Company Registration No. 05808613 (England and Wales)
SEC Recruitment Limited
Annual report and financial statements
for the year ended 31 December 2023
SEC Recruitment Limited
Company information
Directors
Stuart Goldup
Matthew Perrett
Company number
05808613
Registered office
63-66 Hatton Garden
Fifth Floor Suite 23
London
EC1N 8LE
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
SEC Recruitment Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
SEC Recruitment Limited
Strategic report
For the year ended 31 December 2023
1
The directors present the strategic report for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the supply of international contract and permanent personnel to organisations in the Life Sciences sectors across UK, Europe and USA.
Financial Review and Key Performance Indicators
The key performance indicators used by the directors in monitoring the business are the number of contractors in assignments at any one time, permanent placements made and the gross profit achieved on these contract and permanent assignments.
During the year under review the company turnover reduced by 32% and gross profit decreased by 39%. Gross profit as a percentage of turnover increased during the year by a value of 0.3%. Administrative costs in the year decreased from £480k per month to £239k, a decrease of 50% which principally reflects a decrease in average employee numbers of 34% over the previous year. This led to an increasing in Operating loss in the year of £126k.
Following the substantial changes to the leadership in 2021 the new Exec team, has set about restructuring the business to strengthen and grow the areas where the business is strong, particularly in servicing the Life Sciences Industry internationally. However, these changes have been set against a backdrop of very difficult trading conditions throughout the period from mid-2022 through to the end of 2024 resulting in a much slower restructuring than originally anticipated.
On 30th June 2023 the ownership of the group changed. RDL Corporation Ltd was acquired through a securities swap by SEC Group Holdings Ltd in a friendly restructuring which left the Persons with Significant Control of the group unchanged. The net result of the changes was a reduction in external debt owed by the group in the form of A and B Loan stock plus accrued interest of over £7m.
On 21st July 2023 all of the C Loan stock had also been cancelled, further reducing the debt by which the group was encumbered by c£0.5m.
Despite global socio-economic uncertainties the board is confident that its strategy of focussing on talent-short STEM sectors which have positive near and mid-term demand dynamics and investing in the development of its employees, infrastructure and service offerings, will support continued international growth.
The groups results reflect the significant work undertaken by its employees and the board wishes to thank them for their commitment through this period.
SEC Recruitment Limited
Strategic report (continued)
For the year ended 31 December 2023
2
Principal risks and uncertainties
The directors consider the following to be the principle risks and uncertainties of the group:
Covid-19 and future pandemics
The business is exposed to global pandemics, lessons learned from the current pandemic will be deployed in the business to ensure that it remains agile to respond quickly to such events in future.
Credit risk
The business is exposed to the risk of payment default by customers for services rendered. This risk is monitored by managing the credit offered to customers and regular reviews of outstanding items and ongoing dialogue with customers.
Liquidity risk
The company finances its operations through retained earnings and a fixed rate invoice finance facility and from July 2023 a bank term loan and director loans. The company's policy is to maintain good relationships with its bankers to ensure that sufficient facilities are in place to fund the company's needs as required.
Skill Shortage
Like most specialist recruitment firms, the company continues to be faced with the constant challenge of skill shortages. Mitigation of this risk is achieved by succession planning, training of staff, competitive pay structures and career progression.
Competition
The recruitment sector is competitive and as such the company continues to face competitor risk in the markets where we operate.
Legislation
The recruitment industry is becoming increasingly legislated; the company takes a proactive approach and regularly monitors the regulatory requirements of the markets in which the company is active, international data protection requirements and the ongoing legislative change initiatives to ensure the Group meets its obligations.
With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control.
Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.
Stuart Goldup
Director
6 March 2025
SEC Recruitment Limited
Directors' report
For the year ended 31 December 2023
3
The directors present their annual report and financial statements for the year ended 31 December 2023.
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:
Stuart Goldup
Matthew Perrett
Auditor
Saffery LLP have expressed their willingness to continue in office.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
SEC Recruitment Limited
Directors' report (continued)
For the year ended 31 December 2023
4
Going concern
At the time of approving the financial statements, and despite any future effect of COVID 19, the directors have a reasonable expectation that the company and wider group has adequate resources to continue in operational existence for the foreseeable future. The company and wider group have put in place the necessary measures to mitigate against the effect of COVID 19 on its ability to continue as a going concern.
The talent required by our clients who operate at various stages of funding rounds, across the biotech and medtech sectors and from R&D, clinical trails and manufacturing through to commercialisation across the wider life sciences sector is still much sought after and we are positioned to provide the services needed to help our clients locate and hire the people they need and vice versa.
Following the substantial reorganisation of the Group's debt position in June/July 2023, and despite the material improvement of the balance sheet the trading conditions experienced in 2024 have meant that a material uncertainty remains as to the company’s ability to continue as a going concern.
The directors are aware that there are substantial macro-economic factors affecting the trading landscape at the current time, including international wars, supply shortages, inflation and interest rates higher than experienced in recent years. These threats have led to potential challenging trading conditions and may lead to recessions.
The directors believe that following reductions in the cost base of the business and investments in strengthening the sales team in late 2024 the business is now well positioned to work with clients across a wider geographic client footprint across Europe and the US generating revenues from both perm and contract placements to generate profits and positive cashflows through 2025.
The directors have assessed that, following additional recent financial support from the directors, the company and wider group has operating cash flows and management forecasts which support positive working capital headroom.
Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Stuart Goldup
Director
6 March 2025
SEC Recruitment Limited
Independent auditor's report
To the members of SEC Recruitment Limited
5
Opinion
We have audited the financial statements of SEC Recruitment Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1.2 in the financial statements, which indicates that as at 31 December 2023 the company incurred losses of £125,941.
As stated in note 1.2, these events or conditions, along with other matters as set forth in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
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.
SEC Recruitment Limited
Independent auditor's report (continued)
To the members of SEC Recruitment Limited
6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
SEC Recruitment Limited
Independent auditor's report (continued)
To the members of SEC Recruitment Limited
7
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
SEC Recruitment Limited
Independent auditor's report (continued)
To the members of SEC Recruitment Limited
8
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jamie Cassell
Senior Statutory Auditor
For and on behalf of Saffery LLP
7 March 2025
Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
SEC Recruitment Limited
Statement of comprehensive income
For the year ended 31 December 2023
9
2023
2022
Notes
£
£
Turnover
3
11,330,211
16,679,564
Cost of sales
(8,932,285)
(12,735,285)
Gross profit
2,397,926
3,944,279
Administrative expenses
(2,865,889)
(5,761,824)
Other operating income
517,329
987,974
Operating profit/(loss)
4
49,366
(829,571)
Interest payable and similar expenses
7
(175,307)
(72,964)
Loss before taxation
(125,941)
(902,535)
Tax on loss
Loss for the financial year
(125,941)
(902,535)
Other comprehensive income
Currency translation gain/(loss) taken to retained earnings
(815)
Total comprehensive income for the year
(125,941)
(903,350)
The income statement has been prepared on the basis that all operations are continuing operations.
SEC Recruitment Limited
Statement of financial position
As at 31 December 2023
31 December 2023
10
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
125,945
211,271
Current assets
Debtors
9
4,483,247
5,066,059
Cash at bank and in hand
22,251
206,375
4,505,498
5,272,434
Creditors: amounts falling due within one year
10
(4,074,342)
(4,800,663)
Net current assets
431,156
471,771
Net assets
557,101
683,042
Capital and reserves
Called up share capital
13
1
1
Profit and loss reserves
557,100
683,041
Total equity
557,101
683,042
The financial statements were approved by the board of directors and authorised for issue on 6 March 2025 and are signed on its behalf by:
Stuart Goldup
Director
Company Registration No. 05808613
SEC Recruitment Limited
Statement of changes in equity
For the year ended 31 December 2023
11
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1
1,586,391
1,586,392
Year ended 31 December 2022:
Loss for the year
-
(902,535)
(902,535)
Other comprehensive income:
Currency translation differences
-
(815)
(815)
Total comprehensive income for the year
(903,350)
(903,350)
Balance at 31 December 2022
1
683,041
683,042
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(125,941)
(125,941)
Balance at 31 December 2023
1
557,100
557,101
SEC Recruitment Limited
Notes to the financial statements
For the year ended 31 December 2023
12
1
Accounting policies
Company information
SEC Recruitment Limited is a private company limited by shares incorporated in England and Wales. The registered office is 63-66 Hatton Garden, Fifth Floor Suite 23, London, EC1N 8LE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of RDL Corporation Limited. These consolidated financial statements are available from its registered office, 63-66 Hatton Garden, Fifth Floor Suite 23, London, EC1N 8LE.
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
13
1.2
Going concern
At the time of approving the financial statements, and despite any future effect of COVID 19, the directors have a reasonable expectation that the company and wider group has adequate resources to continue in operational existence for the foreseeable future. The company and wider group have put in place the necessary measures to mitigate against the effect of COVID 19 on its ability to continue as a going concern.true
The talent required by our clients who operate at various stages of funding rounds, across the biotech and medtech sectors and from R&D, clinical trails and manufacturing through to commercialisation across the wider life sciences sector is still much sought after and we are positioned to provide the services needed to help our clients locate and hire the people they need and vice versa.
Following the substantial reorganisation of the Group's debt position in June/July 2023, and despite the material improvement of the balance sheet the trading conditions experienced in 2024 have meant that a material uncertainty remains as to the company’s ability to continue as a going concern.
The directors are aware that there are substantial macro-economic factors affecting the trading landscape at the current time, including international wars, supply shortages, inflation and interest rates higher than experienced in recent years. These threats have led to potential challenging trading conditions and may lead to recessions.
The directors believe that following reductions in the cost base of the business and investments in strengthening the sales team in late 2024 the business is now well positioned to work with clients across a wider geographic client footprint across Europe and the US generating revenues from both perm and contract placements to generate profits and positive cashflows through 2025.
The directors have assessed that, following additional recent financial support from the directors, the company and wider group has operating cash flows and management forecasts which support positive working capital headroom.
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 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.
In relation to temporary placements, turnover is recognised by the company in respect of services supplied on a month by month basis.
Revenue in respect of permanent placement fees is recognised when the company has fulfilled its contractual obligations in accordance with the underlying contracts. Depending on the contract, this is either on the start date of the candidates' employment, or when a candidate accepts an offer of employment and a start date has been determined. Where revenue is recognised on acceptance the directors consider the likelihood of withdrawal and make a provision accordingly.
1.4
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.
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
over the period of the lease
Fixtures and fittings
33% on cost
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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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.
1.6
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
Basic financial assets
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognized 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.
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
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.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements and estimates
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Bad debt provision for trade debtors
The company's policy on recognising an impairment of the trade receivables balance is based on a review of individual debtor balances, their ageing and management's assessment of realisation. This review and assessment is conducted on a continuing basis and any material change in management's assessment of trade debtor impairment is reflected in the carrying value of the asset.
Recoverability of intercompany balances
Management regularly assess balances due from other entities within the company and whether these are recoverable by the respective entities. Where it is considered that the future cash flows of these debts are less than the carrying amount in SEC Recruitment Limited, appropriate provisions are made against these balances to reflect the recoverability of the asset.
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
18
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
UK
5,525,861
10,562,576
Europe
4,327,440
4,274,768
Rest of world
1,476,910
1,842,220
11,330,211
16,679,564
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
39,485
67,129
Depreciation of owned tangible fixed assets
92,823
87,204
Operating lease charges
143,201
119,018
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration and support
13
16
Sales
21
36
Total
34
52
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,620,010
3,056,693
Social security costs
222,631
461,850
Pension costs
24,760
36,213
1,867,401
3,554,756
6
Directors' remuneration
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
19
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
130,421
72,964
Other interest on financial liabilities
44,886
175,307
72,964
8
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
101,692
234,725
336,417
Additions
7,497
7,497
At 31 December 2023
101,692
242,222
343,914
Depreciation and impairment
At 1 January 2023
26,810
98,336
125,146
Depreciation charged in the year
20,341
72,482
92,823
At 31 December 2023
47,151
170,818
217,969
Carrying amount
At 31 December 2023
54,541
71,404
125,945
At 31 December 2022
74,882
136,389
211,271
9
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,766,496
2,856,937
Corporation tax recoverable
7,878
7,878
Amounts owed by group undertakings
1,727,969
1,780,859
Other debtors
128,091
32,459
Prepayments and accrued income
852,813
387,926
4,483,247
5,066,059
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
20
10
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Invoice discounting
11
1,961,669
1,842,835
Trade creditors
185,899
708,848
Amounts owed to group undertakings
945,144
1,087,680
Taxation and social security
73,076
444,069
Other creditors
84,578
166,287
Accruals and deferred income
823,976
550,944
4,074,342
4,800,663
11
Loans and overdrafts
2023
2022
£
£
Other loans
1,961,669
1,842,835
Payable within one year
1,961,669
1,842,835
The company's invoice discounting facility is secured by way of a fixed and floating charge over the assets of the company.
12
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
24,760
36,213
Contributions totalling £3,608 (2021 - £6,791) were payable to the scheme at the end of the year and are included in other creditors.
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.
13
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
SEC Recruitment Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
21
14
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
153,561
90,974
Between two and five years
255,935
409,496
409,496
500,470
15
Related party transactions
The company has taken advantage of the exemption available under Section 33 of the Financial Reporting Standard 102 not to disclose transactions with other wholly owned members of the group.
16
Controlling party
The company's immediate parent is RDL Corporation Limited, incorporated in England and Wales.
The only group in which the results of the company for the year ended 31 December 2023 are consolidated is headed by RDL Corporation Limited. Copies of RDL Corporation Limited's consolidated financial statements may be obtained from the company secretary at the registered office.
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