Company Registration No. 10987828 (England and Wales)
Parallel Group Limited
Annual report and
group financial statements
for the year ended 31 December 2023
Parallel Group Limited
Company information
Directors
S J Lamport-Went
I A Al-Tarafi
Secretary
S J Lamport-Went
Company number
10987828
Registered office
The Warehouse
212 New King's Road
London
SW6 4NZ
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Parallel Group Limited
Contents
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Group profit and loss account
8
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 29
Parallel Group Limited
Strategic report
For the year ended 31 December 2023
1

The directors present the strategic report for the year ended 31 December 2023.

Business review and note on comparative financial information

The principal activity of the Parallel Group during the year continued to be the provision of recruitment services. Services include the provision of consultants and temporary workers on a contract hire basis along with permanent search & selection services.

 

During 2023 the Group's total turnover decreased by 14.9% from £14.72m to £12.53m. Turnover declined across all markets with the biggest decrease in our US market (47.5% decrease). The Group's gross profit in 2023 decreased by 29.9% from £6.13m to £4.29m. Average Group headcount increased marginally in 2023 from 75 to 79 staff (a 5% increase), however total wage & salary costs decreased by 7.3.%, reflecting a change in the mix of senior and junior sales staff.

 

Net administration expenses which include the above labour investment decreased by 7.5% in 2023 from £5.45m to £5.05m. As a result of these movements, the Group generated an Operating loss before tax and interest of £0.76m (Operating profit before interest and tax in 2022 of £0.68m).

 

 

Risk management objectives and policies

Management objectives are to retain and rebuild profits within the businesses, thus growing shareholder equity and thereby enabling the Group to continue to meet its day-to-day operational requirements and to build up its reserves. The businesses currently make little use of financial instruments other than bank accounts and invoice discounting facilities to help fund contract activities.

 

Foreign Currency: The group operates in multiple currencies and is therefore exposed to foreign exchange risk. Foreign exchange rates are constantly monitored with regular conversions taking place to ensure the group is not overly exposed with large foreign currency balances on account.

 

Credit risk: The group is exposed to potential payment default by our clients. The risk is mitigated by operating a strong credit control policy, regular monitoring of trade receivables and ensuring we have strong relationships with our clients to ensure prompt payment and awareness of any challenges our clients may be facing, allowing us to take fast pre-emptive action where required.

 

Liquidity Risk: The group is financed through its retained earnings. With a growing contract book, it is imperative that the group ensures there is not a short-term cash shortfall resulting in the group becoming illiquid. As a result, the group ensures that the client and contractor terms are in line with each other as well as running a strong credit control policy.

 

Other key business risk areas within the Group (market risk, geographic risk, and talent risk) are being successfully addressed through the diversification in our offerings within technology, varied geographic reach and our use of staff incentive plans.

On behalf of the board

I A Al-Tarafi
Director
18 October 2024
Parallel Group Limited
Directors' report
For the year ended 31 December 2023
2

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

Principal activities

The principal activity of the company and group continued to be that of the provision of recruitment services.

 

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £270,000 (2022: £400,000). The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

S J Lamport-Went
I A Al-Tarafi
Auditor

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

 

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

Parallel Group Limited
Directors' report (continued)
For the year ended 31 December 2023
3
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of its principal risks, financial risk management and, a review of its business.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
I A Al-Tarafi
Director
18 October 2024
Parallel Group Limited
Independent auditor's report
To the members of Parallel Group Limited
4
Opinion

We have audited the financial statements of Parallel Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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.

Parallel Group Limited
Independent auditor's report (continued)
To the members of Parallel Group Limited
5

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

 

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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

Parallel Group Limited
Independent auditor's report (continued)
To the members of Parallel Group Limited
6
Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the group and parent company 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 group and parent 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 group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.

 

Laws and regulations of direct significance in the context of the group and parent 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 group and parent company financial statement disclosures. We reviewed the parent 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 parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

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.

As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.

 

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.

Parallel Group Limited
Independent auditor's report (continued)
To the members of Parallel Group Limited
7

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.

Use of our report

This report is made solely to the parent 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 parent company's members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Jamie Cassell (Senior Statutory Auditor)
For and on behalf of Saffery LLP
18 October 2024
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Parallel Group Limited
Group profit and loss account
For the year ended 31 December 2023
8
2023
2022
Notes
£'000
£'000
Turnover
3
12,531
14,720
Cost of sales
(8,234)
(8,592)
Gross profit
4,297
6,128
Administrative expenses
(6,486)
(6,867)
Other operating income
1,429
1,417
Operating (loss)/profit
4
(760)
678
Interest receivable and similar income
8
1
-
0
Interest payable and similar expenses
9
(14)
(1)
(Loss)/profit before taxation
(773)
677
Tax on (loss)/profit
10
(2)
(121)
(Loss)/profit for the financial year
(775)
556
(Loss)/profit for the financial year is attributable to:
- Owners of the parent company
(752)
526
- Non-controlling interests
(23)
30
(775)
556
Parallel Group Limited
Group statement of comprehensive income
For the year ended 31 December 2023
9
2023
2022
£'000
£'000
(Loss)/profit for the year
(775)
556
Other comprehensive income
Currency translation gain taken to retained earnings
40
14
Total comprehensive income for the year
(735)
570
Total comprehensive income for the year is attributable to:
- Owners of the parent company
(712)
540
- Non-controlling interests
(23)
30
(735)
570
Parallel Group Limited
Group balance sheet
As at 31 December 2023
31 December 2023
10
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
12
75
12
Investments
13
-
0
-
0
75
12
Current assets
Debtors
15
2,251
2,984
Cash at bank and in hand
616
1,221
2,867
4,205
Creditors: amounts falling due within one year
16
(1,632)
(1,908)
Net current assets
1,235
2,297
Total assets less current liabilities
1,310
2,309
Creditors: amounts falling due after more than one year
17
(55)
-
Net assets
1,255
2,309
Capital and reserves
Called up share capital
21
3,664
3,664
Other reserves
(3,663)
(3,663)
Profit and loss reserves
1,277
2,278
Equity attributable to owners of the parent company
1,278
2,279
Non-controlling interests
(23)
30
1,255
2,309
The financial statements were approved by the board of directors and authorised for issue on 18 October 2024 and are signed on its behalf by:
18 October 2024
I A  Al-Tarafi
Director
Company Registration No. 10987828
Parallel Group Limited
Company balance sheet
As at 31 December 2023
31 December 2023
11
2023
2022
Notes
£'000
£'000
Fixed assets
Investments
13
3,239
3,664
Capital and reserves
Called up share capital
21
3,664
3,664
Profit and loss reserves
(425)
-
Total equity
3,239
3,664

As permitted by s408 Companies Act 2006, the Company has not presented its own statement of comprehensive income. The Company's total comprehensive income for the year was -£155,247 (2022: £400,000).

 

The financial statements were approved by the board of directors and authorised for issue on 18 October 2024 and are signed on its behalf by:
18 October 2024
I A  Al-Tarafi
Director
Company Registration No. 10987828
Parallel Group Limited
Group statement of changes in equity
For the year ended 31 December 2023
12
Share capital
Other reserves
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£'000
£'000
£'000
£'000
£'000
£'000
Balance at 1 January 2022
3,664
(3,663)
2,122
2,123
16
2,139
Year ended 31 December 2022:
Profit for the year
-
-
526
526
30
556
Other comprehensive income:
Currency translation differences
-
-
11
11
3
14
Total comprehensive income
-
-
537
537
33
570
Dividends
11
-
-
(400)
(400)
-
(400)
Balance at 31 December 2022
3,664
(3,663)
2,259
2,260
49
2,309
Year ended 31 December 2023:
Loss for the year
-
-
(752)
(752)
(23)
(775)
Other comprehensive income:
Currency translation differences
-
-
40
40
-
40
Total comprehensive income
-
-
(712)
(712)
(23)
(735)
Dividends
11
-
-
(270)
(270)
-
(270)
Balance at 31 December 2023
3,664
(3,663)
1,277
1,278
26
1,304
Parallel Group Limited
Company statement of changes in equity
For the year ended 31 December 2023
13
Share capital
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
Balance at 1 January 2022
3,664
-
0
3,664
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
400
400
Dividends
11
-
(400)
(400)
Balance at 31 December 2022
3,664
-
0
3,664
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(155)
(155)
Dividends
11
-
(270)
(270)
Balance at 31 December 2023
3,664
(425)
3,239
Parallel Group Limited
Group statement of cash flows
For the year ended 31 December 2023
14
2023
2022
Notes
£'000
£'000
£'000
£'000
Cash flows from operating activities
Cash (absorbed by)/generated from operations
26
(219)
1,034
Interest paid
(14)
(1)
Income taxes paid
(57)
(168)
Net cash (outflow)/inflow from operating activities
(290)
865
Investing activities
Purchase of tangible fixed assets
(90)
(3)
Interest received
1
-
0
Net cash used in investing activities
(89)
(3)
Financing activities
Payment of finance leases obligations
59
-
Dividends paid to equity shareholders
(270)
(400)
Net cash used in financing activities
(211)
(400)
Net (decrease)/increase in cash and cash equivalents
(590)
462
Cash and cash equivalents at beginning of year
1,101
637
Effect of foreign exchange rates
(9)
2
Cash and cash equivalents at end of year
502
1,101
Relating to:
Cash at bank and in hand
616
1,221
Short term borrowings
(114)
(120)
Parallel Group Limited
Notes to the group financial statements
For the year ended 31 December 2023
15
1
Accounting policies
Company information

Parallel Group Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is The Warehouse, 212 New King's Road, London, SW6 4NZ.

 

The group consists of Parallel Group Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The Company is a qualifying entity under FRS 102 Reduced Disclosure Framework and has taken advantage of an exemption from presenting a statement of cash flow and related notes.

 

As permitted by s408 Companies Act 2006, the Company has not presented its own statement of comprehensive income. The Company's total comprehensive income for the year was -£155,247 (2022: £400,000).

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Parallel Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

 

1.3
Going concern

The Directors are regularly reviewing the financial information on the business and have prepared detailed forecasts that have been sensitised to reflect the uncertainty in the market place. Even with the forecasts sensitised the company and group has enough funds through its current bank balance and relevant funding lines to continue in operation for a period of greater than 12 months. The directors are also managing the business carefully looking at margins, recruitment hires and other business operations to ensure the business is fit for purpose for the future. Therefore the directors have elected to continue to prepare the financial statements on the going concern basis.

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
1.4
Turnover

Turnover shown in the profit and loss account represents the sales value of all services, whether invoiced or accrued, delivered during the year, exclusive of value added tax. Sales are recognised at the point at which the Group has fulfilled its contractual obligations to the client.

 

Turnover in respect of temporary placements is recognised when the service has been rendered and accepted by the client.

 

Turnover in respect of contingent permanent fees is recognised when the company has fulfilled its contractual obligations in accordance with the underlying contracts. Depending on the contract, this is either on the start date of the candidates' employment, or when a candidate accepts an offer of employment and a start date has been determined.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvement
20% straight line
Fixtures and fittings
20% straight line
Computers
33.3% straight line
Motor vehicles
33.3% straight line

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 profit and loss account.

The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.

1.6
Fixed asset investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Investments are stated at cost, being purchase price, less provision for impairment.

1.7
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
1.9
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
18
1.10
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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 stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

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

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
19
1.14
Share-based payments

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

 

The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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.

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
20
2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Intercompany recharges

During the year, the group received income in the form of recharges from its associated companies. Management use a detailed transfer pricing calculation and intercompany contract to form the basis of these recharges. The percentage recharges are conducted based on a usage basis (or anticipated usage) and per the transfer pricing agreement this ranges from 2% to 3%.

Impairment of investment in subsidiaries

The group conducts an impairment review of the investment in subsidiaries whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable or tests for impairment annually in accordance with the relevant accounting standards. Determining whether an asset is impaired requires an estimation of the recoverable amount which requires the group to estimate the value in use which is based on future cash flows and a suitable discount factor in order to calculate the present value. Where the actual cash flows are less than expected, an impairment loss may arise. After reviewing the business environment and the group's strategies and past performance of its cash generating units, management concluded that there was no impairment of investments in subsidiaries at the current year end.

Share based payments

The estimated fair values of the Company’s share options have been calculated using a Black-Scholes valuation technique. This method requires the application of judgement in assessing a number of key inputs, including expected dividends, expected share price volatility and the expected period to exercise. The Directors makes these judgement by reference to observable external sources, where applicable, or by review of forecast and historical data.

Recoverability of intercompany balances

Management regularly assess balances due between group entities and whether these are recoverable. Where it is considered that the future cash flows of these debts are less than the carrying amount in the individual company financial statements, appropriate provisions are made against these balances to reflect the recoverability of the asset.

3
Turnover and other revenue
2023
2022
£'000
£'000
Turnover analysed by class of business
Recruitment services
12,531
14,720
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
3
Turnover and other revenue (continued)
21
2023
2022
£'000
£'000
Other significant revenue
Interest income
1
-
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
474
752
Rest of the World
12,057
13,968
12,531
14,720
4
Operating (loss)/profit
2023
2022
£'000
£'000
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
89
(63)
Depreciation of owned tangible fixed assets
27
18
Operating lease charges
477
447
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the group and company
4
4
Audit of the financial statements of the company's subsidiaries
32
30
36
34
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
22
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Sales consultants
54
51
-
-
Administrative staff
25
24
-
-
Total
79
75
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Wages and salaries
4,171
4,439
-
0
-
0
Social security costs
387
442
-
-
Pension costs
55
92
-
0
-
0
4,613
4,973
-
0
-
0
7
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services (including P11D's)
31
29
Company pension contributions to defined contribution schemes
-
40
31
69
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to nil (2022: 2).
8
Interest receivable and similar income
2023
2022
£'000
£'000
Interest income
Interest on bank deposits
1
-
0
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
23
9
Interest payable and similar expenses
2023
2022
£'000
£'000
Interest payable on short term borrowings
11
1
Interest on finance leases and hire purchase contracts
3
-
Total finance costs
14
1
10
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
-
0
122
Adjustments in respect of prior periods
2
(1)
Total current tax
2
121

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£'000
£'000
(Loss)/profit before taxation
(773)
676
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(147)
129
Tax effect of expenses that are not deductible in determining taxable profit
5
5
Tax effect of utilisation of tax losses not previously recognised
14
-
0
Change in unrecognised deferred tax assets
128
-
0
Adjustments in respect of prior years
2
(1)
Effect of overseas tax rates
-
0
(8)
Under provided in respect of current year
-
0
(4)
Taxation charge
2
121
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£'000
£'000
Interim paid
270
400
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
24
12
Tangible fixed assets
Group
Leasehold improvement
Fixtures and fittings
Computers
Motor vehicles
Total
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
230
113
75
-
0
418
Additions
-
0
-
0
-
0
90
90
At 31 December 2023
230
113
75
90
508
Depreciation and impairment
At 1 January 2023
230
109
67
-
0
406
Depreciation charged in the year
-
0
4
8
15
27
At 31 December 2023
230
113
75
15
433
Carrying amount
At 31 December 2023
-
0
-
0
-
0
75
75
At 31 December 2022
-
0
4
8
-
0
12
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.

Motor vehicles include amount in respect of assets held on hire purchase with a net book value of £75,000 (2022: £nil). The depreciation charge for the year in relation to these amounted to £15,000 (2022: £nil).

13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£'000
£'000
£'000
£'000
Investments in subsidiaries
14
-
0
-
0
3,239
3,664
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
13
Fixed asset investments (continued)
25
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£'000
£'000
£'000
Cost or valuation
At 1 January 2023
3,664
277
3,941
Impairment
(425)
-
(425)
At 31 December 2023
3,239
277
3,516
Impairment
At 1 January 2023 and 31 December 2023
-
277
277
Carrying amount
At 31 December 2023
3,239
-
3,239
At 31 December 2022
3,664
-
3,664
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Parallel Consulting Limited
The Warehouse, 212 New King's Road, London, SW6 4NZ
Ordinary
100
Parallel Consulting Inc
251 Little Falls Drive, Wilmington DE19808, County of New Castle, Delaware, USA
Common stock
90
Parallel Consulting B.V
Ceintuurbaan 211,
3051 KC Rotterdam,
Netherlands
Ordinary
100
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£'000
£'000
£'000
£'000
Trade debtors
1,856
2,415
-
0
-
0
Corporation tax recoverable
4
-
0
-
0
-
0
Amounts owed by associated undertakings
67
276
-
-
Other debtors
324
293
-
0
-
0
2,251
2,984
-
-
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
15
Debtors (continued)
26

Trade debtors include amounts that were both invoiced and un-invoiced at the year end. The amount of such income included in trade debtors is for the group £678,000 (2022: £862,000) and company £nil (2022: £nil).

16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£'000
£'000
£'000
£'000
Obligations under finance leases
18
4
-
0
-
0
-
0
Trade creditors
855
846
-
0
-
0
Corporation tax payable
-
0
51
-
0
-
0
Other taxation and social security
125
172
-
-
Invoice discounting
114
120
Other creditors
534
719
-
0
-
0
1,632
1,908
-
-

Trade creditors include amounts that were both invoiced and un-invoiced at the year end. The amount of such un-invoiced costs included in trade creditors is for the Group £141,000 (2022: £248,000) and Company £nil (2022: £nil).

 

The invoice discounting facility with Barclays is secured by two fixed and floating charges and a debenture on all the assets of the subsidiary.

17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£'000
£'000
£'000
£'000
Obligations under finance leases
18
55
-
0
-
0
-
0
18
Finance lease obligations
Group
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Future minimum lease payments due under finance leases:
Within one year
10
-
0
-
0
-
0
In two to five years
62
-
0
-
0
-
0
72
-
-
-
Less: future finance charges
(13)
-
0
-
0
-
0
59
-
-
0
-
0
Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
18
Finance lease obligations (continued)
27

Finance lease payments represent rentals payable by the company for motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
Retirement benefit schemes
2023
2022
Pensions
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
55
92

All the companies in the group have either auto enrol pension schemes in place or make contributions to local pension schemes where required by law.

 

The group also operates a defined contribution pension scheme. At the year end the unpaid pension contributions of the Company were £nil (2022: £nil) and of the Group £7,000 (2022: £10,000).

20
Share-based payment transactions

During the year the company operated two equity settled option schemes over a maximum term of 10 years. The first scheme is based on performance conditions of both the group and the individual prior to an exit event. The second is based on an exit event only.

Group
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£'000
£'000
Outstanding at 1 January 2023
1,126,650
1,346,490
-
-
Forfeited
(219,840)
(219,840)
-
-
Outstanding at 31 December 2023
906,810
1,126,650
-
-
Exercisable at 31 December 2023
-
-
-
-

 

The options outstanding at 31 December 2023 had an exercise price of £0.28, and a remaining contractual life of 7 years.

Group

The fair value of the equity instruments granted were calculated using a Black-Scholes model. The parent company has reviewed the value of the options and based on the conditions of the agreement any option charge is considered immaterial. The Black-Scholes model is considered to apply the most appropriate valuation method due to the relatively short contractual lives of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the “vesting date”).

 

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
28
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of £1 each
3,664,000
3,664,000
3,664
3,664

Ordinary shares have full rights in the company with respect to voting, dividends and distributions.

22
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Within one year
490
517
-
-
Between two and five years
318
747
-
-
808
1,264
-
-
23
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£'000
£'000
Aggregate compensation
31
69
Transactions with related parties

During the year the group entered into the following transactions with related parties:

2023
2022
£'000
£'000
Group
Entities with control, joint control or significant influence
over the company
1,429
1,417

 

Parallel Group Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2023
23
Related party transactions (continued)
29

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£'000
£'000
Group
Entities with control, joint control or significant influence
over the company
7
2

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£'000
£'000
Group
Entities with control, joint control or significant influence
over the company
67
276

 

24
Directors' transactions

Dividends totalling £270,000 (2022: £400,000) were paid in the year in respect of shares held by the company's directors.

25
Ultimate Control

The ultimate controlling parties are S J Lamport-Went and I A Al-Tarafi.

26
Cash (absorbed by)/generated from group operations
2023
2022
£'000
£'000
(Loss)/profit for the year after tax
(775)
556
Adjustments for:
Taxation charged
2
121
Finance costs
14
1
Investment income
(1)
-
0
Depreciation and impairment of tangible fixed assets
27
18
Foreign exchange movements on non-cash items
-
12
Movements in working capital:
Decrease in debtors
737
442
Decrease in creditors
(223)
(116)
Cash (absorbed by)/generated from operations
(219)
1,034
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