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Registered number: 08745731
SKALA RECRUITMENT LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 MARCH 2022
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SKALA RECRUITMENT LIMITED
COMPANY INFORMATION
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P J D Hiles (resigned 31 December 2021)
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Chartered Accountants and Statutory Auditor
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SKALA RECRUITMENT LIMITED
CONTENTS
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Notes to the Financial Statements
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SKALA RECRUITMENT LIMITED
REGISTERED NUMBER: 08745731
BALANCE SHEET
AS AT 31 MARCH 2022
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
Page 1
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SKALA RECRUITMENT LIMITED
REGISTERED NUMBER: 08745731
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 3 to 11 form part of these financial statements.
Page 2
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Skala Recruitment Limited is a private limited company limited by share capital and incorporated in England and Wales. The address of its registered office is 71 Buckingham Avenue, Slough, Berkshire, SL1 4PN.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.
The following principal accounting policies have been applied:
Exemption has been taken from preparing a cash flow statement on the grounds that the company qualifies as a small company.
The company recorded a profit after taxation of £50,362 for the year (2021: £168,921), had net current assets of £1,564,574 (2021: £1,503,100) and had net assets of £1,586,204 (2021: £1,535,842) at the balance sheet date, however this includes an intercompany debtor balance of £1,522,269 which is not expected to be recoverable in the 12 months following signing the financial statements.
The directors have prepared forecasts for a period of 12 months from the date of approval of these financial statements which indicate that the company remains a going concern. The outcome of the stress testing performed has indicated that 12 months after the balance sheet signing date there is some uncertainty with regards to the timing of cash flows, which gives rise to a material uncertainty in respect of going concern.
The financial statements do not include the adjustments that would be necessary should the going concern basis of preparation no longer be appropriate. However, after considering the uncertainties the directors have a reasonable expectation that the company will continue to successfully trade. Accordingly the directors consider it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
Turnover comprises revenue recognised by the company in respect of services supplied, exclusive of Value Added Tax and trade discounts.
Turnover is recognised on the date of supply of the service to the customer.
Goodwill is the amount paid in relation to the acquisition of the business of Onyxcol Limited. Goodwill is amortised to the Profit and Loss Account over its estimated economic life of 10 years.
Page 3
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using both the straight-line and reducing balance method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 4
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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The average monthly number of employees, including directors, during the year was 16 (2021 - 16).
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Page 5
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Page 6
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Page 7
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Proceeds of factored debts
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Amounts due to the invoice discounting company are secured on the book debts of the company.
See note 10 for details on the bank loan.
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Page 8
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Creditors: Amounts falling due after more than one year
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See note 10 for details on the bank loan.
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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The bank loan relates to the coronavirus business interruption loan which is repayable over 60 months at a fixed interest rate of 10.1%.
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Charged to profit or loss
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Page 9
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
10.Deferred taxation (continued)
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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Allotted, called up and fully paid
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100 (2021 - 100) Ordinary shares of £1.00 each
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Commitments under operating leases
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At 31 March 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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At the balance sheet date the company was owed a balance of £774,791 (2021: £774,791) from Onyxcol Limited, a fellow subsidiary, as a result of expenses paid by Skala Recruitment Limited.
At the balance sheet date the company was owed £100 (2021: £100) from Supplysmart Limited, the ultimate parent company.
At the balance sheet date, the company was owed £747,378 (2021: £573,232) from Skala Employee Ownership Trust, the ultimate parent.
At the balance sheet date, included in other debtors is an amount of £2,938 (2021: £7,826) owed by P A Ballinger to the company. The loan is interest free and has no fixed date for repayment.
At the balance sheet date, included in other debtors is an amount of £1,440 (2021: £1,320) owed by P E Lebby to the company. The loan is interest free and has no fixed date for repayment.
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Page 10
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SKALA RECRUITMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
The immediate parent company is Supplysmart Limited, which is owned by Skala Employee Ownership Trust.
In the opinion of the directors, Skala Employee Ownership Trust is not controlled by any one person.
The auditors' report on the financial statements for the year ended 31 March 2022 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
We draw attention to note 2.3 in the financial statements, which highlights the impact current trading conditions have had on the company. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, 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 director's 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.
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The audit report was signed on 6 December 2022 by Darren O'Connor BSc (Hons) FCCA ACA (Senior Statutory Auditor) on behalf of James Cowper Kreston.
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