The directors present the strategic report for the year ended 31 December 2024.
Pangea International Limited is the holding company for the Pangea group of companies, and the principal activity of the Group during the year has continued to be the provision of recruitment services. Services include the provision of consultants and temporary workers on a contract hire basis, along with permanent search & selection services, project management solutions, and strategic intelligence consultancy.
During 2024, when excluding the disposal of the investment in Axiom IPS Group Limited, the Group's turnover declined by 18.3% from £19.27m to £15.75m. Group gross profit saw a rise of 2.7% from £8.53m to £8.76m, Administrative expenses decreased by 19.3% during this time, primarily due to headcount decreases and better cost management.
The Group implemented a restructuring programme aimed at reducing operational costs through the integration of new technologies and processes. This created operational efficiencies, increasing Net Fee Income per sales head and improving net results. Efforts were also directed at improving cash flow through technology investments and strengthened commercial terms, resulting in shorter debtor collection periods and reduced supplier balances.
These changes followed a period of underperformance in 2023, when earlier investments did not yield the expected results. The restructuring, initiated toward the end of 2023 and continuing through 2024, has since improved efficiency and profitability indicators. Despite the decline in turnover, the increase in Net Fee Income per sales head demonstrates the success of these initiatives. The directors remain confident that the Group is now well positioned to capture additional market share in the medium term.
Management objectives are to retain profits within the businesses when generated, thus growing shareholder equity and thereby enabling the individual subsidiaries to continue to meet their day to day operational requirements and to build up their reserves. The businesses currently make little use of financial instruments other than bank accounts and invoice discounting facilities to help fund its contract recruitment services, and so exposure to price risk, credit risk, liquidity risk and cash flow risk is currently not material for the assessment of the assets, liabilities, financial position and profit & loss of the businesses. There is sufficient headroom available on our short-term borrowing facilities to meet current business needs.
Other key business risk areas within the Group (market risk, geographic risk, and talent risk) are being successfully addressed through continuing diversification, across various energy related sectors, as well as new service offerings, new staff incentive plans, and consolidating operating bases. These initiatives will continue our service diversification and market capture initiatives.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £17,000 (2023: £Nil). The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the company's articles, a resolution proposing that Saffery LLP be reappointed as auditor of the group will be put at a General Meeting.
We have audited the financial statements of Pangea International Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters 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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company's members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £154,000 (2023: £89,000).
Pangea International Limited (“the company”) is a private limited company incorporated in England and Wales. The registered office is 85 Great Portland Street, First Floor, London, W1W 7LT.
The group consists of Pangea International Limited and its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity 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 for parent company information presented within the consolidated financial statements:
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 financial instruments not measured at fair value; 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 consolidated group financial statements consist of the financial statements of the parent company Pangea International Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The directors are regularly reviewing the financial information on the business and have prepared detailing forecasts that have been sensitised to reflect the uncertainty in the market place. Even with the forecasts sensitised the company has enough funds through its current bank balance, shareholder funds and relevant funding lines to continue in operation for a period of greater than 12 months. The directors are also managing the business carefully looking at margins, recruitment hires and other business operations to ensure the business is fit for purpose for the future. Therefore the directors have elected to continue to prepare the financial statements on the going concern basis.
The turnover shown in the profit and loss account represents the value of all services, whether invoiced or accrued, delivered during the year, at selling price exclusive of Value Added Tax. Sales are recognised at the point at which the Group has fulfilled its contractual obligations to the client.
Turnover in respect of temporary placements is recognised when the service has been rendered and accepted by the client.
Turnover in respect of contingent permanent fees is recognised when the Group 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.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Investments are stated at cost, being purchase price, less provision for impairment.
At each reporting period end date, the group 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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, 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.
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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, 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.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The group conducts an impairment review of the investment in subsidiaries whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable or tests for impairment annually in accordance with the relevant accounting standards. Determining whether an asset is impaired requires an estimation of the recoverable amount which requires the group to estimate the value in use which is based on future cash flows and a suitable discount factor in order to calculate the present value. Where the actual cash flows are less than expected, an impairment loss may arise. After reviewing the business environment and the group's strategies and past performance of its cash generating units, management concluded that there was no impairment of investments in subsidiaries at the current year end.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The directors remuneration for the group was £185,000 (2023: £137,000) and the company was £Nil (2023: £Nil).
Included within the group profit and loss account is the loss on the disposal of the group's controlling investment in Axiom IPS Group Limited, Axiom IPS UK Limited, Axiom IPS GmbH and Axiom IPS SRL. The investment has been consolidated until the date of disposal and had no operations in the previous financial period.
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The group and company have not recognised a deferred tax asset for tax losses due to the uncertainty of timing of profits. The group has tax losses of £984,612 to utilise against future trading profits.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Trade debtors include amounts that were both invoiced and un-invoiced at the year end. The amount of such income included in the trade debtors is for the Group £208,000 (2023: £1,339,000) and Company £Nil (2023: £Nil).
The invoice discounting facility with HSBC is secured by a fixed and floating charge and debenture on all the assets of Pangea Resourcing Limited.
Trade creditors include amounts that were both invoiced and un-invoiced at the year end. The amount of such un-invoiced costs included in trade creditors is for the Group £91,000 (2023: £768,000) and Company £Nil (2023: £Nil).
All companies in the group have either an auto-enrol pension scheme in place or make contributions to local pension schemes where required by law. At the year end, the unpaid pension contributions of the group were £16,000 (2023: £10,000) and of the company was £Nil (2023: £Nil).
The brought forward issued and fully paid share capital comprised 950,000 shares of £0.001 each, divided into 252,500 "A" Ordinary Shares, 350,000 "B" Ordinary Shares, 252,500 "C" Ordinary Shares, and 95,000 "D" Ordinary Shares.
On 15 March 2024, 95,000 "D" shares were re-designated as "A" shares, 126,250 ''A'' shares were re-designated as ''C'' shares and 126,250 ''C'' shares were re-designated as ''A'' shares.
On 15 March 2024, the company allotted 800,000 "Z" Ordinary Shares of £1.00 each, which were fully paid in cash.
Following this allotment, the total issued and fully paid share capital increased to 1,750,000 shares, comprising:
347,500 "A" Ordinary Shares
350,000 "B" Ordinary Shares
252,500 "C" Ordinary Shares
800,000 "Z" Ordinary Shares
Ordinary share rights:
The Company's A, B, C, and D Ordinary Shares carry no right to fixed income and each carry the right to one vote at general meetings of the Company. The Z Ordinary Shares do not carry voting rights and do not carry any right to fixed income.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
On 18 June 2025 the company allotted 99,724 "F" Ordinary Shares of £0.001 each. 42,899 of the shares were paid by a share for share exchange with 10 Pangea Resourcing Inc shares and 56,825 shares were settled in cash of £3.44
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
Included within amounts due to other related parties are loans of £1,312,000 (2023: £2,060,000) from a director and shareholder of the company. These loans are unsecured, and accrued interest at 15% per annum with no fixed repayment terms.
Dividends totalling £17,000 (2023 - £Nil) were paid in the year in respect of shares held by the company's directors.
During the year, directors were advanced amounts totalling £224,000 (2023: £170,000) by the group and accrued interest at 2.25% per annum. The directors repaid their loans of £170,000 from the previous year. At the year end, the loans due to the group were £224,000 (2023: £170,000).