Company registration number 01714804 (England and Wales)
ISG (GROUP SERVICES) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ISG (GROUP SERVICES) LIMITED
COMPANY INFORMATION
Directors
Mr S A J Lowndes
Mr T F Leonard
Secretary
Mr S A J Lowndes
Company number
01714804
Registered office
Hays House
Millmead
Guildford
Surrey
GU2 4HJ
Auditor
Edwards
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
ISG (GROUP SERVICES) LIMITED
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
ISG (GROUP SERVICES) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The company's principal activity is that of the provision of group services to companies within the Information Services Group, headed by Information Services Group, Inc. The company is a subsidiary of Information Services Group, Inc., ('ISG', 'the Group'). The Group is a management consulting firm that identifies and delivers significant improvement in the business operations of large global organisations. With over 1,300 professionals operating in 21 countries, ISG brings together a more comprehensive range of research, consulting and managed services offerings to deliver even greater value for our clients. From trusted business performance metrics and detailed assessment analytics to industry-leading transformation methodologies, ISG helps clients assess, optimise, and manage their operational environment and drive operational excellence throughout your organisation.

Results and dividends

The results for the year are set out on page 7.

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:

Mr S A J Lowndes
Mr A R Scheller
(Resigned 31 December 2023)
Mr T F Leonard
Directors' insurance

Throughout the financial year and up to the date of the approval of these financial statements, the ultimate parent company, Information Services Group, Inc., maintained Directors' and Officers' Liability insurance policies on behalf of the directors of the company. These policies meet the 2006 companies act definition of a qualifying third party indemnity provision.

Auditor

In accordance with the company's articles, a resolution proposing that Edwards be reappointed as auditor of the company will be put at a General Meeting.

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.

Funding and liquidity

The company has net current assets of £10,742,408 as at 31 December 2023 (2022: £9,915,848). The financial statements have been prepared on a going concern basis, which is dependent on the continuing financial support of the ultimate parent company, Information Services Group, Inc.

 

Information Services Group, Inc. has confirmed that it will provide financing to the company, if required, to allow the company to pay its debts as they fall due, for a period of at least twelve months following the signing of these financial statements.

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

ISG (GROUP SERVICES) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
On behalf of the board
Mr S A J Lowndes
Director
27 September 2024
ISG (GROUP SERVICES) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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:

 

 

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.

ISG (GROUP SERVICES) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ISG (GROUP SERVICES) LIMITED
- 4 -
Opinion

We have audited the financial statements of ISG (Group Services) 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

Other information

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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

ISG (GROUP SERVICES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ISG (GROUP SERVICES) LIMITED
- 5 -
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 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:

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:

Based on our understanding of the industry, we identified that the principal risks of non-compliance related to health and safety, GDPR and employment law. We considered the extent to which non-compliance might have a material affect on the financial statements. We also considered those laws and regulations that have a direct impact on preparation of the financial statements, such as the Companies Act 2006. We examined management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of overriding of controls) and determined that the principal risks were relating to management bias in accounting estimates. We also discussed with management the possibility of non-compliance with such regulations as noted above and reviewed the management controls in place to detect such irregularities. Audit procedures included challenging assumptions made by management in their significant accounting estimates. 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 described 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 due to 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: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

ISG (GROUP SERVICES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ISG (GROUP SERVICES) LIMITED
- 6 -

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.

Paul Tonks BSc (Econ) FCA (Senior Statutory Auditor)
For and on behalf of Edwards
1 October 2024
Chartered Accountants
Statutory Auditor
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
ISG (GROUP SERVICES) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Revenue
4
3,802,760
3,603,915
Cost of sales
(3,741,034)
(3,497,916)
Gross profit
61,726
105,999
Investment income
8
768,320
447,010
Finance costs
9
(42,768)
(18,754)
Profit before taxation
787,278
534,255
Tax on profit
10
(180,257)
(77,861)
Profit and total comprehensive income for the financial year
607,021
456,394

The income statement has been prepared on the basis that all operations are continuing operations.

ISG (GROUP SERVICES) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
11
244,036
416,054
Property, plant and equipment
12
462,547
632,567
706,583
1,048,621
Current assets
Trade and other receivables
13
14,715,603
14,112,780
Cash and cash equivalents
417,898
83,627
15,133,501
14,196,407
Current liabilities
14
(4,391,093)
(4,280,559)
Net current assets
10,742,408
9,915,848
Total assets less current liabilities
11,448,991
10,964,469
Non-current liabilities
14
(216,916)
(353,839)
Net assets
11,232,075
10,610,630
Equity
Called up share capital
19
1,000
1,000
Capital contribution reserve
788,715
788,715
Retained earnings
10,442,360
9,820,915
Total equity
11,232,075
10,610,630
The financial statements were approved by the board of directors and authorised for issue on 27 September 2024 and are signed on its behalf by:
Mr S A J Lowndes
Director
Company Registration No. 01714804
ISG (GROUP SERVICES) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Capital redemption reserve
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 January 2022
1,000
788,715
9,384,190
10,173,905
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
456,394
456,394
Adjustment in respect of employee share schemes
18
-
-
(19,669)
(19,669)
Balance at 31 December 2022
1,000
788,715
9,820,915
10,610,630
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
607,021
607,021
Adjustment in respect of employee share schemes
18
-
-
14,424
14,424
Balance at 31 December 2023
1,000
788,715
10,442,360
11,232,075
ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information

ISG (Group Services) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hays House, Millmead, Guildford, Surrey, GU2 4HJ. The company's principal activities and nature of its operations are disclosed in the directors' report.

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 on the historical cost basis. The principal accounting policies adopted are set out below.

As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to financial instruments, presentation of a cash flow statement, presentation of comparative information in respect of certain assets, standards not yet effective and related party transactions.

 

Where required, equivalent disclosures are given in the group accounts of Information Services Group, Inc. The group accounts of Information Services Group, Inc are available to the public.

1.2
Going concern

The company monitors cash flow as part of its control procedures. The directors consider cash flow projections on a monthly basis and ensure that appropriate facilities are available to be drawn upon as necessary. true

 

Based upon the activity levels forecast and confirmation that sufficient financial support will be provided by the ultimate parent company, the directors consider that the company will be able to maintain its cash at bank resources through the period that is twelve months from the date of approval of these financial statements.

 

At 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 represents sales to fellow group subsidiaries at invoiced amounts for regional management services including Finance, HR and IT functions, plus mark up. Revenues are earned over time and recognised as the company invoices its fellow group subsidiaries.

1.4
Intangible assets other than goodwill

Computer software is stated at cost less accumulated amortisation and accumulated impairment losses. Software is amortised over its estimated useful life, of between three and a half and two and a half years, on a straight line basis.

 

Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.

 

The assets are reviewed for impairment if the above factors indicate that the carrying value amount may be impaired.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.5
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
10% straight line
Fixtures and fittings
20% straight line
Computer equipment
40% straight line
Right of use assets
Over lease term

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.

1.6
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible 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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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.

 

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 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.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.8
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.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

Impairment of financial assets

Financial assets, other than those measured at fair value through profit or 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 of the investment have been effected.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.

1.9
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'.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

 

 

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

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.

1.10
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.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.11
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.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.

1.12
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.

 

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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Share-based payments

Equity-settled share-based payments are measured at market value at the date of grant by reference to the NASDAQ. The market value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the shares granted that will eventually vest. A corresponding adjustment is made to equity.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.15
Leases

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases 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.

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Adoption of new and revised standards and changes in accounting policies

In the current year, there were no new and revised Standards and Interpretations that had been adopted by the company which had an effect on the current period or future periods.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
3
Critical accounting estimates and judgements

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.

 

No critical estimates and assumptions have been used in the preparation of financial statements.

4
Revenue

These financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and the company is therefore exempt from the requirement to disclose a geographic analysis of revenue.

 

The company does not have contract assets and contract liabilities.

5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses
48
100
Fees payable to the company's auditor for the audit of the company's financial statements
15,450
14,500
Depreciation of property, plant and equipment
170,020
360,709
Amortisation of intangible assets (included within cost of sales)
221,439
249,180
6
Employees
2023
2022
Number
Number
Office and management
31
28
31
28

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,825,945
1,596,991
Social security costs
226,426
198,733
Pension costs
114,783
105,675
2,167,154
1,901,399
ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
162,437
160,917
Company pension contributions to defined contribution schemes
9,287
9,150
171,724
170,067

There was one director (2022 - 1) in the Company's defined contribution pension scheme 'Compass Group Personal Pension' during the year and one director (2022 - 1) entitled to shares under the ISG Group long-term incentive scheme.

 

The emoluments noted above were paid to one (2022 - 1) director of ISG (Group Services) Limited for their services as a director of ISG (Group Services) Limited and other subsidiaries in the ISG Group.

 

One of the directors was granted nil restricted stock units (2022 - Nil) during the year.

 

The remaining directors are employees of Information Services Group, Inc. based in the US and are remunerated for their services to the Group, not as directors of the Company. No recharge is made to the Company and hence no amounts are disclosed above.

 

 

8
Investment income
2023
2022
£
£
Interest income
Interest receivable from group undertakings
768,250
447,010
Other interest income
70
-
0
Total income
768,320
447,010
9
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
42,768
18,754
ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax for the current period
180,257
77,861

The charge for the year can be reconciled to the profit per the income statement as follows:

2023
2022
£
£
Profit before taxation
787,278
534,255
Expected tax charge based on a corporation tax rate of 25.00% (2022: 19.00%)
196,820
101,508
Effect of expenses not deductible/(taxable) in determining taxable profit
1,779
(10,931)
Effect of change in UK corporation tax rate
(16,228)
-
0
Group relief
(2,114)
-
0
Permanent capital allowances in excess of depreciation
-
0
(12,716)
Taxation charge for the year
180,257
77,861
Factors that may affect future tax charges

In October 2022, the UK Government announced that the proposed increase in the UK Corporation Tax rate to 25% will go ahead as planned starting 1 April 2023. As such, any deferred tax has been recognised at future tax rates based on the estimated timing of reversal.

There were no other factors that may affect future tax charges.

 

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Intangible fixed assets
Software
£
Cost
At 31 December 2022
886,754
Additions
49,421
At 31 December 2023
936,175
Amortisation and impairment
At 31 December 2022
470,700
Charge for the year
221,439
At 31 December 2023
692,139
Carrying amount
At 31 December 2023
244,036
At 31 December 2022
416,054
12
Property, plant and equipment
Leasehold improvements
Fixtures and fittings
Computer equipment
Right of use assets
Total
£
£
£
£
£
Cost
At 31 December 2022
243,443
88,847
565,103
1,129,010
2,026,403
Disposals
-
0
-
0
-
0
(461,232)
(461,232)
At 31 December 2023
243,443
88,847
565,103
667,778
1,565,171
Accumulated depreciation and impairment
At 31 December 2022
202,630
88,847
549,592
552,767
1,393,836
Charge for the year
10,350
-
0
11,342
148,328
170,020
Eliminated on disposal
-
0
-
0
-
0
(461,232)
(461,232)
At 31 December 2023
212,980
88,847
560,934
239,863
1,102,624
Carrying amount
At 31 December 2023
30,463
-
0
4,169
427,915
462,547
At 31 December 2022
40,813
-
0
15,511
576,243
632,567
ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
13
Trade and other receivables
2023
2022
£
£
VAT recoverable
84,607
103,042
Amounts owed by fellow group undertakings
14,391,008
13,527,623
Other receivables
4,435
205,365
Prepayments and accrued income
235,553
276,750
14,715,603
14,112,780

Amounts owed by group undertakings include a loan of £2,915,779 (2022 - £2,685,923) due from Information Services Group Netherlands B.V. and a loan of £6,829,653 (2022 - £6,291,259) due from Information Services Group Europe Limited. All loans incur interest at 3 months sterling LIBOR plus 3.5% per annum calculated on a daily basis and are repayable on demand.

 

The remaining amounts owed by group companies are unsecured, interest free and are repayable on demand.

14
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Trade and other payables
15
3,612,273
3,657,813
-
0
-
0
Corporation tax
180,257
47,841
-
-
Other taxation and social security
443,852
415,237
-
-
Lease liabilities
16
154,711
159,668
216,916
353,839
4,391,093
4,280,559
216,916
353,839
15
Trade and other payables
2023
2022
£
£
Trade payables
223,834
212,337
Amounts owed to fellow group undertakings
3,344,456
3,344,456
Accruals and deferred income
43,983
101,020
3,612,273
3,657,813

Amounts owed to group undertakings include a loan of £764,792 (2022 - £722,024) due to Information Services Group France S.A. The loan incurs interest at 3 months sterling LIBOR plus 1% per annum calculated on a daily basis and are repayable on demand.

 

The remaining amounts owed to group companies are unsecured, interest free and are repayable on demand.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
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:

Present Value
2023
£
Current liabilities
143,811
Non-current liabilities
227,816
371,627
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
114,783
105,675

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.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Share-based payment transactions

Certain of the Company's employees are awarded restricted stock units in Information Services Group Inc., a company based in the USA. Information Services Group Inc. currently issues restricted stock units under the 2007 Equity Incentive Plan.

 

Restricted Stock Units

The charge in respect of restricted stock units is calculated as the fair value on date of grant multiplied by the number of restricted stock units awarded spread over the vesting period. Restricted stock units of 9,990 were awarded in 2023 (2022 - 5,539). The average exercise price on grant date was £4.00 (2022 - £5.71).

Number of restricted stock units
Weighted average grant price
2023
2022
2023
2022
£
£
Outstanding at 1 January 2023
4,884
13,019
2.14
2.69
Granted in the period
9,990
5,539
4.00
5.71
Exercised / released in the period
(2,349)
(13,674)
5.39
3.14
Outstanding at 31 December 2023
12,525
4,884
4.27
2.14
Exercisable at 31 December 2023
5,886
1,832
4.51
2.14

The total charge for the year relating to restricted stock units was £14,424 (2022 - £19,669 credit).

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
20
Related party transactions

The company is a wholly owned subsidiary of Information Services Group, Inc. and the company has taken advantage of the exemption provided by FRS101 from disclosing related party transactions with other wholly owned entities.

ISG (GROUP SERVICES) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Controlling party

The Company's immediate parent undertaking is Information Services Group Netherlands B.V., a company registered in the Netherlands.

            

The company's ultimate parent undertaking and its controlling party is Information Services Group, Inc., a company registered in the United States of America. The consolidated financial statements of Information Services Group, Inc. are available at 2187 Atlantic Street, Stamford, CT 06902, USA. No other group financial statements include the results of the company.

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