Company Registration No. 09783489 (England and Wales)
Source Group International Limited
Annual report and financial statements
for the year ended 31 December 2023
Source Group International Limited
Company information
Directors
G Tew
L Hargreaves
A Dexter
Secretary
G Tew
Company number
09783489
Registered office
Dixcart House Addlestone
Bourne Business Park
Addlestone
England
KT15 2LE
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Source Group International Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
Source Group International Limited
Strategic report
For the year ended 31 December 2023
1
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The company's principal activity is that of recruitment consultancy providing both temporary and contract staff specialising in technology for multiple sectors including banking, digital, consultancy, medical tech and automotive manufacturing.
Revenue grew while the business continued to invest in controls and governance. A focus on cost discipline and sustainability produced a significant structural reduction in the cost base which mitigated a worsening of macro trading conditions across 2023.
The profit and loss on page 10 shows turnover of £28,378,945 (2022: £26,720,394) which resulted in a gross profit of £6,290,759 (2022: £6,515,707).
Operating profit for the year was £554,325 (2022: £492,712) resulting in a loss before tax for the year of £936 (2022: £66,175 profit).
The balance sheet shows that the company's net assets decreased from £781,767 to £642,775.
Strategy
The company's strategy is to continue to increase headcount in key markets where job flow is strong and margins attractive. This is underpinned by investments in the business support team, technology and training and development.
Principal risks and uncertainties
The company is exposed to several potential risks including market environment risk, credit risk, liquidity risk and foreign exchange risk.
Market Environment Risk
The company operates in domestic and international markets, each of which present challenges.
Credit Risk
All clients are credit checked prior to commencing trade, most are at least partially covered by credit insurance. The Company continues to investment in credit control to minimise outstanding debt. Regular reviews are undertaken by senior management and actions allocated accordingly.
Liquidity Risk
Credit terms and cash collection are carefully managed and regular cash forecasts are prepared and reviewed. The Company has regular discussions with banks and lenders and shares forecasts to ensure that sufficient credit facilities are in place.
Foreign Exchange Risk
The company is exposed to foreign exchange risk by nature of its multi region presence. The company reduces its foreign exchange risk by ensuring that contractor payroll is paid and billed in the same currency.
Source Group International Limited
Strategic report (continued)
For the year ended 31 December 2023
2
Key performance indicators
The company monitors a number of key performance indicators, including:
2023 2022
Net Fee Income £6,290,759 £6,515,707
Operating profit £554,325 £492,712
Net assets £642,775 £781,767
L Hargreaves
Director
4 November 2024
Source Group International Limited
Directors' report
For the year ended 31 December 2023
3
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of temporary employment agency activities.
Results and dividends
The results for the year are set out on page 9.
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:
A Dexter
L Hargreaves
G Tew
Auditor
Saffery LLP were appointed as auditor to the company and in accordance with section 485 of the Company Act 2006, and have expressed their willingness to continue in office.
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.
On behalf of the board
L Hargreaves
Director
4 November 2024
Source Group International Limited
Directors' responsibilities statement
For the year ended 31 December 2023
4
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Source Group International Limited
Independent auditor's report
To the members of Source Group International Limited
5
Opinion
We have audited the financial statements of Source Group International 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 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Source Group International Limited
Independent auditor's report (continued)
To the members of Source Group International Limited
6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
Source Group International Limited
Independent auditor's report (continued)
To the members of Source Group International Limited
7
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Source Group International Limited
Independent auditor's report (continued)
To the members of Source Group International Limited
8
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jamie Cassell
Senior Statutory Auditor
For and on behalf of
4 November 2024
Statutory Auditors
Source Group International Limited
Income statement
For the year ended 31 December 2023
9
2023
2022
Notes
£
£
Turnover
3
28,378,945
26,720,394
Cost of sales
(22,088,186)
(20,204,687)
Gross profit
6,290,759
6,515,707
Administrative expenses
(6,080,444)
(6,243,395)
Administrative expenses - One off costs
-
(88,440)
Other operating income
344,010
308,840
Operating profit
4
554,325
492,712
Interest receivable and similar income
7
5,154
Interest payable and similar expenses
8
(560,415)
(426,537)
(Loss)/profit before taxation
(936)
66,175
Tax on (loss)/profit
9
(138,056)
83,953
(Loss)/profit for the financial year
(138,992)
150,128
The income statement has been prepared on the basis that all operations are continuing operations.
Source Group International Limited
Statement of financial position
As at 31 December 2023
10
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
41,721
54,264
Tangible assets
11
53,602
61,879
Investments
12
92
92
95,415
116,235
Current assets
Debtors
14
8,941,833
8,665,719
Cash at bank and in hand
480,715
491,254
9,422,548
9,156,973
Creditors: amounts falling due within one year
15
(8,774,504)
(8,306,571)
Net current assets
648,044
850,402
Total assets less current liabilities
743,459
966,637
Creditors: amounts falling due after more than one year
16
(85,214)
(169,400)
Provisions for liabilities
Deferred tax liability
18
15,470
15,470
(15,470)
(15,470)
Net assets
642,775
781,767
Capital and reserves
Called up share capital
20
2
2
Profit and loss reserves
642,773
781,765
Total equity
642,775
781,767
The financial statements were approved by the board of directors and authorised for issue on 4 November 2024 and are signed on its behalf by:
L Hargreaves
Director
Company Registration No. 09783489
Source Group International Limited
Statement of changes in equity
For the year ended 31 December 2023
11
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
2
631,637
631,639
Year ended 31 December 2022:
Profit and total comprehensive income
-
150,128
150,128
Balance at 31 December 2022
2
781,765
781,767
Year ended 31 December 2023:
Loss and total comprehensive income
-
(138,992)
(138,992)
Balance at 31 December 2023
2
642,773
642,775
Source Group International Limited
Notes to the financial statements
For the year ended 31 December 2023
12
1
Accounting policies
Company information
Source Group International Limited is a private company limited by shares incorporated in England and Wales. The registered office is Dixcart House Addlestone Road, Bourne Business Park, Addlestone, England, KT15 2LE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss for the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 'Statement of Cash Flows: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 'Basic Financial Instruments and Section 12 'Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(ii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 'Share based Payment': Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 'Related Party Disclosures': Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Source Group International Holdings Limited. These consolidated financial statements are available from its registered office, Dixcart House, Addlestone Road, Bourne Business Park, Addlestone, England, KT15 2LE.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation based on the three year forecast that has been produced that the company has adequate resources to continue in operational existence for the foreseeable future. The directors of the company regularly review the performance of the business against the forecasts to ensure that they are meeting expectations and where necessary obtain sufficient funding to continue their growth strategy. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
13
1.3
Turnover
Turnover is recognised at the fair value of the consideration received for the placement of permanent and temporary staff in the ordinary course of the company's activities. Turnover is shown net of value added tax, returns, rebates and discounts. Turnover consists of:
- contractor placements, representing fees billed for the services of contractors including their costs, which is recognised when the service has been provided and an invoice has been raised
- permanent placements, representing fees billed as a percentage of the candidate's remuneration package, which is recognised on the start date of the candidate
Turnover not invoiced at the balance sheet date is included within accrued income.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Other Intangibles
3 years straight line
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:
Computers
5 years 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 credited or charged to profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14
1.7
Impairment of fixed assets
At each reporting period 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, 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.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
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 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.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
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.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
1.15
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
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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.
Assessing indicators of impairment of debtors and intercompany balances
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings, latest management accounts and experience of recoverability. There have been no material indicators of impairments identified during the current financial year.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Critical accounting judgements and key sources of estimation uncertainty (continued)
18
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Accrued contract income
In assessing the need for accrued contract income and associated costs, the directors utilise information both internal and external post year end to identify the need to recognised income associated with work performed not yet invoiced. As this information is often finalised post year end, there is an element of estimation uncertainty. In these instances, the directors use historic knowledge of the business and the industry to estimate the revenue and associated costs to be recognised.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Contract placements
26,579,578
24,576,013
Permanent placements
1,799,367
2,144,381
28,378,945
26,720,394
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
13,522,607
9,528,067
Europe
14,423,730
16,552,376
Rest of the world
432,608
639,951
28,378,945
26,720,394
2023
2022
£
£
Other revenue
Other income
2,770
4,650
Group recharges
341,740
304,190
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
19
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
458,510
232,041
Other income
(2,270)
(4,650)
Fees payable to the company's auditor for the audit of the company's financial statements
51,637
41,200
Depreciation of owned tangible fixed assets
19,267
14,424
Amortisation of intangible assets
12,543
35,967
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management
3
3
Sales
66
73
Total
69
76
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,373,158
3,928,665
Social security costs
776,256
543,380
Pension costs
192,327
146,687
4,341,741
4,618,732
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
477,795
539,320
Company pension contributions to defined contribution schemes
20,132
44,015
497,927
583,335
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
6
Directors' remuneration (continued)
20
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
201,320
189,583
Company pension contributions to defined contribution schemes
20,132
14,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
5,154
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
43,419
40,509
Interest on invoice finance arrangements
516,996
386,028
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
18,256
Adjustments in respect of prior periods
75,764
(47,514)
Total current tax
94,020
(47,514)
Deferred tax
Movement in deferred tax
44,036
(36,439)
Total tax charge/(credit)
138,056
(83,953)
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
9
Taxation (continued)
21
The actual charge/(credit) 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
£
£
(Loss)/profit before taxation
(936)
66,175
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(220)
12,573
Tax effect of expenses that are not deductible in determining taxable profit
2,185
13,753
Change in unrecognised deferred tax assets
44,036
(68,257)
Change in unrecognised corporation tax assets
22,290
Effect of change in corporation tax rate
7,636
Remeasurement of deferred tax for changes in tax rates
(5,899)
Other permanent differences
(100)
(2,144)
Tax effect of prior year adjustment
75,764
(47,514)
Taxation charge/(credit) for the year
138,056
(83,953)
10
Intangible fixed assets
Other Intangibles
£
Cost
At 1 January 2023 and 31 December 2023
170,515
Amortisation and impairment
At 1 January 2023
116,251
Amortisation charged for the year
12,543
At 31 December 2023
128,794
Carrying amount
At 31 December 2023
41,721
At 31 December 2022
54,264
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
11
Tangible fixed assets
Computers
£
Cost
At 1 January 2023
112,675
Additions
10,991
At 31 December 2023
123,666
Depreciation and impairment
At 1 January 2023
50,796
Depreciation charged in the year
19,268
At 31 December 2023
70,064
Carrying amount
At 31 December 2023
53,602
At 31 December 2022
61,879
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
92
92
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of shares held
% Held Direct
Source Group International Inc
Corporation trust center, 1209 Orange St, Wilmington
Ordinary
100.00
Source Group International BV
Joop Geesinkweg 901, Ground, 1st, 2nd and 3rd floor, 1114AB Amsterdam
Ordinary
100.00
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
23
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,590,254
3,302,441
Corporation tax recoverable
357,061
57,753
Amounts owed by group undertakings
2,867,649
2,360,305
Other debtors
1,357,456
1,470,698
Prepayments and accrued income
1,761,540
1,422,613
8,933,960
8,613,810
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 18)
7,873
51,909
Total debtors
8,941,833
8,665,719
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
106,395
112,580
Trade creditors
2,430,535
2,178,513
Amounts owed to group undertakings
2,120,969
626,669
Corporation tax
100,296
177,880
Other taxation and social security
159,724
221,037
Other creditors
1,624,034
2,528,880
Accruals and deferred income
2,232,551
2,461,012
8,774,504
8,306,571
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
85,214
169,400
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
17
Loans and overdrafts
2023
2022
£
£
Bank loans
191,609
281,980
Payable within one year
106,395
112,580
Payable after one year
85,214
169,400
During the 2021 year, Source Group International Limited obtained a loan of £250,000 under the Business Interruption Loan Scheme introduced by the UK government in response to the Coronavirus pandemic. The loan bears interest at a rate of 10.95% per annum and repayable over 4 years.
During the 2022 year, Source Group International Limited obtained a loan of £100,000 under the Recovery Loan Scheme introduced by the UK government in response to the Coronavirus pandemic. The loan bears interest at a rate of 12.10% per annum and repayable over 6 years.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Fixed asset timing differences
15,470
15,470
-
-
Losses and other deductions
-
-
7,873
51,909
15,470
15,470
7,873
51,909
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
192,327
146,687
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.
Source Group International Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
25
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
21
Related party transactions
The company is a wholly owned subsidiary of Source Group International Holdings Limited and as such has taken advantage of the exemption permitted by FRS102 Section 33 Related Party Disclosures not to provide disclosures of transactions entered into with other wholly owned members of the group.
22
Directors' transactions
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Net transactions
Closing balance
£
£
£
Directors' loan
-
860,878
358,761
1,219,639
860,878
358,761
1,219,639
23
Ultimate controlling party
The ultimate parent company is Source Group International Holdings Limited by virtue of its 100% ownership of the company. Copies of the consolidated financial statements can be obtained from its registered office Dixcart House, Addlestone Road, Bourne Business Park, Addlestone, England, KT15 2LE.
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