Trilogy_International_Hol - Accounts
Trilogy_International_Hol - Accounts
group financial statements
for the year ended 30 November 2021
The directors present the strategic report for the year ended 30 November 2021. The company was incorporated on 4 February 2021.
The principal activity of the group during the year continued to be the provision of recruitment services in the Technology and Business Transformation & Change market as well as IT consultancy.
The business performed well over the period and continued to execute against the growth and investment plan it initiated at the start of COVID-19 in April 2020.
The businesses key focus during the period was to:
Rebuild the contract book back to the highs we had seen early in 2020 and then beyond
Further develop our Perm offering in the USA market, which was launched in April 2020
Develop the size and capability of our leadership team to allow us to better execute on the opportunities available
Diversify the business from the UK
Continue to invest ahead of profit growth in headcount and be best placed for a post COVID-19 bounce
Complete a corporate restructure
In the year we saw Gross margin increase by 19% to £5,861k.
We saw our headcount increase by 13% to 43.
We saw our Perm revenue increase by 84% to £1,667k.
We saw our revenues outside of the UK grow to 27% of the group’s revenues.
The trading environment and outlook for the future remains positive. Our positioning in Technology and also Business Transformation & Change, means we are well placed to take advantage of the projects that have been initiated by our clients as they get used to operating effectively in the COVID-19 era. We are also able to take advantage of the increase in demand from clients due to the pauses on hiring that took place during the lockdowns in 2020 and 2021.
The strategy to launch into Europe in 2018 has continued to provide excellent opportunities for contractor growth, and our teams focusing on the DACH and Benelux regions continue to show an increase in demand and receptiveness to our product offering. Our European business now accounts for 23% of the Group’s overall revenues.
The business is cautiously optimistic as to the opportunities available to it in the UK, partly due to the on-going adaptation to off-payroll legislation by our clients and the opportunities that presents. But we are also mindful of the post Brexit trading environment and the on-going uncertainty in respect to the future trading environment afforded to the UK.
Our decision to incubate the USA in April 2020 has opened up a brand new market for the group, our proposition has been very well received in the local market. We opened a physical office in New York in October 2021 and will continue to invest heavily into the US operations in 2022.
Our USA revenue grew from £142k in 2020 to £969k in the year ended 30 November 2021.
Credit Risk: The group is exposed to potential payment default by our clients. This risk is mitigated by operating a strong credit control policy, regular monitoring of trade receivables and ensuring we have strong relationships with clients to ensure swift payment and awareness of any challenges our clients might be facing, allowing us to take fast pre-emptive action where required.
Liquidity Risk: The group is financed through its retained earnings and its relationship with its bankers. We have a large invoice finance facility that provides adequate headroom for current and future growth and is reviewed by the board regularly in line with current and forecast performance.
Foreign currency: We operate in multi currencies and are exposed to fluctuations in foreign exchange rates. We mitigate FX exposure by ensuring contracts and associated costs are denominated in the same currencies. The board does not believe the level of risk requires a more sophisticated approach at this stage of growth.
Macro-Economic Factors: Currently, there is a significant level of global uncertainty in the markets, coupled with high inflation and the cost of living crisis and the broader economic outlook does tend to loosely correlate with our clients hiring plans. To mitigate this we focus on sectors and niches within those sectors that are more resilient to the fluctuations in the economy. We also ensure that the business is geographically diverse in both regions and operations. We offer both Permanent, Contract and consulting solutions to our clients and remain agile to new opportunities that are presented in the regions in which we operate. The diversity of our client base means we are well placed to take advantage of an increase in demand, or mitigate a decline.
| 2021 | 2020 | Commentary |
Gross Profit | £5,860,747 | £4,912,177 | Perm GP increased by £761k (84%) with a significant focus on the US market, whilst Contract GP also increased by £188k (5%) with further diversification into Europe |
Average Headcount | 43 | 38 | Headcount growth was mainly due to the expansion of our Irish business which serves Europe & Ireland and additional heads focused on the USA |
Productivity per Head | £139,296 | £129,268 | We have been able to improve our overall productivity whilst simultaneously investing in headcount for growth |
Conversion Ratio | 35% | 47% | Operating profit as a % of GP has decreased in 2021. This is due to 2020 reflecting significant cost saving measures adopted during the pandemic whilst 2021 reflects the investment in the recovery and some key projects such as the restructure and introduction of the Holding company. |
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 November 2021.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £525,000. 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:
Saffery Champness LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006 and have expressed their willingness to continue in office.
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 ; prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
give a true and fair view of the state of the group and of the parent company's affairs as at 30 November 2021 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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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
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.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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 their 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 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 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 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.
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.
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.
Other matters
The financial statements for the prior year were unaudited. We have obtained sufficient, appropriate audit evidence that the opening balances do not contain a misstatement that materially impact the current period financial statements.
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 profit for the year was £525,000.
Trilogy International Holdings Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is 24 Cornhill, London, EC3V 3ND.
The group consists of Trilogy International Holdings 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 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 Trilogy International Holdings Limited together with all entities controlled by the parent company (its subsidiaries).
The results of the group reorganisation are included from the effective date of acquisition which was 2 March 2021 using merger accounting. Under merger accounting the group is then treated as if it has always been in existence therefore comparative figures are shown for the group but only current year figures for the company itself.
All financial statements are made up to 30 November 2021. 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. The comparative figures include the 12 month results ended 31 December 2020 for Forbes Testing Limited.
All intra-group transactions and balances between group companies are eliminated on consolidation.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. This is based on a 12 month forecast from the date of approving the financial statements that incorporate a sustained growth over the period after taking into account the potential impact of the global economic downturn. The group has enough headroom in its funding facilities to cope with additional growth of the group.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business , and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Turnover consists of:
contractor placements, representing fees billed for the services of contractors including their costs, which is recognised when the service has been provided
permanent placements, representing fees billed as a percentage of the candidate's remuneration package, which is recognised on the start date of the candidate
Turnover not invoiced at the balance sheet date is included within accrued income.
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 income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities 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.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
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 statement of financial position 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.
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.
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 assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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 income statement 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.
The company operates an employee benefit trust (EBT) and has for accounting purposes only de facto control of the shares held by the trust and bears their benefits and risks. The company records assets and liabilities of the trust as its own. Consideration paid by the EBT for shares of the company is deducted from equity. Finance costs and administrative expenses incurred by the company in relation to the EBT are recognised on an accruals basis.
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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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 average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The directors were paid no compensation through Trilogy International Holdings Limited, but were paid by a subsidiary of the company.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 30 November 2021 are as follows:
Trilogy International USA, Inc. was incorporated in the USA on 4 January 2021.
Trilogy International EBT Limited was incorporated in the UK on 2 March 2021.
The addresses of the subsidiaries are as follows:
UK entities - 24 Cornhill, London, United Kingdom, EC3V 3ND
Republic of Ireland - 27 Upper Mount Street, Dublin 2, D02F890, Ireland
USA - 9 E. Loockerman St. Suite 311, Dover, DE 19901, USA
Amounts due to group undertakings are unsecured, interest free and repayable on demand.
The group entered into an agreement with HSBC invoice Finance (UK) Ltd in January 2016 to secure the above invoice finance facility. This agreement contains fixed and floating charges over the assets of the company and a negative pledge. The group also entered into a legal assignment on contract monies with HSBC Bank Plc, in January 2016. This assignment contains a negative pledge over certain liabilities of the company. This is further secured by way of a debenture dates January 2016, which includes a fixed a floating charge over all assets of the company and a negative pledge.
During the prior year, the group entered into two fixed rate loan agreements for £50,000 each with HSBC UK Bank plc attracting an annual interest of 2.5%, after one year from the date the loans were granted. The loans are due for repayment in monthly instalments and to be repaid in full by 18 November 2026. These lending facilities are supported by the Bounce Back Loan Scheme (BBLS), managed by the British Business Bank with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy. The balance at 30 November 2021 was £100,361.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The A Ordinary shares have full voting, dividend and capital distribution rights. 3 A ordinary shares were originally issued on 4 February 2021 for £1 each. 297 additional A ordinary shares were issued on 2 March 2021 for £1 each.
The B Ordinary shares are non-voting shares. They have attached to them certain dividend rights. On a capital distribution, holder of B ordinary shares received the amount paid up on their shares only and are not entitled to share in the distribution of any surplus assets. These B ordinary shares were issued on 2 March 2021 for £1 each.
Employee Benefit Trust
The Company is the settler and sponsor of the Trilogy International Employee Benefit Trust (EBT), a discretionary trust which was executed as a trust deed on 10 February 2022. Since that time, for accounting purposes only, the Company has had de facto control of the assets and liabilities of the trust and, consequently, the assets and liabilities of the trust are recognised in the Company accounts.
During the year, the EBT referred to above acquired 15% of the Ordinary A shares for consideration of £3,000,000.
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:
During the period, the group provided loans amounting to £49,108 (2020: £249,249) to connected company Quantum Six Consulting Limited. These loans accrued interest at a rate of 6%, amounting to £14,406 in the period (2020: £5,280). The loans are due for repayment in full by 30 October 2023. At the year end, the group was owed £318,043 (2020: £254,529).
At the year end, Directors' loan accounts of £1,634,207 that were included in a subsidiary undertaking were transferred to the company. The Directors' loan accounts were then offset by the dividends declared of £525,000, as well as amounts paid by the shareholders of £1,125,000. Further amounts were owed to the directors of £526,117, leaving an outstanding balance owed to the directors at the year end of £541,910.