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Registered number: 04318754
The SAS Group of Companies Limited
Annual Report and Financial Statements
For the Year Ended 31 December 2020
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The SAS Group of Companies Limited
Company Information
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G C Duffy (appointed 1 April 2020)
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C Mattey (appointed 1 April 2020)
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Chartered Accountants & Statutory Auditor
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The SAS Group of Companies Limited
Contents
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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The SAS Group of Companies Limited
Group Strategic Report
For the Year Ended 31 December 2020
The directors present their strategic report for the year ended 31 December 2020.
Fair review of the business
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Turnover for the year was £18,984,632 (2019 - £16,102,842), leading to an operating loss of £50,578 (2019 – loss of £585,433). Financial performance was boosted by the rollout of previously-delayed contracts, the impact of savings from earlier restructuring and new projects with existing customers. Having renewed ten major long term contracts early, we also secured new contracts across multiple sectors.
The Covid-19 pandemic created challenges for many businesses during 2020. However, we are pleased to report that we were able to maintain support levels for all our customers and continue to roll out networks for them. This has generated considerable goodwill and confidence that will help us with customer advocacy and future renewals.
Our customers are increasingly deploying applications from the cloud and allowing staff to access them from home over the internet. This has created new opportunities for us to help customers with the consequent challenges in network performance and network security. To leverage these, we have continued to invest in service development, maturing SD WAN and monitoring services and extending to new capabilities in network security (eg SASE) and in cloud services. Our developments have borne fruit, helping us to secure cloud transformation projects for existing customers and multiple new customers across both 2020 and 2021.
We are pleased to report that our ongoing focus on delighting our customers has also been successful. Customers have continued to act as references to help secure new contracts, and a Net Promoter Score survey in 2021 produced an impressive score of 77.6.
We are confident that our strategy is working and delighted with our improved performance.
At 31 December 2020 the group had net assets of £1,629,094 (2019 - £1,916,487).
Despite difficult trading during the year, the group has maintained a positive bank balance, with the net balance at the year-end amounting to £405,349 (2019 - £205,731).
Principal risks and uncertainties
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The directors are aware that delays in the delivery of computer hardware due to manufacturing constraints and possible changes in import duties could delay projects. The directors consider that they have a strong management team and robust processes in place to protect the company going forward. Future uncertainties are mitigated by the company having a high proportion of contracts secured long-term, a solid pipeline of work and growing annuity revenues.
Our maturing SD WAN proposition and evolving cloud and network security capabilities will continue to help us secure network transformation projects with existing customers and win new contracts.
Page 1
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The SAS Group of Companies Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2020
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Financial key performance indicators
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The directors monitor the pipeline of work and the key metrics are Earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA") and the levels of cash held and planned expenditure.
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The cash reserves of the group are set out in the Business review section above.
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This report was approved by the board on 24 June 2021 and signed on its behalf.
Page 2
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The SAS Group of Companies Limited
Directors' Report
For the Year Ended 31 December 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Group's financial statements 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 Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to 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.
The principal activity of the company is that of a holding company. The principal activity of the group is the design, installation and support of IT infrastructure and networks, the setting up of telecommunication installations programmes and the provision of software engineering and support services.
The profit for the year, after taxation, amounted to £13,418 (2019 - loss £711,617).
During the year the directors declared dividends of £222,000 (2019 - £300,000).
The directors who served during the year were:
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R J Smith (resigned 31 March 2020)
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K Darling (appointed 1 April 2020, resigned 23 February 2021)
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G C Duffy (appointed 1 April 2020)
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C Mattey (appointed 1 April 2020)
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Page 3
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The SAS Group of Companies Limited
Directors' Report (continued)
For the Year Ended 31 December 2020
Objectives and policies
The group's financial risk management policies are designed to reduce the risk of liquidity and credit risk exposure. The group's principal financial instruments comprise cash at bank, bank overdraft, trade debtors and creditors, accrued and deferred income and balances with group companies.
The group manages its cash flow to ensure it has sufficient funds to meet its liabilities as they fall due for payment, whilst at the same time operating within agreed bank facilities. Trade debtors are monitored on an ongoing basis and at the year end there are no significant concerns of credit risk in the group.
Research and development activities
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During 2020 we continued to invest in research and development, shaped by customer priorities and feedback.
Alongside ongoing development in SD WAN, Next Generation Monitoring and Voice, we are now focussing on Network Security including SASE, and in Cloud.
All of these developments were well received by customers and contributed to improvements in sales performance.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
Page 4
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The SAS Group of Companies Limited
Directors' Report (continued)
For the Year Ended 31 December 2020
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 5
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The SAS Group of Companies Limited
Independent Auditors' Report to the Members of The SAS Group of Companies Limited
We have audited the financial statements of The SAS Group of Companies Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, 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 Financial Reporting Standard 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 of the parent Company's affairs as at 31 December 2020 and of the Group's profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
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 United Kingdom, including the Financial Reporting Council'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
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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 or 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.
Page 6
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The SAS Group of Companies Limited
Independent Auditors' Report to the Members of The SAS Group of Companies Limited (continued)
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 Auditors' Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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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 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.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Page 7
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The SAS Group of Companies Limited
Independent Auditors' Report to the Members of The SAS Group of Companies Limited (continued)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 Group 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:
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.
Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure and management bias in accounting estimates and judgemental areas of the financial statements such as revenue and margin recognition on revenue contracts. Audit procedures performed by the group engagement team included:
• Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud; and
• Assessment of identified fraud risk factors; and
• Challenging assumptions and judgements made by management in its significant accounting estimates; and
• Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
• Performing analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
• Reading minutes of meetings of those charged with governance and reviewing correspondence with relevant tax authorities; and
• Identifying and testing journal entries, in particular manual entries made at the year end for financial statement prearpation; and
• Year end trade debtors have been agreed to post year end cash received.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
Page 8
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The SAS Group of Companies Limited
Independent Auditors' Report to the Members of The SAS Group of Companies Limited (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 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 Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Graham Hunt BA FCA (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Horsham
25 June 2021
Page 9
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The SAS Group of Companies Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2020
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Interest receivable and similar income
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Interest payable and expenses
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Profit/(loss) for the financial year
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Loss for the year attributable to:
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Owners of the parent Company
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The notes on pages 18 to 38 form part of these financial statements.
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Page 10
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The SAS Group of Companies Limited
Registered number: 04318754
Consolidated Balance Sheet
As at 31 December 2020
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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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Provisions for liabilities
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Capital redemption reserve
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Equity attributable to owners of the parent Company
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 June 2021.
The notes on pages 18 to 38 form part of these financial statements.
Page 11
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The SAS Group of Companies Limited
Registered number: 04318754
Company Balance Sheet
As at 31 December 2020
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Capital redemption reserve
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Profit and loss account brought forward
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Other changes in the profit and loss account
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 June 2021.
The notes on pages 18 to 38 form part of these financial statements.
Page 12
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The SAS Group of Companies Limited
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Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2020
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Capital redemption reserve
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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Shares cancelled during the year
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Total transactions with owners
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The notes on pages 18 to 38 form part of these financial statements.
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Page 13
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The SAS Group of Companies Limited
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Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2019
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Capital redemption reserve
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 18 to 38 form part of these financial statements.
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Page 14
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The SAS Group of Companies Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2020
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Shares cancelled during the year
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Total transactions with owners
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The notes on pages 18 to 38 form part of these financial statements.
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Page 15
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The SAS Group of Companies Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2020
Cash flows from operating activities
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Profit/(loss) for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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(Increase)/decrease in stocks
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(Increase)/decrease in debtors
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Increase/(decrease) in creditors
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(Decrease)/increase in provisions
|
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Corporation tax received/(paid)
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|
Net cash generated from operating activities
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|
Cash flows from investing activities
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|
Purchase of intangible fixed assets
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|
Purchase of tangible fixed assets
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|
Sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Repayment of/new finance leases
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Net cash used in financing activities
|
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|
Net increase/(decrease) in cash and cash equivalents
|
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|
Cash and cash equivalents at beginning of year
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|
Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 18 to 38 form part of these financial statements.
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Page 16
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The SAS Group of Companies Limited
Consolidated Analysis of Net Debt
For the Year Ended 31 December 2020
The notes on pages 18 to 38 form part of these financial statements.
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Page 17
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
The company is a private company limited by share capital incorporated in England and Wales.
The address of its registered office and principal place of business is:
SAS House
Blackhouse Road
Colgate
West Sussex
RH13 6HS
2.Accounting policies
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Basis of preparation of financial statements
|
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The financial statements are presented in Sterling which is the functional currency of the company and are rounded to the nearest £.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
Parent company disclosure exemptions
In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙No Statement of Cash Flows has been presented for the parent company;
The following principal accounting policies have been applied:
Page 18
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2020.
No income statement is presented for the company as permitted by section 408 of the Companies Act 2016. The company made a profit after tax for the financial year of £419,703 (2019 - £302,475).
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Inter-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
The COVID-19 pandemic has developed rapidly in 2020. The government have announced implementation of government assistance measures to mitigate some of the impact of the COVID-19
pandemic. Through the use of the government assistance and from reserves and cash balances available to the group the directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future. The directors have assessed the impact of the continuing pandemic on the group by way of forecasts and do not believe that it will have a material impact on the group's ability to continue to trade nor on the value of the group's assets of liabilities. Therefore the financial statements have been prepared on a going concern basis.
Page 19
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|
The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Where payments are received from customers in advance of services provided the amounts are recorded as deferred income and included as part of creditors due within one year.
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Foreign currency translation
|
Functional and presentation currency
The Group's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Page 20
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|
The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
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Operating leases: the Group as lessor
|
Rental income from operating leases is included in turnover and is credited to profit or loss on a straight line basis over the lease term.
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Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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Leased assets: the Group as lessee
|
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Group. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Consolidated Statement of Comprehensive Income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Grants are accounted under the accruals model as permitted by FRS 102.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
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Short-term employee benefits
|
When employees have rendered service to the Group, short-term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service.
Page 21
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|
The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
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Current and deferred taxation
|
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 and the Group operate and generate 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;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
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.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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2 - 10 years straight line
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5 - 10 years straight line
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Page 22
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|
The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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 the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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20 - 33.33% straight line
|
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.
Investments in subsidiaries and other fixed asset investments are measured at cost less accumulated impairment.
Dividends on equity securities are recognised in income when receivable.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. They are measured subsequently at amortised cost using the effective interest method, less any impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables
Page 23
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
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Cash and cash equivalents
|
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.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
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Provisions for liabilities
|
Provisions are made where an event has taken place that gives the Group 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 Group 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.
The Group 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 third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
Page 24
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
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Financial instruments (continued)
|
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Judgements in applying accounting policies and key sources of estimation uncertainty
|
In the application of the group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
Stage of completion for revenue contracts - Determining the stage of completion for revenue contracts requires an estimate of the expected costs to complete, the estimated profit or loss on the contract and the estimated completion date. The amounts recoverable on contracts at the balance sheet date are included within accrued income within Prepayments and accrued income. The carrying amount is £802,935 (2019 - £445,046).
Page 25
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
Analysis of turnover by country of destination:
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Government grants receivable
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The operating loss is stated after charging:
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Depreciation of tangible fixed assets - owned
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Depreciation of tangible fixed assets - leased
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Amortisation of intangible assets, including goodwill
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Profit on disposal of property, plant and equipment
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Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
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Fees payable to the Group's auditor and its associates in respect of:
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Page 26
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Management and administration
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Development, selling and distribution
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The Company has no employees other than the directors. The directors of the Company received remuneration from SAS Global Communications Limited (a subsidiary company).
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 6 directors (2019 - 4) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £140,760 (2019 - £119,720).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £4,000 (2019 - £5,092).
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Page 27
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Current tax on losses for the year
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Origination and reversal of timing differences
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Taxation on loss on ordinary activities
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2019 - higher than) the standard rate of corporation tax in the UK of 19% (2019 - 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Utilisation of tax losses
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Adjustments to tax charge in respect of prior periods
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Deferred tax not recognised
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Other timing differences leading to an increase/(decrease) in taxation
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Total tax charge for the year
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Factors that may affect future tax charges
|
There were no significant factors that may affect future tax charges.
Page 28
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Charge for the year on owned assets
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Page 29
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Furniture, fittings and equipment
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Charge for the year on owned assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Furniture, fittings and equipment
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Page 30
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Other fixed asset investments
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Investments in subsidiary companies
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Page 31
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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The following were subsidiary undertakings of the Company:
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SAS Global Communications Limited
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SAS Managed Applications Limited
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Tidewell Solutions Limited
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SAS Network Services Limited
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The SAS Business Group Limited
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All of the above subsidiaries have the same registered office as the parent company.
In line with the exemption allowed under section 479A of the Companies Act 2006 certain of the subsidiary companies of The SAS Group of Companies Limited have been made exempt from the requirements to have an audit under section 475 of the Companies Act 2006. In order to meet this exemption The SAS Group of Companies Limited has pledged to guarantee all outstanding liabilities to which the relevant subsidiaries are subject to at the end of the financial year to which the guarantee relates until they are satisfied in full and that this guarantee is enforceable against the parent undertaking by any person to which the subsidiaries are liable in respect of those liabilities.
For the year ended 31 December 2020 the following subsidiary company has taken the exemption from
audit under section 479A of the Companies Act 2006:
- SAS Managed Applications Limited (Registered number: 08402293)
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Finished goods and goods for resale
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Amounts owed by group undertakings
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Prepayments and accrued income
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Page 32
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Cash and cash equivalents
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Less: bank overdrafts (secured)
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Creditors: Amounts falling due within one year
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Bank overdrafts (secured)
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Page 33
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Amounts falling due within one year
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Bank overdrafts (secured)
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Hire purchase liabilities
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Amounts falling due 1-2 years
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Hire purchase liabilities
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Group
Other borrowings
The hire purchase liabilities with a carrying amount of £1,223,706 (2019 - £690,098) are denominated in Sterling. The final instalment is due in June 2023.
The hire purchase liabilities are secured on the relevant assets leased.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Page 34
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities measured at amortised cost
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Financial assets that are debt instruments measured at amortised cost comprise cash, trade debtors, other debtors, amounts owed by group undertakings and accrued income.
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Financial liabilities measured at amortised cost comprise trade creditors, amounts owed to group undertakings, obligations under finance lease and hire purchase contracts, other creditors and deferred income.
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Released to profit or loss
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Accelerated capital allowances
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Tax losses carried forward
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Page 35
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Allotted, called up and fully paid
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9,750 (2019 - 10,750) Ordinary shares of £1.00 each
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75,250 (2019 - 75,250) Ordinary B shares of £1.00 each
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8,150 (2019 - 8,150) Ordinary D shares of £1.00 each
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During the year, the parent company entered into a contract to purchase 1,000 of its Ordinary £1 shares. Consideration for the purchase was £78,811. The parent company has transferred an amount of £1,000 from share capital to the capital redemption reserve.
Rights, preferences and restrictions
"B" ordinary shares have the following rights, preferences and restrictions:
The "B" ordinary shares rank pari passu with the ordinary shares in all respects save that the company may pay dividends of different amounts on these shares to the exclusion of the other classes of shares.
"D" ordinary shares have the following rights, preferences and restrictions:
The "D" ordinary shares rank pari passu with the ordinary shares in all respects save that the economic rights attaching to the shares, including rights on sale, to dividends and on return of capital are 1/100th of the rights attaching to ordinary shares.
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Share premium account
Contains the premium arising on issue of equity shares, net of issue expenses.
Capital redemption reserve
Arises on the cancellation of issued share capital.
Other reserves
Arising due to merger and consolidation in previous years.
Profit and loss account
Includes all current and prior year retained profits and losses, after the payment of dividends.
The group operates an Enterprise Management Incentive (‘EMI’) scheme for certain directors and employees. Share options are exercisable for ordinary shares at prices determined at the date of the grant. The share options were granted on 9 February 2018 with the expiry dates being 10 years following the date of the grant or earlier if individuals cease to be an employee of the group. The share options are exercisable only on the sale of the group. Based on the results of the group, as at the date of grant, and at the year end, the sale of the company was not considered to be likely and therefore no charge has been recognised in relation to these share options.
At the 31 December 2020 there were 12,000 (2019: 12,500) options outstanding. During the year 500 options expired.
Page 36
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £242,392 (2019 - £247,690). Contributions totalling £46,070 (2019 - £46,920) were payable to the funds at the balance sheet date and are included in creditors.
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Financial guarantee contracts
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Group
Barclays Bank Plc holds a debenture over the undertakings and assets of The SAS Group of Companies Limited and certain of its subsidiaries as security for the group's bank facilities. At the end of the period the company has a contingent liability for amounts guaranteed under the group banking facilities of £Nil (2019 - £177,508).
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Commitments under operating leases
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At 31 December 2020 the Group 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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The group as lessor
At 31 December 2020, the Group had contracted with customers to receive the following total future minimum lease rentals as follows:
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Later than 1 year and not later than 5 years
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Page 37
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The SAS Group of Companies Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Related party transactions
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Group
Key management personnel
The group considers its key management personnel to comprise of: M Stichbury, D J Biggins, G Duffy, R Ellis and C Mattey for the 2020 financial year. For the 2019 financial year it comprised of K Darling, N Cothill, M Stichbury, D J Biggins, R Smith, G Duffy, R Ellis, C Mattey and C M Owen-Smith.
Summary of transactions with key management
During the year the group paid £574,600 (2019 - £903,174) in gross salaries, £72,348 (2019 - £112,243) in employer's NI Contributions, £21,317 (2019 - £37,245) in pension contributions and £7,701 (2019 - £43,785) in benefits in kind to key management personnel.
Summary of transactions with other related parties
S A Stanway
Ultimate controlling party
During the year the parent company paid dividends of £222,000 (2019 - £300,000) to S A Stanway. At the balance sheet date the amount due to S A Stanway was £nil (2019 - £nil).
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The ultimate controlling party for the group and company is S A Stanway.
Page 38
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