Exceed Outsourcing Limited - Limited company accounts 20.1

REGISTERED NUMBER: 08566829 (England and Wales)

for

Page

Company Information  

1

Group Strategic Report  

2

Report of the Directors  

5

Report of the Independent Auditors  

7

Consolidated Income Statement  

11

Consolidated Other Comprehensive Income  

12

Consolidated Balance Sheet  

13

Company Balance Sheet  

14

Consolidated Statement of Changes in Equity  

15

Company Statement of Changes in Equity  

16

Consolidated Cash Flow Statement  

17

Notes to the Consolidated Cash Flow Statement

18

Notes to the Consolidated Financial Statements

19

DIRECTORS:

B Mellor

M Parsons

REGISTERED OFFICE:

Office 2, 2nd Floor Parsonage Chambers

3 Parsonage

Manchester

Greater Manchester

M3 2HW

REGISTERED NUMBER:

08566829 (England and Wales)

AUDITORS:

Hurst Accountants Limited

21 Tiviot Dale

Stockport

Cheshire

SK1 1TD

The directors present their strategic report of the company and the group for the year ended 31 December 2020.

REVIEW OF BUSINESS

For Exceed, 2020 was a year of great highs and equally challenging lows.  The year started strongly, with contractor numbers increasing month on month.  We expanded our service offering by acquiring a book of business from Indigo Strategic, a UK payroll and HR bureau.  We also acquired the international payroll clients of Payroll Services Limited. We invested in new systems and were ahead of forecast.

When the pandemic started to take hold and lockdowns initiated, this proved to be extremely challenging.  We already had the infrastructure in place to enable our staff to work from home, but that wasn't true across all sectors. Existing contractors were unable to undertake their assignments in some instances and many recruitment agencies were struggling to place new candidates.  This had a big impact on our revenue.  We utilised the Government schemes available to businesses, such as the Coronavirus Job Retention Scheme, but unfortunately still needed to make a small number of redundancies. Fortunately, our staff were extremely flexible and offered to continue working reduced hours in order to cut our wages bill.  We also took advantage of the VAT deferral scheme which has now all been repaid in full. This made a huge difference to us.  We focused on efficiencies, cost cutting and where appropriate, increased margins.

In July, a Management Buyout was completed by Matthew Parsons and Barry Mellor. This led to change of focus and strategy, from merely survival to how we can thrive in this environment. We focused on our growth objectives whilst maintaining low costs, which saw a slow increase in revenue throughout Q3 and strong growth in Q4.

Overall, 2020 was a very unusual year, where we managed to achieve a good profit in a difficult situation.

So far, 2021 is looking even more positive.  We were achieving pre-pandemic revenue levels in Q1 and are continuing to grow.  We intend to recruit additional staff by utilising the Government's Kickstart Scheme, as well as taking advantage of the Apprenticeship Scheme for both new and existing staff.  We will undoubtedly require a new office in 2021, as we are quickly outgrowing our current property.

We are in a very strong position now, and I firmly believe that 2021 will be an excellent year for Exceed Outsourcing.

PRINCIPAL RISKS AND UNCERTAINTIES

The group finances its operations through retained profits, with no external borrowing.

The management's objectives are to retain sufficient liquid funds to enable it to meet its day-to-day obligations as they fall due.

The impact of the Covid-19 pandemic is far reaching across the economy and therefore, the demand for contractor placements has fallen. The impact of the pandemic has been taken into account in cashflow forecasts and rolling forecasts are maintained so that preventative actions can be taken should the pandemic further impact the Company's contractor numbers.

As the group's surplus funds are primarily invested in sterling bank accounts, this limits exposure to price risk.

The group's credit risk is primarily attributable to its trade debtors. It is the group's policy that payments to suppliers are made in accordance with those terms and conditions agreed

between the group and its suppliers, provided that all trading terms and conditions have been complied with.

SECTION 172 STATEMENT

Contractors

Our clients and contractors are the central focus of our business. The company's ongoing success is built upon an ability to understand their needs and respond with solutions. This allows us to anticipate how these needs will evolve and to provide services and products that meet their goals.

We engage with our clients through a variety of channels including, obtaining feedback from genuine customers via independent review site Feefo and engaging directly with both satisfied and dissatisfied clients. Periodic surveys to understand their needs, current challenges and concerns to ensure we evolve the business and its solutions to meet their needs. Engagement of a strategy consulting firm who have undertaken surveys of our clients and the wider

market to highlight how our offering should evolve to meet their needs.

People

Our people are our biggest asset and are central to the ongoing success of the company. Our people strategy runs to develop an agile workforce as we continue to attract, retain, develop and motivate the right people for our current and future business needs.

We engage with our people through the following activities. Annual employee opinion survey, involving all staff in the development of our new vision and values, with engagement sessions held by the executive and senior management team, regular management briefings and presentations by the executive team to discuss

performance against the new vision, values and strategic plan. Additionally, in the current year and the unprecedented times we have all faced, the Board have ensured that the health, wellbeing and safety of our employees is the highest priority. Consequently, we ensured that as many employees as possible who could work from home have done so. Where this was impractical either due to the nature of the role, or our employees' circumstances, significant changes to work practices have been implemented to ensure all our employees can work in a safe environment and ensure social distancing was adhered to at all times.

Partners and professional bodies

We recognise the importance of our various partners in delivering services to clients and ensure we have shared values. We seek to build positive relationships with the professional bodies that represent both us and the industry as a whole.

We engage with our partners and professional bodies through the following activities. We ensure our payment terms with all suppliers are fair and in compliance with payment practices. We maintain ongoing relations with our key suppliers and partners, proactively engaging with them on specific challenges or changes. We hold meetings with Professional Passport, HMRC and other Government bodies, ensuring we maintain a compliant and transparent relationship at all times.

Society and communities

We recognise the responsibility we have to wider society and other key stakeholders. As a significant employer where we are based, the local communities are keen to ensure we are supporting and investing in local jobs, operating safely and ethically.

We engage with society and the communities in which we operate through the following activities: On an annual basis our staff help to select a charity to support. This year, we are actively trying to help homeless and vulnerable people in Manchester.

The below shows the key events and decisions made by the Board during the year, the stakeholders they impacted and the associated actions taken by the directors to engage with the relevant stakeholders. Events are considered to be key if they are either material to the business or have a significant impact on one or more category of stakeholder.

Restructuring and furlough

Affecting - employees

The Executive and Senior Management Teams worked in consultation with HR to agree the size, scope and approach of the proposed restructuring. Legal advice was taken where needed to ensure all laws and regulations set by HMRC were met and that we had documented the advice appropriately. Affected employees were given notice of redundancy and given the opportunity to raise any questions regarding the process. Affected employees were informed and agreed to be furloughed and were given opportunity to raise any questions regarding the process. We communicated to all employees on a regular basis regarding the furlough of employees and the restructuring process.

Management Buyout

Affecting - Employees

The Executive proposed an MBO to the shareholders, which was duly accepted. Legal advice was sought and MBO was concluded. The MBO was  communicated to all employees, with reassurance that impact would be minimal. We Gave employees opportunity to ask questions/raise concerns regarding the MBO

KEY PERFORMANCE INDICATORS

The group's key financial and other performance indicators during the period were as follows:

2020

2019

£

£

Turnover

42,529,183

38,163,379

Operating profit / (Loss)

66,196

(237,879

)

Operating Margin

0.16%

(0.62%

)

Net Assets

115,215

(248,093

)

The above comparative figures in respect of the period ended 31 December.

ON BEHALF OF THE BOARD:

M Parsons - Director

30 September 2021

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2020.

PRINCIPAL ACTIVITY

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2020.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report.

B Mellor

M Parsons

DISABLED EMPLOYEES

The group gives full consideration to applicants for employment from disabled persons where the candidates' aptitudes and abilities consistent with adequately meeting the requirement of the job. Opportunities are available to disabled employees for training, career development and promotion.

Where existing employees become disabled, it is the groups policy to provide continuing employment wherever practicable in the same or alternative position and to provide appropriate training to achieve this aim. The group adheres to the Equal Opportunities Act and make reasonable adjustments in the workplace following any access to work assessment.

ENGAGEMENT WITH EMPLOYEES

The Directors have a very open communication policy with our staff, trying to involve and inform them at every stage. During FY2020, the Directors and Senior Managers met each month to discuss all aspects of business with the outcome of these meetings were taken forward to the board and decisions made. These decisions were then cascaded back to staff, so they were fully abreast of the strategy and direction.

When COVID hit in FY2020, we were extremely honest with the staff about the impacts and the decisions we were going to have to take. They have shown their loyalty and dedication by remaining as flexible as possible in order to help us through this difficult period. We are currently discussing a share scheme for staff, to compensate them for any hardships suffered over the last 6 months. Staff morale is high and we are pulling together as a team.

GREENHOUSE GAS EMISSIONS, ENERGY CONSUMPTION AND ENERGY EFFICIENCY ACTION

The company has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower

DISCLOSURE IN THE STRATEGIC REPORT

The directors have chosen to set out the disclosure relating to financial risk objectives & policies in the strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 company and the group 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 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 company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors,  Hurst Accountants Limited, who were appointed after the year end, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

M Parsons - Director

30 September 2021

Opinion

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 Auditors' responsibilities for the audit of the financial statements section of our report.  We are independent of the group 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 the 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 in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-

the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Group Strategic Report or the Report of the Directors.

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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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:

Identifying and assessing potential risks related to irregularities

In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

-The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.

-The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.

-Supporting documentation relating to the Company's policies and procedures for:

    - Identifying, evaluating, and complying with laws and regulations

    - Detecting and responding to the risks of fraud

-The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.

-The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

-The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption.

Audit response to risks identified

Our procedures to respond to the risks identified included the following:

-Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.

-Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.

-Evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities.

-Enquiring of management about any actual and potential litigation and claims.

Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.

We have also considered the risk of fraud through management override of controls by:

-Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.

-Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and

-Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  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 for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

J Glover (Senior Statutory Auditor)

for and on behalf of Hurst Accountants Limited

21 Tiviot Dale

Stockport

Cheshire

SK1 1TD

30 September 2021

TURNOVER

3

42,529,183

38,163,379

Cost of sales

42,381,549

36,850,887

GROSS PROFIT

147,634

1,312,492

Administrative expenses

993,794

1,550,371

(846,160

)

(237,879

)

Other operating income

4

912,356

-

OPERATING PROFIT/(LOSS)

7

66,196

(237,879

)

Exceptional items

8

297,381

-

EXCEPTIONAL ITEMS                                                                                 363,577                                    (237,879)

Interest receivable and similar income

9

243

56

PROFIT/(LOSS) BEFORE TAXATION

363,820

(237,823

)

Tax on profit/(loss)

10

512

-

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

363,308

(237,823

)

Profit/(loss) attributable to:

Owners of the parent

363,308

(237,823

)

PROFIT/(LOSS) FOR THE YEAR

363,308

(237,823

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE

YEAR

363,308

(237,823

)

Total comprehensive income attributable to:

Owners of the parent

363,308

(237,823

)

FIXED ASSETS

Tangible assets

11

2,697

3,833

Investments

12

-

-

2,697

3,833

CURRENT ASSETS

Debtors

13

145,371

221,964

Cash at bank

4,383,575

2,710,469

4,528,946

2,932,433

CREDITORS

Amounts falling due within one year

14

4,415,916

3,184,359

NET CURRENT ASSETS/(LIABILITIES)

113,030

(251,926

)

TOTAL ASSETS LESS CURRENT LIABILITIES

115,727

(248,093

)

PROVISIONS FOR LIABILITIES

16

512

-

NET ASSETS/(LIABILITIES)

115,215

(248,093

)

CAPITAL AND RESERVES

Called up share capital

17

4,000

4,000

Retained earnings

18

111,215

(252,093

)

SHAREHOLDERS' FUNDS

115,215

(248,093

)

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2021 and were signed on its behalf by:

M Parsons - Director

FIXED ASSETS

Tangible assets

11

2,502

3,512

Investments

12

3

3

2,505

3,515

CURRENT ASSETS

Debtors

13

391,975

27,356

Cash at bank

17,615

11,395

409,590

38,751

CREDITORS

Amounts falling due within one year

14

31,878

631,898

NET CURRENT ASSETS/(LIABILITIES)

377,712

(593,147

)

TOTAL ASSETS LESS CURRENT LIABILITIES

380,217

(589,632

)

PROVISIONS FOR LIABILITIES

16

475

-

NET ASSETS/(LIABILITIES)

379,742

(589,632

)

CAPITAL AND RESERVES

Called up share capital

17

4,000

4,000

Retained earnings

18

375,742

(593,632

)

SHAREHOLDERS' FUNDS

379,742

(589,632

)

Company's profit/(loss) for the financial

year

969,374

(584,862

)

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2021 and were signed on its behalf by:

M Parsons - Director

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1 January 2019

1

(14,270

)

(14,269

)

Changes in equity

Issue of share capital

3,999

-

3,999

Total comprehensive income

-

(237,823

)

(237,823

)

Balance at 31 December 2019

4,000

(252,093

)

(248,093

)

Changes in equity

Total comprehensive income

-

363,308

363,308

Balance at 31 December 2020

4,000

111,215

115,215

Called up

share

Retained

Total

capital

earnings

equity

£   

£   

£   

Balance at 1 January 2019

1

(8,770

)

(8,769

)

Changes in equity