1
Company Registration No. 03184978
CROMA SECURITY SOLUTIONS GROUP PLC
REPORT AND FINANCIAL STATEMENTS
AS AT 30 JUNE 2024
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CONTENTS
Page
Company information
3
Chairman's statement
4
CEO's statement
5
Strategic report
6-15
Corporate Governance
16-23
Board of Directors
24
Directors' report
25-28
Statement of Directors' responsibilities
29
Independent auditor's report
30-39
Consolidated statement of comprehensive income
40
Consolidated statement of financial position
41
Consolidated statement of cash flows
42
Consolidated statement of changes in equity
43
Notes to the consolidated financial statements
44-73
Parent company financial statements
74-83
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COMPANY INFORMATION
Directors
B J Haigh-Rosser (J Haigh)
R M Fiorentino
T Andreeva
S Naylor
(Non-Executive Chairman)
(Chief Executive Officer)
(Chief Financial Officer)
(Non-Executive)
Registered Office
Unit 7&8, Fulcrum 4
Solent Way
Whiteley
Fareham
Hampshire
PO15 7FT
Registered Number
03184978
Nominated advisers and brokers
Zeus Capital Limited
125 Old Broad Street
London
EC2N 1AR
Registered independent
UHY Hacker Young LLP
statutory auditor
Quadrant House, 4 Thomas More Square
London, England
E1W 1YW
Solicitors
Shoosmiths
Forum 5
Parkway
Whiteley
PO15 7PA
Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Principal Bankers
NatWest
36 St Andrews Square
Edinburgh
United Kingdom
EHY 2YB
Website
www.cssgplc.com
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CROMA SECURITY SOLUTIONS GROUP PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
4
Chairman’s Statement
The 12 months to the 30 June 2024 marks the end of my first financial year as non-executive Chairman of Croma,
as well as the completion of the first year of operating the business under our new strategy: to refocus on our core
businesses – Croma Locksmiths and Croma Fire & Security – and to expand our security centres into a national
network through new store acquisitions.
I am delighted to say that it has been a successful trading year for the business as we have delivered on
management expectations, repositioned the Company following the successful disposal of the lower margin man
guarding Vigilant division for a total consideration of £6.5 million plus intercompany balances of just over £1
million, and expanded our network of security centres.
Our priority is to continue our good progress and create significant further value for our shareholders, through:
•
Pursuing a strategy of reinvesting the proceeds from the sale of Vigilant into generating a higher return by
growing Croma into a national security brand;
•
This will be achieved primarily through an acquisition-led roll-out of the Group’s security centre network;
•
The Board aim to acquire modestly valued, independent locksmith stores, and add value by converting them
to security centres with a broader product range, securing cost savings and thus delivering significantly greater
earnings potential;
•
The acquisition and conversion model is well-established with a good pipeline of opportunities ahead and an
annual ROI target of at least 15%.
The civil unrest which has dominated news headlines over the summer, while extremely undesirable, served as a
reminder to all of the importance of good security for individuals, their homes and their businesses. Criminality
is constantly evolving and so, therefore, must security. Technology is critical to keeping pace with change and it
is a key driver to our ambition to establish a nationwide security brand. Currently, there is no such national security
brand in the UK.
In the 12-month period under review, we acquired two locksmith businesses in Peterborough and Worthing, with
a combined revenue of £0.21 million since 2 January 2024, taking our total number of Croma security centres to
16. Both acquisitions have bedded down well and are performing according to plan. We have a strong pipeline to
support our aim of acquiring 3-5 additional locksmith businesses to our network per annum. We are confident of
achieving this target and as the Group currently has a strong cash position and no borrowings, we are well-placed
to fund the Group’s expansion.
I am pleased to report that the Group will maintain the same level of ESG disclosure reporting as begun in the past
year. This is despite our requirements significantly reducing following the sale of Vigilant. We continue to monitor
our greenhouse gas emissions, energy consumption and energy efficiency actions closely.
Trading in FY25 has begun well and I am hopeful we can complete further acquisitions in the coming months.
Demand from consumer and commercial customers is steady and perhaps underpinned by a sense of the need for
good security given the summer unrest. Overall, Croma is in a very strong financial position, backed by a solid
asset base with no bank borrowings, and a clear and proven strategy to expand our UK security network.
The Board is pleased to recommend a final dividend to shareholders of 2.3p per share and subject to approval at
the Annual General Meeting to be held on 4 December 2024, the final dividend will be paid on 18 December 2024
to all shareholders on the register at the close of business on 6 December 2024. The shares will be marked ex-
dividend on 5 December 2024.
J Haigh – Chairman
1 November 2024
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CROMA SECURITY SOLUTIONS GROUP PLC
CEO’S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
5
CEO’S Statement and Operational Review
I am pleased to present the Group’s FY24 results. This was a good trading period and represents the
successful completion of our first year following the sale of Vigilant and the transition of the Group to
being focused on the higher margin Croma Locksmiths and Croma Fire and Security divisions.
Revenue in FY24 increased by 8.9% to £8.74 million (FY23: £8.03 million) with consistently solid
growth across both of our business divisions. The underlying business performance was strong, with
EBITDA for the Group 11% up to £1.06 million (FY23: £0.95 million). We have maintained the
EBITDA margin at 12%. The Group have ended FY24 with a strong cash position of £2.14 million
(FY23: £2.14 million). Our financial strength has since been enhanced by further payments from
Vigilant of £1.76 million at the beginning of July 2024 and a further payment of £0.45 million on 30
September 2024.
From an operational perspective, the business has developed well during the course of FY24 through
key new business wins with the likes of NHS Trust security contracts, the addition of new security
technology such as AJAX systems and the expansion of our security centre network.
Acquisition led growth strategy
Our strategy to expand our Locksmiths business is founded on our ability to acquire modestly valued
locksmiths retail stores and transform them into modern security centres. We are able to deliver material
sales synergies between our two businesses as outlined above, as well as within our network of
locksmiths, where an expanded product range across a wider network can provide innovation and an
enhanced range of client solutions. These cross-selling opportunities, coupled with central cost synergies
and shared expertise mean that returns are typically improved, and we aim for a minimum ROI on
acquisitions of 15% per annum.
There is no shortage of potential acquisitions. Whilst there are 6,500 Locksmiths in the UK, many of
them are sole traders from home and we are focused on the independent retail locksmith stores in the
UK. The market is highly fragmented, and made up largely of small, family-run operations. Using a
strict criteria and our decades of industry experience, we have collected an attractive pipeline of
opportunities. This pipeline is researched on a frequent basis and is larger than at the beginning of FY24,
therefore our focus is now on converting these opportunities.
Our target is to complete 3-5 acquisitions per annum. We are seeking to acquire independent stores
operating on low single digit EBITDA margins. Through transforming them into modern security
centres with a significantly broadened product range and Croma’s inbuilt advantages in terms of
software, central purchasing and cost duplication elimination, the Group is aiming to lift these EBITDA
margins to those currently achieved by the Group.
In our opinion, Croma is now more than ever ideally positioned to develop its profile and brand as a
leading nationwide UK security business.
Roberto Fiorentino – CEO
1 November 2024
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
6
Financial and Operational Review
The Directors present the Group Strategic Report for Croma Security Solutions Group plc and its subsidiary
companies for the year ended 30 June 2024.
Group sales were up 8.9% to £8.74 million, (FY23 £8.03 million), reflecting acquisitions made during the year as
well as strong organic growth within the core businesses of 6.3%.
Gross margins on continuing businesses marginally reduced by 0.9% to 45.8% (FY23: 46.7%). EBITDA on the
trading businesses before central costs for the Period was £1.73 million (FY23: £1.60 million), an increase of 8%.
Adjusting for central Group overheads, EBITDA was up 11.6% at £1.06 million (FY23: £0.95 million).
Group net profit from continuing operations for the year was £0.54 million (FY23: £0.17 million) and EPS from
continuing operations was 3.95p (FY23: 1.11p).
Over the year, we invested £0.07 million on acquisitions of two locksmith centres and one freehold property in
Peterborough for £0.36 million. These investments reflect our long-term belief in the prospects of our security
centre network.
The solid underlying cash generation enabled us to end the year with no borrowings cash and cash equivalents of
£2.14 million (FY23: £2.14 million). A further £1.76 million due from Vigilant was received at the beginning of
July 2024, bringing our cash balances to over £4 million as per the publication date of these accounts, despite the
further investments in acquisitions and capital expenditure. Our cash position and no bank debt allows us to
continue our stated strategy of acquiring locksmiths and building out our security centres network where there is
scope to enhance the offering and deliver synergies.
Croma Locksmiths
The Croma Locksmiths business delivers one-stop-shop security solutions to both commercial and residential
customers and now comprises 16 security centres across the UK.
The division recorded a good trading period with sales up 8.5% to £5.10 million (FY23: £4.70 million), while
EBITDA of £1 million was up 3.2% from £0.97 million.
The security centres are all former locksmith stores and have been converted into a network servicing not only
local communities but also national accounts. Larger commercial customers within this division encompass a broad
spread of industries including Travel, Utilities, Housing Associations and Student Housing, Healthcare and
Defence.
The individual security centres generally have very loyal customer bases and good recurring revenues. This is partly
due to locks being a very reliable product with very low fail rates which tends to build customer trust. Alongside
this, providing master key services, a significant source of revenue, requires long-term support as changing a master
key set-up is costly and time consuming. This enables the centres to build long-term relationships with commercial
customers and enjoy repeat custom.
In the student housing market, sales of the innovative mobile phone powered door lock called ILOQ, continue to
grow and the pipeline for the current year looks promising. Croma is the preferred supplier of ILOQ in the UK and
it is an excellent example of a modern technology solution improving security.
Building on the strong relationships and customer confidence in the security centres, the Group seeks to introduce
to these customers additional services provided by the Fire and Security business. Importantly, spend on
locksmithing services usually forms a small part of any overall corporate security budget, typically 10% - 20%, so
there is a much bigger potential share of the locksmith customer wallet to tap into for our Fire and Security business.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
7
Croma Fire and Security
Croma Fire and Security provides a full range of electronic security solutions and services to commercial and
individual customers and has strong commercial relationships across the public health and hospitality sectors.
Croma Fire and Security recorded sales for the year of £3.80 million (FY23: £3.48 million) up 9.2%. EBITDA for
the period was up 16% to £0.73 million (FY23: £0.63 million).
Operating out of Southampton and Bury (Manchester), an experienced team of specialist engineers supports a range
of commercial and domestic customers.
This business also boasts a loyal base of clients. In the Entertainment sector, Croma has long-standing relationships
and a constant flow of work across a national network of entertainment venues. The healthcare sector is also key for the
business, with both existing and new customers. A key win during the year was securing an access control upgrade
order worth £0.4 million. Alongside this, we successfully retained an additional three-year NHS Trust contract. The
healthcare sector is a key area of future opportunity which we hope to develop alongside the Group’s geographical
expansion.
Technology is at the forefront for innovators in this market. Today, the majority of alarm systems continue to focus
on internal activation, whereas Croma’s solutions focus on a combination of externally and internally activated alarms,
thereby seeking to prevent threats from even entering a property. In September 2023, Croma became an approved
agent of the market-leading AJAX systems. Fast to install, providing accurate external sensors able to differentiate
between a human and another objects, and operating from a single app – this system represents a strong driver of future
revenues.
In May 2024, the Company entered into new a partnership with bSafe Group to bring to the UK market the Croma bSafe
personal security App. Already a success in its domestic market, Norway, as well as in the US, the personal protection
App offers round-the-clock protection and voice activated technology, a market-first security solution available to the
UK public.
Proceeds from Vigilant sale
In June 2023, the Group sold its manned guarding business Vigilant for £6.5 million, in order to focus on the Group’s
core businesses, Croma Locksmiths and Croma Fire & Security. The proceeds from the Vigilant sale are staggered
over 10 quarterly instalments from 31 March 2024. By 30 June 2024 the Company had received £1.5 million as part of
the consideration for the sale. The 30 June 2024 payment for £1.7 million arrived in the first week of July 2024, and
then at the end of September 2024 a further £0.43 million was received.
As of the date of these accounts, from the total £6.5 million consideration, £3.6 million has been received with a
further £2.9 million to be received over the next 7 quarters.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
8
Group financials
FY2024
FY2023
Continuing
operations
Continuing
operations
(as restated)
Revenue
£8,737k
£8,025k
Gross profit
£3,999k
£3,749k
Gross margin %
45.8%
46.7%
Administrative expenses
£3,395k
£3,325k
EBITDA
£1,061k
£954k
Operating profit
£607k
£427k
Profit for the year from continuing operations
£543k
£166k
Earnings per share from continuing operations
3.95p
1.11p
Net assets
£15,224k
£15,151k
Cash generated from operations
£723k
£1,274k
Cash and cash equivalents
£2,142k
£2,144k
Dividends per share in relation to the year
2.3p
2.2p
Croma
Locksmiths
Croma Fire &
Security
Group
Total
£000s
£000s
£000s
£000s
EBITDA
999
728
(666)
1,061
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
9
Risk management
The Board has put in place a framework of identified risk and risk management processes.
Principal risks and uncertainties
Regulatory environment
The Group operates in a highly regulated sector and is audited and accredited by a number of regulatory bodies
including the NSI, CHAS and the SafeContractor. During the Period, the Group achieved ISO 27001. An inability
to respond and adapt to changes in the sector and comply with the regulatory requirements would adversely affect
our business.
Controls and mitigating strategies
Our regulatory compliance is monitored by key members of staff who work with external consultants to maintain
our processes and procedures at the required standards.
Health and safety environment
Instances of non-compliance with Health & Safety and Environmental regulations could expose our people, the
environment, and our reputation.
Controls and mitigating strategies
Responsibility for health and safety compliance is delegated to experienced members of staff who work with
external consultants. Training is provided to all employees.
Fraud and uninsured losses
A significant fraud in relation to our retail shops where staff operate in small numbers on a local bases
(misappropriation of assets, cash and stock) or uninsured loss, could damage the financial performance of our
business such as financial phishing attacks.
Controls and mitigating strategies
Systems, policies, and procedures are in place to segregate duties and minimise any opportunity for fraud along
with our own software systems for stock and till cash handling. Timely management reporting exists which can
help identify anomalies. Where possible, our insurance strategy minimises other risks.
Cyber security
A cyber security incident can result in unauthorised access to, or misuse of our information systems, technology
or data. This could lead to leakage of sensitive information, loss of our critical assets, impact on trading and
reputational damage.
Responsibility
Sits with internal IT Cyber team and the Executive team.
Controls and mitigating strategies
Our cyber strategy focuses on early detection and the prevention of cyber-attacks. This is achieved through a
number of implemented systems which are regularly reviewed. We also provide regular training sessions and
communications to our staff to help prevent incidents. We achieved ISO 27001 in the period.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
10
Data privacy
Failure to comply with any legal or regulatory requirements relating to data privacy may result in fines,
reputational damage or legal matters against us which would have an adverse impact on our ability to do business.
Responsibility
Sits with the internal compliance team and the Executive team.
Controls and mitigating strategies
Our data privacy strategy focuses on implementing the correct policies and controls to ensure personal data is
protected and used appropriately. These policies and controls are regularly reviewed by the internal compliance
team alongside third party experts. We also provide regular training sessions and communications to our staff to
teach them the correct practices related to data handling.
IT systems
The failure of the Group’s IT systems may result in loss of business operations, financial impact and reputation
damage.
Responsibility
Responsibility sits with the internal IT team and the Executive team.
Controls and mitigating strategies
We continue to invest in our IT infrastructure to improve system resilience, capacity as the business grows and
the capabilities of our systems to enable the business to operate more efficiently. To control this, we have policies
in place for change management, life cycle management and skilled IT personnel to oversee.
Other risks and uncertainties
Customer service
The failure of our customer services could undermine our business performance.
Controls and mitigating strategies
We undertake regular customer satisfaction surveys with unsatisfactory comments being addressed. Any
complaints received at Board level are dealt with on a timely basis by the affected operating division.
Credit risk
If our customers do not pay within our terms, our cashflow and liquidity may be compromised.
Controls and mitigating strategies
Responsibility for credit control is delegated to experienced staff in our finance department. While there continue
to be instances where customers have settled beyond credit terms, this has not caused any significant difficulty.
Liquidity and funding
The Directors regularly review new investment opportunities and capital projects, which could compromise
working capital if not adequately appraised and costed.
Controls and mitigating strategies
The Group CFO is responsible for reviewing our capital structures. Robust budgets and cashflow forecasts are
prepared and presented to the Board which are reviewed and updated to ensure new projects and opportunities can
be pursued either within existing working capital, or where necessary, external sources such as our banks with
whom we enjoy a good working relationship.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
11
Executive Directors:
R Fiorentino – Chief Executive Officer
Responsible for the delivery and implementation of the Group’s strategy. Ensuring alignment with short-term and long-
term objectives. Mr Fiorentino maintains awareness in matters of crime and security product developments to drive the
strategy of the business. His vast experience over many years within the industry actively supports the Group in
identifying the most suitable expansion opportunities through organic growth and acquisitions.
T Andreeva – Chief Financial Officer
Responsible for overall financial strategy of the Group and for ensuing timely production of management and statutory
information. With a deep understanding of the business, Mrs Andreeva is involved in strategic thinking and leadership.
Beyond finance and accounting Mrs Andreeva is involved in risk management, regulatory compliance, and business
planning. She works closely with the CEO on delivering the Group’s corporate strategy.
Non-Executive Directors J Haigh
As Chairman, Mrs Haigh oversees the Board and is also Chairman of the Remuneration Committee and a member of the
Risk and Audit Committee. Jo is LLB qualified and a member of the Institute of Chartered Accountants. As founder of
a corporate finance boutique, she has been involved in over 400 corporate finance transactions. She provides
independent oversight and a constructive challenge to the executive directors.
S Naylor
Chairman of the Risk and Audit Committee and a member of the Remuneration Committee. As a qualified accountant
and a member of the Institute of Chartered Accountants, Mr Naylor supports J Haigh with independent advice and
challenge to the executive directors.
Matters reserved for the Board
The Board reserves formulation, dissemination, and implementation of strategy to itself, it also handles stakeholder
relations, dividend policy and oversight of cash management.
Other operational matters are devolved to Directors and managers, except for investment-level decisions involving
material balances which require Board consideration.
Any Director needing independent professional advice in the furtherance of their duties may obtain this advice at the
expense of the Group.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
12
Board Meetings
The Board formally meet on a monthly basis face-to-face and via video conference to review and discuss strategy, financial
results, business planning, sales, operations and HR matters.
Director’s attendance at formal Board and Committee meetings during the year was as follows:
Name of
Director
Board Meetings
Audit
Committee
Remuneration
Committee
Risk Committee
Attended
Eligible
Attended
Eligible
Attended
Eligible
Attended
Eligible
R M Fiorentino
12
12
-
-
-
-
2
2
T Andreeva
12
12
-
-
-
-
2
2
B J Haigh- Rosser
12
12
2
2
2
2
2
2
S Naylor
12
12
2
2
2
2
2
2
Rules concerning the appointment and replacement of Directors of the Group are contained in the Articles of Association
("Articles"). Amendments to the Articles must be approved by the special resolution of shareholders. Under the Articles,
all Directors are subject to election by shareholders at the first Annual General Meeting following their appointment, and
to re-election thereafter at intervals of no more than three years.
Internal control and risk assessment
The Board is responsible for maintaining an appropriate system of internal controls to safeguard the shareholders’
investment and Group assets. Where appropriate, the Board may delegate responsibility to the CFO to review
internal controls and then feedback to the Board.
The Directors continue to review the financial reporting procedures and internal controls of the Group companies
to ensure they are robust enough to deliver timely, detailed reporting that will allow accurate monitoring of the
Group’s performance.
Internal financial control procedures undertaken by the Board include:
•
Review of monthly financial reports and monitoring performance
•
Approval of all significant expenditure including all major investment decisions
•
Review and approval of treasury policy
In the context of the Group’s overall strategy the Board undertakes risk assessment as well as the review of internal
controls. The review covers the key business, operational, compliance and financial risks facing the Group’s
operations in the light of the following:
•
The nature and extent of risks which it regards as acceptable for the Group to bear within its
overall business objective
•
The threat of such a risk becoming a reality
•
The Group’s ability to reduce the incidence and impact of risk on its performance
•
The cost and benefits to the Group of operating the relevant controls
The Board has reviewed the operation and effectiveness of the Group’s system of internal control and risk
assessment for the financial year and the period up to the date of approval of these financial statements.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
13
Relations with shareholders
Communication with shareholders is given a high priority by the Board and the Directors are available to enter
into dialogue with shareholders. All shareholders are encouraged to attend and vote at our Annual General
Meeting.
Section 172 statement
Section 172 of the UK Companies Act 2006 requires Directors to act in a way they consider, in good faith, would
promote the success of the Group for the benefit of its members as a whole. In doing this the Directors are required
to have regard to the interest of the Group's employees and other stakeholders, including the impact of its activities
on the community, environment and the Group's reputation, when making decisions. Details on how the Board
operates and the way Directors reach decisions, including some of the matters discussed during the year and the
key stakeholder considerations that were central to those discussions, are included in the Corporate Governance
Report on pages 16 to 23.
The Board considers that the impact of the Group's operations on the community and environment are minimal.
However, measures including the regular replacement of Company vehicles, so that our fleet meets the most up to
date emission standards; occupation of modern energy efficient premises; route planning and vehicle tracking to
minimise Company mileage, so as to reduce their carbon footprint; are all matters which are given consideration.
The Group reports under the Energy Savings Opportunity Scheme (ESOS) and receives reports from its advisors
giving further recommendations the Group can take to reduce its environmental impact. Our Greenhouse gas
emissions, energy consumption and energy efficiency actions are reported in the Directors report on pages 25-28.
Audit committee matters
The Audit Committee are to assist the Board in discharging its collective legal responsibility for ensuring that:
•
the Group's financial and accounting systems provide accurate and up-to-date information on its current
financial position.
•
the Group's published financial statements represent a true and fair reflection of this position; and
•
the external audit, which the law requires to provide independent confirmation that these legal
responsibilities are being met, is conducted in a thorough, efficient, and effective manner. The external
auditor may attend Audit Committee meetings.
Non-financial and sustainability report
Since its inception, Croma has always sought to operate under a high quality Environmental, Social and
Governance guidelines.
Our activities have a minimal effect on the environment, but where they do, we always endeavour to act
responsibly. The Group reports under the Energy Savings Opportunity Scheme (ESOS) and receives reports from
its advisors giving further recommendations that the Group can take to reduce its environmental impact. Our
Greenhouse gas emissions, energy consumption and energy efficiency actions are reported in the Directors report.
Though the Group now counts less than 250 employees, we remain committed to full transparency and diversity
across the Company. The Group recruits and screens employees based on integrity, as well as competence. The
Group has in place an anti-bribery policy and an anti-slavery policy which are both reviewed at appropriate
intervals. We welcome applications for employment from disabled persons, and all necessary assistance with
initial training courses is given. Once employed, a career plan is developed to ensure suitable opportunities for
each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled,
to enable them to perform work identified as appropriate. Our Croma Fire and Security business has introduced a
trainee programme as well as an overseas sponsorship scheme to diversify our employment strategies. We strive
for diversity across all levels of the business and are proud to have two female Board members: J Haigh as Chair
and T Andreeva as CFO.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
14
We believe good Governance is key to the Company building a recognised brand that is synonymous with the
provision of the highest level of security products and services. Our Board is composed so as to maximise
transparency, deliver on governance guidelines, and hold accountability. We also have Audit, Remuneration and
Risk Committees in place to support these commitments.
Climate-related Financial Disclosure Report
In FY2023 for the first time, we reported under the Climate-related Financial Disclosure Regulations 2022. This
was due to our Group previously having over 500 employees, prior to the divestment of its subsidiary Vigilant. The
requirement to report under the Climate-related Financial Disclosure Regulations was no longer applicable in
FY24, though we continue to review our monitoring and reporting on environmental issues.
Governance
The Board is responsible for setting the strategic direction of the Group and ensuring the long-term success of the
business. As part of that success, it ensures that risks are identified, considered, and appropriate actions are taken
to limit any negative impact to Croma. The Board has overall responsibility for all matters, including monitoring
and responding to risks and opportunities arising from climate change. The Group reports under the Energy
Savings Opportunity Scheme (ESOS) and receives reports from its advisors giving further recommendations the
Group can take to reduce its environmental impact.
Strategy
The Board’s strategy is to support long-term business growth whilst minimising its impact on the environment
and operating in an ethical and responsible way. The Board is continuously conscious of the risk and
responsibilities associated with climate change and has taken a number of actions to reduce the Group’s impact on
the environment.
•
Our Greenhouse gas emissions, energy consumption and energy efficiency actions are reported in the
Directors report. This considers all fuel purchased for Company vehicles, gas and electricity purchases for
Company offices and reimbursements to employees who used their own vehicles for business travel.
•
Measures to reduce the carbon footprint of Company vehicles so that our fleet meets the most up to
date emission standards include:
o
Regular replacement of Company vehicles
o
Occupation of modern, energy efficient premises
o
Route planning
o
Vehicle tracking to minimise company mileage
Where we are aware of significant risk or opportunity, the Board is responsible for coordinating the response from
the wider business to ensure that we are building the appropriate actions into our operational and financial
planning. This includes identifying projects such as energy efficiency as well as working with suppliers to ensure
that we have a secure and ethical supply chain.
In assessing how these risks might impact us, we have applied the guidance from the London Stock Exchange
which prompts the business to define whether it would still be profitable if:
•
All countries were successful in achieving goals of the Paris Agreement and there is an orderly transition to
a low carbon economy
•
There is an abrupt and disorderly transition as countries belatedly catch up on climate crisis management
•
There is a failure to transition
While it is difficult to predict the answers to those questions with certainty, Croma believes that we will be able to
develop plans that enable us to respond effectively to these scenarios.
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CROMA SECURITY SOLUTIONS GROUP PLC
STRATEGIC REPORT
FOR THE YEAR END 30 JUNE 2024
15
Key performance indicators
Indicator
Performance
Croma Locksmiths
Sales and
retail
performance
Our in-house developed EPOS and Business Intelligence software continues to provide
powerful insights to our business performance. Recording sales and footfall daily to help
management better understand the business performance and the purchasing trends of
customers.
Croma managers continue to evaluate the individual performance of the outlets with
regular visits, consultations and meetings to support branch managers with continued
business development.
Through regular meetings held with the branch managers, a better level of understanding
has been achieved with cooperation between retail shops thus ensuring that new services
and products are brought to the forefront. This has led to continuous growth of sales by
8.5% to £5.10m (FY23: £4.70m) with £0.19m of this organic and £0.21m of this growth
driven by the acquisition of our new branches in Worthing and Peterborough.
Our strategy continues to be to develop our existing geographic coverage by expanding
our branch network of security centres thus taking advantage of improved economies of
scale, and to gain more profitable commercial contracts on the back of this.
Cash
At the year-end cash balances were £0.39m (FY23: £0.06m).
We invested £0.07m on two acquisitions and £0.36m to acquire a freehold in Peterborough.
We continue to hold excess cash over and above working capital requirements in the
parent company within interest-bearing accounts.
Croma Fire and Security
Sales
Sales saw a 9.2% improvement to £3.80m (FY23: £3.48m).
We have changed our sales model to one that utilises highly experienced technical staff
to better ensure that our clients receive the very best of security solution designs and not
those from commission-based sales staff. We see this as a major change and benefit for
our clients and execution of our core values.
Customer
retention
Customer retention remains high based on the level of renewing maintenance contracts
(91%) from existing customers each year. It has been maintained by the implementation of
a customer retention policy.
Engineers
The engineer market remains very active and engineer retention and remuneration is
monitored. The business continues to be impacted by a shortage of high-quality engineers
however our trainee programme that commenced last year is raising standards within our
trainee engineers and they are more able to support the business needs within the
engineering team.
Cash
At the year-end cash balances are £0.27m (FY23: £0.02m).
We continue to hold excess cash over and above working capital requirements in the
parent company within interest bearing accounts.
Roberto Fiorentino – Chief Executive Officer
1 November 2024
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CROMA SECURITY SOLUTIONS GROUP PLC
CORPORATE GOVERNANCE
FOR THE YEAR ENDED 30 JUNE 2024
16
Statement of Corporate Governance
The Board
The Board is responsible for the governance of the Group and Company, governance being the systems and
procedures by which the Group and Company is directed and controlled. A prescribed set of rules does not itself
determine good governance or stewardship of a company and, in fulfilling their responsibilities, the Directors
believe that they govern the Group and Company in the best interests of the shareholders, whilst having due regard
to the interests of other stakeholders in the Group including, in particular, customers, employees and creditors.
The Board comprises, the Non-Executive director and Chairman J Haigh, the Chief Executive Officer R M
Fiorentino, the Chief Financial Officer T Andreeva and the Non-Executive director S Naylor.
The biographies of the Directors are set out in this document on page 24. These show the range of business and
financial experience upon which the Board can call. The Board’s goal is to ensure that its membership should be
balanced between Executives and Non-Executives and have all the appropriate skills and experience and
knowledge of the business.
Chairman
The Chairman is responsible for making sure that the Board agenda concentrates on the key issues, both
operational and financial, with regular reviews of the Company’s strategy and its overall implementation. The
Chairman should ensure that the Board receives accurate, timely and clear information and there should be good
information flows within the Board and its committees as well as between the non-executive directors and senior
management.
Non-Executives
Non-Executive Directors should be independent, be able to provide appropriate oversight and to perform their
role. The non-executive Directors of the Company:
•
Are required to commit an appropriate amount of time to the Company of approximately 15 days on an
ongoing basis, including attendance at 12 Board meetings per annum of which 5 face to face meetings
per year where possible, and on regular conference calls with the Board, and to be available to
shareholders as required.
•
Are appointed to the three Board committees with formal terms of reference.
•
Satisfy themselves on the integrity of financial information and that financial controls and systems of
risk management are robust and defensible.
•
Are responsible for determining appropriate levels of remuneration of executive Directors and have a
prime role in appointing and, where necessary, removing senior management and in succession planning.
•
Uphold high standards of integrity and probity, supporting the executive Directors in instilling the
appropriate culture, values and behaviours in the Boardroom and beyond.
•
Will receive high-quality information sufficiently in advance of Board and committee meetings, which
is accurate, clear, comprehensive, up-to-date and timely.
•
Have access to the Chief Executive Officer, the Chief Financial Officer and the Company's advisers.
•
Are able to call upon independent professional advice at the Company's expense if they consider it
necessary to discharge their responsibilities as Directors.
•
Are expected to receive ongoing training and development; and
•
Will have their performance assessed on a regular basis (along with the executive Directors).
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CORPORATE GOVERNANCE
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17
The QCA guidelines acknowledge for growing companies it may not be possible for boards to meet the definition
of "independence" for Non-Executive Directors, however it sets out that it is important for the board to foster an
attitude of independence of character and judgement.
Based on the QCA guidelines the Board concludes that the non-executives are independent in terms of character
and judgement in how they execute their role as Non-Executive Directors.
The Board is mindful of the threat to independence and actively manages the potential risk to ensure that the non-
executives provide the independent constructive challenge to help develop the Board's proposals on strategy.
Board Committees
The standing committees of the Board are the Audit, Remuneration and Risk Committees. At the current time it
is not felt that a Nominations Committee is appropriate given the size and scope of the Group’s operations, with
any tasks and responsibilities in respect to nominations being handled by the Board as a whole.
Audit Committee
The Audit Committee comprises of J Haigh and is chaired by S Naylor, who is an FCA Chartered Accountant and
has relevant financial experience. The Audit Committee reviews the external audit activities, monitors compliance
with statutory requirements for financial reporting and reviews the half year and annual financial statements before
they are presented to the Board for approval. The Audit Committee also keeps under review the scope and results
of the audit and its cost effectiveness and the independence and objectivity of the Auditor and the effectiveness of
the Group's internal control systems.
The Group does not have an independent Internal Audit function, as it is not considered appropriate given the
scale of the Group's operations. However, the Groups' CFO is continuously improving on internal control, by
evaluating and testing the Group's financial control procedures and standardise processes around best practice.
Any significant issues are reported to the Chairman of the Audit Committee and shared with the external Auditors
as appropriate.
The Group CFO and the external Auditors attend meetings of the Audit Committee by invitation. The Committee
may also hold separate meetings with the external Auditors, as appropriate.
Remuneration Committee
The Remuneration Committee comprises of S Naylor and is chaired by J Haigh. Although not a member of the
Committee, the Committee would normally consult the Chief Executive on proposals relating to the remuneration
of members of the Group's senior management team, though never for matters related to his own remuneration
package. The Committee, on behalf of the Board, determines all elements of the remuneration packages of the
executive Directors and would also approve any compensation arrangements resulting from the termination by the
Company of a Director's service contracts. For Directors' remuneration see note 8.
Risk Committee
The Risk Committee comprises of J Haigh, T Andreeva, R Fiorentino and is chaired by S Naylor.
The primary objective of the Board Risk Committee is to assist the Board in overseeing the management of risk
across the Group. This role is performed by ensuring that key risks are identified, and steps are taken by
management to mitigate them within the risk appetite levels agreed by the Board. Consideration is given to all
significant matters relating to governance, control, regulatory and compliance issues. The identified risks and the
reporting of the risk assessment is included in the annual report and accounts within the Strategic Report.
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CORPORATE GOVERNANCE
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18
Frequency of meetings
Where possible, the Board meets on a formal basis every month. Relevant information is distributed to Directors
in advance of the meetings. The Board makes decisions on all material matters including long term and
commercial strategy, annual operating and capital budgets, capital Structure and financial and internal controls.
The Group has a formal schedule of matters reserved to the Board which is periodically reviewed and approved
by the Board.
Evaluating Board Performance
The Board has a number of sources of information from which it judges its own performance and that of the
individual Directors, and these include but are not limited to:
•
Financial performance indicators including, revenue, order book (including contract wins and losses),
gross margin, net margin, earnings per share and cash flow;
•
The Company's share price;
•
Reports from external auditors;
•
Shareholder feedback;
•
Customer feedback; and
•
Employee feedback.
All these factors are considered, and action taken to improve performance as appropriate.
Communication with shareholders
The Board attaches great importance to providing shareholders with clear and transparent information on the
Group's activities, strategies, and financial position, in addition to having regard to its obligations as a quoted
public company and the AIM Rules.
The Group holds meetings with significant shareholders on a regular basis and regards the Annual General
Meeting as a good opportunity to communicate directly with shareholders via an open question and answer session.
The Group lists contact details on its website should shareholders wish to communicate with the Board. All
announcements and results, including those released via RNS and RNS Reach, are available on the Group's
website.
Internal controls
The Board reviews and approves an Annual Budget and Business Plan prior to the start of each financial year.
This includes reviewing the key strategic, operational and financial objectives for the year, together with a detailed
financial budget.
The Executives are accountable to the Board for delivery of the Annual Business Plan. The Executives report
performance against the plan on a monthly basis, which includes detailed analysis of budgetary variances and
updated financial projections.
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CORPORATE GOVERNANCE
FOR THE YEAR ENDED 30 JUNE 2024
19
To provide a framework for the delivery of the Group's strategy and plans, the Board has developed an
organisational structure with clear roles and responsibilities, and clear lines of reporting.
City code on takeovers and mergers
The Company is subject to the City Code on Takeovers and Mergers.
QCA Corporate governance code
In accordance with AIM rule 26 the Company has adopted the QCA code and sets out below how it has adopted
and complied with the QCA code.
1. Establish a strategy and business model which promotes long-term value for shareholders
The strategy and business model of the Group is expressed more clearly in the Chairman's Statement and the
Strategic Report. In summary, the Group seeks to build a recognised brand that is synonymous with the provision
of the highest level of security products and services. The Group is stringently focused upon delivering outstanding
service delivery for all our clients, and in such a way that in time our clients can have all their security needs met
by one service provider.
The values we adopt are largely driven on endeavouring to engage employees that can deliver a capable, well-
trained, highly motivated service. We continue to believe that this approach will deliver market leading full-service
security offerings to the top end of the corporate and residential markets, as well as leading public service providers
such as utilities, hospitals and schools.
The Group has a strategy to acquire new businesses and applies rigorous checks to the sustainability and value of
any such decisions.
The business has a reasonable appetite for risk, and we actively engage in developing new technologies to assist
our service provisions even where such new technologies have a long development phase.
Our markets are highly regulated, audited and accredited by a number of regulatory bodies, including the NSI,
BAFE and CHAS, all of which require our Board and operational employees to be personally regulated, thus
adding to the maintenance of the values and standards we operate to.
2. Seek to understand shareholder needs and expectations
The Group seeks to maintain a dialogue with its shareholders in order to communicate the Group’s strategy and
results and to understand the needs and expectations of its shareholder base.
The Board is aware of the need to protect the interests if the minority shareholders and balancing those interests
with those of any more substantial shareholders.
Beyond the Annual General Meeting, the Executives seek to meet with all significant shareholders after the release
of the half year and full year results. The Chief Executive is the primary point of contact for the shareholders and
is available to answer queries over the phone or via email from shareholders throughout the year.
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CROMA SECURITY SOLUTIONS GROUP PLC
CORPORATE GOVERNANCE
FOR THE YEAR ENDED 30 JUNE 2024
20
3. Consider wide stakeholder and social responsibilities and their implications for long-term success
The Directors are aware of the impact that its business activities have on the communities in which the Group’s
businesses operate and is aware of its corporate responsibilities to its stakeholders including staff, suppliers,
customers and the wider society. The Group endeavours to consider feedback received from stakeholders, by
making amendments to its business plans and operations as appropriate.
The Board endeavours to create a platform for delivering a high-quality service and this requires us to utilise best
in class suppliers (such as iLOQ, Hitachi, Assa Abloy and Bosch), for customers who appreciate and therefore
pay for a higher level of service, and a workforce that is trained to the highest of standards to always give of its
best.
We constantly solicit feedback from all stakeholders, some of which is on the website of the Company in terms
of customer experiences, and supplier confidence in us and in our operations.
Our customers are of course pivotal to the success of our business. Through our sales and operations teams, we
endeavour to supply a knowledgeable and targeted service. Our security solutions are tailored to exactly meet our
client's requirements. We are well placed to meet our customers security needs by bringing all the skills across
our divisions together to provide a one-stop solution.
We operate an open-door policy, and employees can speak and engage with senior management or the Board about
issues or ideas.
We have a formal induction and appraisal processes for new and existing employees. We have a web-based
employee portal, primarily used for scheduling holidays and access to company policies and information. This
portal undergoes continuous development. We also have a cross company integrated email system and utilise
video conferencing software for collaboration between stakeholders internally and externally.
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has overall responsibility for the systems of risk management and internal control and for reviewing
their effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable
but not absolute assurance against material misstatement or loss.
The Board has established Audit, Risk and Remuneration Committees, a summary of which is set out above, and
in this Corporate Governance section.
The Group maintains appropriate insurance cover in respect of actions taken against the Directors, as well as
against material loss or claims against the Group. The insurance cover in place is reviewed on a periodic basis.
5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board, the identities and biographies, the Board committees and the timing of Board meetings and a detailed
summary of attendances at those meetings is considered in the Strategic Report, the Directors' Report and
elsewhere in the Accounts.
The Board considers that both its non-executive Directors are independent and that they have the time necessary
to be able to provide rigorous challenge to the executive Directors when necessary as well as support as needed.
Nevertheless, guidance on time served by non-executives and the expansion in the business means the Board keep
this under review.
The Board considers itself sufficiently independent. The QCA Code suggests that a board should have at least two
independent non-executive Directors. The Board have considered each non-executive Directors' length of service
and interests in the share capital of the Group and consider that J Haigh and S Naylor are independent of the
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CROMA SECURITY SOLUTIONS GROUP PLC
CORPORATE GOVERNANCE
FOR THE YEAR ENDED 30 JUNE 2024
21
executive management and free from any undue extraneous influences which might otherwise affect their
judgement. All board members are fully aware of their fiduciary duty under company law and consequently seek
at all times to act in the best interests of the Company as a whole.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Directors who have been appointed to the Company have been chosen because of the skills and experience they
offer and their personal qualities and capabilities. Full biographical details of the Directors are included under "the
Directors biographies" section of the website which give an indication of their breadth of skills and experience.
This is also summarised on page 24.
The Board regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of
skills to support the ongoing strategy of the Group.
All members of the Board are encouraged to attend management development courses. The Board is rigorous in
reviewing the performance of each of its Directors and where there are actions that need to be taken, the Board is
proactive in carrying out what needs to be done.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The non-executive Directors monitor the personal and corporate performance of the Chief Executive, including
asking the Company's senior management, auditors, and other advisors to report on his performance.
The Executives participate in an annual performance related bonus arrangement. As soon as reasonably practicable
after the announcement of the preliminary results or the publication of the accounts of the Company for each
financial year, the Remuneration Committee considers the performance of the Company and the Executives in
that year against relevant targets and then, in its absolute discretion, determines the value of any bonus to be
received by the Executives in respect of that year.
Succession planning is considered by the entire Board. The Board recognises the importance of considering
succession planning, and each division has a leader and deputies, who are able, effectively, to step into the shoes
of the leader.
The Chairman will conduct an effectiveness review by means of a questionnaire, with comment on the Chairman
passed to the Non-Executive Director. Comments will also be made on non-executive Directors and the
Committees' effectiveness. The results of this exercise will be reviewed, and individual feedback will be provided
for each of the Directors, and the Board as a whole. Feedback will be provided by the Chairman in respect of
assessments of each of the other Directors and the Board as a whole, and by the Non-Executive Director to the
Chairman herself.
The outcome of the appraisal is to assess if the Board has been effective in discharging its duties during the year
and it will be formally discussed at a Board meeting, with conclusions in the areas of major shareholder
representation in the Board, how the NEDs interact with the Board, the development of strategy and the
presentation of recommendations to the Board.
8. Promote a corporate culture that is based on ethical values and behaviours
The Group has no formal values statement, but the business is still driven by a guiding set of principles or ways
of behaving and doing business. The Group is focused on principled performance, and transparent reporting from
the businesses to the Board, and from the Board to the Shareholders and advisors through regular meetings,
presentations, the Annual Report and at the Annual General Meeting.
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CORPORATE GOVERNANCE
FOR THE YEAR ENDED 30 JUNE 2024
22
Senior management are encouraged to take personal responsibility for achieving the Group's objectives and to act
with openness, integrity and trust. Staff are encouraged to ask for help, admit to their mistakes and put things
right. The Group does not operate a blame culture. The non-executive members of the Board are encouraged to
have open dialogues with senior management around the Group about their opinions and concerns.
Senior management across the organisation are comfortable coming forward with legal, compliance, and ethics
questions and concerns without fear of retaliation at the frequent subsidiary level Board meetings, which are all
attended by the Chief Executive and the CFO.
The Group recruits and screens employees based on integrity, as well as competence. Employees are well-treated
when they leave or retire.
The Group has in place an anti-bribery policy and an anti-slavery policy which are both reviewed at appropriate
intervals.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making
by the Board
The Board has overall responsibility for the strategic direction and performance of the Group. The executive
Directors have day-to-day responsibility for the operation of the Group's businesses and implementing the strategy
of the Board.
The Board meets once a month. The Board is provided with detailed financial reports of the Group's financial
performance on a regular monthly basis with more frequent updates if required. Detailed written reports are
provided one week prior to the Company's Board meetings. Written recommendations from the executive
Directors are delivered in a timely manner with supporting documentation, supplemented as required by reports
from external professional advisers so that the Board can constructively challenge recommendations before
making decisions.
The Chief Executive Officer is the primary point of contact for the shareholders and is available to answer queries
over the phone or via email from shareholders throughout the year.
The Group has an Audit, Risk and Remuneration committee. The Audit Committee comprises J Haigh and is
chaired by S Naylor. The Remuneration Committee comprises S Naylor and is chaired by J Haigh. The Risk
Committee comprises J Haigh, T Andreeva, R Fiorentino and is chaired by S Naylor.
Formal terms of reference have been agreed for Board Committees. The responsibilities of each of these have
been summarised below:
Audit Committee
•
To meet at least twice a year and otherwise as required
•
To oversee the appointment of external auditors
•
To review the nature and scope of the audit proposed by the external auditors
•
To review the effectiveness of Group’s internal control framework
•
To review the effectiveness of Group's risk management framework
•
To review the annual financial statements, and challenge where necessary, the actions and judgments of
management in relation to these
•
To attend the Annual General Meeting to answer any shareholder queries
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CORPORATE GOVERNANCE
FOR THE YEAR ENDED 30 JUNE 2024
23
Remuneration Committee
•
To set the remuneration for the Board including basic pay, any bonus basis and awards and participation
in share incentive schemes.
•
To agree the terms of employment of all Board members, including those on cessation of employment,
ensuring all payment are fair to both the employee and the Group.
•
To continue to review the appropriateness of the remuneration polices, with reference to the conditions
across the Group and up-to-date information in other companies.
•
To ensure that all requirements on the disclosure of remuneration are fulfilled.
•
To meet at least twice a year and otherwise as required.
•
To attend the Annual General Meeting to answer any shareholder queries.
The Board has considered the requirements of the QCA code and our responsibilities. Where we have not made
the relevant disclosures as per the QCA code, we consider this appropriate for the size and nature of the business.
Risk Committee
•
Consider and challenge the effectiveness of the business and recommend any changes to the Board.
•
Consider, review and approve the overall risk appetite, risk attitude and risk strategy.
•
Oversee and monitor current risk exposures and emerging/future risk strategy.
•
Ensure that the processes for managing risks are fit for purpose and implemented appropriately by
management.
•
Monitor the Group’s most significant risk exposures.
The Board offer to meet with all significant shareholders after the release of the half year and full year results and
encourage all shareholders to attend and ask questions of the Board as a whole at the annual general meeting.
The Chief Executive is the primary point of contact for the shareholders and is available to answer queries over
the phone or via email from shareholders throughout the year.
There is a strong focus on transparent reporting in the half-year interim results and annual report, including the
challenges faced by the Group both in the reporting periods and in the future.
The Group's website is regularly updated. The Group's financial reports and annual reports, notices of general
meetings of the Company can be located under the "Company Documents" section of the website.
The results of voting on all resolutions at future general meetings will be posted to the Group's website, including
any actions to be taken as a result of resolutions for which votes against have comprised a significant proportion
of votes.
10. Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders.
The Company communicates governance and performance in the annual report along with regular announcements.
We further engage with shareholders and other stakeholders through general meetings, webinars and road shows.
On occasions, one-on-one meetings are held. In addition, the Company’s website communicates annual reports,
results announcements and notices of general meetings.
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CROMA SECURITY SOLUTIONS GROUP PLC
BOARD OF DIRECTORS
FOR THE YEAR ENDED 30 JUNE 2024
24
Directors Biographies
BJ Haigh - Rosser - Non-Executive Chairman
J Haigh brings significant experience to the Group. Currently, she is Chairman of FDS Director Services Limited,
provider of corporate finance services, with a focus on supporting companies develop, expand and then secure
successful exits. Alongside her M&A advisory work, Jo provides specialist director training services. In 2018 she
founded Onboarding Officers, an exclusive community for exiting military officers to help them transfer their
skills into the commercial world and become world-class business leaders.
Roberto Fiorentino - Chief Executive Officer
Roberto Fiorentino is Chief Executive Officer of the Group. Roberto has over four decades of experience across
all areas of the security industry. One of the true pioneers in the sector, he has been instrumental in driving a shift
in the business to prevention solutions. Under his leadership, the Group has successfully grown the core business
thanks to a focus on innovative technological solutions, as well as to a number of strategic acquisitions which
have enabled the Group to expand its network to where it stands today.
Teo Andreeva - Chief Financial Officer
Teo Andreeva was appointed Chief Financial Officer of the Group in April 2023. Mrs Andreeva has over 15 years'
experience at Croma and has extensive and detailed knowledge of all areas of the business. Appointed Group
Financial Controller in 2015, Teo was instrumental in supporting the Group in its transition from family owned to
listed company, implementing rigorous financial management practices as well as being at the forefront of change
management.
Alongside Roberto, Teo is focused on driving Group acquisition strategy. Teo is CIMA certified.
Steve Naylor - Non-Executive Director
Steve Naylor, non-executive Director, is an experienced CFO of both public and private companies. Currently he
provides fractional director services to growing businesses, where he has worked with a number of ecommerce,
telecommunication and software companies. Previously Steve was a Financial Director for Advanced Smartcard
Technologies PLC, an AIM listed company, and the company secretary of main market listed Sanderson Group PLC.
Steve is an FCA Chartered Accountant.
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CROMA SECURITY SOLUTIONS GROUP PLC
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2024
25
The Directors submit their report and the audited annual financial statements of Croma Security Solutions Group
PLC and its subsidiary undertaking for the year ended 30 June 24.
Principal activities
Croma Locksmiths:- Provide mechanical solutions via our 16 retail outlets, online store, as well as our team of
onsite engineers. This allows us to supply, install and maintain Locks, Padlocks, Safes, Ironmongery, UPVC
mechanisms, Security shutters, Grilles and Doors.
Croma Fire and Security:- Operate from our offices in the South and the North and design, supply, install,
monitor and maintain Intruder Alarms systems, CCTV, Fire and Life Safety systems, Access Control Systems,
Perimeter Detection Systems, Barriers, Gates, Bollards and Automatic Doors.
Directors
The Directors who have held office at any time during the reported period are as follows:
Executive Directors
Non-Executive Directors
R M Fiorentino
B J Haigh - Rosser
T Andreeva
S Naylor
Including all immediate relatives, the Directors who have held office at any time during the reported period had
the following beneficial interest in the ordinary shares of the Company:
FY24
FY23
R M Fiorentino
4,037,587
4,037,587
T Andreeva
15,000
-
B J Haigh-Rosser
-
-
S Naylor
-
-
Major shareholdings
Apart from the interest of the Directors referred to above, the Company has received the following notifications
of holdings of more the 3% of the ordinary share capital of the Company at 30 June 24:
Liontrust asset management
9.9%
Russell Long
6.4%
Securities Services Nominees
6.1%
Mr Francis Maurice Erard
4.2%
There are 66,500 (FY23: 40,500) options in issue over the Company’s shares of which 12,000 (FY23: 2,000) are
held by the Directors.
At 30 June 24, 2,168,936 (FY23: 1,794,936) shares were held in treasury, being 13.6% (FY23: 11.3%) of the
issued share capital. The increase in treasury shares is from the share buyback of 400,000 shares on 3 August
2023, although there is a difference as one of the sellers (Vigilant Disposal) confirmed 26,000 more ordinary shares
than the number received. The Seller has therefore returned to the Company the sum of £12,350, being the amount
overpaid for the 26,000 Ordinary Shares incorrectly stated at a price of 47.5 pence per share in the Buy-Back.
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CROMA SECURITY SOLUTIONS GROUP PLC
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2024
26
Matters covered in the strategic report
Statutory disclosures required under company law within the Directors report are included where relevant within the
strategic report.
Financial risk management
Details of exposure to price, credit, liquidity and cash flow risk are included in note 22.
R&D
There was no significant research and development expenditure during the year or the prior year.
Employment of disabled persons
The Group considers applications for employment from disabled persons where the candidate’s particular aptitudes
and abilities are consistent with adequately meeting the requirements of the job. All necessary assistance with initial
training courses is given. Once employed, a career plan is developed to ensure suitable opportunities for each disabled
person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to
perform work identified as appropriate to their aptitudes and abilities.
Risk management
The principal risks are regularly reviewed by the Board such that our business longevity, reputation and environmental
footprint are managed in a way which protects the interests of our business and its stakeholders.
Critical risks are identified as those which would prevent the business operating or have a significant impact on
profitability or reputation. These form part of our risk register reviewed by the Board. Key risks are those which the
business needs to consider and mitigate in the normal course of the business. The Board has responsibility for
monitoring and formulating appropriate action plans to respond to both critical and key risks.
The Group operates in a highly regulated sector and is audited and accredited by a number of regulatory bodies
including the NSI, CHAS and SafeContractor. During the Period the Group achieved ISO 27001.
The table below represents the critical risks that Croma is exposed to as a result of climate change. These have been
classified as “physical” – i.e., risks due to longer term shifts in climate patterns – or “transitional” – risks in transitioning
to a lower carbon economy, in line with the TCFD framework.
Risk identified
Impact
Type
Timeframe
Increased rainfall
over UK winters
increases flood
risk
A minimal number of our sites are in coastal or riverside
locations at risk of flooding. The risk of flooding is considered
as part of the SAR process when selecting new sites and
monitored through the annual insurance process.
Physical
Short
Drier/ hotter
summers lead to
droughts / water
shortages
Water stress in sites, increased energy costs for refrigeration
and cooling at sites.
Physical
Short
Extreme weather
events cause
disruption in
supply chains
Global droughts may impact our suppliers.
Physical
Medium
Compliance and
cost risk from new
government
regulation
Increased cost to comply with new government regulation to
meet climate targets, such as packaging tax, carbon taxes,
EPC standards etc. Potential financial penalties and
reputational damage for noncompliance.
Transitional
Medium
Cultural shift to
prioritising
sustainability
Increased focus from both customers and teams on
sustainability. Impact on car fleet. Recruitment / retention/
reputational impacts if we’re not seen to be driving change.
Transitional
Medium
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CROMA SECURITY SOLUTIONS GROUP PLC
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2024
27
Carbon Metrics
In FY24 we collected data and calculated the energy consumption levels and CO2 emissions across the Group.
This included all fuel purchased for Company vehicles, gas and electricity purchases for Company offices and
reimbursements to employees who used their own vehicles for business travel. This information was converted to
equivalent kilograms of carbon dioxide (Kg of CO2) emissions in all cases. We will use this data as a springboard
to enable us to track our progress to lowering our overall emissions and carbon footprint. The Group’s emissions
from energy use during the year are reported in the section below.
Environmental policy
The Group recognises the importance of environmental responsibility. The nature of its activities has a minimal
effect on the environment but where it does the Group aims to act responsibly and is aware of its obligations at all
times.
Greenhouse gas emissions, energy consumption and energy efficiency action
The Group has collected data on its energy consumption and CO2 emissions for the year. This considered all fuel
purchased for Company vehicles, gas and electricity purchases for Company offices and reimbursements to
employees who used their own vehicles for business travel. This information was converted to equivalent
kilograms or carbon dioxide (kg of CO2) emissions in all cases.
The Group’s emissions from energy use during the year were:
•
Direct and indirect emissions from transport use were 165 tonnes of CO2 (FY23: 253 tonnes)
•
Direct emissions the combustion of natural gas were 23 tonnes of CO2 (FY23: 22 tonnes)
•
Indirect emissions from the use of electricity were 31 tonnes of CO2 (FY23:34 tonnes)
Total emissions were the equivalent to 2.51 tonnes per employee (FY23: 0.25 tonnes)
The Group began reporting under the Climate-related Financial Disclosure Regulations 2022 in FY23 as at that
time the Group had over 500 employees. Since then, the Group divested the Vigilant division and now has less
than 250 employees making year on year comparisons on energy use and emissions not relevant. Our FY25 report
will provide comparisons with FY24.
The Directors recognise the importance of energy efficiency and during the year have continued to replace the
Group’s vehicle fleet with lower emission and electric alternatives.
Employee involvement
The Group continues to be committed to maintaining full transparency through regular contact and dialogue with
our employers. For the year under review total number of employees was less than 250. We adopt the policy of
ensuring employees are consulted on all matters which are likely to affect employees’ interests through staff
councils and via meetings. Information on matters of concern to employees, especially in the year under review,
is given through information bulletins and reports which seek to achieve a common awareness on the part of all
employees of the financial and economic factors affecting the Group’s performance, and particularly in regard to
health and safety when at the workplace.
Political and charitable donations
Charitable donations were £200 (FY23: £8,986). There were no political donations in the current year and prior
year.
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CROMA SECURITY SOLUTIONS GROUP PLC
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2024
28
Dividends
A final dividend of 2.2p per share was declared for the year ended 30 June 2023 on 6 November 2023 and paid on 15
December 2023 at a cost of £0.3m. Subject to approval at the AGM, the Board recommends a final dividend of 2.3p per
share for the year ended 30 June 2024.
Post balance sheet events
As part of the deferred consideration owed to the Group from the £6.5 million sale of Vigilant, the following payments
were received in 2024:
•
£0.46 million on 1 July, related to the repayment of loan notes and interest.
•
£1.3 million on 4 July, related to the purchase of the outstanding redeemable shares by Vigilant.
•
£0.45 million on 30 September, as the next instalment of loan notes and interest.
Outlook
The outlook for the business remains positive. The Group continues to invest in infrastructure and other opportunities to
expand operations and deliver growth.
Auditors
UHY Hacker Young LLP 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 the forthcoming Annual General
Meeting.
Statement of disclosure to auditor
Each of the persons who is a Director at the date of approval of this report confirms that:
a) So far as they are aware, there is no relevant audit information of which the Group and Company’s auditors are
unaware and;
b) They have taken all the steps that they ought to have taken as Directors to make themselves aware if any relevant
audit information and to establish that the Group and Company’s auditors are aware of that information.
By order of the Board
T Andreeva – Chief Financial Officer
1 November 2024
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CROMA SECURITY SOLUTIONS GROUP PLC
STATEMENT OF DIRECTORS RESPONSIBILITES
FOR THE YEAR ENDED 30 JUNE 2024
29
Directors’ responsibilities
The Directors are responsible for preparing the Strategic Report, Directors’ report and the Group and Parent
company 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 Group financial statements in accordance with UK-adopted international
accounting standards and the parent company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law including FRS 102,
the Financial Reporting Standard applicable in the UK).
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 Group and Company and of the profit or loss of the Group
for that period.
In preparing these financial statements, the Directors are required to:
•
Select suitable accounting policies and then apply them consistently
•
Make judgements and accounting estimates that are reasonable and prudent
•
State whether applicable accounting standards have been followed subject to any material departures
disclosed and explained in the financial statements
•
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company and the Group will continue in business
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company and Group’s transactions and which disclose with reasonable accuracy at any time the financial position
of the Company and Group and enable them to ensure that the financial statements comply with the requirements
of the Companies Act 2006. They are also responsible for the Group’s system of internal financial control,
safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities. The directors are also responsible for ensuring that they meet their
responsibilities under the AIM Rules.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a
website. Financial statements are published on the Group's website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the
Directors. The Directors' responsibility also extends to the on-going integrity of the financial statements contained
therein.
Signed on behalf of the Board
T Andreeva – Chief Financial Officer
1 November 2024
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
30
Independent auditors’ report to the members of Croma Security Solutions
Group Plc
Opinion
We have audited the Group and Parent Company financial statements of Croma Security Solutions
Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 30 June 2024
which comprise the consolidated statement of comprehensive income, the consolidated and parent
company statement of financial position, the consolidated and parent statement of cash flows, the
consolidated and parent statement of changes in equity and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has been applied in the
preparation of the Group’s financial statements is applicable law and UK adopted International
Accounting Standards. The financial reporting framework that has been applied in the preparation of
the Parent Company’s financial statements is FRS 102 ‘The Financial Reporting Standard applicable
in the UK and Republic of Ireland’ (“FRS 102” or “UK GAAP”) and in accordance with the provisions of
the Companies Act 2006.
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 30 June 2024 and of the Group’s profit for the year then ended;
•
the Group financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards;
•
the Parent Company financial statements have been properly prepared in accordance with FRS
102 and as applied in accordance with the provisions of the Companies Act 2006; and
•
the Group financial statements 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
Group and Parent 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 as applied to listed entities,
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 statement is appropriate.
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
31
Our evaluation of the Directors’ assessment of the entity’s ability to continue to adopt the going concern
basis of accounting included:
Evaluation of management assessment
Key observations
Management have prepared detailed
consolidated cash flow forecasts incorporating
all entities within the Group covering the period
to 31 December 2025. These are based on their
expectation of future costs, including budgeted
operating and capital expenditure.
We evaluated the directors’ going concern
assessment and performed the following
procedures:
•
Assessed the transparency and the
completeness and accuracy of the
matters covered in the going concern
disclosure by evaluating management’s
consolidated cashflow, profit and loss,
and balance sheet projections for the
forecast period to December 2025 and
challenging the underlying assumptions.
•
We obtained post year-end trading
results and compared these to the
forecasts to ensure forecasting is
reasonable and to evaluate where post
year-end results are in line with
expectations.
•
Evaluated the key assumptions in the
forecasts, which were consistent with
our knowledge of the business and
considered whether these were
supported by the evidence we obtained.
•
Discussed plans for the Group going
forward with management, ensuring
these had been incorporated into
budgeting and would not have an
impact on the going concern status of
the group.
•
We reviewed the disclosures relating to
the going concern basis of preparation
and found that these provided an
explanation of the Directors’
assessment that was consistent with the
evidence we obtained.
•
We have further obtained
management’s documented
assessment of whether the group is a
going concern. We have reviewed this
and found this is consistent with the
evidence we obtained.
The Group incurred a net profit from continuing
operations of £706k for the year ended 30 June
2024 (2023: £166k). They generated net cash
from operating activities of £1.26m for the year
ended 30 June 2024 (2023: £1.27m) and had a
cash balance of £2.14m as at 30 June 2024
(2023: £2.14m). Net assets of the group were
£15.4m at the year-end (2023: £15.2m).
Clear and full disclosure of the facts and the
Directors’ rationale for the use of the going
concern basis of preparations, is a key financial
statement disclosure and so was the focus of
our audit in this area. Auditing standards require
that to be reported as a key audit matter. Upon
review of the disclosures in the accounts we
found that the going concern disclosures in both
the Group and Parent Company financial
statements are appropriate.
We have reviewed the latest management
accounts available which were to the 30
September 2024. We noted that the post year-
end trading results are materially in line with the
forecasts. We have further reviewed the cash
balances as of October 2024 which showed
these are in line with expectations.
We have evaluated the key assumptions in the
forecasts, and their sensitivity to changes in
assumptions by sensitising the revenue and
profit before tax figures. From this we concluded
that appropriate headroom is in place around
the key assumptions.
We also note that the group currently has no
bank borrowings and holds freehold properties
worth £1.6m, thus could secure financing using
this should it need to.
Based on the audit procedures performed we
concluded that the Group and Parent Company
have appropriately adopted the going concern
basis of preparation. Further, we did not identify
any material disclosures that should be included
regarding any material uncertainty in respect of
the going concern basis of preparation.
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
32
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 entity’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.
Our approach to the audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the Group and Parent Company’s financial statements. In particular, we looked at
where the directors made subjective judgements, for example in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial statements as a whole, taking into account an understanding of the structure of
the Parent Company and the Group, their activities, the accounting processes and controls, and the
industry in which they operate. Our planned audit testing was directed accordingly and was focused on
areas where we assessed there to be the highest risk of material misstatement.
Our Group audit scope includes all of the group companies. At the Parent Company level, we also
tested the consolidation procedures. The audit team met and communicated regularly throughout the
audit with the Chief Financial Officer (‘CFO’) and Chief Executive Officer (‘CEO’) in order to ensure we
had a good knowledge of the business of the Group. During the audit we reassessed and re-evaluated
audit risks and tailored our approach accordingly.
The audit testing included substantive testing on significant transactions, balances and disclosures, the
extent of which was based on various factors such as our overall assessment of the control
environment, the effectiveness of controls and the management of specific risk.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant findings, including any significant deficiencies in internal
control that we identify during the audit.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not
a complete list of all risks identified during the audit. Going concern is a significant key audit matter and
is described above. In arriving at our audit opinion above, the other key audit matters were as follows:
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
33
Key audit matters
How our audit addressed the key audit
matters
Locksmith,
Fire
and
Security
revenue
recognition
(applicable to the Group financial statements)
Under ISA 240 (UK) there is a presumed risk of
fraud in relation to revenue recognition.
The revenue reported represents information of
significant interest to many users of the financial
statements.
The Locksmith business delivers a one stop
shop
selling
security
solutions
to
both
commercial and residential customers and now
comprise of 16 security centres across the UK.
There are till sales, account sales and cash
sales and comprises of high volume and low
value items. Therefore, for these reasons this
creates greater risk of manipulation, bias and
misstatement.
The Fire and Security business provides a full
range of electronic security solutions and
services
to
commercial
and
individual
customers. Services includes installation and
maintenance. Due to the number of contracts
involved and timing of the services provided
there is a risk of revenue not being recognised
correctly.
We therefore, considered that there is a
significant risk over the occurrence, accuracy
and cut-off assertions relating to revenue
recognition. We have also recognised a low risk
over the completeness of sales, given minimal
incentives are considered present for
management to purposefully understate
revenue.
Our audit work included, but was not restricted
to:
•
We updated our documentation of the
revenue process and controls in place,
this included assessing the design and
implementation of those controls;
•
Tested a sample of transactions to
agreements and supporting evidence.
We have audited both Locksmith, Fire
and Security revenue for occurrence by
tracing sales from the sales ledgers by
company to the underlying transaction
recorded in the invoice, and then
through to bank statements;
•
For the Locksmith we have audited
revenue for completeness for sales, on
a
sample
basis,
by
agreeing
transactions from the Z-report for the
day, sales orders and Shopify and have
agreed this back to their respective
invoices and the sales ledger;
•
For the Fire and Security business we
have audited revenue for completeness
for sales, on a sample basis, by
agreeing
transactions
from
the
customer
approval
or
annual
maintenance reminder. This is agreed
back to their respective engineer visit
report, invoice and back to the sales
ledger;
•
Assessed
whether
revenue
was
accounted in accordance with the
accounting
policy
on
revenue
recognition;
•
Analytically reviewed revenues and
verified significant movements; and
•
Reviewed the assessment made by
management
in
relation
to
the
application
of
the
correct
cut-off
processes.
The Group’s accounting policy on revenue
recognition is shown in note 1 to the group
financial statements and related disclosures are
included in note 3.
Key observations
As a result of the audit procedures we
performed, we have concluded that revenue
recognition is materially complete, accurate,
has occurred and recognised on an appropriate
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
34
basis and no significant or reportable
adjustments were noted based on the work
performed.
Impairment of Investments in Subsidiaries
(applicable to the Parent Company financial
statements only)
The Parent Company's investment in its
subsidiaries is highly material, as per note E of
the Parent Company financial statements, they
had a total carrying amount of £6,940k at the
year-end. Management should carry out an
impairment review where events or changes in
circumstances indicate that the carrying amount
of an asset may not be recoverable.
The estimated recoverable amount of these
balances is subjective due to the inherent
uncertainty
involved
in
forecasting
the
profitability of the subsidiaries. Where indicators
of impairment have been identified a robust
review of the investments held by the Parent
Company
and
any
amounts
due
from
subsidiaries to the Parent Company should be
undertaken by the directors to confirm the value
in use of these amounts and that there are no
indications, or requirements for, impairments of
the amounts.
We therefore identified the risk over the
valuation over the impairment of investments in
subsidiaries as a significant risk and key audit
matter.
Our audit work included, but was not restricted
to:
•
Assessing
the
Parent
Company’s
accounting policy on impairment of
investments
in
subsidiaries
for
consistency of application and for
appropriateness in respect to the
requirements of Financial Reporting
Standard 102;
•
Critically
evaluated
management’s
assessment of their impairment reviews
of
each
investment
in
subsidiary
balance, for whether any impairment of
assets
is
required
and
their
appropriateness;
•
We completed our own impairment
review on the investment in subsidiary
balances by comparing their carrying
value to their level of profitability in the
year and prior year, and by reviewing
their net assets after exclusion of
intercompany balances; and
•
Assessed
the
adequacy
of
the
disclosures included within the Parent
Company
financial
statements
for
compliance
with
FRS
102
as
appropriate.
Key observations
We concluded that management has completed
sufficiently robust assessments of impairment,
which indicated that there was no requirement
to impair the value of investments held as at
the year-end. From the audit procedures we
performed we concur that no material
impairments were required.
Impairment of Goodwill
(applicable to the Group financial statements)
The Group has material goodwill at the year-end
totalling £5,042k, which relate to two cash
generating units (CGU).
As per IAS 36, Goodwill is required to have an
impairment review by management at each
year-end.
The goodwill arises from the acquisition of
several businesses, as part of the Group’s
continuing strategy to expand the network of
security centres.
Our audit work included, but was not restricted
to:
•
Evaluated the appropriateness of the
goodwill balance in the accounting
records
and
ensuring
that
the
measurement
of
goodwill
is
in
accordance with the applicable financial
framework and considered whether
there is an indication of impairment.
•
Reviewed management’s impairment
assessment of goodwill;
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
35
The Group’s assessment of the recoverability of
the goodwill requires significant judgement
regarding future cash flows from each CGU,
growth rates, discount rates and sensitivity
assumptions.
We therefore identified impairment of goodwill
as a significant risk and key audit matter.
•
Compared
the
latest
management
accounts to previous forecasts to
assess the accuracy;
•
We
reviewed
the
discount
factor
(WACC) used by management in their
value to perpetuity calculations, and
recalculated this to ensure the WACC
used is appropriate;
•
Furthermore,
we
have
sensitised
management’s
forecast
using
sensitivities for revenue, direct costs
and
indirect
costs,
using
these
cashflows we have recalculated a
sensitised valuation to perpetuity; and
•
Considered whether the assumptions
used the forecasts are appropriate and
in line with actuals and industry norms.
The Group’s accounting policy on impairment of
goodwill is shown in the notes to the group
financial statements. These policies, along with
related disclosures, including the significant
uncertainty involved in estimating the value in
use of goodwill, are included in note 1 and 2.
Key observations
As a result of the audit procedures we
performed, and after considering
management’s disclosures of the significant
uncertainty present in estimating the value in
use of goodwill along with other assumptions
used in the impairment review such as the
discount rate used, we have concluded no
significant or reportable adjustments were
noted based on the work performed.
We found management's assumptions on
which the impairment reviews had been based
to be reasonable and in line with expectations.
The calculations were found to be accurate and
with sufficient headroom present, which
confirmed that no material impairments were
required to goodwill as at the year-end.
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
36
Materiality Measure
Group
Parent Company
Overall materiality
We determined materiality for the
financial statements as a whole to
be £222,000 (2023: £642,000).
We determined Parent Company
materiality to be £155,000 (2023:
£417,300).
How we determine it
Based on a benchmark of 2.5% of
Group revenue.
Based on the component discount
factor to be applied of 70% of
Group overall materiality.
Rationale for
benchmarks applied
We believe 2.5% of revenue to be
the most appropriate benchmark
due to revenue generated being
one of the key drivers of the
business and is a key KPI for
stakeholders.
The Parent Company’s materiality
was originally calculated based on
the Parent Company’s gross
assets at 3%, however this
exceeds group materiality so, we
have capped the Parent
Company’s materiality at
component materiality.
Performance
materiality
On the basis of our risk
assessment, together with our
assessment of the Group’s control
environment, our judgement is that
performance materiality for the
Group financial statements should
be 65% of materiality, and was set
at £144,000 (2023: £417,300).
On the basis of our risk
assessment, together with our
assessment of the Group’s control
environment, our judgement is that
performance materiality for the
Parent Company financial
statements should be 70% of
group performance materiality, and
was set at £100,000 (2023:
£333,840).
Specific materiality
A lower materiality has been used
for the cash element of Directors’
remuneration being £2,000.
A lower materiality has been used
for the cash element of Directors’
remuneration being £2,000.
Reporting threshold
We agreed with the Audit
Committee that we would report to
them all misstatements over
£11,000 (5% of Group materiality)
identified during the audit, as well
as differences below that threshold
that, in our view, warrant reporting
on qualitative grounds.
We also report to the Audit
Committee on disclosure matters
that we identified when assessing
the overall presentation of the
financial statements.
We agreed with the Audit
Committee that we would report to
them all misstatements over
£7,500 (70% of Group reporting
threshold) identified during the
audit, as well as differences below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
We also report to the Audit
Committee on disclosure matters
that we identified when assessing
the overall presentation of the
financial statements.
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality. We
apply the concept of materiality both in planning and performing our audit, and in evaluating the effect
of misstatements on our audit and on the financial statements.
We define financial statement materiality as the magnitude by which misstatements, including
omissions, could reasonably be expected to influence the economic decisions taken on the basis of the
financial statements by reasonable users.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we
also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
37
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditors’ 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 the audit:
•
the information given in the 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 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 Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting records and
returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of Directors’ responsibilities set out on page 29, the Directors
are responsible for the preparation of the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to do
so.
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
38
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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed
below:
Based on our understanding of the Group and the industry in which it operates, we identified that the
principal risks of non-compliance with laws and regulations related to compliance with UK tax legislation,
Company Law, employment and health and safety regulations, anti-bribery, corruption and fraud and
accreditations with regulatory bodies such as the National Security Inspectorate (“NSI”), The
Contractors Health and Safety Assessment Scheme (“CHAS”), SafeContractor and ISO 27001 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, UK adopted International Accounting Standards,
and United Kingdom Generally Accepted Accounting Practice. We evaluated management’s incentives
and opportunities for fraudulent manipulation of the financial statements (including the risk of override
of controls), and determined that the principal risks were related to posting manual journal entries to
manipulate financial performance, management bias through judgements and assumptions in
significant accounting estimates, in particular in relation to revenue recognition, and significant one-off
or unusual transactions.
Our audit procedures were designed to respond to those identified risks, including non-compliance with
laws and regulations (irregularities) and the QCA’s Code on Corporate Governance and fraud that are
material to the financial statements. Our audit procedures included but were not limited to:
•
Review of the financial statement disclosures to underlying supporting documentation;
•
Review of correspondence with tax authorities;
•
Discussing with management their policies and procedures regarding compliance with laws and
regulations;
•
Enquiries of management and review of board minutes in so far as they related to the financial
statements;
•
Enquiring of management as to actual and potential litigation and claims;
•
Review of relevant legal or professional costs within the accounting records for any evidence
of previously un-detected or un-reported instances of non-compliance;
•
Communicating identified laws and regulations throughout our engagement team and
remaining alert to any indications of non-compliance throughout our audit; and
•
Considering the risk of acts by the Group which were contrary to the applicable laws and
regulations, including fraud.
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CROMA SECURITY SOLUTIONS GROUP PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CROMA
SECURITY SOLUTIONS GROUP PLC
FOR THE YEAR ENDED 30 JUNE 2024
39
Our audit procedures in relation to fraud included but were not limited to:
•
Making enquiries of the management on whether they had knowledge of any actual, suspected
or alleged fraud;
•
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
•
Substantively testing of revenue and testing of journals to identify unusual transactions and
evaluating whether there was evidence of bias by the Directors that represented a risk of
material misstatement due to fraud;
•
Performed analytical procedures to identify any unusual or unexpected relationships;
•
Assessed whether judgements and assumptions made in determining the accounting estimates
were indicative of potential bias;
•
Investigated the rationale behind any significant or unusual transactions;
•
Discussing amongst the engagement team the risks of fraud; and
•
Addressing the risks of fraud through management override of controls by performing journal
entry testing.
There are inherent limitations in the audit procedures described above and the further removed non-
compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we would become aware of it. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through
collusion.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with part 3 of
Chapter 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the Parent 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 Parent Company and the Parent Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
Colin Wright
(Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
…………………………………
01/11/2024
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CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
40
Notes
£000s
£000s
£000s
£000s
Revenue
3
8,737
8,025
Cost of sales
(4,738)
(4,276)
Gross profit
3,999
3,749
Administrative expenses
(3,395)
(3,325)
Other operating income
3
3
Operating profit
607
427
Analysed as:
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
1,061
954
Amortisation of intangible assets
(62)
(60)
Depreciation
(392)
(467)
607
427
Financial expenses
5
(27)
(24)
Interest receivable
6
217
-
Profit before tax
797
403
Tax
9
(254)
(237)
Profit for the year from continuing operations
543
166
Discontinued operations
Profit after tax for the year from discontinued operations
33
-
3,534
Profit after tax and total other comprehensive income
543
3,700
Earnings per share
Basic and diluted earnings per share (pence) from
10
3.95
1.11
continuing operations
Basic and diluted earnings per share (pence) from
10
-
23.71
discontinued operations
2023
2024
(as restated)
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CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
41
These financial statements were approved and authorised for issue by the Board of Directors on 1 November 2024.
Roberto Fiorentino – CEO
Croma Security Solutions Group Plc - Company Number: 03184978
Notes
2024
2023
£000s
£000s
Assets
Non-current assets
Goodwill
13
5,042
5,042
Other intangible assets
14
85
147
Property, plant and equipment
15
2,576
1,950
Right-of-use assets
16
552
656
Other receivables
18
1,651
3,122
9,906
10,917
Current assets
Inventories
17
1,203
1,106
Trade and other receivables
18
4,818
3,551
Cash and cash equivalents
29
2,142
2,144
8,163
6,801
Total assets
18,069
17,718
Liabilities
Current liabilities
Trade and other payables
20
(1,876)
(1,564)
Lease liabilities
22
(114)
(114)
(1,990)
(1,678)
Non-current liabilities
Provisions
21
(161)
(190)
Deferred tax
24
(217)
(154)
Lease liabilities
22
(477)
(545)
(855)
(889)
Total liabilities
(2,845)
(2,567)
Net assets
15,224
15,151
Issued capital and reserves attributable to owners of the parent
Share capital
25
794
794
Treasury shares
(946)
(778)
Share premium
6,133
6,133
Merger reserves
2,139
2,139
Capital redemption reserve
51
51
Retained earnings
7,053
6,812
Total equity
15,224
15,151
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CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 2024
42
Notes
2024
2023
£000s
£000s
Cash flows from operating activities
Profit before taxation
797
3,937
Depreciation, amortisation and impairment losses
454
527
(Profit) on sale of discontinued operations
33
-
(3,069)
Loss on sale of property, plant and equipment
-
1
Net changes in working capital
28
(136)
(78)
Interest payable
5
27
24
Interest receivable
6
(217)
-
Corporation tax paid
(202)
(68)
Net cash generated from operations
723
1,274
Cash flows from investing activities
Purchase of businesses net of cash acquired
12
(73)
(1,226)
Purchase of property, plant and equipment
15
(793)
(411)
Proceeds on disposal of discontinued operations
538
669
Proceeds on disposal of property, plant and equipment
-
-
Net cash used in investing activities
(328)
(968)
Cash flows from financing activities
Payments to reduce lease liabilities
30
(117)
(374)
Treasury shares acquired
(168)
-
Financial income (net)
190
-
Increase/(decrease) in borrowings
30
-
(31)
Dividends paid
(302)
(313)
Net cash used in financing activities
(397)
(718)
Net (decrease) in cash and cash equivalents
(2)
(412)
Cash and cash equivalents at beginning of period
2,144
2,556
Cash and cash equivalents at end of period
29
2,142
2,144
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CROMA SECURITY SOLUTIONS GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 2024
43
Attributable to owners of parent
Share capital
Capital
redemption
reserve
Treasury
shares
Share
premium
Merger
reserve
Retained
earnings
Total equity
£000s
£000s
£000s
£000s
£000s
£000s
£000s
At 1 July 2022
794
51
(399)
6,133
2,139
3,425
12,143
Treasury shares acquired
-
-
(379)
-
-
-
(379)
Profit for the year
-
-
-
-
-
3,700
3,700
Dividends paid
-
-
-
-
-
(313)
(313)
At 30th June 2023
794
51
(778)
6,133
2,139
6,812
15,151
Treasury shares acquired
-
-
(168)
-
-
-
(168)
Profit for the year
-
-
-
-
-
543
543
Dividends paid
-
-
-
-
-
(302)
(302)
At 30th June 2024
794
51
(946)
6,133
2,139
7,053
15,224
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
44
The following notes form part of the primary financial statements:
1. Accounting policies
Croma Security Solutions Group Plc is a public limited company incorporated and domiciled in England and Wales
and is AIM listed.
The address of the registered office is Unit 7&8 Fulcrum 4, Solent Way, Whiteley, Fareham, Hampshire PO15 7FT.
The Group financial statements have been prepared under the historical cost convention and approved by the Directors
in accordance with UK-adopted international accounting standards.
Going concern
The Group financial statements have been prepared on a going concern basis.
The Group’s activities are funded by long-term equity capital and by cash generated from trading. Further cash supporting
the business trading has become available from the disposal of the Vigilant business. With £3.6 million received to date
and a further £2.9 million due over the next 7 quarters.
In considering the ability of the Group to meet its obligations as they fall due, the Board has considered the expected
trading and cash requirements of the Group until the end of December 2025. The Board continues to be positive about
the retention of customers and the outlook of its trading operations. Profit and cash flow projections support the Board’s
view that the Group will meet its obligations as they fall due with the use of cash surpluses from trading.
Changes in accounting policies and disclosures
A) New and amended Standards and Interpretations applied
The following new and amended Standards and Interpretations have been issued and are effective for the current
financial period of the group. Their adoption has not had any material impact on the disclosures in, or on the amounts
reported in, these financial statements
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
Amendments to IAS 1 and IFRS Practice
Statement 2
Disclosure of Accounting Policies
Amendments to IAS 8
Definition of Accounting Estimates
Amendments to IAS 12
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
B) New and revised Standards and Interpretations in issue but not yet effective
These standards are effective for annual periods commencing on or after 1 January 2024. At the date of authorisation
of these financial statements, the group has not early adopted any of these amendments to Standards and
Interpretations that have been issued but are not yet effective.
These have been endorsed and adopted for use in the UK. The directors do not expect any material impact as a result
of adopting the standards.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
45
Amendments to IAS 1
Classification of Liabilities as Current or Non-
current
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
Amendments to IAS 1
Non-current liabilities with Covenants
Amendments to IAS 7 and IFRS 7
Supplier Finance Arrangements
Amendments to IAS 10 and IAS 28
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
The effect on the consolidated financial statements of the Group for these new standards, interpretations and
amendments has not yet been assessed.
Basis of consolidation
Where the Company has power over the investee; has exposure, or rights, to variable returns from its involvement
with the investee and has the ability to use its power over the investee to affect the amount of its returns, the
investee is classified as a subsidiary.
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if
they formed a single entity. Inter-company transactions and balances between Group companies are therefore
eliminated in full.
The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of
Profit or Loss from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Segment reporting
The Directors consider there to be two continuing operating segments namely ‘Croma Fire and Security’ which
comprises the business of CSS Total Security Limited, Safecell Security Ltd and The Safecell Security Group
Limited; and ‘Croma Locksmiths’, which comprises the business of Croma Locksmiths & Security Solutions
Limited, Basingstoke Locksmiths Limited, Safeguard (NW) Ltd, Southern Stronghold Limited, Authorized
Access Systems Limited and City Locks Limited.
The operating segments identified above are reported in a manner consistent with the internal reporting provided
to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the executive Directors
collectively.
Revenue recognition
Revenue is measured at the transaction price of the consideration received or receivable, and represents amounts
receivable for goods supplied, stated net of discounts, returns and value added taxes. The Group recognises
revenue when the amount of revenue can be reliably measured, when it is probable that future economic benefits
will flow to the entity, and when specific criteria have been met for each of the Group's performance obligations,
as described below.
•
Revenue in respect of security personnel services is recognised over the term of the contract or, where
sales contracts are on a “cost plus” basis, at the point at which manpower services have been provided.
•
Sale of goods is recognised at the point that the goods are delivered to a client on signature of a goods
received note or to a customer in one of our retail outlets which is the point that control of over the asset
is transferred.
•
Installation income is recognised straight line over the period of the installation.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
46
•
Maintenance and service fees are recognised when the service has been provided, which is typically
within a three-month period after the customer has been invoiced. Where the service has not been
provided at year end, this leads to contract liabilities which is held under ‘Accruals and contract
liabilities’ being part of ‘Trade and other payables’ in the consolidated statement of financial position.
•
Monitoring income is recognised over the term of the contract; customers are invoiced in advance for the
full contract term leading to contract liabilities which is also held under ‘Accruals and contract liabilities’
being part of ‘Trade and other payables’ in the consolidated statement of financial position.
Cost of sales
Cost of sales are the direct costs relating to customer generated revenue and comprise direct labour payroll costs,
other costs associated with direct labour, stock purchases, installation and subcontracted costs all sold on to
customers.
Intangible assets
(a)
Goodwill
Goodwill represents the excess of the cost of a business combination over the interest in the fair value of
identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair value of assets given,
liabilities assumed, and equity instruments issued.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the
consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and
contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated
statement of comprehensive income on the acquisition date.
(b)
Other intangible assets
Intangible assets acquired separately are carried initially at cost. An intangible asset acquired as part of a business
combination is recognised separately from goodwill if the asset is separable or arises from contractual or other
legal rights and its fair value can be measured reliably.
Intangible assets with a finite life are amortised on a straight-line basis over their expected useful life as follows:
•
Customer relationships
–
10 years
•
Brand royalties
–
4 years
•
R&D
–
3 years
•
Brands
–
10 years
•
Software licences
–
10 years
(c) Internally generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-
generated intangible asset arising from the Group's development activity is recognised only if all of the conditions
of IAS 38 are met.
Internally generated intangible assets are amortised on a straight-line basis over their useful lives. Where no
internally generated intangible asset can be recognised, development expenditure is recognised as an expense in
the period in which it is incurred.
Impairment testing
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken
annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value
of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset
is written down accordingly.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
47
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried
out on the asset’s cash-generating unit (i.e. the lowest group of assets in which the asset belongs for which there
are separately identifiable cash flows). Goodwill is allocated on initial recognition to each of the Group’s cash-
generating units that are expected to benefit from the synergies of the combination giving rise to the goodwill.
Impairment charges are included separately in the consolidated statement of comprehensive income. An
impairment loss recognised for goodwill is not reversed.
Business combinations
The consolidated financial statements incorporate the results of business combinations using the acquisition
method. In the consolidated statement of financial position, the acquiree’s identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired
operations are included in the consolidated statement of comprehensive income from the date on which control is
obtained.
Property, plant and equipment
Property, plant and equipment are stated at costs less depreciation. Depreciation is provided on all property, plant
and equipment at rates calculated to write off the cost of each asset less its estimated residual value evenly over
its estimated useful life, as follows;
Freehold property
-
4% on cost
Leasehold property
-
Over the term of the lease
Plant, computer and office equipment
-
Between 10% and 35% on cost
Motor vehicles
-
Between 20% and 35% on cost
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first
in first out basis together with costs in bringing it to its present condition and location. A provision is made at
the end of each financial year to provide for excessive loss in the value of stock held likely to be incurred in the
future through obsolescence, damage, expired shelf life, or lack of historic and future expected movement. Work
in progress and finished goods include attributable overheads. Net realisable value is based on estimated selling
price less additional costs to completion and disposal.
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity
shareholders, this is when interim dividends are paid. In the case of final dividends, this is when approved by the
shareholders at the AGM.
Taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity. Current income tax assets and/or liabilities comprise those obligations
to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting
date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation
of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the
reporting period.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement
of financial position differs from its tax base, except for differences arising on:
• the initial recognition of goodwill
• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time
of the transaction affects neither accounting or taxable profit
•investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the
reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
48
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be
available against which the difference can be utilised. The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the statement of financial position date and are expected
to apply when the deferred tax liabilities/ (assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax
assets and liabilities.
The deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
•
the same taxable Group company; or
•
different group entities which intend either to settle current tax assets and liabilities on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which significant
amounts of deferred tax assets or liabilities are expected to be settled or recovered.
Provisions for liabilities
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. Where the effect of the time value of money is material, the amount expected to be required to settle
the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is
recognised as a finance cost in the income statement in the period it arises.
Leased assets
A right of use asset and a lease liability has been recognised for all leases except leases of low value assets, which
are considered to be those with a fair value below £4,500, and those with a duration of 12 months or less. The
right-of-use asset has been measured at cost, which is made up of the initial measurement of the lease liability, any
initial direct costs incurred by the group, an estimate of any costs to dismantle and remove the asset at the end of the
lease, and any lease payments made in advance of the lease commencement date.
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the
earlier end of the useful life of the right-of-use asset or the end of the lease term. Where impairment indicators
exist, the right of use asset will be assessed for impairment.
The lease liabilities are measured at the present value of the lease payments due to the lessor over the lease term,
discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental
borrowing rate.
After initial measurement, any payments made will reduce the liability and the interest accrued will increase it.
Any reassessment or modification will lead to a remeasurement of the liability. In such case, the corresponding
adjustment will be reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced
to zero.
On the consolidated statement of financial position, right-of-use assets have been disclosed separately from
property, plant and equipment.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition
of a financial liability. The Group’s ordinary shares are classified as equity instruments.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
49
Share-based payments
The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the
form of shares or share options, is recognised as an employee benefit expense in the profit or loss within the
consolidated statement of comprehensive income.
The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair
value (excluding the effect of non-market-based vesting conditions) at the date of grant.
At the end of each reporting period the assumptions underlying the number of awards expected to vest are adjusted
for the effects of non- market-based vesting conditions to reflect the conditions prevailing at that date. The impact
of any revisions to the original estimates is recognised in the profit or loss within the consolidated statement of
comprehensive income, with a corresponding adjustment to equity.
Fair value is measured by the use of a Black- Scholes option pricing model. The expected life used in the model
has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations. When share options are exercised, the company issues new shares. The proceeds
received net of any directly attributable transaction costs are credited to share capital (nominal value) and share
premium.
Financial assets
Financial assets are trade receivables and other receivables.
Trade receivables are held in order to collect the contractual cash flows and are initially measured at the transaction
price as defined in IFRS 15, as the contracts of the Group do not contain significant financing components.
Impairment losses are recognised based on lifetime expected credit losses in profit or loss.
Other receivables within trade and other receivables in the Statement of Financial Position are held in order to
collect the contractual cash flows and accordingly are measured at initial recognition at fair value, which ordinarily
equates to cost and are subsequently measured at cost less impairment due to their short-term nature. A provision
for impairment is established based on 12-month expected credit losses unless there has been a significant increase
in credit risk when lifetime expected credit losses are recognised. The amount of any provision is recognised in
profit or loss.
Other receivables held within non-current assets in the Statement of Financial Position are held in order to collect
the contractual cash flows which are due after 12 months and are measured at initial recognition at fair value,
which ordinarily equates to cost and are subsequently measured at cost less impairment The amount of any
provision for impairment is recognised in profit or loss.
The Group de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another entity. Where the Group has transferred trade receivables under invoice discounting arrangements and it
retains substantially all the risks and rewards of ownership of the transferred trade receivables, the Group continues
to recognise the trade receivables and also recognises a liability for the proceeds received.
Financial liabilities
Trade payables and other short-term monetary liabilities are initially recognised at their fair value and
subsequently at their amortised cost.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
50
Capital management
The Group manages capital to safeguard its ability to continue as a going concern with the aim of strengthening
its capital base to provide returns to shareholders. Excluding credit card and lease liabilities the Group has no
short or long-term debt.
The Group considers its capital to comprise its ordinary share capital, share premium, merger reserve, and
accumulated retained earnings.
Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand and deposits held at
call with banks.
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other short-term
highly liquid investments with original maturities of three months or less.
Discontinued operations
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be
clearly distinguished from the rest of the Group, and which represents a separate major line of business operation.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria
to be classified as held-for-sale under IFRS 5.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI
is re-presented as if the operation had been discontinued from the start of the comparative year.
Disposal of subsidiaries
At the date of disposal of a subsidiary all assets and liabilities of the disposed subsidiary are derecognised in the
financial statements.
The fair value of consideration is recognised in the financial statements and any resulting gain or loss in profit or
loss attributable to the parent.
2. Critical Accounting Estimates and Judgements
The Group makes certain estimates and judgements regarding the future. Estimates and judgements are
continually evaluated based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. In the future, actual experience may differ from these
estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Estimates and assumptions:
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units
to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the future
cashflows expected to arise from the cash generating unit. In order to derive the present value, the discount rate
that has been calculated is 15% (FY23:16%).
The carrying amount of goodwill at the consolidated statement of financial position was £5,042k. Details relating
to the allocation of goodwill to cash generating units are given in note 12. Based on the review performed by the
directors at the year-end, the goodwill required no impairment (FY23: £0k).
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
51
Stock provision
A stock provision is estimated based upon a formula that has been judged fair for the industry which calculates
slow moving stock. This formula works on the basis of the quantity of an item we have in stock against the
projected number of years required to sell it, based on our sales data. The stock provision for FY24 is £206k
(FY23: 344k) as per note 17.
Property dilapidations
Provisions for leasehold property dilapidation repairs are recognised when the Group has a present obligation to
carry out dilapidation work on the leasehold premises before the property is vacated. The amount recognised as
a provision is the best estimate of the costs required to carry out the dilapidations work. Factors that are
considered:
•
Historical Condition Reports: Reviewing past condition assessments to understand the typical wear and tear
associated with similar properties.
•
Pro-Rata Basis: Allocating costs proportionally based on the duration of the lease to ensure a fair and accurate
estimate.
The provision for FY24 is £161k (FY23: £190k) as per note 21.
The Directors do not consider there to be any key areas of judgement.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
52
3. Segmental reporting
Croma
Vigilant
(Guarding)
Croma Fire
and Security
Croma
Locksmiths
(Locks)
Central
Total
£000s
£000s
£000s
£000s
£000s
2024 Business Segments
Segment revenues
-
3,799
5,095
-
8,894
Inter-segment revenue
-
(81)
(76)
-
(157)
Revenue from external customers
-
3,718
5,019
-
8,737
Gross profit
-
1,998
2,072
-
4,070
Administrative expenses
-
(1,270)
(1,076)
(666)
(3,012)
Amortisation
-
-
(60)
(2)
(62)
Depreciation
-
(174)
(218)
-
(392)
Other operating income
-
-
3
-
3
Operating profit/(loss) before impairment
-
554
721
(668)
607
Profit/(loss) on disposal
-
-
-
-
-
Operating profit/(loss) before impairment
-
554
721
(668)
607
EBITDA
-
728
999
(666)
1,061
Segment assets
-
2,740
6,037
9,292
18,069
Segment (liabilities)
-
(1,003)
(1,131)
(711)
(2,845)
Segment net assets
-
1,737
4,906
8,580
15,224
Additions to non-current assets
-
239
668
7
914
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
53
Vigilant is a discontinued operation that was disposed of during the year 30 June 2023.
Croma
Vigilant
(Guarding)
Croma Fire
and Security
Croma
Locksmiths
(Locks)
Central
Total
(as restated)
(as restated)
(as restated)
(as restated)
(as restated)
£000s
£000s
£000s
£000s
£000s
2023 Business Segments
Segment revenues
-
3,480
4,696
-
8,176
Inter-segment revenue
-
(118)
(33)
-
(151)
Revenue from external customers
-
3,362
4,663
-
8,025
Gross profit
-
1,683
2,007
-
3,690
Administrative expenses
-
(1,057)
(1,043)
(639)
(2,739)
Amortisation
-
-
(60)
-
(60)
Depreciation
-
(179)
(288)
-
(467)
Other operating income
-
-
3
-
3
Operating profit/(loss) before impairment
-
447
619
(639)
427
Profit from discontinued operations
465
-
-
3,069
3,534
Operating profit/(loss) before impairment
465
447
619
2,430
3,961
EBITDA from continuing operations
-
630
970
(646)
954
Segment assets
-
2,805
4,201
10,712
17,718
Segment (liabilities)
-
(1,010)
(1,141)
(416)
(2,567)
Segment net assets
-
1,795
3,060
10,296
15,151
Additions to non-current assets
-
202
403
-
605
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
54
There is no revenue from non-UK sources.
There were no customers where revenue was greater than 10% of the total (FY23: 0).
3. Segmental reporting (continued)
An analysis of revenue by type is shown below:
Revenues from UK sources
2024
2023
£000s
£000s
Sales of goods and installation services
7,691
7,334
Monitoring maintenance and service fees
860
592
Web shop
186
99
8,737
8,025
The following is an estimate of future revenues arising from unsatisfied performance
obligations based on contract renewal and projected monthly billing:
2024
2023
£000s
£000s
To be satisfied in the next financial year
359
299
359
299
4. Expenses
2024
2023
£000s
£000s
Amount of inventory expensed as cost of sales
3,387
3,359
Depreciation - owned assets
239
331
Depreciation - right of use assets
153
136
Amortisation
62
60
Auditors' remuneration:
Audit of parent company and consolidated financial information
60
76
5. Financial expenses
2024
2023
£000s
£000s
Interest on lease liabilities
27
24
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
55
6. Financial income
2024
2023
£000s
£000s
Interest receivable
217
-
7. Staff and staff costs
Continuing operations
The average monthly number of persons (including Directors) employed
2024
2023
by the Group during the period was:
No.
No.
Management and administration
32
28
Service and product provision
55
44
87
72
Staff cost (for the above persons):
£000s
£000s
Wages and salaries
2,821
2,514
Pension
68
50
Social security costs
272
250
3,161
2,814
Discontinued operations
The average monthly number of persons (including Directors) for Vigilant for
2024
2023
the period was:
No.
No.
Management and administration
-
41
Service and product provision
-
957
-
998
Staff cost (for the above persons):
£000s
£000s
Wages and salaries
-
27,828
Pension
-
536
Social security costs
-
2,767
-
31,131
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
56
10,000 share options were granted to directors during the year (FY23: nil) and no share options were exercised in
the period (FY23: nil). The total outstanding share options held by the directors at the year-end is 12,000 (FY23:
2,000). The number of exercisable share options held by directors at the year-end is nil (FY23: nil).
Key management personnel compensation payable to the Directors including employers National Insurance,
comprises short-term employee benefits which total £535k (FY23: £649k) and long-term employee benefits which
total £16k (FY23: £15k).
8. Directors' and key management personnel remuneration
2024
Salary and
bonus
Estimated value
of benefits
Pension
Total
£000s
£000s
£000s
£000s
R M Fiorentino
246
4
-
250
T Andreeva
150
3
8
161
J Haigh
50
-
8
58
S Naylor
28
-
-
28
474
7
16
497
2023
Salary and
bonus
Estimated value
of benefits
Pension
Total
£000s
£000s
£000s
£000s
S J F Morley
77
4
2
83
R M Fiorentino
250
4
-
254
P Williamson
75
1
1
77
R A Juett
55
2
11
68
A N Hewson
25
3
-
28
C McMicking
25
-
-
25
T Andreeva
47
1
1
49
J Haigh
13
-
-
13
S Naylor
4
-
-
4
571
15
15
601
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
57
The standard rate of corporation tax in the UK of 25% (2023: 25%).
10. Earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders, from
continuing operations, divided by the weighted average number of shares in issue during the year, calculated on a
daily basis.
The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the issue
of shares and the post-tax effect of dividends and interest on the assumed conversion of all other dilutive options
and other potential ordinary shares.
9. Taxation
2024
2023
£000s
£000s
Analysis of the tax charge in the year
Current year tax charge
UK corporation tax charge on profit for the year
191
200
Adjustments for prior periods
-
-
Total current tax
191
200
Deferred tax
Current year
63
37
Adjustments for prior periods
-
-
Total deferred tax
63
37
Tax on profit on ordinary activities
254
237
2024
2023
(as restated)
£000s
£000s
Profit before taxation
797
403
Profit multiplied by the standard rate of corporation tax of 25% (2023: 25%)
199
101
Effects of:
Expenses not deductible for tax purposes
55
136
Total tax charge for the year
254
237
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
58
11. Dividends
A final dividend of 2.2p was declared for the year ended 30 June 2023 on 6 November 2023 and paid on 15 December
2023 at a cost of £0.3m. Subject to approval at the AGM, the Board recommends a final dividend of 2.3p per share
for the year ended 30 June 2024.
Continued and discontinued operations
2024
2023
£000s
£000s
Numerator
Earnings for the year used in basic and diluted EPS
543
3,700
Denominator
Weighted average number of shares used in basic and diluted EPS (000s)
13,766
14,902
Pence
Pence
Basic and diluted earnings per share
3.95
24.83
Continued operations
2024
2023
(as restated)
£000s
£000s
Numerator
Earnings for the year on continuing operations and used in basic and diluted EPS
543
166
Denominator
Weighted average number of shares used in basic and diluted EPS (000s)
13,766
14,902
Pence
Pence
Basic and diluted earnings / (loss) per share
3.95
1.11
Discontinued operations
2024
2023
(as restated)
£000s
£000s
Numerator
Earnings for the year on discontinuing operations and used in basic and diluted EPS
-
3,534
Denominator
Weighted average number of shares used in basic and diluted EPS (000s)
13,766
14,902
Pence
Pence
Basic and diluted earnings / (loss) per share
-
23.71
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
59
12. Business combinations (acquisitions)
As part of the Group’s continuing strategy to expand the network of security centres, on 2 January 2024 Croma
Locksmiths and Security Solutions Limited acquired a business comprising 100% of the share capital of City
Locks Limited, a business trading out of Peterborough.
Transaction costs of £15k relating to the acquisition of City Locks Limited have been recognised as an expense and
included within administrative expenses in the statement of profit or loss.
City Locks Limited contributed £139k to the Group’s revenue and £35k to the Group’s profit before tax for the
period from the date of acquisition to the year-end date. If the acquisition of City Locks Limited had been
completed on the first day of the financial year, this would have added £281k to the Group’s revenue and £56k to
Group profit before tax.
The book values of the assets and liabilities acquired at the acquisition date were considered to be approximate of
their fair values.
In addition to the above acquisition, on 2 January 2024, the Group acquired the assets and customer relationships
of Attle Locksmiths, a partnership operating out of Worthing for the value of £43k.
The fair value of net assets acquired is set out below:
£000s
Purchase consideration (satisfied entirely by cash)
30
Less: The fair value of assets acquired
Property, plant and equipment
43
Inventories
20
Trade and other receivables
16
Cash and cash equivalents
-
Add: the fair value of liabilities
Trade and other payables
(49)
Goodwill
-
-
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
60
Transaction costs of £1k relating to the business purchase of Attle Locksmiths have been recognised as an expense
and included within administrative expenses in the statement of profit or loss.
This addition contributed £71k to the Group’s revenue and £6k to the Group’s profit before tax for the period from
the date of acquisition to the year-end date. If the acquisition of Attle Locksmiths had been completed on the first
day of the financial year, this would have added £142k to the Group’s revenue and £12k to Group profit before tax.
The book values of the assets and liabilities acquired at the acquisition date were considered to be approximate of
their fair values.
The fair value of net assets acquired is set out below:
£000s
Purchase consideration (satisfied entirely by cash)
43
Less: The fair value of assets acquired
Property, plant and equipment
28
Vehicles
1
Inventories
14
Goodwill
-
-
13. Goodwill
Cost
£000s
At 1 July 2023
6,526
At 30 June 2024
6,526
Accumulated impairment losses
At 1 July 2023
(1,484)
at 30 June 2024
(1,484)
Net book value
At 1 July 2023
5,042
At 30 June 2024
5,042
Impairment testing
2024
2023
£000s
£000s
The carrying value of goodwill by each CGU is as follows:
Croma Fire and Security
2,620
2,620
Croma Locksmith
2,422
2,422
5,042
5,042
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
61
Forecasts, growth and discount rates
The recoverable amount relating to Croma Fire and Security and Croma Locksmiths was determined based on
value-in-use calculations, covering a detailed forecast for the five-year period to 30 June 2029, followed by
extrapolation of expected cashflows for the remaining useful lives using a 2% growth rate. Forecasts are based on
management’s best estimate of future growth based on combination of their past experience and knowledge of the
business. The present value for the expected cashflows was determined using a pre-tax discount rate of 15% (FY23:
16%) which is based on a number of factors including the risk-free rates in the UK (using the yield from 20 year
gilts, with a nominal zero coupon, as at 30 June 2024), the Group’s estimated market risk premium, the anticipated
future rates of corporation tax and a premium to reflect the size of the Group and the current uncertain economic
environment.
Cashflow assumptions
Croma Fire and Security
As noted above for the year ended 30 June 2024 we have retained all our major customers, whilst also gaining new
work during this period. We achieved our revenue growth forecasts for the year ended 2024 and have forecast 5%
increase in turnover for the year ending 30 June 2025.
For the period from 1 July 2025 to 30 June 2029 the following assumptions have been made:
•
Revenue growth of 4.25%
(FY23: 4.25%) per annum
•
Direct cost growth of 3.69%
(FY23: 3.69%) per annum
•
Overheads growth of 3.30%
(FY23: 3.30%) per annum
For the year ended 30 June 2029 onwards, revenues less costs are assumed to increase by 2% per annum.
The net present value of future cashflows is £6,454k which when compared to the carrying value of goodwill has
resulted in an impairment loss of £0k (FY23: £0k).
Croma Locksmiths
During the year to 30 June 2024 sales increased by 8.5% due to acquisition and organic growth. For the year ended
30 June 2025 we continue to forecast positive growth of 2% in sales from our existing locksmith businesses and from
iLOQ for which we continue to receive strong customer interest.
For the period from 1 July 2025 to 30 June 2029 the following assumptions have been made:
• Revenue growth of 4.25%
(FY23: 4.25%) per annum
• Direct cost growth of 3.69 %
(FY23: 3.69%) per annum
• Indirect costs growth of 3.02% (FY23: 2.99%) per annum
For the year ended 30 June 2029 onwards, revenues less costs are assumed to increase by 2% per annum.
The net present value of future cashflows is £8,178k which when compared to the carrying value of goodwill has
resulted in an impairment loss of £0k (FY23: £0k).
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
62
Sensitivities
The discount rate used decreased by 1% from 16% in 2023 to 15% in 2024, this is determined by a reduction in
business risks.
The Directors have applied sensitivity analysis to future cashflows to estimate the likelihood of future impairment.
The cashflow forecasts for Croma Locksmiths and Croma Fire and Security are sensitive to changes in the discount
rate and to long term revenue growth.
In Croma Locksmiths for example, for each 0.1% increase in the discount rate, the value of future cashflows reduces
by approximately £284k and for each 0.1% decrease in the long-term revenue growth rate the value of future
cashflows reduces by approximately £375k.
In Croma Fire and Security for example, for each 0.1% increase in the discount rate, the value of future cashflows
reduces by approximately £224k and for each 0.1% decrease in the long-term revenue growth rate the value of
future cashflows reduces by approximately £296k.
The amortisation expense of £62k (FY23: £60k) has been categorised as an administrative expense in the Consolidated
Statement of Comprehensive Income. At the year end the Directors reviewed intangible assets for impairments.
Customer relationships
Customer relationships extant the date of acquisition were considered. A forecast was prepared for future gross revenues
from the relationships after giving due consideration to historic attrition rates. A discount rate of 15% (2023:16%) was
then applied to give the present value of these future cashflows. Customer relationships relate to Croma Locksmith.
No impairment adjustment has been found to be necessary against the carrying value of customer relationships acquired
with the business of Croma Locksmiths & Security Solutions Limited. The useful lives as noted in the accounting
policies were considered appropriate. Customer relationships with a net book value of £85k (FY23: £145k) have a
remaining life of less than 2 years.
14. Other intangible assets
R&D
Customer
relationships
Brands
Software
licences
Brand
royalties
Total
£000s
£000s
£000s
£000s
£000s
£000s
Cost
At 30 June 2022
86
1,727
295
224
31
2,363
Additions
-
-
-
-
-
-
At 30 June 2023
86
1,727
295
224
31
2,363
Additions
-
-
-
-
-
-
At 30 June 2024
86
1,727
295
224
31
2,363
Accumulated amortisation
At 30 June 2022
86
1,522
295
222
31
2,156
Charge for the year
-
60
-
-
-
60
At 30 June 2023
86
1,582
295
222
31
2,216
Charge for the year
-
60
-
2
-
62
At 30 June 2024
86
1,642
295
224
31
2,278
Net book value
At 1 July 2023
-
145
-
2
-
147
At 30 June 2024
-
85
-
-
-
85
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
63
15. Property, plant and equipment
Property
Plant and
office
equipment
Motor
vehicles
Total
£000s
£000s
£000s
£000s
Cost
At 30 June 2022
1,125
1,169
567
2,861
Additions
153
155
103
411
Additions from acquisitions
420
44
51
515
Disposals
(80)
(556)
(216)
(852)
At 30 June 2023
1,618
812
505
2,935
Additions
440
72
281
793
Additions from acquisitions
-
71
1
72
Disposals
-
-
-
-
At 30 June 2024
2,058
955
787
3,800
Depreciation
At 30 June 2022
159
913
312
1,384
Charge for the year
99
131
101
331
On disposal
(47)
(499)
(184)
(730)
At 30 June 2023
211
545
229
985
Charge for the year
37
89
113
239
On disposal
-
-
-
-
At 30 June 2024
248
634
342
1,224
Net book value
At 1 July 2023
1,407
267
276
1,950
At 30 June 2024
1,810
321
445
2,576
16. Right of use assets
Property
Motor
vehicles
Total
£000s
£000s
£000s
Cost
At 30 June 2022
1,606
352
1,958
Additions
-
-
-
Disposals
(586)
(255)
(841)
At 30 June 2023
1,020
97
1,117
Additions
49
-
49
Disposals
-
-
-
At 30 June 2024
1,069
97
1,166
Depreciation
At 30 June 2022
658
180
838
Charge for the year
127
9
136
On disposal
(397)
(116)
(513)
At 30 June 2023
388
73
461
Charge for the year
139
14
153
On disposal
-
-
-
At 30 June 2024
527
87
614
Net book value
At 1 July 2023
632
24
656
At 30 June 2024
542
10
552
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
64
Included in the finished goods, raw material and consumables amount above is a stock provision at the year-end
of £206k (FY23: £344k). The stock figure in June 2023 was made up of a large stock provision amount from
acquisitions.
The balance of ‘Other receivables' due within 1 year relates entirely from the disposal of Vigilant, of which we
have received £2.1 million post year end.
The balance of ‘Total trade and other receivables’ due after 1 year relates entirely to the balance due from the
disposal of Vigilant.
Owing to the short-term nature of the trade receivables, their fair value is the same as the book value. A provision
for impairment of trade receivables is established using an expected loss model. Expected loss is calculated from
a provision matrix based on the expected lifetime default rates and estimates of loss on default. There was no
provision for impairment of trade receivables at 30 June 2024 (FY23: £0)
In the view of the Board the level of credit risk remains low, due to a wide mix of clients in different trade sectors.
The maximum exposure to credit risk at the reporting date is the carrying value of each class or receivable set out
above.
17. Inventories
2024
2023
£000s
£000s
Finished goods, raw materials and consumables
1,119
947
Work in progress
84
159
1,203
1,106
18. Trade and other receivables
2024
2023
£000s
£000s
Trade receivables
1,247
1,139
Allowance for bad debts
-
-
Net trade receivables
1,247
1,139
Other receivables
3,365
2,307
Prepayments
206
105
Total trade and other receivables due within 1 year
4,818
3,551
Total trade and other receivables due after 1 year
1,651
3,122
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
65
Age profile
2024
2023
£000s
£000s
Debts not past due date
657
640
30-60 days
285
295
60-90 days
184
117
Over 90 days
121
87
1,247
1,139
Debtor days
43
43
19. Categories of financial assets
2024
2023
£000s
£000s
Loans and receivables
Trade and other receivables
4,612
3,446
Cash at bank and in hand
2,142
2,144
6,754
5,590
20. Trade and other payables
2024
2023
£000s
£000s
Trade payables
921
621
Other payables
-
-
921
621
Other taxes and social security
270
222
Corporation tax liability
217
228
Accruals and deferred income
468
493
1,876
1,564
Total trade and other payables, excluding lease liabilities due within 1 year
21. Provisions
2024
2023
£000s
£000s
Provisions for leasehold property dilapidations
161
190
161
190
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
66
22. Leases
The Group has lease contracts for property, vehicles and other assets which have lease terms varying between 1 and
10 years. The Group also has certain leases with lease terms of 12 months or less and leases of office equipment
with low value; these leases have been expensed in accordance with the practical expedients permitted under IFRS
16.
Contracts may contain both lease and non-lease components. The Group allocates consideration between lease and
non-lease components based on the price a lessor. Or similar supplier, would charge to purchase that component
separately.
The lease terms begin at the commencement date and includes any rent-free periods provided by the lessor. Lease
terms vary between contracts and depend on the individual facts and circumstances of the contract.
Lease liabilities are measured at the present value of the remaining lease payments, discounted using the Group’s
incremental borrowing rate at 30 June 2024. The Group’s incremental borrowing rate is that rate at which a similar
borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted
average rate applied was 3.5% (FY23: 3.5%).
Leases
2024
2023
£000s
£000s
Minimum lease payments fall due as follows:
Gross obligation repayable
Within 1 year
136
134
Between 1 and 5 years
474
533
Over 5 years
20
61
Net obligations repayable:
Within 1 year
114
114
Between 1 and 5 years
418
486
Over 5 years
59
59
477
545
Amounts recognised in the consolidated statement of comprehensive income:
Interest on lease liabilities
27
24
Amounts recognised in the consolidated statement of cash flows:
Payments to reduce lease liabilities
117
374
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
67
Interest rate risk
This is not a material risk since the Group has no bank borrowings. Currently surplus cash is invested in quick access
interest bearing accounts to take advantage of the favourable interest rates and improve the cash position until it is required
for future acquisitions.
Liquidity risk
The Group has sufficient liquid resources to meet the operating needs of the business as per its current forecasts. As we
progress with our acquisition strategy, a need for debt finance may arise. The Group monitors liquidity ratios on a
monthly basis.
23. Interest rate and liquidity risk
2024
Weighted
average
effective
interest rate
Less than 1
month or on
demand
1-12 months
After 1 year
Total
%
£000s
£000s
£000s
£000s
Fixed rate
Trade and other payables
921
-
-
921
Lease obligations
3.5%
-
136
494
630
Accruals
-
270
-
270
Total
921
406
494
1,821
2023
Weighted
average
effective
interest rate
Less than 1
month or on
demand
1-12 months
After 1 year
Total
%
£000s
£000s
£000s
£000s
Fixed rate
Trade and other payables
103
60
-
163
Lease obligations
3.5%
-
134
594
728
Accruals
-
384
-
384
Total
103
578
594
1,275
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
68
At 30 June 2024 deferred tax has been provided at a rate of 25% (2023: 25%)
The Group has tax losses of approximately £1.8m (FY23: £1.8m) to carry forward which could not be utilised
against trading profits. The potential deferred tax asset arising on these tax losses of £450k (FY23: £450k) has not
been recognised as it is doubtful that it will be utilised in the foreseeable future as historically, the Croma Group
has accumulated tax losses. These historic tax losses can only be utilised if the parent company itself generates
trading profits in the current period.
The Group operates the CSSG Share Option Scheme 2014 (the Scheme), which is a share option scheme approved by
HMRC.
The Board keep the scheme under review, and consider new options to motivate, retain and recruit high calibre
employees and with regard to the contribution that such employees are expected to make in achieving the Group’s
objectives.
During the year 51,000 new options were issued and there were 66,500 options outstanding at 30 June 2024.
24. Deferred tax
2024
2023
£000s
£000s
The movement on the deferred tax account is shown below:
At 1 July
154
117
Charged to the statement of comprehensive income
63
37
At 30 June
217
154
The deferred tax provision at 30 June comprises the following temporary differences:
Capital allowance in advance of depreciation
217
125
Arising on fair value adjustments recognised on business combinations
-
47
Other short term temporary differences
-
(18)
217
154
25. Share capital
2024
2023
£000s
£000s
Authorised, allotted, called up and fully paid:
Other ordinary shares of 5 pence each
794
794
Number
Number
000s
000s
Issued and fully paid
Ordinary shares of 5 pence each at the start and end of the year
15,899
15,899
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
69
Details of share options outstanding during the year for the Group’s share option scheme are as follows:
The share options outstanding at 30 June 2024 had a weighted average remaining contractual life of 1.4 years
(FY23: 1.4 years). There were no share options exercised during the year (FY23: 0).
During the year, 51,000 share options were issued. The details of these options and their fair value at the grant
dates are detailed below. The fair value of the options at the grant dates were calculated using the Black-Scholes
model.
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the
previous 5 years. The expected life used in the model has been adjusted, based on management’s best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural considerations.
The closing price of the Company’s shares at the year-end was £0.725.
In FY24, there has been no charge recognised in the Consolidated Statement of Comprehensive Income with
respect to share options. This mirrors the previous financial year of 2023, where the charge recognised was also £0,
owing to the insignificance of the values involved.
If the share options had been charged for the financial year 2024, the amount would have been £5k (FY23: £3k).
Number of share
options
Weighted average
exercise price (£)
Options outstanding at 30 June 2023
40,500
0.94
Granted during the year
51,000
0.49
Lapsed during the year
(25,000)
0.70
Exercised during the year
-
-
Options outstanding at 30 June 2024
66,500
0.68
Share options exercisable at the end of the year were:
Number of share
options
Weighted average
exercise price (£)
Options exercisable at 1 July 2022
-
-
Options exercisable at 30 June 2023
-
-
Options exercisable at 30 June 2024
-
-
14-Jul-23
10-Nov-23
Share price at grant date (£)
0.48
0.54
Exercise price (£)
0.48
0.54
Expected volatility
30%
30%
Expected option life
3 years
3 years
Risk-free interest rate
5.30%
5.30%
Fair value at grant date (£)
£0.10
£0.12
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
70
26. Reserves
Reserve
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value less related
professional and regulatory fees.
Merger reserve
The merger reserve arose on the acquisition of the CSS Group to the extent
that this was funded by the issue of new shares.
Retained Earnings
Cumulative net gains and losses recognised in the statement of comprehensive
income less amounts distributed to shareholders.
Capital Redemption Reserve
The capital redemption reserve arose on the purchase and cancellation of own
shares.
Ordinary Shares
Amount subscribed for share capital at nominal value.
Treasury Shares Reserve
Arose on the purchase of own shares.
27. Related party transactions
Identity of related parties
The Parent Company has a controlling related party relationship with its subsidiary companies. The Group has a
related party relationship with its directors, executive officers, pension funds and trusts, who with their immediate
relatives control 29% of the voting shares.
Rental of Premises
R M Fiorentino and his family are beneficiaries of the County Access Systems Limited Retirement Benefits Scheme
from which the Group leases trading and ex-trading premises. The total rental on these premises was £86k (FY23:
£86k) and in respect of these leases, £212k (FY23: £248k) is included in lease liabilities on 30 June 2024.
Salaries paid to close family members
During the year, salaries totalling £60k (FY23: £74k) were paid to close family members of key management
personnel.
Services provided by close family members
During the year services totalling £5k (FY23: £0) were provided by close family member of a director. There was no
outstanding balance at the year end. All transactions were conducted on an arm's length basis and in accordance with
our corporate governance protocols to ensure fairness and transparency.
Intercompany trading with shared board members
During the year, Safecell Security Limited provided services for the value of £14k (FY23: £0) to Fresh Start Waste
Services Limited, with whom the Group share a common board member. The year end balance was £1k (FY23: £0).
All transactions were conducted on an arm's length basis and in accordance with our corporate governance protocols
to ensure fairness and transparency.
Directors’ remuneration for the year is disclosed above in Note 8.
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
71
31. Contingent liabilities
There are no contingent liabilities either at the year-end or up to the date of signing the financial statements.
32. Subsidiary audit exemption
The wholly owned subsidiaries of Croma Security Solutions Group Plc: CSS Total Security Limited, CSS
Locksmiths Limited, Croma Locksmiths and Security Solutions Limited, Safeguard (N/W) Limited, Basingstoke
Locksmiths Limited, Southern Stronghold Limited and The Safecell Security Group Limited and its subsidiaries
Safecell Security Limited, Authorized Access Systems Limited and City Locks Limited are exempt from the
requirements of Companies Act 2006 relating to the audit of individual accounts by virtue of section 479A.
28. Notes supporting the cash flow statement
2024
2023
£000s
£000s
Net changes in working capital
(Increase)/decrease in inventories
(63)
98
Decrease/ (increase) in trade and other receivables
(317)
(2,260)
Increase in trade and other payables
244
2,084
(136)
(78)
29. Cash and cash equivalents
2024
2023
£000s
£000s
Cash at bank and in hand
2,142
2,144
30. Reconciliation of liabilities arising from financing activities
Lease
liabilities
Credit card
liabilities
Total
At 30 June 2022
1,141
31
1,172
New lease liabilities
-
-
-
Lease liability disposals
(132)
-
(132)
Cash flows
(350)
(31)
(381)
At 1 July 2023
659
-
659
New lease liabilities
49
-
49
Lease liability disposals
-
-
-
Cash flows
(117)
-
(117)
At 30 June 2024
591
-
591
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
72
33. Discontinued operations
Vigilant Security (Scotland) Limited, a wholly owned subsidiary, was discontinued with effect from 30 June 2023. The
results of these discontinued activities were as follows:
The results from the discontinued operation of the group for the year ended 30th June 2023 have been re-
presented, as required by IFRS 5, so that the disclosures relate to all operations that been discontinued by
30th June 2023 for all periods presented.
During the year the discontinued operation paid £0k (FY23: £188k) to the group's net operating cash flows,
received £nil (FY23: £nil) in respect of investing activities and paid £nil (FY23: £1,183k) in respect of financing
activities.
Goodwill of £1,396k in relation to discontinued operations was written off in the year to 30th June 2023.
2024
2023
£000s
£000s
Profit/(loss) on disposal of discontinued operations
-
3,069
Profit/(loss) after taxation
-
3,069
2024
2023
(as restated)
£000s
£000s
Revenue
-
34,802
Cost of sales
-
(30,432)
Gross profit
-
4,370
Administrative expenses
-
(3,915)
Other operating income
-
10
Operating profit
-
465
Taxation
-
-
Profit after tax
-
465
Profit on disposal
-
3,069
Profit after tax for the year from discontinued operations
-
3,534
Earnings per share
Basic and diluted earnings per share (pence) from discontinued operations
-
23.71
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CROMA SECURITY SOLUTIONS GROUP PLC
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
73
34. Post balance sheet events
As part of the deferred consideration owed to the Group from the £6.5 million sale of Vigilant, the following
payments were received subsequent to June 2024:
•
£0.46 million on 1 July, related to the repayment of loan notes and interest.
•
£1.3 million on 4 July, related to the purchase of the outstanding redeemable shares by Vigilant.
•
£0.45 million on 30 September, as the next instalment of loan notes and interest.
35. Restatement of consolidated statement of comprehensive income
In the financial statements for FY23 EPS for basic and diluted earnings per share (pence) from continuing
operations was stated as 21.70p and was calculated based on the continuing operations generating £3,235k
(continuing operations profit amounting to £166k plus disposal profit amounting to £3,069k). The restatement
has reclassified the profit on disposal of £3,069k as discontinued operations and therefore, the restated EPS
amounts to 1.11p based on the restated profit from continuing operations amounting to £166k. The profit before
tax has reduced from £3,472k to £403k as a result of the profit on disposal of £3,069k being reclassified as
discontinued operations.
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74
Company Registration No. 03184978
CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY FINANCIAL STATEMENTS
AS AT 30 JUNE 2024
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
75
Company profit for the year totalled £336k (2023: £6,276k). As permitted by section 408 of the Companies Act 2006, a
separate profit and loss account has not been presented for the holding company.
The financial statements were approved by and authorised for issue by the Board of Directors on 1 November 2024 and
signed on their behalf by:
Roberto Fiorentino
Director
Croma Security Solutions Group Plc – Company no. 03184978
Notes
2024
2023
£000s
£000s
Assets
Non-current assets
Investment
E
6,940
6,940
Trade and other receivables
F
1,651
3,122
8,591
10,062
Current assets
Trade and other receivables
F
5,224
3,204
Cash and cash equivalents
1,490
2,068
6,714
5,272
Total assets
15,305
15,334
Liabilities
Current liabilities
Trade and other payables
G
(754)
(649)
(754)
(649)
Net assets
14,551
14,685
Issued capital and reserves attributable to owners of the parent
Share capital
H
794
794
Treasury shares
(946)
(778)
Share premium
6,133
6,133
Merger reserves
2,139
2,139
Capital redemption reserve
51
51
Retained earnings
6,380
6,346
Total equity
14,551
14,685
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CASHFLOWS
FOR THE YEAR END 30 JUNE 2024
76
Notes
2024
2023
£000s
£000s
Cash flows from operating activities
Profit before taxation
336
6,275
Net changed in working capital
J
(982)
536
(Profit) on sale of subsidiaries
-
(5,102)
Impairment losses
-
-
Net cash (used in) / generated from operations
(646)
1,709
Cash flows from investing activities
Proceeds on disposal of subsidiaries
538
670
Net cash used in investing activities
538
670
Cash flows from financing activities
Treasury shares acquired
(168)
-
Dividends paid
(302)
(314)
Net cash used in financing activities
(470)
(314)
Net (decrease)/increase in cash
(578)
2,065
Cash and cash equivalents at beginning of period
2,068
3
Cash and cash equivalents at end of period
1,490
2,068
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
77
Attributable to owners of parent
Share capital
Capital
redemption
reserve
Treasury shares Share premium
Merger reserve
Retained
earnings
Total equity
£000s
£000s
£000s
£000s
£000s
£000s
£000s
At 1 July 2022
794
51
(399)
6,133
2,139
385
9,103
Treasury shares acquired
-
-
(379)
-
-
-
(379)
Profit for the year
-
-
-
-
-
6,275
6,275
Dividends paid
-
-
-
-
-
(314)
(314)
At 30th June 2023
794
51
(778)
6,133
2,139
6,346
14,685
Treasury shares acquired
-
-
(168)
-
-
-
(168)
Profit for the year
-
-
-
-
-
336
336
Dividends paid
-
-
-
-
-
(302)
(302)
At 30th June 2024
794
51
(946)
6,133
2,139
6,380
14,551
ENV64075861-3623-FDED-1292-EABC
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
78
A. Significant accounting policies
Croma Security Solutions Group Plc is a public limited company incorporated and domiciled in England and Wales
and is AIM listed.
The address of the registered office is Unit 7&8, Fulcrum 4, Solent Way, Whiteley, Fareham, Hampshire PO15 7FT.
Basis of accounting
The separate financial statements of the Company have been prepared under the historical cost convention and in
accordance with Financial Report Standard 102. The Financial Reporting Standard applicable in the United Kingdom
and the Republic of Ireland and the Companies Act 2006.
The principal accounting policies are summarised below. They have all been applied consistently throughout the
year and the preceding year.
Going Concern
These financial statements have been drawn up on the going concern basis.
The Company made an operating profit for the year of £336k (FY23: £6,276k) Dividends of £800k were received
from its subsidiary undertakings (FY23: £1,800k)
The Company's activities are funded by long-term equity capital and by profits and cash generated from the activity of
a holding company.
The financial statements do not reflect the adjustments that would be necessary were the performance of the
Company to deteriorate. However, the Directors have considered the expected cash requirements of the Company
until 31 December 2025 and these projections suggest that the Company will meet its obligations as they fall due at
least until this date.
Investments
Fixed asset investments in subsidiaries are shown at cost less provision for impairment.
Financial instruments
Financial assets and financial liabilities are recognised on the Company's statement of financial position when the
Company becomes a party to the contractual provision of the instrument.
Financial liabilities and equity
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 after deducting all of
its financial liabilities.
Where the contractual obligations of the financial instruments (including share capital) are equivalent to a similar
debt instrument they are classified as financial liabilities. Financial liabilities are presented as such in the statement
of financial position. Finance costs and gains or losses relating to financial liabilities are included in the statement
of comprehensive income. Finance costs are calculated so as to produce a constant rate of return on the outstanding
liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability
then this is classed as an equity instrument. Dividends and distributions relating to equity are debited direct to
equity.
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
79
Taxes
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement
of financial position date. Timing differences are differences between the Company's taxable profits and its results
as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods
different from those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available
evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future
reversal of timing differences can be deducted.
Deferred tax is measured on a non-discounted basis at the average tax rates that are expected to apply in the periods
in which the timing differences are expected to reverse.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
B. Judgements in applying accounting policies and key sources of estimation uncertainty
Estimates and judgements are evaluated and are based· on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting
estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
Estimates and assumptions:
At each year end, the directors review each of the investment balances and produce an impairment assessment, which
reviews the forecasted figures for each subsidiary and also the actual achieved to date to determine whether an
impairment is necessary.
An impairment adjustment of £0 (FY23: £0k) against fixed assets investments has been recorded. At the year end
the carrying value of investments totalled £6,940k (FY23: £6,940k).
The directors do not consider there to be any other key areas of judgement.
C. Profit attributable to ordinary shareholders
The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006 from
presenting its own profit and loss account. The profit dealt within the financial statements of the Company was
£336k (FY23: £6,275k).
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
80
D. Staff and staff costs
The average monthly number of persons (including Directors)
2024
2023
employed by the company during the period was:
No.
No.
Management and administration
4
5
Staff cost (for the above persons):
£000s
£000s
Wages and salaries
357
449
Pension
9
12
Social security costs
45
59
Estimated value of benefits
4
14
415
534
E. Fixed asset investments
Cost
£000s
At 1 July 2023
7,662
Additions
-
Disposal
-
At 30 June 2024
7,662
Accumulated impairment losses
At 1 July 2023
(722)
Arising in the year
-
Disposal
-
at 30 June 2024
(722)
Net book value
At 1 July 2023
6,940
At 30 June 2024
6,940
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
81
The balance of ‘Other debtors’ due within 1 year relates entirely from the Vigilant consideration of which we have
received £2.1 million post year end.
The balance of ‘Total trade and other receivables’ due after 1 year relates entirely to balance due from the disposal of
Vigilant.
The principal fixed asset investments are as follows:
Company
% Ordinary shareholding
Nature of business
CSS Total Security Limited
100% directly
CCTV and security systems
Croma Locksmiths & Security
100% directly
Locksmithing, Keys and Safes
Solutions Limited
Safeguard (N/W) Limited
100% indirectly
Locksmithing, Keys and Safes
Basingstoke Locksmiths Limited
100% indirectly
Locksmithing, Keys and Safes
CSS Locksmiths Limited
Dormant
Centre Security Limited
100% indirectly
Dormant
Access Key and Lock Limited
100% indirectly
Dormant
The Safecell Security Group Ltd
100% indirectly
Holding company
Southern Stronghold Ltd
100% indirectly
Locksmithing, Keys and Safes
Safecell Security Ltd
100% indirectly
CCTV and security systems
Authorized Access Systems Ltd
100% indirectly
Locksmithing, Keys and Safes
City Locks Ltd
100% indirectly
Locksmithing, Keys and Safes
The registered office of all group companies is Units 7/8 Fulcrum 4, Fareham, Whiteley PO15 7FT.
55% directly 45% indirectly
F. Debtors
2024
2023
£000s
£000s
Amounts due from subsidiary undertakings
1,826
887
Other debtors
3,342
2,304
Prepayments
56
13
Trade and other receivables falling due within 1 year
5,224
3,204
Other debtors due after 1 year
1,651
3,122
G. Creditors
2024
2023
£000s
£000s
Amounts due to subsidiary undertakings
642
512
Trade creditors
16
30
Other creditors
90
107
Other taxes and social security
6
-
754
649
ENV64075861-3623-FDED-1292-EABC
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
82
Rights attaching to shares
The holders of the ordinary shares of 5 pence each are entitled to receive dividends and a return of capital on
liquidation as well as attend and vote at a general meeting of the Company.
Share option scheme
In 2014 the Group instigated an Approved Company Share Option Scheme. Details are in Note 23 of the
consolidated accounts.
Parent company has taken advantage of the disclosure exemptions under FRS102.1.12 relating to share-based
payments. No additional disclosure required in these financial statements on grounds of materiality.
Full details of the Group's share option scheme are in Note 23 of the consolidated financial statements.
I. Related party transactions Identity of related parties
The Parent Company has a controlling related party relationship with its subsidiary companies. The Group has a
related party relationship with its directors, executive officers, pension funds and trusts, who their immediate
relatives’ control 29% of the voting shares.
Full details of compensation Key Management Personnel of the parent company are included in note 7 to the
financial statements of the Group.
H. Share capital
2024
2023
£000s
£000s
Authorised, allotted, called up and fully paid:
Other ordinary shares of 5 pence each
794
794
Number
Number
000s
000s
Issued and fully paid
Ordinary shares of 5 pence each at the start and end of the year
15,899
15,899
J. Notes supporting the cash flow statement
2024
2023
£000s
£000s
Net changes in working capital
Decrease/(increase) in trade and other receivables
(1,087)
304
Increase/(decrease) in trade and other payables
105
232
(982)
536
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CROMA SECURITY SOLUTIONS GROUP PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR END 30 JUNE 2024
83
K. Post balance sheet events
As part of the deferred consideration owed to the Group from the £6.5 million sale of Vigilant, the following
payments were received subsequent to June 2024:
•
£0.46 million on 1 July, related to the repayment of loan notes and interest.
•
£1.3 million on 4 July, related to the purchase of the outstanding redeemable shares by Vigilant.
•
£0.45 million on 30 September, as the next instalment of loan notes and interest.
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