OPTIONS_RESOURCING_LIMITE - Accounts
OPTIONS_RESOURCING_LIMITE - Accounts
The directors present the strategic report for the year ended 31 March 2020.
Principal Activity
The principal activity of the group in the year under review was that of an employment agency and business.
While the directors are pleased with the performance for the year and the results are in line with their expectations, more challenging market conditions that were at least in part due to Brexit uncertainty, contributed to a reduction in overall trading volumes. The impact of Covid-19 was only felt in the last week of trading in the year, and while the directors expect it to result in reduced overall trading volumes in the next financial year, they are pleased with the recovery in performance over recent months and believe the business is well placed for continuing future growth.
The group has numerous preferred supplier agreements with market leaders within the built environment sector due to the innovative services being offered. The Board of Directors continue to develop effective strategies to combat the following market weaknesses:
Shortage of high quality recruitment professionals and the corresponding wage inflation.
Changing legislation governing the engagement of temporary contractors.
Shortage of skilled temporary contractors.
The group implements market leading reward schemes to ensure retention of key staff throughout the business and to mitigate against loss of key personnel.
The Board of Directors are mindful in particular of the potential effect of Brexit from 2021 and changing future immigration patterns on the availability of skilled temporary contractors, but are satisfied that the group is well placed to deal with such changes.
The activities of the group expose it to a number of financial risks:
Credit risk
The group’s principal asset is its trade debtors and as such, its principal risk is attributable to its trade debtors. The objective of the group is to minimise the level of doubtful debts through exposure to only very credit worthy customers, meticulous credit control procedures and a full trade credit insurance policy. Furthermore, exposure is spread over a large number of active clients.
Interest rate risk
The group is exposed to fluctuations in interest rates due to external funding arrangements. The group seeks to reduce this risk by minimising borrowing, retaining sufficient liquid funds to enable it to meet its day to day requirements, and by matching the repayment schedule of external borrowings with the future cash flows expected from the group’s trading activities.
Reduction in business activity
The group is, like all others, exposed to downturn within the core market sectors in which it trades. Performance is monitored by the Directors and senior management team on a daily basis, who will seek to implement alternative strategies if necessary. This day to day involvement in controlling the business mitigates this risk. Furthermore, the Directors have invested in the creation of new allied market sectors to further diversify the trading operations of the business.
Employee involvement
The value of employee involvement is recognised by the group and has informed all stakeholders of the numerous factors affecting the group’s performance. Regular formal and informal meetings are held with employees and the group intranet and newsletter is used to communicate effectively with them.
The directors consider the level of sales and gross profit margin to be key performance indicators. While sales decreased from £35,338,921 in 2019 to £31,821,072 in 2020, gross profit margins increased from 13.7% in 2019 to 13.8% in 2020. The directors also consider profit before taxation to be a key measure of the overall performance of the business, and profit before taxation decreased slightly from £1,136,018 in 2019 to £1,115,124 in 2020.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2020.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 8.
No dividends will be distributed for the year ended 31 March 2020 (2019: nil).
In accordance with the company's articles, a resolution proposing that be reappointed as auditor of the group will be put at a General Meeting.
On 7 September 2020 Group Audit Services Limited, trading as Wilkins Kennedy Audit Services, changed it's name to Azets Audit Services Limited. The name they practice under is Azets Audit Services and accordingly they have signed their report in their new name.
• Review of the business, including future developments • Financial risk management objectives; and • Indication of exposure to interest rate risk, liquidity and cash flow risk/foreign currency risk
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
We have audited the financial statements of Options Resourcing Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2020 which comprise the group statement of comprehensive income, 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, the company statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2020 and of the group's profit for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006.
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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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 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.
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 £60,276 (2019 - £25,313 profit).
Options Resourcing Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 30 Queen Square, Bristol, United Kingdom, BS1 4ND.
The group consists of Options Resourcing Limited and all of 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 £.
The financial statements have been prepared under the historical cost convention.
The consolidated financial statements incorporate the financial statements of the company and its subsidiaries controlled by the group. Control is achieved where the group has the power to govern the financial and operating policies of an entity so as to obtain benefit from its activities.
The results of subsidiaries which are acquired or disposed of during the year are included in total comprehensive income from the date of acquisition and to the date of disposal applying accounting policies that are consistent with the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates. In the group financial statements, associates are accounted for using the equity method.
At the time of approving the financial statements, the directors are comfortable that it is appropriate to adopt the going concern basis of accounting in preparing the financial statements.
The directors have considered the potential ongoing impact of the COVID-19 virus, and while it creates a heightened degree of uncertainty, there is no reason to suggest the going concern basis is not appropriate.
Staff within the business are continuing to operate with a mix of remote and office based working and the post year end performance to date has remained profitable. The directors have prepared and reviewed forecasts and projections for the group and, taking into account the economic conditions and possible changes in trading performance, alongside the facts noted above, they have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future.
The group's balance sheet presents net current assets of £609,167 and total equity of £689,492 (2019: £668,230 and £749,767 respectively) at the balance sheet date, demonstrating the strength of its resources. The group therefore continues to adopt the going concern basis in preparing its financial statements.
The turnover shown in the profit and loss account represents the value of all services delivered during the year, at selling price exclusive of Value Added Tax.
Revenue recognition
Revenue from temporary placements, which represents amounts billed for the services of temporary staff, is recognised when the service has been provided.
Revenue from permanent placements is recognised when the placement starts.
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current of deferred taxation assets and liabilities are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Short term employee benefits, including holiday entitlement and other non-monetary benefits, and contributions to defined contribution plans are recognised as an expense in the period in which they are incurred.
The group recognises an accrual for accumulated annual leave accrued by employees as a result of services rendered in the current period for which employees can carry forward and use within the next year. The accrual is measured at a salary cost of the respective employee in relation to the period of absence.
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.
Trade and other receivables
Trade and other receivables are measured at transaction price less any impairment unless the arrangement constitutes a financing transaction in which case the transaction is measured at the present value of the future receipts discounted at the prevailing market rate of interest. Loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest method less any impairment.
Trade and other payables
Trade and other payables are measured at their transaction price unless the arrangement constitutes a financing transaction in which case the transaction is measured at the present value of the future payments discounted at prevailing market rate of interest. Other financial liabilities are initially measured at fair value net of their transaction costs. They are subsequently measured at amortised cost using the effective interest method.
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The group makes an estimate of the recoverable value of its debtors. When assessing impairment of debtors, management considers factors including any history of non-payment by the counter-party or any other factors which indicate that they may not be able to settle their obligation to the group in full.
The annual depreciation charge of tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/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:
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not permitted as part of these financial statements.
The company has a controlling interest in the following LLP's, details of the company's subsidiaries at 31 March 2020 are as follows:
Group
An impairment provision of £88,916 (2019: £92,270) is recognised against trade debtors.
Company
An impairment provision of £7,628 (2019: £2,900) is recognised against trade debtors.
Other creditors include £2,891,676 (2019: £3,354,700) in relation to factoring. Lloyds Commercial Finance Limited holds a primary fixed and floating charge over the undertaking and all property and assets present and future.
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:
At the time of this report, the Covid-19 pandemic has caused significant disruption to economic activity, financial markets and the daily lives of a significant part of the world's population. The pandemic is a non-adjusting event and is ongoing. The lasting effects on the world’s economies is not yet known. The Company continues to manage its principal risks as explained above and believe that it is suitable to do so also in the face of the Covid-19 pandemic, as it has not seen a material impact on the company's financial statements.
All directors who have the authority and responsibility for planning directing and controlling activities of the group are considered to be key management personnel.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
There is no ultimate controlling party.