SALT_RECRUITMENT_GROUP_LI - Accounts

The directors present the strategic report for the year ended 31 December 2020.

Salt Recruitment Group Limited (“the Group”) is a global leader in digital recruitment. The Group covers all aspects of digital; creating futures for our customers globally that will positively impact the digital economy.

The Group has traded for over 10 years, operating in a high growth market designed to meet the challenges of existing and emerging technology. Customer demand is strong as new product development continues with vendors, consultancies expand globally, and businesses work on their digital transformations; all whilst access to talent is seen as the bottleneck.

The group has excellent client diversity; developing long-term, direct relationships with many of the world’s fastest growing, blue-chip and emerging companies. Salt Recruitment Group Limited provides permanent and contract solutions across creative, marketing, sales and technology, building teams for tech companies and covering all areas from customer experience, ecommerce, data analytics, AI (Artificial Intelligence), software engineering, consulting, transformation, cyber security, VR (virtual reality) to IOT (Internet of Things).

As well as managing global recruitment campaigns, the Group also places its staff onsite and provides an embedded solution to accelerate time to hire whilst reducing cost per hire; this product is known as our DRO (Digital Recruitment Outsourcing – Salt X).

Much of the Group’s success is due to our experienced and stable management and over 220 staff (including staff employed by associates) across 11 offices globally (London, Auckland, Cape Town, Dubai, Hong Kong, Johannesburg, Kuala Lumpur, Melbourne, New York, Singapore and Sydney).

During the year, global markets experienced a severe shock as the Covid 19 outbreak was declared a pandemic on 12th March 2020. Despite market turmoil, the Group delivered a strong performance with operating profits of £1.2m (2019: £2.2m) underpinned by a strong team, a loyal customer base and being a specialist digital recruiter where demand returned quickly after the initial closures to curtail the spread of Covid 19.

The Group is experiencing demand for its services at levels above that seen in 2019 and expects to return stronger turnover and profitability in 2021 by focussing on core digital recruitment activities.

Strategy

The Group has ambitious organic growth plans and continues discussions with complimentary businesses to accelerate growth and performance, and sees 2021 and 2022 as providing further opportunities. Having built a market leading global platform, with the infrastructure and expertise to consistently deliver, the Group will continue to be opportunistic about complementary assets and expects to see consistent performances in 2021 and beyond.

Economic and market risk

The recruitment market is driven by economic cycles and business confidence, and as a consequence the Group is subject to risks associated with an economic downturn. The Group addresses this risk through ensuring non- dependence on any one client or service, operating globally across 9 countries, and post year end across 10 countries, and by offering a broad range of services within the sectors in which it operates together with a focus on quality and performance of delivery.

Covid 19 risk

During the year, markets have experienced a severe shock as, globally, businesses were shut or moved wholly online to curtail the spread of Covid 19. Uncertainty remains on the length of the crisis and as a consequence the Group is subject to revenue risk as recruitment demand is affected. The Group addresses this risk by managing variable costs, which is expected to mitigate the impact of revenue reduction; and by preparing cash flow forecasts which demonstrate that the Group maintains profitability and has sufficient cash flows to meet its operating commitments for the foreseeable future.

Competitive risk

The markets in which the Group operates are competitive and fragmented, and as a consequence the Group is subject to a number of risks including the impact of competitor activity, key staff attraction and retention. The Group addresses this risk through regularly monitoring competitor rates and margins and by attracting and retaining quality staff through incentive and retention initiatives, although the Group accepts a moderate level of attrition may arise given the focus on achievement, quality and compliance. Risks are regularly reviewed and assessed by the management team to ensure that adverse effects are minimised.

Credit risk

The Group policies are set to minimise exposure to credit risk, and in particular over bad debts. The Group addresses this risk through monitoring the creditworthiness of customers, working with customers to ensure debt is within acceptable credit limits and taking remedial action where necessary. Credit risk is regularly reviewed through an efficient management process of financial control, invoicing and debt recovery.

Foreign exchange risk

The Group has exposure to foreign exchange risk. The Group addresses this risk through ensuring costs and revenues are delivered in the same local currency and reviewing exchange exposure on a monthly basis.

The recruitment market is dynamic and the directors track a range of key performance indicators on a periodic basis. The more important KPI’s include NFI, contractor numbers and margins, and written business, all of which are measured on a regular basis against budget metrics.

The Group’s operation exposes it to a variety of financial risks that include the effects of credit risk, currency risk and liquidity risk. The directors seek to limit the effects of credit and liquidity risk by monitoring turnover and debtor days. The risks in relation to currency have been less material to the Group in the year as currency movements have appreciated in favour of the Group on its group debt movements. The directors seek to limit the effects on the financial performance of the Group by regularly monitoring levels of exposure to identified financial risks.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2020.

The principal activity of the company and group continued to be that of the provision of recruitment services.

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £95,112. 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 Beavis Morgan Audit Limited be reappointed as auditor of the group will be put at a General Meeting.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     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.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Salt Recruitment Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2020 which comprise the Group Profit And Loss Account, 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 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).

In our opinion the financial statements:

•     give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2020 and of the group's loss for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

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

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. The directors are responsible for the other information. 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 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 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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

• Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, company law, pensions legislation, and distributable profits legislation.

• Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include tax legislation and the Conduct of Employment Agencies and Employment Businesses Regulations 2003.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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 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 profit for the year was £684,929 (2019 - loss of £1).

Salt Recruitment Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 9 Wootton Street, London, SE1 8TG.

The group consists of Salt Recruitment Group 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 parent company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention.

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 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The consolidated group financial statements consist of the financial statements of the parent company Salt Recruitment Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2020. 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.

Any subsidiary that has a different functional currency to the presentational currency of the group is retranslated using the following rates. Items in profit and loss are translated from the functional currency to the presentational currency using the rate of exchange prevailing at the date of the transaction or an average rate where more appropriate. Balance sheet items are translated at the rate of exchange prevailing on the reporting end date. Differences arising on translation are recognised in other comprehensive income.

Entities other than subsidiary undertakings 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 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.

Turnover comprises revenue recognised by the group in respect of recruitment services provided, exclusive of Value Added Tax, and is recognised when candidates commence permanent employment, and contract revenue is recognised in the period the contractor undertakes the work.  A provision is recognised where a rebate is due should the candidate cease permanent employment within the agreed terms of business.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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.

Investments in subsidiaries are measured at cost less accumulated impairment.

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, or where there is the power to exercise, or the actual exercise of,dominant influence or control over the entity.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates and subsidiaries are accounted for at cost less 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.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, and bank overdrafts. Unless a formal right of set off exists, bank overdrafts are shown within borrowings in current liabilities.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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, loans advanced to fellow group members and cash and bank balances, 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 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, loans from fellow group members and invoice finance facilities, 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 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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.

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.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using an appropriate valuation model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

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.

Judgement has been required in respect of determining whether the group exercises control over certain subsidiaries.

Those accounting estimates that have most impact on the financial statements are in relation to provisioning for bad debts, the useful economic lives of tangible and intangible fixed assets, and drop out provisioning for permanent placements.

The whole of turnover is attributable to the principal activity of the group.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

* This subsidiary was completely disposed of by the group in October 2020.

Details of associates at 31 December 2020 are as follows:

The directors consider the company holds significant influence because of the existence of an option agreement to acquire further shares and other contractual rights held by it.

Included within loans are amounts owed under an invoice finance facility, which is secured by a debenture dated 10th January 2017 over the assets of Salt Search Limited and Salt Contracts Limited respectively, and by a guarantee from Salt Recruitment Group Limited. The amounts owed under the agreements at 31 December 2020 was £1,120,441 (2019: £4,379,018).

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.

On 31 January 2020 the group acquired 50 percent of the issued capital of Recruit Digital Associates (Pty) Limited.

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 30 June 2021 the company exercised its option to purchase 369 shares (37% of the issued share capital) in its associate Salt APAC Pte Limited for approximately £1.2m. This brings the company's total holding to 50% and due to the shareholding and control exercised over Salt APAC Pte Limited's operating and financial policies the directors consider that the associate became a subsidiary at this date.

At 31 December 2020 there was no overall controlling party.

Entities under common control

2020             -          -     - - - -*

2019            187,344          -     - 1,214,954 - 2,350,954*

Entities over which the group has significant influence

2020             -          -     - - - 1,063,816

2019             -          -     - - - 973,841

*This represents amounts advanced to a related party company on 1 April 2018 in which the directors have control and significant influence. The loan is unsecured, bears an interest rate of 1.75% (1.55% from April 2019) over 3 month LIBOR, and was due for repayment on 1 April 2020.

Interest amounting to £52,120 was charged on this loan in the year and the full balance of £2,403,074 was written off in the year.

During the year, advances totalling £250,696 (2019: £10,140) and £252,735 (2019:£103,324) were made to PDA Schiavo and M Schiavo respectively, who are directors of the company.

At the balance sheet date, the group owed £1,961 (2019: £nil) to PDA Schiavo and was owed £39 (2019: £nil) by M Schiavo.

Dividends amounting to £95,112 (2019: £Nil) were paid to the directors in the year.

Company

At the balance sheet, the company owed £906,798 (2019: £792,241) and £3,769 (2019: £1,500) to Salt Search Limited and Salt Contracts Limited respectively. Salt Search Limited and Salt Contracts Limited are subsidiaries of the company.

As permitted by FRS 102, the company has taken advantage of paragraph 33.1A, and not disclosed transactions between wholly-owned members of the group.

At the balance sheet date, the company owed £39 (2019: £nil) and £39 (2019: £nil) to PDA Schiavo and M Schiavo respectively.

Dividends amounting to £95,112 (2019: £Nil) were paid to the directors in the year.

The company has granted options under an Enterprise Management Incentive Scheme. Share options granted from time to time are placed in the employee's hands until exercise or expiry. Options remaining unexercised after a period of 10 years from the date of grant expire. Furthermore, share options are forfeit if the employee leaves the company before the options vest,

At the balance sheet date, the total number of shares issuable under outstanding options are 836 (2019 – 1,140) Ordinary B shares of £0.10 each at a purchase price of £23 per share, and 500 (2019 – 1,000) Ordinary C shares of £0.10 each at a purchase price of £1.75 per share.The corresponding cost of the outstanding options amounts to £1,134 (2019 - £2,267).