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Registration number: 10155889

SmartRecruiters Ltd

Annual Report and Financial Statements

for the Year Ended 31 January 2024

 

SmartRecruiters Ltd

Contents
for the Year Ended 31 January 2024

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 5

Independent Auditor's Report

6 to 9

Profit and Loss Account

10

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Statement of Cash Flows

14

Notes to the Financial Statements

15 to 26

 

SmartRecruiters Ltd

Company Information
for the Year Ended 31 January 2024

Directors

A Ziebicka

T Didesidero

Company secretary

Windsor Accountancy Limited

Registered office

190a Bermondsey Street
London
SE1 3TQ

Registered number

10155889 ( England and Wales )

Auditors

Kirk Rice LLP
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP

 

SmartRecruiters Ltd

Strategic Report for the Year Ended 31 January 2024

The directors present their strategic report for the year ended 31 January 2024.

Principal activity

The principal activity of the company remains the sale of talent management software through a cloud-based talent acquisition platform. This platform combines advanced software capabilities with on-demand services, aimed at creating a collaborative, efficient, and social hiring process.

Fair review of the business

The company continues operations at the expected level, and there were no unexpected market changes impacting business activity. The company routinely prepares detailed budgets to assist with financial decision making and adheres to the group business plan, which is approved by the Board.

The company demonstrated significant growth during the financial year. Revenue increased by 74% to £18.1 million (2023: £10.4 million), reflecting the ongoing success of the company's core offerings and continued expansion in key markets. The forecast for financial year 2025 anticipates stable revenue growth.

Operating profit for the year was £137k, a substantial turnaround from the operating loss of £4.8 million recorded in 2023. Loss after tax reduced by 98% to £116k (2023: £4.9 million). These results underscore management's strategic efforts to enhance operational efficiency and capitalise on market opportunities. Staff-related costs remain the largest expense category, emphasising the importance of talent retention and employee engagement to the company’s strategy.

The company does not have conditional and unconditional obligations other than standard course of business office rental agreements and other standard vendor contracts. There is no overreliance on any vendor, minimising the risk of disrupted business operations arising from vendor issues. The company continues to build excellent relationships with all customers and creates the environment of hiring success. The core customer base is not highly concentrated and therefore the risk of a material impact to the financial performance of the company arising from customer disputes is minimised.

Key developments during the year included:

• Improved client retention rates, driven by investments in customer success initiatives.
• Expansion of product capabilities to address evolving client needs, such as enhanced analytics features.
• Continued focus on cost control measures, reducing administrative expense as a percentage of revenue.

Key performance indicators (KPIs)
 

To assess performance and guide strategic decision-making, the company tracks several KPIs:

• Revenue Growth: Revenue increased by 74% year-on-year, driven by expanded client acquisition and higher utilisation of premium services.

• Operating Margin: Operating profit as a percentage of revenue was 0.8%, reflecting improved cost management. This equates to a movement of £4.9 million from the prior year's operating loss of £4.8 million to a profit of £137k.

 

SmartRecruiters Ltd

Strategic Report for the Year Ended 31 January 2024

• Administrative Cost Management: Administrative expenses as a percentage of revenue decreased from 135% in 2023 to 89% in 2024, highlighting improved cost efficiency.

• Liquidity Position: Cash at bank and in hand increased to £733k from £576k, providing a solid liquidity base.

• Headcount Efficiency: The average headcount decreased to 70 from 78 in the prior year, reflecting a 10% reduction in staff while maintaining operational performance.

Principal risks and uncertainties

The company operates in a dynamic market with inherent risks set out below. Measures enacted to mitigate these risks include detailed market analyses, strategic budgeting, and a focus on innovation and customer satisfaction.

• Market competition: The talent management software market remains competitive, with continuous innovation required to retain and grow market share.

• Economic conditions: Macroeconomic factors such as inflation and economic slowdowns could impact client budgets.

• Technological obsolescence: Rapid technological advancements necessitate ongoing R&D investments to stay relevant.

Going concern

At the end of the financial year, the company had a positive cash balance of £733k, supported by the parent company's ongoing commitment to providing financial resources through inter-company funding. These measures ensure sufficient liquidity to continue operations in the foreseeable future.

Management’s assessment identified no material uncertainties affecting the company’s ability to continue as a going concern. There are no legal proceedings which can have a significant impact on the going concern status of the company.

Approved and authorised by the Board on 29 January 2025 and signed on its behalf by:
 

.........................................
A Ziebicka
Director

 

SmartRecruiters Ltd

Directors' Report for the Year Ended 31 January 2024

The directors present their report and the financial statements for the year ended 31 January 2024.

Directors of the company

The directors who held office during the year were as follows:

A Ziebicka

J Johnson (ceased 2 February 2024)

The following directors were appointed after the year end:

M Desimone (appointed 2 February 2024 and ceased 16 May 2024)

T Didesidero (appointed 25 September 2024)

Future developments

The Company forecasts continued steady growth through consistent focus on customer success and relationships, as well as ongoing research and development into relevant technology.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Important adjusting events after the financial period

There have been no significant events affecting the company since the year end date.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Statement of directors' responsibilities

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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

 

SmartRecruiters Ltd

Directors' Report for the Year Ended 31 January 2024

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.

Approved and authorised by the Board on 29 January 2025 and signed on its behalf by:
 

.........................................
A Ziebicka
Director

 

SmartRecruiters Ltd

Independent Auditor's Report to the Members of SmartRecruiters Ltd
for the Year Ended 31 January 2024

Opinion

We have audited the financial statements of SmartRecruiters Ltd (the 'company') for the year ended 31 January 2024, 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 31 January 2024 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor 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 director's 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 original financial statements were authorised for issue.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

SmartRecruiters Ltd

Independent Auditor's Report to the Members of SmartRecruiters Ltd
for the Year Ended 31 January 2024

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. 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.

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

We have nothing to report in respect of the following matters where 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 directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
 

Responsibilities of directors

As explained more fully in the directors' responsibility 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.

 

SmartRecruiters Ltd

Independent Auditor's Report to the Members of SmartRecruiters Ltd
for the Year Ended 31 January 2024

Auditor 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.

Our audit approach was developed by obtaining an understanding of the company’s activities, the key functions undertaken by management and by service organisations, and the overall control environment. Based on this understanding we assessed those aspects of the company’s transactions and balances which were most likely to give rise to a material misstatement and were most susceptible to irregularities including fraud or error. Specifically, we identified what we considered to be key audit risks and planned our audit approach accordingly.

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with the Companies Act 2006 and FRS 102.

We designed audit procedures to respond to the risk, recognising that 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, misrepresentations or through collusion.

We focused on laws and regulations that could give rise to a material misstatement in the company's financial statements. Our tests included, but were not limited to:

· Agreement of the financial statements disclosures to underlying supporting documentation;
· Making enquiries of management.

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. As in all of our audits we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

SmartRecruiters Ltd

Independent Auditor's Report to the Members of SmartRecruiters Ltd
for the Year Ended 31 January 2024

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Andrew Beet (Senior Statutory Auditor)
For and on behalf of Kirk Rice LLP, Statutory Auditor

The Courtyard
High Street
Ascot
Berkshire
SL5 7HP

29 January 2025

 

SmartRecruiters Ltd

Profit and Loss Account for the Year Ended 31 January 2024

Note

2024
£

2023
£

Turnover

3

18,104,606

10,484,407

Cost of sales

 

(1,933,397)

(1,172,007)

Gross profit

 

16,171,209

9,312,400

Administrative expenses

 

(16,033,919)

(14,107,754)

Operating profit/(loss)

4

137,290

(4,795,354)

Other interest receivable and similar income

5

1,284

-

Interest payable and similar expenses

6

(254,583)

(121,577)

   

(253,299)

(121,577)

Loss before tax

 

(116,009)

(4,916,931)

Loss for the financial year

 

(116,009)

(4,916,931)

The above results were derived from continuing operations.

 

SmartRecruiters Ltd

Statement of Comprehensive Income for the Year Ended 31 January 2024

2024
£

2023
£

Loss for the year

(116,009)

(4,916,931)

Other comprehensive income

148,521

199,862

Total comprehensive income for the year

32,512

(4,717,069)

 

SmartRecruiters Ltd

(Registration number: 10155889)
Balance Sheet as at 31 January 2024

Note

2024
£

2023
£

Fixed assets

 

Tangible assets

10

112,245

94,800

Current assets

 

Debtors

11

9,532,625

7,465,462

Cash at bank and in hand

 

732,688

575,664

 

10,265,313

8,041,126

Creditors: Amounts falling due within one year

13

(21,526,946)

(19,317,826)

Net current liabilities

 

(11,261,633)

(11,276,700)

Net liabilities

 

(11,149,388)

(11,181,900)

Capital and reserves

 

Called up share capital

100

100

Other reserves

621,320

472,799

Retained earnings

(11,770,808)

(11,654,799)

Shareholders' deficit

 

(11,149,388)

(11,181,900)

Approved and authorised by the Board on 29 January 2025 and signed on its behalf by:
 

.........................................
A Ziebicka
Director

 

SmartRecruiters Ltd

Statement of Changes in Equity for the Year Ended 31 January 2024

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 February 2023

100

472,799

(11,654,799)

(11,181,900)

Loss for the year

-

-

(116,009)

(116,009)

Other comprehensive income

-

148,521

-

148,521

Total comprehensive income

-

148,521

(116,009)

32,512

At 31 January 2024

100

621,320

(11,770,808)

(11,149,388)

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 February 2022

100

272,937

(6,737,868)

(6,464,831)

Loss for the year

-

-

(4,916,931)

(4,916,931)

Other comprehensive income

-

199,862

-

199,862

Total comprehensive income

-

199,862

(4,916,931)

(4,717,069)

At 31 January 2023

100

472,799

(11,654,799)

(11,181,900)

 

SmartRecruiters Ltd

Statement of Cash Flows for the Year Ended 31 January 2024

Note

2024
£

2023
£

Cash flows from operating activities

Loss for the year

 

(116,009)

(4,916,931)

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

32,409

22,349

Finance income

5

(1,284)

-

Finance costs

6

254,583

121,577

Foreign exchange gains/losses

 

(261,642)

720,174

 

(91,943)

(4,052,831)

Working capital adjustments

 

Increase in debtors

11

(2,067,163)

(2,968,344)

Increase in creditors

13

2,202,301

7,942,628

Net cash flow from operating activities

 

43,195

921,453

Cash flows from investing activities

 

Interest received

5

1,284

-

Acquisitions of tangible assets

(49,855)

(56,089)

Net cash flows from investing activities

 

(48,571)

(56,089)

Cash flows from financing activities

 

Interest paid

6

(254,583)

(121,577)

Proceeds from exercise of share options

 

148,521

199,862

Net cash flows from financing activities

 

(106,062)

78,285

Net (decrease)/increase in cash and cash equivalents

 

(111,438)

943,649

Cash and cash equivalents at 1 February

 

575,664

352,189

Effect of exchange rate fluctuations on cash held

 

261,643

(720,174)

Cash and cash equivalents at 31 January

 

725,869

575,664

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The registered number is 10155889.

The address of its registered office is:
190a Bermondsey Street
London
SE1 3TQ

These financial statements were authorised for issue by the Board on 29 January 2025.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

The company transitioned to FRS 102 as of 1 February 2023. The transition has been accounted for in accordance with Section 35 of FRS 102. No adjustments were required to the financial position or financial performance previously reported under the previous financial reporting framework, and therefore, the comparative figures for the year ended 31 January 2023 remain unchanged.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are presented in pound sterling (£), which is the company's functional currency. All amounts presented in the financial statements have been rounded to the nearest pound unless otherwise stated.

Going concern

The financial statements have been prepared on a going concern basis, the validity of which is dependent upon the continued financial support of the parent company. The directors have confirmed this support will be continued and will enable the company to trade for the forseeable future and meet its financial commitments as they fall due.

The continued support of the parent company affirmed by the directors includes a commitment to the provision of working capital as required for the next 12 months, and forecasting by the parent company to ensure that they can continue to meet this commitment. At the time of approval of the finacial statements, there were no plans for the parent company to call in the balance owed by SmartRecruiters Ltd of £13,017,289 (2023: £13,228,435).

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

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 revision and future periods where the revision affects both current and future periods.

The directors are of the opinion that there are no estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities at the year end.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
 

Asset class

Depreciation method and rate

Office equipment

20% Straight line

Furniture and fittings

20% Straight line

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. Amounts classified as receivable within one year are not amortised.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method. Amounts classified as payable within one year are not amortised.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

Financial instruments


Classification
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 statements.

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 liability simultaneously.


 Recognition and measurement
Financial assets and liabilities are initially measured at transaction price, including transaction costs, except for financial assets and liabilities measured at fair value through profit or loss, which are initially measured at fair value.

Subsequent measurement depends on the classification of the instrument. Basic financial instruments are measured at amortised cost using the effective interest method, less any impairment for financial assets. Other financial instruments are measured at fair value at each reporting date, with changes in fair value recognised in profit or loss.

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.

Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.

 

Impairment

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

An impairment loss is recognised in profit or loss when there is objective evidence that the carrying amount of a financial asset exceeds the present value of estimated future cash flows, discounted at the asset’s original effective interest rate.

If a subsequent event reduces the impairment loss, the reversal is recognised in profit or loss, ensuring the carrying amount does not exceed the amount that would have been recognised if no impairment had been recorded.

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

Share based payments

Equity-settled share based payment transactions include share options and long-term equity incentive plans where the overall outcome is that the employee receives shares. For these awards, fair value is to be measured at the date of grant and charged to the profit and loss over the vesting period. The vesting period is the period of time before shares in an employee plan are unconditionally owned by an employee.

The company measures the fair value of services received and recognises a corresponding increase in equity, shown within other reserves.

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2024
 £

2023
 £

Rendering of services

18,104,606

10,484,407

4

Operating profit/(loss)

Arrived at after charging/(crediting)

2024
 £

2023
 £

Depreciation expense

32,409

22,349

Foreign exchange (gains)/losses

(261,642)

720,174

5

Other interest receivable and similar income

2024
 £

2023
 £

Interest income on bank deposits

1,284

-

6

Interest payable and similar expenses

2024
 £

2023
 £

Interest expense on other finance liabilities

254,583

121,577

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
 £

2023
 £

Wages and salaries

6,940,890

6,008,867

Social security costs

1,293,244

841,816

Other short-term employee benefits

148,718

152,959

Pension costs, defined contribution scheme

279,446

259,833

Redundancy costs

390,488

42,500

Other employee expense

2,346,360

1,601,545

11,399,146

8,907,520

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2024
No.

2023
No.

Cost of sales

23

20

Administration and support

3

12

Research and development

19

17

Sales and marketing

25

29

70

78

8

Auditors' remuneration

2024
 £

2023
 £

Audit of the financial statements

9,187

13,500


 

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

9

Taxation

An increase in the rate of corporation tax from 19% to 25% became effective from 1 April 2023 this will impact the Company's future tax charges accordingly for any profits taxed at the main rate.

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:
 

2024
 £

2023
 £

Loss before tax

(116,009)

(4,916,931)

Corporation tax at standard rate

(22,042)

(934,217)

Tax increase (decrease) from effect of capital allowances and depreciation

(3,923)

(9,608)

Tax increase (decrease) from effect of unrelieved tax losses carried forward

(11,591)

927,660

Tax increase (decrease) from effect of expenses not deductible in determining taxable profit or loss

37,556

16,165

Total tax charge/(credit)

-

-

10

Tangible assets

Fixtures and fittings
£

Office equipment
£

Total
£

Cost or valuation

At 1 February 2023

6,997

145,836

152,833

Additions

-

49,855

49,855

At 31 January 2024

6,997

195,691

202,688

Depreciation

At 1 February 2023

1,024

57,009

58,033

Charge for the year

1,483

30,927

32,410

At 31 January 2024

2,507

87,936

90,443

Carrying amount

At 31 January 2024

4,490

107,755

112,245

At 31 January 2023

5,973

88,827

94,800

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

11

Debtors

Current

Note

2024
£

2023
£

Trade debtors

 

5,229,408

3,446,199

Amounts owed by related parties

19

-

90,119

Other debtors

 

331,355

308,963

Prepayments

 

3,971,862

3,620,181

   

9,532,625

7,465,462

12

Cash and cash equivalents

2024
 £

2023
 £

Cash at bank

732,688

575,664

Bank overdrafts

(6,819)

-

Cash and cash equivalents in statement of cash flows

725,869

575,664

13

Creditors

Note

2024
 £

2023
 £

Due within one year

 

Loans and borrowings

16

6,819

-

Trade creditors

 

474,531

273,936

Amounts due to related parties

19

13,017,289

13,228,435

Social security and other taxes

 

307,160

217,960

Other payables

 

318,539

191,358

Accrued expenses

 

7,402,608

5,406,137

 

21,526,946

19,317,826

Amounts owed by the company to group undertakings of £13,017,289 (2023: £13,228,435) were unsecured, free of interest and deemed repayable on demand.

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

14

Pension and other schemes

Defined Contribution Pension Scheme

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 adminstered fund.

The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £279,446 (2023 - £259,833).

15

Share capital

Allotted, called up and fully paid shares

2024

2023

No.

£

No.

£

Ordinary shares of £1 each

100

100

100

100

       

Rights, preferences and restrictions

Ordinary shares were non-redeemable and had full voting and distribution rights.

16

Loans and borrowings

2024
 £

2023
 £

Current loans and borrowings

Bank overdrafts

6,819

-

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

17

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Not later than one year

79,973

79,973

Later than one year and not later than five years

319,890

319,890

Later than five years

33,322

113,294

433,185

513,157

The amount of non-cancellable operating lease payments recognised as an expense during the year was £79,973 (2023 - £79,973).

18

Share-based payments

Employee Share Options

Scheme details and movements

The Company has established the 2020 Equity Incentive Plan for the grant of share options to eligible employees of the Company.

There are three types of option vesting arrangements:

1. New hires: 25% of options are vested after 1 year of employment; the remaining 75% vests at 1/36 every month for the next 3 years.
2. Existing employees: options vest at 1/48 every month for the period of 4 years.
3. Manual - 4 year, 1 year cliff: options start vesting after 1 year of employment at 1/36 every month for the next 3 years.

The company offer share options to their employees. The vesting of options is not related to performance. The options are settled with equity in the parent company.

The fair value is equal to the grant price on the basis that the options are granted at the price defined by the business' valuation, which is performed annually, There is no market price available for the shares. The business' valuation considers the market condition, company's situation, and also any secondary transactions performed with the company's shares.

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

The movements in the number of share options during the year were as follows:
 

2024
Number

2023
Number

Outstanding, start of period

165,449

122,350

Granted during the period

90,257

77,256

Forfeited during the period

(58,884)

(33,508)

Exercised during the period

-

(649)

Outstanding, end of period

196,822

165,449

The movements in the weighted average exercise price of share options during the year were as follows:

2024
£

2023
£

Outstanding, start of period

2.86

2.23

Granted during the period

4.99

5.11

Forfeited during the period

5.12

5.64

Exercised during the period

-

8.58

Outstanding, end of period

3.16

2.86

Effect of share-based payments on profit or loss and financial position

The total expense recognised in profit or loss for the year was £148,520 (2023 - £199,863).

The total carrying amount of the liabilities arising from share-based payments at the end of the year was £621,320 (2023 - £472,799).

19

Related party transactions

Summary of transactions with entities with joint control or significant interest


During the year, lease was assigned from Attrax Limited, a company with the same ultimate beneficial ownership. No consideration was payable.

20

Ultimate controlling party

The immediate and ultimate parent undertaking is SmartRecruiters, Inc., a company incorporated in the United States. The parent company address is 166 Geary St, San Francisco, CA 94108.

The largest and smallest group in which the results of the Company are consolidated is that headed by SmartRecruiters, Inc.

SmartRecruiters, Inc. is owned by several shareholders and individually no shareholder can exert control.

 

SmartRecruiters Ltd

Notes to the Financial Statements for the Year Ended 31 January 2024

21

Off-balance sheet arrangements

Fixed Charges Held
SmartRecruiters Ltd holds an uncommitted credit facility with BNP Paribas London, which is secured by way of fixed charge as continuing security for the payment and discharge of the secured liabilities.