Shield Group Holdings Limited - Limited company accounts 23.2

REGISTERED NUMBER: 09633745 (England and Wales)

Group Strategic Report, Directors' Report and

Consolidated Financial Statements for the Year Ended 31 March 2023

for

Shield Group Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Directors' Report

4

Independent Auditors' Report

7

Consolidated Income Statement

11

Consolidated Other Comprehensive Income

12

Consolidated Statement of Financial Position

13

Company Statement of Financial Position

14

Consolidated Statement of Changes in Equity

15

Company Statement of Changes in Equity

16

Consolidated Statement of Cash Flows

17

Notes to the Consolidated Statement of Cash Flows

18

Notes to the Consolidated Financial Statements

19

DIRECTORS:

Mr C Belsey

Mr G G Bough

Mr S A Casha

Mr L T P Woods

REGISTERED OFFICE:

Princess Mary House

4 Bluecoats Avenue

Hertford

Hertfordshire

SG14 1PB

REGISTERED NUMBER:

09633745 (England and Wales)

AUDITORS:

Thickbroom Coventry

Chartered Accountants

and Statutory Auditors

147a High Street

Waltham Cross

Hertfordshire

EN8 7AP

The directors present their strategic report of the company and the group for the year ended 31 March 2023.

REVIEW OF BUSINESS

The group has seized upon an opening in the market for payroll and administration services by offering and providing a flexible timely advice, processing and administrative 'one stop shop' service at an affordable price. The Group continues to offer compliant payment mechanisms despite the constant changes in market conditions.

Turnover is down on the previous year, the main reason being COVID-19 and various lockdowns during the year and the competitive market driving prices down. Due to the support of the government and strategic cost cutting exercises the company did however return to profitability.

The group supported many workers through the furlough scheme and are grateful to the government for grants to allow the company to be able to do that.

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

Unit

2023

2022

Turnover increase

%

17.1%

(2.39%

)

Gross profit margin

%

3.04%

3.53%

PRINCIPAL RISKS AND UNCERTAINTIES

The group has a wide range of services, details of which can be found on its website. It is reliant on the uptake of these services and therefore any changes in the level of activity is likely to affect the results. Growth will be achieved by increasing its market share at the expense of other competitors. The directors believe that at the current time there is an excess supply in the market and therefore price is a sensitive factor. Cost levels are constantly monitored to ensure an adequate return is received without the need for affecting prices charged.

SECTION 172(1) STATEMENT

The directors consider, both individually and together, that they have acted in a way that they consider, in good faith, to be most likely to promote success of the group for its members as a whole (having regard to its stakeholders and the matters set out in Sec. 172 (1) (a-f) of the Companies Act).

In addition to its shareholders the group considers its other stakeholders to be its employees, the environment and its suppliers and customers

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHER RELATIONSHIPS

Customers

The group endeavours to work in a close and collaborative manner with all its customers.

Suppliers

The group's business partners are treated fairly and with respect and the directors work hard to maintain solid long term relationships with the supplier base.

ENGAGEMENT WITH EMPLOYEES

The group always strives to provide a safe workplace, controlling and eliminating risks to health and well being and ensuring that facilities and equipment it controls are safe. Following the emergence of COVID-19 pandemic the directors took steps to further safeguard the employees through greater communication, support and flexibility of working where possible.

A good two way communication with employees is encouraged allowing staff to raise suggestions, ideas or concerns and management perform regular service and quality reviews to ensure staff needs are met.

ON BEHALF OF THE BOARD:

Mr S A Casha - Director

13 December 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2023.

PRINCIPAL ACTIVITY

The principal activity of the group is a holding company and renting property to subsidiaries.

DIVIDENDS

No interim dividends were paid during the year ended 31 March 2023.

The directors recommend final dividends per share as follows:

Ordinary £1 shares

NIL

Ordinary A £1 shares

£7,600

The total distribution of dividends for the year ended 31 March 2023 will be £ 152,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

Mr C Belsey

Mr G G Bough

Mr S A Casha

Mr L T P Woods

FINANCIAL INSTRUMENTS

Objectives and policies

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability in the balance sheet. The corresponding dividends relating to the liability component are charged as interest expense in the profit and loss account.

Price risk, credit risk, liquidity risk and cash flow risk

The business' principal financial instruments comprise bank balances, trade debtors, creditors and finance lease agreements. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the timing of collection of debts and payments of liabilities. All of the business' cash balances are held in such a way that achieves a competitive rate of interest. The business makes use of money market facilities where funds are available.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

Creditors' liquidity risk is managed by ensuring funds are available to meet amounts due.

The business is a lessee in respect of financed leased assets. The liquidity risk in respect of these is managed by ensuring that there are sufficient funds to meet the payments.

ENGAGEMENT WITH EMPLOYEES

Employment of disabled persons

Shield Group Holdings Limited, and its subsidiaries, are Equal Opportunities Employers. The group is committed to the employment of people with disabilities and guarantee and interview for those who meet minimum selection criteria. Each company provides training and development for people with disabilities, tailored where appropriate, to ensure that they have the opportunity to achieve their potential. If a company employee becomes disabled while in our employment, we will do our best to retrain them, including consulting with them about their requirements, making appropriate adjustments and providing alternative suitable provision.

Employee involvement

On average during 2023 the group employed 539 people (2022 : 723). Due to the nature of the subsidiaries principle activities, people are at the heart of the groups business and their interest and development are of paramount concern.The group recognises the importance of its employees and is committed to maintaining:

-a strategy for an effective, open and full two way communication and consultation between management and other staff;

-a line management framework through which staff are able to raise suggestions, ideas and concerns in an appropriate, accessible and receptive environment;

-a clear, appropriate and accessible procedure to enable staff to raise concerns of a serious nature.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Thickbroom Coventry, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S A Casha - Director

13 December 2023

Opinion

We have audited the financial statements of Shield Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 affairs as at 31 March 2023 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.

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Directors' Report, but does not include 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the 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

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 where the Companies Act 2006 requires us to report to you if, in our opinion:

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

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue 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 financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We considered the nature of the Group's industry and its control environment and reviewed the Group's and each individual companies documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the Company and Group operates in and identified the key laws and regulations that:

- had a direct effect on the determination of material amounts and disclosures in the financial statements

- do not have a direct effect on the financial statements but compliance with which may be fundamental to the group's ability to operate or to avoid a material penalty.

We assessed the opportunities and incentives that may exist within the organisation for fraud or irregularities in the following areas and our specific procedures performed to address these were;

- Revenue Recognition;

ISA 240 states that when identifying and assessing the risks of material misstatement due to fraud the auditor shall based on the rebuttable presumption that there are risks of fraud in revenue recognition, evaluate which types of revenue, revenue transactions or assertions give rise to such risks. For the purpose of this audit we identified a potential risk of fraud in respect of revenue completeness and performed tests such as checking the effectiveness of controls, cut off procedures, test of details, cash transactions, and analytical reviews to satisfy ourselves that no fraud or irregularities had occurred.

- Management Override;

In common with all audits under ISA's (UK) we are required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we checked opening balances were free from material error or misstatement, tested the appropriateness of journal entries and other adjustments, assessed whether the judgement made in making accounting estimates were indicative of a potential bias and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of the business.

In addition to the above, our procedures to respond to the risks identified included the following;

- Enquiry of management and those charged with governance and the entity's legal counsel around actual and potential litigation and/or claims,

- Enquiry of staff especially those in compliance functions to identify any instances of non-compliance with laws and regulations,

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations,

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an 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.

Robert Boulton (Senior Statutory Auditor)

for and on behalf of Thickbroom Coventry

Chartered Accountants

and Statutory Auditors

147a High Street

Waltham Cross

Hertfordshire

EN8 7AP

13 December 2023

TURNOVER

56,751,774

48,461,579

Cost of sales

55,023,487

46,750,668

GROSS PROFIT

1,728,287

1,710,911

Administrative expenses

1,038,903

1,546,896

689,384

164,015

Other operating income

6,600

70,959

OPERATING PROFIT

4

695,984

234,974

Interest receivable and similar income

-

369

695,984

235,343

Interest payable and similar expenses

5

1,401

7,185

PROFIT BEFORE TAXATION

694,583

228,158

Tax on profit

6

135,808

45,699

PROFIT FOR THE FINANCIAL YEAR

558,775

182,459

Profit attributable to:

Owners of the parent

529,291

163,177

Non-controlling interests

29,484

19,282

558,775

182,459

PROFIT FOR THE YEAR

558,775

182,459

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

558,775

182,459

Total comprehensive income attributable to:

Owners of the parent

529,291

163,177

Non-controlling interests

29,484

19,282

558,775

182,459

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

16,152

1,398,947

Investments

11

-

-

16,152

1,398,947

CURRENT ASSETS

Debtors

12

750,547

514,379

Cash at bank and in hand

4,106,869

4,528,975

4,857,416

5,043,354

CREDITORS

Amounts falling due within one year

13

3,081,540

5,054,348

NET CURRENT ASSETS/(LIABILITIES)

1,775,876

(10,994

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,792,028

1,387,953

PROVISIONS FOR LIABILITIES

16

2,400

5,100

NET ASSETS

1,789,628

1,382,853

CAPITAL AND RESERVES

Called up share capital

17

100

100

Retained earnings

18

1,610,702

1,233,411

SHAREHOLDERS' FUNDS

1,610,802

1,233,511

NON-CONTROLLING INTERESTS

178,826

149,342

TOTAL EQUITY

1,789,628

1,382,853

The financial statements were approved by the Board of Directors and authorised for issue on 13 December 2023 and were signed on its behalf by:

Mr S A Casha - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

1,375,219

Investments

11

633,155

633,155

633,155

2,008,374

CURRENT ASSETS

Debtors

12

52,779

20,599

Cash at bank

546,699

72,826

599,478

93,425

CREDITORS

Amounts falling due within one year

13

25,927

804,684

NET CURRENT ASSETS/(LIABILITIES)

573,551

(711,259

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,206,706

1,297,115

PROVISIONS FOR LIABILITIES

16

-

1,600

NET ASSETS

1,206,706

1,295,515

CAPITAL AND RESERVES

Called up share capital

17

100

100

Retained earnings

1,206,606

1,295,415

SHAREHOLDERS' FUNDS

1,206,706

1,295,515

Company's profit for the financial year

63,191

72,132

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 13 December 2023 and were signed on its behalf by:

Mr S A Casha - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 April 2021

100

1,270,234

1,270,334

130,060

1,400,394

Changes in equity

Dividends

-

(200,000

)

(200,000

)

-

(200,000

)

Total comprehensive income

-

163,177

163,177

19,282

182,459

Balance at 31 March 2022

100

1,233,411

1,233,511

149,342

1,382,853

Changes in equity

Dividends

-

(152,000

)

(152,000

)

-

(152,000

)

Total comprehensive income

-

529,291

529,291

29,484

558,775

Balance at 31 March 2023

100

1,610,702

1,610,802

178,826

1,789,628

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2021

100

1,423,283

1,423,383

Changes in equity

Dividends

-

(200,000

)

(200,000

)

Total comprehensive income

-

72,132

72,132

Balance at 31 March 2022

100

1,295,415

1,295,515

Changes in equity

Dividends

-

(152,000

)

(152,000

)

Total comprehensive income

-

63,191

63,191

Balance at 31 March 2023

100

1,206,606

1,206,706

Cash flows from operating activities

Cash generated from operations

1

(1,117,592

)

1,333,066

Interest paid

(1,401

)

(7,185

)

Tax paid

(43,800

)

(18,080

)

Net cash from operating activities

(1,162,793

)

1,307,801

Cash flows from investing activities

Purchase of tangible fixed assets

(1,804

)

(12,500

)

Sale of tangible fixed assets

1,475,000

-

Interest received

-

369

Net cash from investing activities

1,473,196

(12,131

)

Cash flows from financing activities

Loan repayments in year

(580,509

)

(59,536

)

Equity dividends paid

(152,000

)

(200,000

)

Net cash from financing activities

(732,509

)

(259,536

)

(Decrease)/increase in cash and cash equivalents

(422,106

)

1,036,134

Cash and cash equivalents at beginning of year

2

4,528,975

3,492,841

Cash and cash equivalents at end of year

2

4,106,869

4,528,975

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2023

2022

£

£

Profit before taxation

694,583

228,158

Depreciation charges

12,099

17,143

Profit on disposal of fixed assets

(102,499

)

-

Finance costs

1,401

7,185

Finance income

-

(369

)

605,584

252,117

Increase in trade and other debtors

(236,168

)

(327,563

)

(Decrease)/increase in trade and other creditors

(1,487,008

)

1,408,512

Cash generated from operations

(1,117,592

)

1,333,066

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 March 2023

31/3/23

1/4/22

£

£

Cash and cash equivalents

4,106,869

4,528,975

Year ended 31 March 2022

31/3/22

1/4/21

£

£

Cash and cash equivalents

4,528,975

3,492,841

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/4/22

Cash flow

At 31/3/23

£

£

£

Net cash

Cash at bank and in hand

4,528,975

(422,106

)

4,106,869

4,528,975

(422,106

)

4,106,869

Debt

Debts falling due within 1 year

(580,508

)

580,508

-

(580,508

)

580,508

-

Total

3,948,467

158,402

4,106,869

1.	STATUTORY INFORMATION

Shield Group Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2023.

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 Profit and Loss Account 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 and contingent 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.

Intra-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. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.