Trade and other receivables
Current
Non-current
2023
2022
2023
2022
£
£
£
£
as restated
Trade receivables
2,939,363
4,403,038
-
-
Provision for bad and doubtful debts
(100,000)
(70,062)
-
-
2,839,363
4,332,976
-
-
VAT recoverable
163,319
12,264
-
-
Amounts owed by fellow group undertakings
3,007,638
1,189,696
Other receivables
94,736
90,800
-
-
Prepayments and accrued income
723,469
538,728
-
-
6,828,525
6,164,464
-
-
Deferred tax asset
-
-
1,169,543
1,241,959
6,828,525
6,164,464
1,169,543
1,241,959
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
11
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Trade and other payables
12
4,637,731
3,485,340
Taxation and social security
139,804
139,546
-
-
Lease liabilities
13
552,160
504,090
47,193
599,352
Deferred income
16
28,432
450,339
5,358,127
4,579,315
47,193
599,352
12
Trade and other payables
2023
2022
£
£
as restated
Trade payables
1,537,197
1,429,847
Amounts owed to fellow group undertakings
2,154,825
1,071,013
Accruals and deferred income
606,372
942,954
Other payables
339,337
41,526
4,637,731
3,485,340
13
Lease liabilities
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2023
2022
£
£
Current liabilities
552,160
504,090
Non-current liabilities
47,193
599,352
599,353
1,103,442
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
39,171
59,259
The Company's lease arrangements are in relation to a property lease in London. The Company is reasonably certain that it will not exercise any early termination clauses in the lease.
Total cash outflows for lease liabilities for the year ended 31 December 2023 were £543,263 (2023: 348,750).
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
25
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Accelerated capital allowances
Tax losses
Other short term timing differences
Total
£
£
£
£
Asset at 1 January 2022
17,315
(1,594,953)
(27,315)
(1,604,953)
Deferred tax movements in prior year
Charge/(credit) to profit or loss
9,132
346,141
7,721
362,994
Asset at 1 January 2023
26,447
(1,248,812)
(19,594)
(1,241,959)
Deferred tax movements in current year
Charge/(credit) to profit or loss
(14,160)
93,944
(7,368)
72,416
Asset at 31 December 2023
12,287
(1,154,868)
(26,962)
(1,169,543)
15
Provisions for liabilities
During the year, a provision of £206,405 was recognised within other payables in relation to an onerous contract.
The contract was entered into prior to the year end for a set number of licences of which, following the reduction in headcount, is no longer being fully utilised. The contract is non-cancellable and non-negotiable; therefore, a provision has been recognised for the element considered to be onerous, which equates to the cost of the licences held surplus to requirement based on forecasted headcount.
16
Deferred revenue
2023
2022
£
£
Other deferred revenue
28,432
450,339
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
60,847
49,411
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.
Outstanding pension commitments recognised as a liability at the balance sheet date amounted to £18,968 (2022: £21,075).
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
26
18
Share-based payments
2023
2022
£
£
Expenses
Related to cash settled share based payments
(379,976)
298,262
During the year ended 31 December 2023, a share based payment credit of £379,976 (2022: £298,262 charge) was recognised in relation to the grant of equity instruments of Project Panda Topco Limited to employees of Meet Recruitment Limited,
Subsidiary exemptions have been taken in relation to share-based payments. Further details of the share-based payments are available from the consolidated financial statements of the parent company, Project Panda Topco Limited.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,250
1,250
1,250
1,250
Ordinary shares have full voting rights and rights to dividends.
20
Share premium account
2023
2022
£
£
At the beginning and end of the year
2,250
2,250
The share premium account represents the premium on allotment of shares and is not available for distribution.
21
Capital contributions
2023
2022
£
£
At the beginning of the year
861,144
562,882
Additions
-
298,262
Other movements
(379,976)
-
At the end of the year
481,168
861,144
Capital contribution reserves represents the share-based payment reserve which arises as the expense of issuing share-based payments is recognised over time.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
27
22
Related party transactions
During the year, remuneration of £932,582 (including post-employment benefits of £9,642) was paid to key management personnel (including the directors).
FRS 101 exempts preparers from the requirements of para. 17 and 18A of IAS 24, meaning that FRS 101 accounts do not disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned within the group. All transactions are with wholly owned companies within the group.
23
Controlling party
At the balance sheet date, the immediate parent company is Meet Group Limited, and the ultimate parent is Project Panda Topco Limited. The directors consider there no one ultimate controlling party. The consolidated financial statements of Project Panda Topco Limited are available from Companies House.
24
Transition adjustments
Reconciliation of equity
1 January
31 December
2022
2022
Notes
£
£
Equity as previously reported
3,165,095
4,440,908
Adjustments to prior year (note 25)
-
47,748
As restated
3,165,095
4,488,656
Adjustments arising from transition:
IFRS 16 adjustment - retained earnings
(74,627)
(187,950)
Equity as restated
3,090,468
4,300,706
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
Transition adjustments (continued)
28
Reconciliation of equity
At 1 January 2022
At 31 December 2022
Previously reported
Effect of transition
As restated
Previously reported
Prior year adjustment
Effect of transition
As restated
Notes
£
£
£
£
£
£
£
Non-current assets
Property, plant and equipment
69,259
1,318,308
1,387,567
123,529
-
915,492
1,039,021
Current assets
Deferred tax
1,604,953
-
1,604,953
1,241,959
-
-
1,241,959
Trade and other receivables - other
9,067,437
-
9,067,437
5,933,413
231,051
-
6,164,464
Bank and cash
658,192
-
658,192
1,033,929
-
-
1,033,929
11,330,582
-
11,330,582
8,209,301
231,051
-
8,440,352
Creditors due within one year
Finance leases
-
(289,491)
(289,491)
1
-
(504,091)
(504,090)
Other payables
(8,234,746)
-
(8,234,746)
(3,441,583)
(183,303)
-
(3,624,886)
Deferred income
-
-
-
(450,339)
-
-
(450,339)
(8,234,746)
(289,491)
(8,524,237)
(3,891,921)
(183,303)
(504,091)
(4,579,315)
Net current assets
3,095,836
(289,491)
2,806,345
4,317,380
47,748
(504,091)
3,861,037
Total assets less current liabilities
3,165,095
1,028,817
4,193,912
4,440,909
47,748
411,401
4,900,058
Creditors due after one year
Finance leases
-
(1,103,444)
(1,103,444)
-
-
(599,352)
(599,352)
Net assets
3,165,095
(74,627)
3,090,468
4,440,909
47,748
(187,951)
4,300,706
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
Transition adjustments
At 1 January 2022
At 31 December 2022
Previously reported
Effect of transition
As restated
Previously reported
Prior year adjustment
Effect of transition
As restated
Notes
£
£
£
£
£
£
£ (continued)
29
Equity
Share capital
1,250
-
1,250
1,250
-
-
1,250
Share premium
2,250
-
2,250
2,250
-
-
2,250
Other reserves
562,882
-
562,882
861,144
-
-
861,144
Profit and loss
2,598,713
(74,627)
2,524,086
3,576,264
47,748
(187,950)
3,436,062
Total equity
3,165,095
(74,627)
3,090,468
4,440,908
47,748
(187,950)
4,300,706
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
30
Reconciliation of profit for the financial period
Year ended 31 December 2022
Previously reported
Prior year adjustment
Effect of transition
As restated
Notes
£
£
£
£
Revenue
23,209,324
231,051
-
23,440,375
Cost of sales
(17,131,094)
(183,303)
-
(17,314,397)
Gross profit
6,078,230
47,748
-
6,125,978
Administrative expenses
(6,832,281)
-
(54,066)
(6,886,347)
Other operating income
2,094,647
-
-
2,094,647
Operating profit
1,340,596
47,748
(54,066)
1,334,278
Finance costs
(50)
-
(59,259)
(59,309)
Taxation
(362,994)
-
-
(362,994)
Profit for the financial period
977,552
47,748
(113,325)
911,975
Notes to reconciliations
IFRS 16
IFRS 16 requires the capitalisation of leased assets together with the recognition of associated lease liabilities. The subsequent treatment of these assets and liabilities differs, and typically gives rise to a frontloaded income statement effect since the effective interest on the lease liability unwinds based on a higher brought forward liability in earlier years.
As such, we have brought the building lease onto the balance sheet from the transition date of 1 January 2022 with the subsequent depreciation and interest payments included in the the income statement.
The right of use assets have been depreciated over the life of the lease and the accounting policy reflects this.
The discount rate applied to the lease liability has been based on the cost of capital to the company and group. The lease liabilities are being unwound in line with the lease term.
Cash flow statement
The company has taken advantage of the exemptions available under FRS 101 which includes the preparation of a cashflow statement. The material adjustment required on transition to IFRS would impact the finance costs relating to interest on the lease liabilities which have been incorporated into the profit and loss.
Additionally, there would be the recognition of the additional depreciation in the profit and loss which would be considered in the cashflow statement.
Meet Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
31
25
Prior period adjustment
Changes to the statement of financial position
At 31 December 2022
Balances as restated before transition adjustments:
Previously reported
Adjustment
As restated
£
£
£
Current assets
Debtors due within one year
5,933,413
231,051
6,164,464
Creditors due within one year
Other payables
(3,441,583)
(183,303)
(3,624,886)
Net assets
4,252,958
47,748
4,300,706
Capital and reserves
Retained earnings
3,388,314
47,748
3,436,062
Total equity
4,252,958
47,748
4,300,706
Notes to reconciliation
Contractor income and costs cut-off treatment
A prior year adjustment has been made to reflect contractor income and related costs which should have been accrued at the end of the prior year. Historically this has not been adjusted for as the net impact of missing accruals for the current and prior year have not been material. Due to the reduction in turnover in 2023 compared to 2022, the resulting error is now material and has been adjusted for.
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