Company Registration No. 11537326 (England and Wales)
GLOBAL SECURE ACCREDITATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
GLOBAL SECURE ACCREDITATION LIMITED
COMPANY INFORMATION
Directors
Andrew Davis
Brian Moore
Andrew Prosser
Robert Quick
Michael Smith
Lee Whiteing
David Wood
Secretary
Robert Quick
Company number
11537326
Registered office
2nd Floor, One Croydon
12-16 Addiscombe Road
Croydon
CR0 0XT
Auditor
UHY Hacker Young
Quadrant House
4 Thomas More Square
London
E1W 1YW
GLOBAL SECURE ACCREDITATION LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11 - 12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 29
GLOBAL SECURE ACCREDITATION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2022
- 1 -
The directors present the strategic report for the year ended 31 August 2022.
Fair review of the business
The company was set up in 2018 to provide independent accreditation of the security of hotels and whilst this remains one of the core activities of the business it has since expanded into providing a similar service to the serviced accommodation sector and during 2021 it began to deploy its expertise to various departments of the UK Government, which continued to grow during 2022 as a result of the unique capability that the company can offer.
The key financial performance indicators of the company are revenue and operating profit. In 2022 the company increased its revenue by 34% with a similar % increase in operating profit. This growth came predominantly from the expansion of the contracts with the UK Government.
The security accreditation work was severely impacted by C
ovid-
19 as hotels globally closed for business for much of 2020, and although hotels have since reopened many are operating at reduced capacity due to the difficulty in recruiting staff, and corporate travel is still some way below levels seen in 2019. However, the company is having some success winning corporate customers for its accreditation services, helped by the publication of the new travel risk management standard ISO 31030, and the company remains optimistic that demand for its accreditation services will increase over the next couple of years.
During both 2021 and 2022 the company generated strong levels of cash and having taken out a small Covid loan in 2020, it repaid this in full during 2022 and it is now debt free, has a strong balance sheet and the directors view that the company has good prospects.
GLOBAL SECURE ACCREDITATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 2 -
Principal risks and uncertainties
The company faces a few business risks and uncertainties, and below it sets out the key risks it has identified along with the company’s approach to mitigating these risks:
Length of customer contracts
Impact on company
The majority of the company’s customer contracts are short term in nature, mostly because the current work is in response to an immediate problem not an ongoing need or requirement.
Mitigation
Since customers are almost universally positive about the quality of the service being offered by GSA, active steps are now being taken to agree commercial terms on multi-year contracts that will benefit both parties.
Cost and complexity of scaling up the infrastructure
Impact on company
As the company grows and takes on more contracts it has to ensure its back office systems and infrastructure are sufficient to meet the increased complexity of supporting more activity, whilst keeping any growth in related costs in proportion to the growth in revenue.
Mitigation
Planning work is already underway, with the help of expert external support, to create a road map of new processes, systems and organisational structures that would be needed as the business grows. Given the financial resources currently available, the company is able and ready to invest slightly ahead of time to ensure that the scale up can be implemented as, and when, required
Willingness of accommodation providers to get security accreditation
Impact on company
Since accommodation providers have a number of competing priorities as the world emerges from CV19, there is reduced appetite and limited budgets for security accreditation of their properties.
Mitigation
The company continues to engage directly with corporates to put pressure on their accommodation providers to get accredited. This strategy is beginning to deliver results. This requirement has been given additional impetus by the new travel risk standard ISO 31030 that requires corporates to take active steps to ensure their employees are safe whilst travelling on business.
Future Developments
Alongside its existing services, the company is beginning to offer its customers new and innovative solutions to address the problems they encounter, not just fix the immediate issues. This approach is being well received and will help ensure that the company retains its existing customers as well as wins new customers, across both UK Government Departments and in the commercial sector. There remains a strong pipeline of recruits, particularly recently retired police officers, keen to work for the company so the directors are confident in the prospects for the company.
GLOBAL SECURE ACCREDITATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 3 -
David Wood
Director
9 December 2022
GLOBAL SECURE ACCREDITATION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2022
- 4 -
The directors present their annual report and financial statements for the year ended 31 August 2022.
Principal activities
The principal activities of the company during the year have been the provision of security accreditation services to accommodation providers and the supply of security trained resource to UK Government departments.
Results and dividends
The results for the year are set out on page 10.
Ordinary interim dividends were paid amounting to £1,130,549. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Andrew Davis
Brian Moore
Andrew Prosser
Robert Quick
Michael Smith
Lee Whiteing
David Wood
Post reporting date events
Post balance sheet events are set out in note 23 to the financial statements.
Auditor
UHY Hacker Young were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of disclosure to auditor
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 directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
GLOBAL SECURE ACCREDITATION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 5 -
On behalf of the board
David Wood
Director
9 December 2022
GLOBAL SECURE ACCREDITATION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2022
- 6 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 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. They are 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom, governing the preparation and dissemination of financial statements, may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GLOBAL SECURE ACCREDITATION LIMITED
- 7 -
Opinion
We have audited the financial statements of Global Secure Accreditation Limited (the 'company') for the year ended 31 August 2022 which comprise 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 31 August 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GLOBAL SECURE ACCREDITATION LIMITED
- 8 -
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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 directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the company or to cease operations, or have no realistic alternative but to do so.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GLOBAL SECURE ACCREDITATION LIMITED
- 9 -
Auditor's 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
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 the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the regulated activities of the Company, which were contrary to applicable laws and regulations including fraud, and 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 and FCA rules. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls)
.
Audit procedures performed included: enquiries of management and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Martin Jones (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
9 December 2022
Chartered Accountants
Statutory Auditor
GLOBAL SECURE ACCREDITATION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2022
- 10 -
2022
2021
Notes
£
£
Turnover
3
13,602,296
10,150,915
Cost of sales
(318,115)
(31,017)
Gross profit
13,284,181
10,119,898
Administrative expenses
(9,827,492)
(7,497,340)
Other operating income
4,061
Operating profit
4
3,456,689
2,626,619
Interest payable and similar expenses
8
(2,980)
(1,132)
Profit before taxation
3,453,709
2,625,487
Tax on profit
9
(629,489)
(412,953)
Profit for the financial year
2,824,220
2,212,534
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There is no other comprehensive income or expense and hence no Statement of Comprehensive Income is presented.
GLOBAL SECURE ACCREDITATION LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2022
31 August 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
11
198,826
248,533
Tangible assets
12
16,075
19,090
Investments
13
1
214,902
267,623
Current assets
Debtors
15
2,459,258
3,116,794
Cash at bank and in hand
4,260,299
3,274,490
6,719,557
6,391,284
Creditors: amounts falling due within one year
16
(2,782,469)
(4,059,905)
Net current assets
3,937,088
2,331,379
Total assets less current liabilities
4,151,990
2,599,002
Creditors: amounts falling due after more than one year
17
(31,000)
(218,750)
Provisions for liabilities
Deferred tax liability
19
3,054
3,627
(3,054)
(3,627)
Net assets
4,117,936
2,376,625
Capital and reserves
Called up share capital
22
1,615
1,502
Share premium account
646,578
646,578
Equity reserve
79,027
31,500
Profit and loss reserves
3,390,716
1,697,045
Total equity
4,117,936
2,376,625
GLOBAL SECURE ACCREDITATION LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 AUGUST 2022
31 August 2022
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 9 December 2022 and are signed on its behalf by:
David Wood
Director
Company Registration No. 11537326
GLOBAL SECURE ACCREDITATION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2022
- 13 -
Share capital
Share premium account
Equity reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 September 2020
1,502
646,578
(515,489)
132,591
Year ended 31 August 2021:
Profit and total comprehensive income for the year
-
-
-
2,212,534
2,212,534
Other movements
-
31,500
-
31,500
Balance at 31 August 2021
1,502
646,578
31,500
1,697,045
2,376,625
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
-
-
2,824,220
2,824,220
Issue of share capital
22
113
-
-
113
Dividends
10
-
-
-
(1,130,549)
(1,130,549)
Other movements
-
47,527
-
47,527
Balance at 31 August 2022
1,615
646,578
79,027
3,390,716
4,117,936
GLOBAL SECURE ACCREDITATION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
2,891,683
3,485,598
Interest paid
(2,980)
(1,132)
Income taxes paid
(577,655)
(421,458)
Net cash inflow from operating activities
2,311,048
3,063,008
Investing activities
Purchase of business
(18,000)
Purchase of intangible assets
(93,533)
Purchase of tangible fixed assets
(2,874)
(18,363)
Proceeds on disposal of tangible fixed assets
354
Net cash used in investing activities
(114,053)
(18,363)
Financing activities
Proceeds from issue of shares
113
75
Repayment of bank loans
(80,750)
(4,250)
Non-operating income treated as financing activity
4,061
Dividends paid
(1,130,549)
Net cash used in financing activities
(1,211,186)
(114)
Net increase in cash and cash equivalents
985,809
3,044,531
Cash and cash equivalents at beginning of year
3,274,490
229,959
Cash and cash equivalents at end of year
4,260,299
3,274,490
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022
- 15 -
1
Accounting policies
Company information
Global Secure Accreditation Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
2nd Floor, One Croydon, 12-16 Addiscombe Road, Croydon, CR0 0XT.
1.1
Accounting convention
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
1
Accounting policies
(Continued)
- 16 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
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:
Intellectual Property
20% Straight line per annum
1.5
Tangible fixed assets
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:
Computer Equipment
25% Straight line per annum
Furniture and Fittings
25% Straight line per annum
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
.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
1
Accounting policies
(Continued)
- 17 -
1.7
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
1
Accounting policies
(Continued)
- 18 -
Basic financial assets
Basic financial assets, which include
debtors
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
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.
Impairment of financial assets
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.
Derecognition of financial assets
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
1
Accounting policies
(Continued)
- 19 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares 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
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
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
s
ubsequently 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 th
r
ough 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
1
Accounting policies
(Continued)
- 20 -
Deferred tax
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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using
the Black-Scholes
model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 21 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover
2022
2021
£
£
Turnover analysed by class of business
Government contracts
13,354,316
10,106,470
Other Contracted Income
166,708
-
Accreditations
80,980
16,975
Recharged Expenses
292
27,470
13,602,296
10,150,915
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(2,527)
53
Fees payable to the company's auditor for the audit of the company's financial statements
17,000
Depreciation of owned tangible fixed assets
5,534
1,005
Amortisation of intangible assets
49,707
Share-based payments
47,527
31,500
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
17,000
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 22 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
164
84
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
7,992,947
6,388,577
Social security costs
987,578
748,549
Pension costs
89,858
31,891
9,070,384
7,169,017
7
Directors' remuneration
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
172,373
120,000
8
Interest payable and similar expenses
2022
2021
£
£
Other finance costs:
Other interest
2,980
1,132
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
630,062
409,655
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
9
Taxation
2022
2021
£
£
(Continued)
- 23 -
Deferred tax
Origination and reversal of timing differences
(573)
3,298
Total tax charge
629,489
412,953
2022
2021
£
£
Profit before taxation
3,453,709
2,625,487
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
656,205
498,843
Tax effect of expenses that are not deductible in determining taxable profit
1,782
534
Tax effect of utilisation of tax losses not previously recognised
(70,170)
Permanent capital allowances in excess of depreciation
(215)
Depreciation on assets not qualifying for tax allowances
1,029
Research and development tax credit
(28,245)
(16,039)
Deferred tax adjustments in respect of prior years
(573)
Capital allowance
(709)
Taxation charge for the year
629,489
412,953
10
Dividends
2022
2021
£
£
Interim paid
1,130,549
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 24 -
11
Intangible fixed assets
Intellectual Property
£
Cost
At 1 September 2021 and 31 August 2022
248,533
Amortisation and impairment
At 1 September 2021
Amortisation charged for the year
49,707
At 31 August 2022
49,707
Carrying amount
At 31 August 2022
198,826
At 31 August 2021
248,533
12
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 September 2021
472
20,687
21,159
Additions
286
2,587
2,873
Disposals
(472)
(472)
At 31 August 2022
286
23,274
23,560
Depreciation and impairment
At 1 September 2021
118
1,951
2,069
Depreciation charged in the year
4
5,530
5,534
Eliminated in respect of disposals
(118)
(118)
At 31 August 2022
4
7,481
7,485
Carrying amount
At 31 August 2022
282
15,793
16,075
At 31 August 2021
354
18,736
19,090
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 25 -
13
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
14
1
Shares in subsidiaries
£
Cost or valuation
At 1 September 2021
-
Additions
1
At 31 August 2022
1
Carrying amount
At 31 August 2022
1
At 31 August 2021
-
14
Subsidiaries
Details of the company's subsidiaries at 31 August 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Global Secure Accreditation Services Limited
One Croydon 12-16 Addiscombe Rd, Croydon, Surrey, England, CR0 0XT
Ordinary
100.00
15
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
853,320
Other debtors
3,474
3,447
Prepayments and accrued income
1,602,464
3,113,347
2,459,258
3,116,794
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 26 -
16
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
18
245
17,245
Directors' loan accounts
18
27
27
Trade creditors
74,118
101,395
Corporation tax
462,062
409,655
Other taxation and social security
993,752
1,664,500
Other creditors
33,112
33,251
Accruals and deferred income
1,219,153
1,833,832
2,782,469
4,059,905
17
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
18
63,750
Accruals and deferred income
31,000
155,000
31,000
218,750
18
Loans and overdrafts
2022
2021
£
£
Bank loans
245
80,995
Other loans
27
27
272
81,022
Payable within one year
272
17,272
Payable after one year
63,750
In May 2020 the company took out a CBILS loan through HSBC for £85,000
which was repayable over 6 years. In August 2022 the company repaid £65,167 due to an early settlement.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 27 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
3,054
3,627
2022
Movements in the year:
£
Liability at 1 September 2021
3,627
Credit to profit or loss
(573)
Liability at 31 August 2022
3,054
The deferred tax liability set out above is not expected to reverse significantly within 12 months and relates to accelerated capital allowances that are not expected to mature within the same period.
20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
89,858
31,891
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.
21
Share-based payment transactions
Global Secure Accreditation Limited operates an EMI option scheme and an unapproved option scheme. Options vest over a 24 month period after grant but are mostly exercisable on the sale of the business or after 5 years whichever is sooner.
For some recipients a portion of the options are exercisable soon after grant. Recipients are able to acquire the shares for £0.01 being their nominal value.
There are no performance criteria attached to the options and nor are there annual grant of options planned.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
21
Share-based payment transactions
(Continued)
- 28 -
Number of share options
Weighted average exercise price
2022
2021
2022
2021
Number
Number
£
£
Outstanding at 1 September 2021
27,500
0.01
Granted
37,500
0.01
Forfeited
-
(2,500)
0.01
Exercised
(11,316)
(7,500)
0.01
0.01
Outstanding at 31 August 2022
16,184
27,500
0.01
0.01
Exercisable at 31 August 2022
11,316
0.01
The options outstanding at 31 August 2022 had an exercise price of £0.01 and a remaining contractual life of between 3 and 4 years.
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £47,527 (2021 - £31,500) which related to equity settled share based payment transactions.
22
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
161,507
150,191
1,615
1,502
23
Events after the reporting date
On 4th September 2022 the Company granted 9,827 options under its EMI scheme, and on 10th October 2022 granted 3,000 unapproved share options. The options vest over a two year period from the grant date and can be exercised within five years.
On 8th November 2022 the Company completed a buyback of 6,400 shares at £16.87 per share from four charities who were bequeathed the shares by a founder shareholder who passed away in 2020.
GLOBAL SECURE ACCREDITATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2022
- 29 -
24
Related party transactions
During the year the company paid £19,793 (2021: £nil) for shared administration and paid £6
5,051
(2021: £71,127) for rent, service charges and office services to Bluelight Global Solutions Ltd, a company in which R Quick and D Wood are directors in the year ending 31 August 202
2
. The company was under no overall control.
During the year a liability of £248,533 (2021: £nil) for Intellectual Property rights assigned to the company by Bluelight Global Solutions Ltd crystalised under the terms of the assignment agreement. A balance of £155,000 has not been paid, of which £124,000 will be paid within one year and £31,000 after mor
e
than one year.
25
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
2,824,220
2,212,534
Adjustments for:
Taxation charged
629,489
412,953
Finance costs
2,980
1,132
Amortisation and impairment of intangible assets
49,707
Depreciation and impairment of tangible fixed assets
5,534
1,005
Equity settled share based payment expense
47,527
31,500
Other operating income
(4,061)
Movements in working capital:
Decrease/(increase) in debtors
657,536
(3,089,384)
(Decrease)/increase in creditors
(1,325,310)
3,919,919
Cash generated from operations
2,891,683
3,485,598
26
Analysis of changes in net funds
1 September 2021
Cash flows
31 August 2022
£
£
£
Cash at bank and in hand
3,274,490
985,809
4,260,299
Borrowings excluding overdrafts
(81,022)
80,750
(272)
3,193,468
1,066,559
4,260,027
2022-08-31
2021-09-01
false
CCH Software
CCH Accounts Production 2022.300
Andrew Davis
Brian Moore
Andrew Prosser
Robert Quick
Michael Smith
Lee Whiteing
David Wood
Robert Quick
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