Company registration number 07083977 (England and Wales)
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
Richard Anthony
Chartered Accountants and Registered Auditors
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
COMPANY INFORMATION
Directors
Mr S Trew
Mr D Sadler
Mr A Chauhan
Mr P Furlong
Mr G Travers
Company number
07083977
Registered office
Ground Floor Cooper House
316 Regents Park Road
London
United Kingdom
N3 2JX
Auditor
Richard Anthony
Ground Floor Cooper House
316 Regents Park Road
London
United Kingdom
N3 2JX
Business address
Unit 66 Spaces Business Centre
15-17 Ingate Place
London
SW8 3NS
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 November 2023.
Review of the business
In our Accounts for the trading period to November 2022 we reported on the lifting of a sense of gloom following the pandemic with a positive message about our hopes and aspirations for the coming year. A year later and we are pleased to report that our confidence was well placed and the green shoots of recovery we thought were visible matured into full blown opportunities.
Our market place witnessed a huge surge in merger and take over activity with many smaller independent contractors struggling with new ways of working, new beaurocracy and new demands from clients ever more engaged in the pursuit of a sustainable way of working. Larger corporations, desperate for increased turnover, acquired many of these struggling organisations and the number of truly independent service providers bringing innovation and real change to the market diminished further. This stagnation meant that our offering continued to really stand out from the crowd and we were able to produce a set of numbers it would be difficult not to be proud of.
The continued program of focus on teamwork and integration of processes meant that we were efficient at delivering exceptionally high standards of work on site while consistently looking for innovation and progress. We introduced a new range of cleaning agents to the majority of our contracts delivering cleaning services using bacteria, being more cost effective, more time efficient and more environmentally friendly.
Once again, our Sales team outperformed our expectations, our Operations team grew with our Key Account Manager role continued in its development to better support and mentor our colleagues on the ground and our Head Office teams worked efficiently and diligently to ensure our back of house operations ran smoothly. In particular our expanded Credit Control process ensured that our outstanding debt level was never a drain on our liquidity and we operated largely without recourse to our banking facility.
Our Manchester office has also been a huge success with portfolio wins across a wide range of Northern locations including Birmingham, Leeds and Liverpool.
Principal risks and uncertainties
With the on-going situation in the Ukraine, global inflation running well above all forecasts and more than 10% increases in Living Wage rates we knew the trading period would be difficult and demanding. We targeted our relationships with our client base as being of critical importance and worked exceptionally hard in ensuring we were considered a strategic and essential partner to all. When it came to annual reviews of charges we were open and honest about our expectations and we were largely supported by clients allowing us to increase charges to levels that protected our margins. There remains significant pressure on pay rates with a restricted labour pool really biting, but we are an employer of choice and our reputation for caring for our colleagues at all levels means that we are regularly approached by industry experienced staff looking for an opportunity to grow with a worthy company.
The situation in Israel at the end of this period caused considerable concern as super powers appeared to take opposing views and we wait to see the full effects of their actions. When supply chains are threatened we always anticipate increases in costs whether in raw materials or fuel prices but, at the moment, these have not yet filtered through to us.
We also renewed our lease on our existing office premises in Battersea as well as taking a new lease on the unit next to our current ones. Three months of works to fit out and then knock through to join up with our existing space means we now have the room and facilities to allow for continued expansion and development, secure with a new three-year lease. We did look at alternative locations but found nothing that offered anything like what we already have for up to double our current expenditure, so securing a new lease and acquiring more space is a significant de-risking.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
Development and performance
In 2022 we reported a 38% increase in the value of our Sales as we came out of the pandemic and Furlough schemes. Given the results from 2020 and 2021 perhaps it wasn’t surprising to see a surge as demand picked up and people returned to work.
In this light our increase in the value of Sales in 2023 in excess of 25% at marginally under £6m in the financial year is quite outstanding and confirms the points raised earlier.
Expansion into new markets, into new geographical locations and with more efficient processes means that we are well placed to exploit the opportunities that arise. Our Royal Warrant is forecast to be renewed for another five years in the coming months and we already know that this is a major selling tool.
With our head office facilities secured with a new three-year lease, which includes expanded space, we are well set to continue to our growth.
Our commitment to developing our ESG team to further set us apart from our marketplace, as well as our unique and expanded Implementations Team, who are dedicated to starting each new instruction, further demonstrate the measures we have invested in to ensure we remain true market leaders.
In 2023 we expanded our Health & Safety team and set targets for the completion of independent Quality Audits to be carried out on all sites with our clients. The Operations team conduct monthly structured reviews with clients, using Ipad based technology, allowing our teams to audit contracts, score our performance and raise issues as and when they occur. The Audits provide us with a clear and demonstrable evidence based trail of standards delivered and clients’ approval.
Our London fleet of nearly 30 vehicles is 88% fully electric while we continue to search for an electric option for the heavy-duty vans, we use to carry specialist equipment; in time these too will be fully electric.
Achieving Gold standard in Investors in People early in this period was a huge coup for our Human Resources and Training colleagues and is a highly regarded and universally accepted independent verification of the way in which we continue to look after our teams as we operate in a very cost-conscious industry
Key performance indicators
Reporting on a set of figures that demonstrate an increase of pre-tax profits of over 30% on the previous period shows the rude health we are in. Our market offering is being well received and our investment in our people, processes and procurement is massively paying off.
Relationships with colleagues at every level are solid and respectful. Our Leadership team provides a voice for all staff to be heard at Board level and we are thrilled to report that staff turnover, at every level, remains incredibly low as the team ethos is so strong. Last year we reported Staff Retention rates of 96% and we celebrated with seven colleagues who had all achieved 14 years employment with the company.
In April 2023 we published our Gender Pay Gap figures and were delighted that our Median Gender Pay Gap had reduced from 2.8% in 2022 to 2.5% in 2023 as we continue to employ, promote and reward on merit rather than any other characteristic.
Mr S Trew
Director
29 November 2024
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 30 November 2023.
Principal activities
The principal activity of the company was that of facilities management.
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:
Mr S Trew
Mrs N Trew
(Resigned 21 December 2023)
Mr D Sadler
Mr A Chauhan
Mr P Furlong
Mr G Travers
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Auditor
In accordance with the company's articles, a resolution proposing that Richard Anthony be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 4 -
On behalf of the board
Mr S Trew
Mrs N Trew
Director
Director
29 November 2024
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 5 -
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; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREENZONE CLEANING & SUPPORT SERVICES LIMITED
- 6 -
Opinion
We have audited the financial statements of Greenzone Cleaning & Support Services Limited (the 'company') for the year ended 30 November 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 30 November 2023 and of its profit 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.
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.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREENZONE CLEANING & SUPPORT SERVICES LIMITED (CONTINUED)
- 7 -
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:
The Companies Act 2006
Financial Reporting Standard 102
UK tax legislation
UK employment legislation
UK health and safety legislation
General Data Protection Regulations
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We understood how the company is complying with those legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with these laws and regulations. The assessment did not identify any issues in this area.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GREENZONE CLEANING & SUPPORT SERVICES LIMITED (CONTINUED)
- 8 -
We assessed the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
Identifying and assessing the measures management has in place to prevent and detect fraud,
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process,
Challenging assumptions and judgements made by management in its significant estimates, and
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential existed within the recording and recognition of revenue and wages and salaries.
Our procedures in this respect were focused on the origination of revenue and directed towards ensuring the accuracy and completeness of the same by undertaking testing on a sample basis of the revenue items to ensure that sales had been recorded correctly and in the appropriate accounting period. We consider that the work we undertook in this regard was considered capable of detecting irregularities and fraud within the sales cycle.
We designed specific procedures with respect to wages and salaries, including verifying employee existence to address the risk of fraud. Further, reconciling payroll records with bank payments, and assessing statutory compliance with PAYE and National Insurance contributions. Based on our procedures, we consider that procedures were capable of detecting irregularities and fraud within the wages and salaries.
Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulations. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. The risk is also greater regarding irregularities occurring to fraud other than error, as fraud involves intentional concealment, forgery, collusion, omission, or misrepresentation.
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.
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.
Michael Barnett BA FCA (Senior Statutory Auditor)
For and on behalf of Richard Anthony, Statutory Auditor
Chartered Accountants
Ground Floor Cooper House
316 Regents Park Road
London
United Kingdom
N3 2JX
29 November 2024
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
28,827,986
22,929,333
Cost of sales
(21,449,636)
(16,787,526)
Gross profit
7,378,350
6,141,807
Administrative expenses
(6,696,553)
(5,634,208)
Operating profit
4
681,797
507,599
Interest receivable and similar income
7
20,860
1
Interest payable and similar expenses
8
(6,126)
(1,104)
Profit before taxation
696,531
506,496
Tax on profit
9
(178,731)
(102,739)
Profit for the financial year
517,800
403,757
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
517,800
403,757
Other comprehensive income
-
-
Total comprehensive income for the year
517,800
403,757
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
182,282
152,593
Tangible assets
11
679,794
447,911
862,076
600,504
Current assets
Debtors
12
7,086,519
4,461,741
Cash at bank and in hand
2,914,688
1,404,068
10,001,207
5,865,809
Creditors: amounts falling due within one year
13
(8,160,697)
(4,381,486)
Net current assets
1,840,510
1,484,323
Total assets less current liabilities
2,702,586
2,084,827
Creditors: amounts falling due after more than one year
14
(46,747)
Provisions for liabilities
Deferred tax liability
16
71,947
18,735
(71,947)
(18,735)
Net assets
2,583,892
2,066,092
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
2,583,792
2,065,992
Total equity
2,583,892
2,066,092
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 November 2024 and are signed on its behalf by:
Mr S Trew
Director
Company registration number 07083977 (England and Wales)
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 December 2021
100
1,662,235
1,662,335
Year ended 30 November 2022:
Profit and total comprehensive income
-
403,757
403,757
Balance at 30 November 2022
100
2,065,992
2,066,092
Year ended 30 November 2023:
Profit and total comprehensive income
-
517,800
517,800
Balance at 30 November 2023
100
2,583,792
2,583,892
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
2,168,830
1,744,070
Interest paid
(6,126)
(1,104)
Income taxes paid
(111,756)
(131,802)
Net cash inflow from operating activities
2,050,948
1,611,164
Investing activities
Purchase of intangible assets
(126,000)
(129,770)
Purchase of tangible fixed assets
(507,922)
(287,660)
Proceeds from disposal of tangible fixed assets
6,431
9,642
Interest received
20,860
1
Net cash used in investing activities
(606,631)
(407,787)
Financing activities
Payment of finance leases obligations
66,303
(2,874)
Net cash generated from/(used in) financing activities
66,303
(2,874)
Net increase in cash and cash equivalents
1,510,620
1,200,503
Cash and cash equivalents at beginning of year
1,404,068
203,565
Cash and cash equivalents at end of year
2,914,688
1,404,068
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 14 -
1
Accounting policies
Company information
Greenzone Cleaning & Support Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ground Floor Cooper House, 316 Regents Park Road, London, United Kingdom, N3 2JX.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Intangible fixed assets other than goodwill
Software and website
Over 3 years
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:
Plant and machinery
25%-33.33% on straight line
Fixtures, fittings & equipment
25%-33.33% on straight line
Motor vehicles
Over 4 years
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
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.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
1.7
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.
1.8
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 balance sheet 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 and cash and bank balances, 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.
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.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
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.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
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 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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of 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.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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 leases asset are consumed.
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
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Cleaning services
28,827,986
22,929,333
2023
2022
£
£
Turnover analysed by geographical market
UK
28,827,986
22,929,333
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
3
Turnover and other revenue
(Continued)
- 19 -
2023
2022
£
£
Other revenue
Interest income
20,860
1
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
33,640
23,430
Depreciation of owned tangible fixed assets
269,608
212,490
Amortisation of intangible assets
96,311
75,631
Operating lease charges
203,504
182,025
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administrative and operations staff
1,131
997
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
20,041,698
15,542,456
Social security costs
1,353,119
1,094,931
Pension costs
477,982
513,489
21,872,799
17,150,876
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
525,475
507,922
Company pension contributions to defined contribution schemes
41,846
174,316
567,321
682,238
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 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
120,000
115,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
20,860
1
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
20,860
1
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
6,126
350
Other interest
754
6,126
1,104
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
125,519
112,669
Deferred tax
Origination and reversal of timing differences
53,212
(9,930)
Total tax charge
178,731
102,739
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
9
Taxation
(Continued)
- 21 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
696,531
506,496
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
174,133
96,234
Tax effect of expenses that are not deductible in determining taxable profit
10,119
56,270
Effect of change in corporation tax rate
(10,850)
Permanent capital allowances in excess of depreciation
(48,866)
(39,835)
Other
983
Deferred tax
53,212
(9,930)
Taxation charge for the year
178,731
102,739
10
Intangible fixed assets
Software and website
£
Cost
At 1 December 2022
309,672
Additions
126,000
At 30 November 2023
435,672
Amortisation and impairment
At 1 December 2022
157,079
Amortisation charged for the year
96,311
At 30 November 2023
253,390
Carrying amount
At 30 November 2023
182,282
At 30 November 2022
152,593
More information on impairment movements in the year is given in note .
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 December 2022
500,711
631,979
475,209
1,607,899
Additions
244,527
104,554
158,841
507,922
Disposals
(13,550)
(13,550)
At 30 November 2023
745,238
736,533
620,500
2,102,271
Depreciation and impairment
At 1 December 2022
354,461
556,581
248,946
1,159,988
Depreciation charged in the year
107,964
63,044
98,600
269,608
Eliminated in respect of disposals
(7,119)
(7,119)
At 30 November 2023
462,425
619,625
340,427
1,422,477
Carrying amount
At 30 November 2023
282,813
116,908
280,073
679,794
At 30 November 2022
146,250
75,398
226,263
447,911
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
71,509
27,962
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
6,776,484
4,289,123
Other debtors
101,473
56,914
Prepayments and accrued income
208,562
115,704
7,086,519
4,461,741
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 23 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
19,556
Trade creditors
712,065
567,964
Corporation tax
125,519
111,756
Other taxation and social security
3,430,796
1,259,071
Other creditors
1,564,997
1,286,254
Accruals and deferred income
2,307,764
1,156,441
8,160,697
4,381,486
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
46,747
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
19,556
In two to five years
46,747
66,303
Finance lease payments represent rentals payable by the company for vehicles. Leases include purchase options at the end of the lease period with nominal consideration payable along with last rental payment. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
71,947
18,735
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
16
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 December 2022
18,735
Charge to profit or loss
53,212
Liability at 30 November 2023
71,947
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
477,982
513,489
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 10p each
1,000
1,000
100
100
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
244,054
196,188
Between two and five years
548,250
202,051
792,304
398,239
20
Ultimate controlling party
The company is a wholly owned subsidiary of Greenzone Group of Companies Limited, which is registered in England and Wales, with business address at Unit 66 Spaces Business Centre, 15-17 Ingate Place, London SW8 3NS.
The ultimate controlling party is Mr S Trew, by virtue of his 83% shareholing in the parent company, Greenzone Group of Companies Limited.
GREENZONE CLEANING & SUPPORT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 25 -
21
Cash generated from operations
2023
2022
£
£
Profit after taxation
517,800
403,757
Adjustments for:
Taxation charged
178,731
102,739
Finance costs
6,126
1,104
Investment income
(20,860)
(1)
Amortisation and impairment of intangible assets
96,311
75,631
Depreciation and impairment of tangible fixed assets
269,608
212,490
Movements in working capital:
(Increase)/decrease in debtors
(2,624,778)
166,105
Increase in creditors
3,745,892
782,245
Cash generated from operations
2,168,830
1,744,070
22
Analysis of changes in net funds
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
1,404,068
1,510,620
2,914,688
Obligations under finance leases
-
(66,303)
(66,303)
1,404,068
1,444,317
2,848,385
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