PENDRAGON_CONSULTANCY_LTD - Accounts

The director presents the strategic report for the year ended 30 September 2022.

Business in the period to 30 September 2022 was satisfactory. Despite the challenges brought by Covid-19, the company continued to benefit from recovering markets and the launch of Pendragon’s Six distinct services under One consultancy, during the latter part of the year, as shown in the company’s profit and loss account on page 9.

Pendragon’s trading styles are:-

Pendragon Comply - supply chain assurance compliance services

Pendragon Global EOR - International Employer of Record Services 150 countries

Pendragon Umbrella - employment Services

Pendragon Employ PEO – outsourced PAYE services

Pendragon Consult -advisory services

Pendragon Currency – business currency exchange

The company’s turnover has increased by 100.29% and gross profit increased by £275,870, while admin expenses increased by £116,420 due to increased expenditure arising from newly launched service offerings and a need to increase capacity to on-board international client business in multiple locations. This resulted in the company attaining an increase in net profit before tax of £111,492, being an increase of 310.59% compared with the prior year.

These favourable increases are a result of Pendragon’s commitment to being a compliant business which continues to ensure that the business is a valued and profitable business partner within the sector. Through its reputation for compliance the company has been able to attract work from international corporate in the USA, North, South America, and Europe in addition to the UK.

Our increased offering has already made an impression on gross profit for 2022 and we expect a significant uptick in revenues by the end of 2024 early 2025.

The company is continually looking to grow its international footprint and increase revenues whilst providing an excellent service to our existing client base in the UK.

The company's key financial and other performance indicators during the year were as follows:

The company’s UK fees are to a large extent based on the level of the employment markets and changes to employment and tax legislation which drives aggressive pricing within the sector. The principal risks to the company are a fall in demand for external outsourced employees and the loss of large clients. The company manages the latter risk by maintaining close and strong relationships with its clients, as well as providing more bespoke partner services which can be embedded into the client’s business more seamlessly adding a stronger value add.

A fall in demand for outsourced employment and compliance consulting and advisory services would likely reduce profitability for the short to mid-term, but should not affect the long-term profitability of the company, as the UK Government is moving to make the sector more compliant and regulated, which would greatly benefit the company, as a leading specialist in this area.  A diverse range of income streams is now in place to mitigate against downturns in demand across the employment and consulting piece.

Client credit risk and supply-chain due diligence carried out on all newly on-boarding clients continues to be closely monitored and deferred payment offered to the odd customer with long term relationships with the business and a satisfactory due-diligence processes.

Promoting the Success of the Company

In line with Companies (Miscellaneous Reporting) Regulations 2018, the Director of the Company is required to give an annual statement on how they have discharged their duty under section 172 of the Companies Act 2006 to promote the success of the Company for the benefit of its members as a whole and with regard to broader stakeholder interests. This section of the Strategic Report states how the Director has had regard to the matters set out in section 172 1) (a) to (f) during the year as required by section 414CZA, of the Companies Act 2006.

The Company is a privately owned business and the the Board of the Company undertakes engagement activities with its specialist advisors and external stakeholders. The Company has identified its stakeholders as being its clients, employees, suppliers, HMRC and regulatory institutions which provide oversight of some of the company’s activities.

The Director acknowledges the effective and meaningful engagement with stakeholders and employees is key to promoting the success of the Company. Details of the action taken to support these objectives are set out as follows:

· The Company continues to develop strong and embedded relationships with its clients, employees, suppliers, HMRC and regulating authorities.

· Trust based client relationships remain a priority to the Director in negotiating ongoing and future engagements.

· The interest of all employees, their health and safety, safety in the workplace and wellbeing are the key responsibilities of the Director. All employees are encouraged to contribute actively towards achieving a hybrid work environment that is free of accidents, incidents, and ill health.          

· The Company has not been subject to any workplace and employment related fines to date.

· Whilst infrastructure already has a hugely positive impact on people’s lives, markets now require the Company to demonstrate the social value of its operations in economic terms. To benefit local areas, the company uses local suppliers and employees wherever possible.

· Whilst short term performance is very important, the Director runs the business for the long term, to enhance and generate more value and mitigate risk. The Director is committed to deliver on their priorities in a responsible and sustainable way, which makes a positive contribution to all stakeholders. This approach is integrated into its business decision making, including a commitment to the trust placed by its clients and ensuring physical and mental wellbeing is supported for employees.

· The Director is aware that in some situations, stakeholder interests will be conflicted. The Director works closely with the stakeholders, this enables them to fully understand the key issues relevant to each stakeholder and the stakeholders are encouraged to provide feedback and opinions into the decision makings of the Director.

On behalf of the board

The director presents her annual report and financial statements for the year ended 30 September 2022.

The principal activity of the company continued to be that of payroll,compliance and employment consultancy services.

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Makesworth Audit Services Limited were appointed as auditor to the company in the year and is deemed to be reappointed under section 487 (2) of the Companies Act.

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

•     select suitable accounting policies and then apply them consistently;

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

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 enable them to ensure that the financial statements comply with the Companies Act 2006. She is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

We have audited the financial statements of Pendragon Consultancy Ltd (the 'company') for the year ended 30 September 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 30 September 2022 and of its profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK Corporation Tax, VAT, Companies Act 2006, PAYE regulations and Agency Workers regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements (including the risk of override of controls), and determined that the principal risks were related to sales and payroll cost cut off, posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed by the engagement team included:

• testing journal entries and other adjustments recorded by management for appropriateness;

• enquiry of management and those charged with governance around actual and potential litigation and claims;

• testing accounting estimates to assess the risk of management bias;

• review financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• review of accrued and deferred revenue and associated direct costs

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report

Other matter

Financial statements for the previous period were not audited.

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 her in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Pendragon Consultancy Ltd is a private company limited by shares incorporated in England and Wales. The registered office is High Oak Business Centre, 15/17 Gentlemens Field, Westmill Road, Ware, Hertfordshire, United Kingdom, SG12 0EF.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.The principal accounting policies adopted are set out below.

The director has a reasonable expectation the company will continue to have adequate resources to fund its working capital for the foreseeable future. The director has carried out a detailed assessment of the viability of the company following to uncertainty over the current economic conditions due to worldwide increasing rate of inflation and interest rates. true

As a result of their review, the director has taken appropriate measures to enable them to have a reasonable expectation that the company will have sufficient working capital for a period of at least 12 months from the date these financial statements have been approved.

On the basis of the above, the director is of the opinion that there is no material uncertainty relating to going concern and therefore it is appropriate to prepare these financial  statements on a going concern basis.

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of providing employment services. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:

The amount of revenue can be reliably measured;

it is probable that future economic benefits will flow to the entity;

and specific criteria have been met for each of the company's activities.

Payroll services revenue is recognised upon receipt of a timesheet from a contractor.

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

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

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

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Basic financial assets, which include #tErm6, amounts owed by related undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities, including creditors, that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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 finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contribution are paid into a pension fund and the company has no legal or constructive obligation to pay further contribution even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

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

Their aggregate remuneration comprised:

In addition to the above, the company employs some of the staff who are supplied to clients and whose costs are part of the company's cost of sales.

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

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The total amount of financial commitments not included in the balance sheet is £9,549 (2021- £9,549 ).

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date: