Prime People Plc
Annual Report and Financial Statements
for the year ended 31 March 2021
2021
Contents
Chairman’s Statement
Strategic Report
Report of the Directors
Statement of Directors’ responsibilities
Corporate governance
Audit Committee Report
Remuneration report
Independent Auditor’s report
Consolidated statement of comprehesive income
Consolidated statement of changes in equity for the year ended 31 March 2020
Consolidated statement of changes in equity for the year ended 31 March 2021
Consolidated statement of financial position
Company statement of financial position
Company statement of changes in equity
Group and company cash flow statement
Notes to the financial statements
Directors and Advisers
Board of Directors
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73
PRIME PEOPLE PLC
Chairman's Statement
Performance
As previously reported, the Covid-19 pandemic
started in the early part of 2020 and, while not
having a material effect on outcomes for the year
ended 31 March 2020, nonetheless, activity slowed
in our final quarter with an increasing impact
throughout the 12 months to 31 March 2021.
The scale of the economic slowdown in all the
Group’s geographical segments saw performance
significantly deteriorate compared with the results
of the previous year.
We closed the year with headline Revenue of
£17.8m (2020: £24.0m) and Net Fee Income
(“NFI”) of £10.9m (2020 £15.5m), a 30% year-on-
year decline. NFI comprises the total fees for
permanent candidates and the margin earned in the
placement of contract staff.
The Group’s Operating Loss, was £0.12m
compared to the prior year profit of £2.0m, before a
goodwill impairment of £4.0m. The decline is
attributable to lower NFI although there were
materially reduced operating costs as consequence
of the income received in respect of the UK
Government Coronavirus Job Retention Scheme
and support programs in overseas locations.
The Board has carefully considered the prospects of
the Group’s operations and markets and are
confident that no impairment charge is required to
be recognised against the overall carrying value of
Goodwill. Further details of the Goodwill are
disclosed in note 11.
Cash Flow
Cash management was strengthened further during
the period and, as previously announced, a
Coronavirus Business Interruption Loan (CBILS)
of £2m was secured, which continues to remain in
place at the time of this report. The Group continues
to maintain a good net cash position. At the start of
the year the Group had cash of £2.1m which had
increased to £4.0m at the end of March 2021, of
which £2.0m is comprised of the CBILS.
Dividend
The Board will not be recommending a final
Dividend this year.
Share Buy Back
During the year 190,000 shares were purchased
through the Group’s buyback programme at a cost
of £103k. In the year no ordinary shares were
transferred from Treasury to satisfy the exercise of
options. At the year end the Group held 190,000
shares in Treasury.
1
PRIME PEOPLE PLC
Chairman's Statement (continued)
Board
The Board believes it has continued to operate
corporate governance standards appropriate to an
AIM quoted company of its size. The Directors
retire by rotation every three years and seek re-
appointment by shareholders at the next AGM.
This year, Peter Moore will retire and seek re-
election under these arrangements.
The Board members have a mix of skills,
experience and backgrounds that are a considerable
support to the business.
People
The average number of staff (excluding Temporary
Contractors) reduced from 137 last year to 117 this
year.
The Group has a diverse cultural and ethnic profile
within its businesses and at the year-end had a
global 60:40 male to female gender ratio.
The success of the Group is dependent on having
competent and committed people and the Board
would like to thank all the members of our staff for
their hard work, commitment and contribution over
the last year.
Current trading and outlook
All our markets have been impacted by Covid-19
and, although we have experienced reasonable
progress as the various economies we operate in
start to recover, noticeably in the UK. As an
international group, we may be impacted by
ongoing restrictions on travel. Several of our
geographic segments face geopolitical uncertainty
and, whilst trading in our international offices is
encouraging, we are closely monitoring
the
systemic risks posed over the longer term in all our
regions of operation.
We believe that with our management focus on the
key business drivers, and optimising interaction
between our regions, the Group is well positioned
to respond swiftly across all businesses to changes
impacting our activity. We are confident about our
ability to generate worthwhile, long-term returns
and will continue to invest for the future.
Robert Macdonald
Executive Chairman
2
PRIME PEOPLE PLC
Strategic Report
Overview
The Group provides Permanent and Contract
recruitment services to selected, niche industry
sectors. Our business model is built around our
people, all of whom are specialists in their industry
verticals.
Our employees are vital to the continued success of
the Group and we invest heavily in them. As such,
we take time to find and train the best talent that
shares our ambition - to be the best, not simply the
biggest.
The built environment continues to be the Group’s
largest market, served through its main subsidiary,
Macdonald & Company. In addition, the Group also
serves the technology & digital transformation and
infrastructure, construction, and design sectors
through its Prime Insight and Command brands
respectively.
The business is organised into teams of specialist
consultants, each managed by a team leader who is
responsible for performance within the operating
framework approved by the Board. The Group
operates a policy of open communication in the
belief that its employees are best placed to suggest
operational improvements and emergent strategies
that will increase earnings.
The Group is committed to managing its talent on
merit and provides equal opportunities for all
current and future employees. It gives full and fair
consideration to applications for employment from
disabled persons, where a disabled person may
adequately carry out the requirements of any
position within the physical constraints of the
Company’s offices. The Board is concerned to
provide a healthy corporate culture and in pursuit of
its objectives and strategy seeks regular input
through open meetings with its staff.
The Group has two locations in the UK, the London
head office and Manchester, and international
offices in Hong Kong (established in 2007), Dubai
(established in 2008), Singapore (established in
2012), Frankfurt (established in 2019), and a
franchise in South Africa (established in 2008). In
the past 12 months, the Group has also opened
offices in Riyadh, Houston, and Düsseldorf.
the world
locked down,
The Covid-19 pandemic had a large impact on all
parts of our business during the period. As societies
across
the Group
experienced a marked decrease in demand which
extended through the year and has significantly
affected results. Despite the strong headwinds
facing all businesses, the Group’s strategy of
cultivating strong client relationships, investing in
the best technology, and employing the best people
helped mitigate the impact of the unprecedented
restrictions placed upon global economies.
These are the foundations of the Group’s success
and, together with an experienced management
team, focussed on tight control of cash resources,
expenditure and productivity per head, they helped
quickly stabilise the Group and have positioned us
to recover as markets began to normalise after the
first round of lockdowns.
While short-term cost reduction measures were
quickly put in place, the Group has continued to
invest in our people and every effort was made to
retain staff and ensure we were equipped to take
advantage of an economic recovery. We were able
to make use of government funded support schemes
and, while some limited staff reductions were,
unfortunately required, the Group was able to retain
its most experienced, productive fee earners.
Over several years, the Group has positioned itself
to be agile in serving our clients - wherever their
demand may be. Consequently, we had made
significant investments in our technology and were
well positioned
to support remote working.
Business was able to continue throughout the
various lockdown measures with little interruption
and we believe that the accelerated adoption of
flexible working will present opportunities for the
Group.
Despite this, performance was materially impacted
by the pandemic with NFI down by 30% overall. As
a result of the reduction in NFI the group reports an
operating
the
fundamentals of the Group are strong and the
investment we made in retaining fee earners during
the period will position us to take advantage of
opportunities in our markets over the long-term.
loss of £0.12m, however,
3
PRIME PEOPLE PLC
Strategic Report (Continued)
Due to a predominantly public sector client base,
contract recruitment in the UK proved resilient.
During the year the Group continued its targeted
expansion into the U.S. and mainland European
markets.
With growth now returning to economies around
the world, the Group remains committed to organic
growth and where individual NFI performance
against costs justifies, it will hire new fee earners.
Regional Performance
United Kingdom
Revenue
Net Fee Income (NFI)
Adjusted Operating (Loss)/Profit (Note 1)
Adjusted Operating (Loss)/Profit as % of NFI
Average number of employees
Revenue reduced by 25.7% to £11.67m (2020:
£15.7m) with NFI reducing by 32.6% to £4.89m
(2020: £7.3m).
.
Asia Pacific
Revenue
Net Fee Income (NFI)
Operating Profit
Operating Profit as % of NFI
Average number of employees
2021
£m
11.67
4.89
(0.02)
(0.4%)
61
2021
£m
5.11
5.01
0.05
9.23%
50
2020
£m
15.70
7.26
0.30
4.55%
71
2020
£m
8.18
8.12
1.67
20.68%
60
NFI declined by 38.3% to £5m (2020: £8.1m) . The region is covered by our offices in Hong Kong and
Singapore and represents 45.8% of Group NFI (2020: 52.5%).
Command Operating Loss, unadjusted for Minority Interest, was part of the reported Operating Profit in the
region.
4
PRIME PEOPLE PLC
Strategic Report (Continued)
Rest of the World
Revenue
Net Fee Income (NFI)
Operating (Loss)/Profit
Operating (Loss)/Profit as % of NFI
Average number of employees
The region now covers our offices in Frankfurt,
Düsseldorf, Houston, Dubai and a franchise in
South Africa.
Peter Moore
Managing Director
22 July 2021
2021
£m
1.03
1.03
(0.13)
(12.73%)
3
2020
£m
0.14
0.14
0.00
0.00%
2
5
PRIME PEOPLE PLC
Strategic Report (Continued)
Financial Review
Revenue
The Group’s Revenue was £17.8m, which represents a 25.5% decline compared to 2020 (£24.0m).
Net Fee Income (NFI)
Overall Group NFI was £10.93.m which is a decrease of 29.5% compared to the prior year.
The split of net fee income was 94% from Permanent Sales (2020: 94%) and 6.0% from Contract Sales (2020:
6.0%).
The Group generated 55.3% of its Net Fee Income from outside the UK (2020: 53.2%).
Administration Costs
Administration costs for the year were £11.7m, a decrease of 13.4% on 2020 due to staff going on furlough and
lower commission costs.
Profit before Taxation
Loss before taxation and Goodwill impairment was £0.17m (2020: profit of £1.89m) and reported loss was
£0.17m after Goodwill Impairment (2020: loss of £2.13m).
Taxation
The taxation credit is £5k on loss before taxation of £173k which gives an effective tax rate of 2.8% (2020:
8.2%). The reasons for the difference from the standard UK corporation tax rate of 19% are detailed in note 7.
Earnings per Share
Basic and diluted earnings per share improved to a loss per share of 0.30p (2020: loss per share of 19.36p).
Balance Sheet
Net Assets at 31 March 2021 were £8.8m compared to the prior year net assets of £9.4m. Trade Receivables
net of provisions for doubtful debts at the year-end were £2.2m (2020: £3.0m) and reflect the reduced average
credit period taken by clients to 48 days (2020: 75 days). The decrease in debtor days is explained by stronger
collection from certain Command clients in Saudi Arabia.
Treasury Management and Currency Risk
Approximately 65.6% of the Group’s revenue in 2021 (2020: 65.4%) was denominated in Sterling.
Consequently, the Group has a currency exposure in accounting for overseas operations.
Currently the Group policy is not to hedge against this exposure, but it does seek to minimise the effect by
converting into Sterling all cash balances in foreign currency that are not required for local short-term working
capital needs.
Cash Flow and Cash Position
At the start of the year the Group had Cash of £2.055m. After net taxation payments of £0.13m (2020: £0.16m)
cash generated from operations was £1.0m (2020: £3.5m).
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PRIME PEOPLE PLC
Strategic Report (Continued)
Financial Review
Principal Risks and Uncertainties
The Board has responsibility for establishing the Group’s approach to risk and the effective risk management. The
Group’s strategy is designed to allow the business to grow without increasing risk beyond an acceptable limit. The
risk fluctuates from time to time and will be assessed in line with delivering the business strategy of the Group, to
safeguard shareholders’ interests and improve the quality of decision making. The Board reviews the principal
risks and uncertainties facing the Group on a regular basis. The Board’s approach is to ascertain the key risks and
develop plans to reduce the potential effects of these risks on the business. The principal risks identified are as
follows:
Dependence on Key People
The sustainable success of the Group is dependent on recruiting and retaining senior management and key staff.
The loss of the services of the senior management and other key people could impact trading and profitability.
To address this, the Group has put into place an internal talent acquisition function and invested in management
information systems, training and development programmes, competitive pay structures and long-term
remuneration plans, the aim of which is to retain key employees. The Board’s management equity incentives
present key management with equity ownership, tying them to the business for the long term.
The Group is fortunate to have the loyalty of the senior management team which allows the business to progress,
even in uncertain markets.
Competitors
The Group’s focus is on specialist, niche sectors where clients need expert knowledge and high levels of service.
We concentrate on markets where there is a shortage of supply of suitable candidates and opportunities to build
strong and fruitful long-term relationships with clients.
The Directors monitor the legal and regulatory environment in all Group markets. By investing in the Group
brands and markets, the executive management reacts to changes in legislation, as well as making it easier to attract
candidates because of the brand reputation and knowledge. The Directors believe that the Group is well positioned
in its chosen markets. Whilst the Group seeks to continue to improve its competitive positions, the actions of
current, or indeed potential, competitors may adversely affect the Group’s business.
Macro-economic factors
Persistent slow growth in the global economy has effects that trigger reduced output, and with it, demand and
investment. There is strong correlation between the business performance and that of the economies in which the
Group operates. The impact on the UK economy from leaving the EU remains unclear and this uncertainty may
continue to negatively impact on investment in staff. The Board sees opportunities for development and will
continue to invest in areas where growth can be delivered at acceptable levels of profitability, increasing cash
generation and growing Group revenue. The Group is geographically diversified, spanning over different countries
which reduces the reliance on the success of any single market. The global Covid-19 pandemic has highlighted
the significant challenges to trading created by outbreaks of this nature. Prolonged impact on our business cannot
be ruled out as a result of Covid-19 and future pandemics.
The Group complies with local guidance and client requirements in place in response to Covid-19. Where possible
alternative recruitment practices such as video interviewing are being employed to maintain recruitment activity.
Regulatory position
The increase in regulatory scrutiny and demands on compliance are influencing hiring. The Group is aware of
continuing challenges as procurement practice evolves but remains committed to being fully compliant in each of
the regions in which it operates. To reduce the legal and compliance risks, fee earners and support staff receive
timely and regular training and updates on changes in legal and compliance requirements.
7
PRIME PEOPLE PLC
Strategic Report (Continued)
Financial Review
Cyber Security and data protection
The risk of sensitive information being accessed without authorisation has grown in the wider business
environment. Any successful breach can lead to the loss of commercially sensitive data, candidate and clients’
data, damage our brand reputation and lead to business disruption. With increasing regulation on data protection
there is an ongoing risk of failing to comply with regulations leading to reputational damage.
We have invested resources on cyber security with close oversight and training to ensure we meet a minimum
standard of security. As we invest further in technology, we will also invest in ensuring our cyber security
measures and policies reflect the changes in the Group.
Information technology
The Group is highly dependent on certain technology systems and the infrastructure on which they operate in
order to maintain its client and candidate database. These systems rely on specific suppliers who provide the
technology infrastructure and disaster recovery solutions. The performance of these suppliers is continually
monitored to ensure that the services are available and maintained. Therefore, the systems and infrastructure are
regularly reviewed and upgraded to ensure appropriate provision of functionality and resilience to support the
business as it develops.
Foreign Exchange Risk
The Group’s international operations account for 34.5% of revenue (2020: 34.7%) and approximately 29.1% of
the Group’s assets (2020: 24.3%). Consequently, the Group has a degree of translation exposure in accounting
for overseas operations and expects this to increase in line with the growth of the Group outside the United
Kingdom. The Group’s policy is not to hedge against this exposure, as there is a degree of natural hedge from
the Group geographical diversification. However, the Group seeks to minimise this exposure by converting into
sterling all cash balances received in foreign currency that are not required for local short-term working capital
needs. The Group will continue to monitor its policies in this area to be able to react if rates move adversely.
Treasury Policies, Liquidity and Financial Risk
Surplus funds are held to support short term working capital requirements. These funds are invested using short
term and period deposits, with a policy of maximising fixed interest returns, whilst providing the flexibility
required to fund on-going operations and to invest cash safely and profitably.
Although the financial risks to which the Group is exposed are currently considered to be minor, future interest
rate, liquidity and foreign currency risks could arise. An additional bout of exchange rate depreciations in emerging
market economies and a sharp decline in capital inflows could force a rapid compression of domestic demand.
The depreciation of Sterling might have a tangible impact on UK business. The Board continues to focus on cash
flow forecasting and to manage financial and foreign exchange risk in order to define and understand the Group
foreign exchange exposures and to ensure the quality of information on each exposure. The Board will continually
review its existing policies and make changes as required to limit the financial risks of the business.
Credit Risk Management
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial
loss to the Group. The principal credit risks arise from the Group’s trade receivables. Client credit terms and cash
collections are managed carefully, and cash balances and cash flow forecast are reviewed weekly. Monthly credit
evaluation is performed on the financial condition of accounts receivable based on payment history and third-
party credit references with appropriate provisions being made.
8
PRIME PEOPLE PLC
Strategic Report (Continued)
Section 172 Statement
Section 172(a)(a) to (f) of the Companies Act 2006 (“s.172”) requires a Director of a company to act in the
way which he/she considers, in good faith, would be most likely to promote the success of the company for
the benefit of its members and, in so doing, to have regard (amongst other matters) to the following factors:
•
•
•
•
•
•
the interest of the Company’s employees.
the likely long-term consequences of any decision being made.
the need to maintain the Company’s relationships with suppliers, customers and others.
the desire to maintain reputation for high professional standards and business conduct.
the need to act fairly between members of the Company, and
the impact of the Company’s operations on the environment and the community
The Board of Directors considers that it acts in a way to promote the success of the Company and Group for the
benefit of its members, having regard to the matters set out above. The Company’s key stakeholders are its
Shareholders, internal staff, candidates, clients, and suppliers. The Board’s aims to make decisions that are for
the long-term strategic benefit of the Group and its stakeholders.
The Board seeks to ensure that its actions and decision-making processes consider key stakeholders and that
there is sufficient time, information and understanding to consider their interests efficiently and effectively,
when making long term decisions. Stakeholder engagement is achieved through direct interaction by Directors,
receiving reports from management who engage with stakeholders.
The Directors recognise that stakeholder groups may not remain static and can be affected by changes in
strategy, legislation, or business requirements. Therefore, these are regularly reviewed to ensure they remain
appropriate.
Detail on how the Board has had regard to the matters set out in s.172 during the year is set out below.
Long-term decision making
The Directors review strategic objectives continually and with Executive Management continued to have their
main focus on delivery of organic growth:
• by further embedding of Prime culture, value drivers and principles, which help create an environment
in which each employee achieves his or her goals, realises individual potential and achieves career
development
• by the continued migration to cloud technologies including Microsoft Modern workplace across all
Group companies, to enable direct and immediate engagement with all employees around the world
• by realignment of the Group Customer Relationship Management system into multiple brands and core
sectors allowing the sharing of common experiences and to leverage synergies and existing capabilities
to achieve more efficient working for our staff and an improved service to other stakeholders
• by the Board, through the Executive Management, creating an environment, in each office location,
where colleagues are happy to work and which supports their wellbeing for the long term
• by ensuring that the business deals fairly and transparently with candidates, having due regard to the
need to protect their confidentiality and personal data
• by continuing to deal equitably with those businesses who supply services and goods to the Group and
particularly seeking to pay them on terms agreed.
9
PRIME PEOPLE PLC
Strategic Report (Continued)
Section 172 Statement (continued)
Investment & Organic Growth
The Board is aware of shareholders sentiment regarding investments and weighs up the need of higher return
to investors against the desire to make investment decisions for organic growth. During the year, the Board
made the decision to further support, grow, and develop the Group’s presence in Germany, along with
establishing a fully incorporated entity in Riyadh, Saudi Arabia, and also incorporating an entity in Delaware,
USA.
The Group approved a budget that enables the Group to effectively manage productivity by investing in:
front and back office technologies (e.g. Bullhorn, Cube- 19, and Sage Cloud solutions)
•
• providing greater central support for training, marketing, and technology
Business Conduct Standards
The Directors recognise the importance of corporate governance, and a description of how the Board complies
with the QCA Corporate Governance Code (the “Code”) can be found on pages 15 and 16 of this Annual Report.
The Board believes that modern slavery and human trafficking are significant global issues, presenting a
challenge for business worldwide and has committed to continually review its practices in this regard. The
Directors are committed to ensuring that the Company and the Group subsidiaries act ethically and with integrity
in their business dealings.
The Board expects all of its colleagues to observe the high standards contained within the Group’s policies in
relation to bribery and corruption, data protection, equality, diversity and inclusion, cyber security, fraud and
whistleblowing, each of which is reinforced though appropriate policies and training.
Dugald Macdonald
Group Commercial Director
22 July 2021
10
PRIME PEOPLE PLC
Report of the Directors for the Year Ended 31 March 2021
The Directors submit their report and the audited Group financial statements of Prime People Plc for the year
ended 31 March 2021. Prime People Plc is a public listed company, incorporated and domiciled in England and
its shares are quoted on the AIM Market.
Directors
The Directors who served during the year were:
Robert Macdonald
Peter Moore
Donka Zaneva-Todorinski ( resigned 31 March 2021)
Chris Heayberd
Sir John Lewis OBE
Immediately following the year end, Dugald Macdonald was appointed a director with effect from 1 April 2021.
As permitted by legislation, the Group has chosen to set out the information regarding likely financial risk
management objectives and policies and future developments in the business of the company, which would
otherwise be required to be contained in the Director's Report, within the Strategic Report.
Share Interests
As at 22 July 2021, other than the Director’s interests shown in the Directors’ remuneration report on page 21
the Company was not required to notify any interests under the Disclosure Guidance and Transparency Rules.
The mid-market quotation of the Company’s ordinary shares at close of business on 31 March 2021 was 61.5p.
The highest and lowest mid-market quotations in the period from 1 April 2020 to 31 March 2021 were 75p and
41.5p, respectively.
Going concern
The Group has two revenue streams, Permanent and Contract recruiting and provides these services across
several established international markets.
Covid-19 has created an unprecedented short to medium term challenge for all of the Group’s markets, and as
a result, the Group secured a £2m CBILS loan, repayable over 6 years commencing in August 2021, to support
the Group, until revenue visibility and stability resumes. Strict cost control measures have been implemented
across all divisions and will continue for the foreseeable future.
The Group continues to also have access to an Invoice Discounting facility of up to £2m in the UK, which
provides working capital underpinned by the contract receivables’ ledger. The facility is renewed annually in
April.
Trading and cash flow forecasts for a period of at least 12 months from the date of approval of the financial
statements have been prepared for each of the Group’s autonomous trading segments and are reviewed and
challenged biweekly by a sub-committee of the Board. The sub - committee reviews the monthly cash collection
forecast, debtor collection assumptions for the upcoming three months, disbursement control and change in cash
balances 12 months forward. The Commercial Director reviews weekly the status of all major clients’
outstanding balances. The Directors have accepted government approved liability deferral schemes and
provided greater job security for its employees by participating in the Government Job Retentions Scheme, in
the UK and similar arrangements overseas. The cash forecasts prepared by management show that all deferred
liabilities are paid in full by January 2022.
11
PRIME PEOPLE PLC
Report of the Directors for the Year Ended 31 March 2021
Going concern (continued)
The forecast models revenues and cash collections and cost outflows across the Group for the period July 2021
to July 2022. Management have modelled a number of scenarios assessing the impact of a reduction in cash
collections, as well as assessing the actions that could be taken to reduce the impact of these such as negotiating
new payment plans with creditors or looking to equity funding.
After reviewing these forecasts, including careful consideration of downside risk trading scenarios, and having
made appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources
to continue operating for a period of at least 12 months. Consequently, the Board continues to adopt the going
concern basis when preparing the financial statements.
Environmental Policy
The Group recognises its responsibilities for the environment and gives due consideration to the possible effects
of its activities on the environment. As such, our environmental impact comes from the running of our business
generating carbon emissions through the consumption of gas and electricity, transport activities and commuting,
as well as office-based waste such as paper and toners. We do not consider that the Group’s activities have a
major effect on the environment. However, it is the Group’s aim to reduce the environmental impact of its
activities and to operate in an environmentally responsible manner. We are, therefore, committed to the
following principles to ensure the business operates in an environmentally sensitive manner:
• Encouraging the re-use and re-cycling of products and waste from our offices;
• Ensuring efficient use of materials and energy; and
• Purchasing environmentally friendly materials where appropriate.
Political Donations
The Group made no political donations during the year (2020: £nil).
Workplace Pensions
In line with the law on workplace pensions the Group continues to operate a defined contribution plan and
automatically enrols certain UK employees into the NEST pension scheme.
Capital Structure
Details of the allotted and issued share capital are shown in note 18. The Company has one class of ordinary
shares which carry no right to fixed income and which represents 100% of the total issued nominal value of all
share capital. Each share carries the right to one vote at general meetings of the company.
Details of employee share schemes are set out in note 18.
12
PRIME PEOPLE PLC
Report of the Directors for the Year Ended 31 March 2021
Dividend
During the year no dividend was paid (2020: 1.8p).
Annual General Meeting (“AGM”)
The 2020 AGM was held on 22 September 2020 at 11:00am at 2 Harewood Place, London, W1S 1BX. All
resolutions put to Shareholders (as detailed in Note 18) were duly passed on a show of hands.
This year’s AGM will be held at 2 Harewood Place, London, W1S 1BX on 1 September 2021 at 11:00am. All
shareholders are encouraged to attend. The resolutions to be put forward to the AGM are detailed in the Notice
of AGM, which is being circulated separately to all shareholders.
Authority to purchase own shares
The Directors renewed their authority at the AGM held on 22 September 2020 to purchase through the market,
up to 15% of the Company’s issued share capital, subject to certain restrictions on price.
During the year the Company purchased 190,000 shares (2020: 19,000 shares). The purchased shares were held
in Treasury.
Statement as to disclosure of information to auditors
The Directors, who were in office on the date of approval of these financial statements, have confirmed that, as
far as they are aware, there is no relevant audit information of which the auditors are unaware. The Directors
have confirmed that they have taken appropriate steps to make them aware of any relevant audit information
and to establish that it has been communicated to the auditors.
Auditor
Crowe U.K. LLP has expressed its willingness to continue in office and a resolution to re-appoint the firm as
Auditor and authorising the Directors to set their remuneration will be proposed at the forthcoming Annual
General Meeting.
By order of the Board
Peter Moore
Managing Director
22 July 2021
13
PRIME PEOPLE PLC
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the
Directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (IFRSs’) as adopted by the EU and applicable law.
Under Company law the Directors must not approve the Financial Statements unless they are satisfied that they
give a true and fair view of the Company and the Group profit or loss for that period. In preparing these Financial
Statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently.
• make judgments 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 will continue in business.
The Directors are responsible for keeping adequate accounting records that are enough to show and explain the
Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company
and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other
information included in the Annual Report and Financial Statements is prepared in accordance with applicable
law in the United Kingdom.
The maintenance and integrity of the Prime People Plc web site is the responsibility of the directors.
Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
14
PRIME PEOPLE PLC
Corporate Governance
Statement by the Directors on Corporate Governance
The Board considers it important that appropriately high standards of corporate governance are maintained.
They have therefore put in place governance structures and provide information which would be expected for a
company quoted on the AIM Market of the London Stock Exchange. The Group has adopted the QCA
Governance Code (the “Code”), so this report follows all required disclosures.
A statement of the Directors’ responsibilities in respect of the financial statements is set out on page 14.
The Board has established two committees, being the Audit Committee and the Remuneration Committee, each
of which operates with defined terms of reference.
Membership of these committees as at the date of this report, the number of meetings held in 2021 and the
attendance record are summarised in the table below:
Directors
Board
Audit
Committee
Remuneration
Committee
Robert Macdonald – Executive Chairman
9/9 (Chair)
Peter Moore – Managing Director
Donka Zaneva-Todorinski – Finance Director (resigned 31
March 2021)
Chris Heayberd – Non-Executive Director
Sir John Lewis – Non-Executive Director
Dugald Macdonald –Commercial Director (appointed 1
April 2021 - post year end)
9/9
8/9
9/9
9/9
n/a
N
N
N
1/1 (Chair)
N
N
N
1/1
1/1
n/a
1/1 (Chair)
n/a
Below is a brief description of the role of the Board and its Committees, followed by a statement regarding the
Group’s system of internal controls.
The Board and its Operation
The Board of Prime People Plc is the body responsible for corporate governance, establishing policies and
objectives, and reviewing the management of the Group’s resources.
The Board consists of an Executive Chairman, Robert Macdonald, two other Executive Directors and two Non-
Executive Directors.
The Non-Executive Directors are John Lewis and Chris Heayberd. They receive a fixed fee for their services
and their interests in the shares of the Company are set out in the Remuneration Report on page 20.
Biographical details for all the Directors are shown on page 75.
The Board meets at least six times each year, or more frequently where business needs require, and the Directors
receive monthly management accounts detailing the performance of the Group. The Board has a general
responsibility for overseeing all day to day matters of the Group with specific responsibility for; reviewing
trading performance; resources (including key appointments); setting and monitoring strategy; examining
acquisition opportunities; and reporting to shareholders.
15
PRIME PEOPLE PLC
Corporate Governance
The Board and its Operation (continued)
The Non-Executive Directors have a responsibility to ensure the strategies proposed by the Executive Directors
are fully considered and to bring their judgment to bear in this role.
To enable the Board to function effectively and Directors to discharge their responsibilities, full and timely
access is given to all relevant information. In the case of Board meetings, this consists of a comprehensive set
of papers, including monthly business progress reports and discussion documents regarding specific matters.
Directors are free to, and regularly make further enquiries where they feel it is necessary and they can take
independent professional advice as required at the Company's expense. This is in addition to the access which
every Director has to the Company Secretary.
Given the size of the Board, there is no separate Nomination Committee and appointments to the Board of both
Executive and Non-Executive Directors are considered and approved by the full Board.
The Board has considered the matter of the independence of its Non-Executive Directors all of whom have
served for more than 5 years or have had previous executive roles. As the Board considers itself to be a “small
Board” and having regard to the professional qualifications, standing and skill levels derived from their other
directorships of its Non-Executive Directors, as set out in Biographical details for all the Directors on page 75,
it considers their level of independence to be adequate. Furthermore, no board performance evaluation is
undertaken for the same reasons.
The Senior Independent Director, Sir John Lewis OBE, is the main point of contact for Shareholders if there
are any concerns that cannot be addressed through the Chairman or Executive Directors.
The Senior Independent Director provides advice and support to the Executive Directors, by holding monthly
meetings with the Chairman.
The Company Secretary is responsible for advising the Board on its governance procedures and compliance
with company law, the AIM Rules and relevant best practice, and for ensuring that the Board receives the
information it needs in a timely manner to fulfil its duties effectively. All Directors have access to the Company
Secretary and their appointment (or termination of appointment) is a matter for decision by the full Board.
Any Director appointed during the year is required, under the provisions of the Company's Articles of
Association, to retire and seek reappointment by shareholders at the next Annual General Meeting. The Articles
also require the Directors to retire by rotation every third year and to seek reappointment at the Annual General
Meeting.
The Executive Directors abstain from any discussion or voting at full board meetings on Remuneration
Committee recommendations where the recommendations have a direct bearing on their own remuneration
package.
Remuneration of Non-Executive Directors is determined by the Board. Non-executive Directors abstain from
discussions concerning their own remuneration.
The Company publishes a full Annual Report and financial statements which are available on the Prime People
website, to Shareholders on request and to other parties who have an interest in the Group's performance.
All shareholders can put questions to the Board at the Company's Annual General Meeting.
16
PRIME PEOPLE PLC
Corporate Governance
Remuneration Committee
The Remuneration Committee comprises the two Non-Executive Directors of the Company and is chaired by
Sir John Lewis OBE.
The committee reviews the Group policy on the Executive Directors’ remuneration and terms of employment;
makes recommendations on this; and approves the provision of policies for the remuneration of senior
employees, including share schemes.
The principal terms of reference of the committee are set out in the Remuneration Report on page 20. The report
also contains full details of Directors' remuneration and a statement of the Company's Remuneration Policy.
The committee meets when required to consider all aspects of the Executive Directors' remuneration, drawing
on outside advice as necessary.
Internal Controls
The Directors are responsible for the Group’s system of internal control and for reviewing its effectiveness
which, by its nature, can only provide reasonable and not absolute assurance against material misstatement or
loss.
When undertaking their review, the Directors have considered all material controls including operational,
compliance and risk management, as well as financial.
The Board has assessed the effectiveness of the Group’s internal control systems for the period 1 April 2020 to
the date of approval of the financial statements and believes it has the procedures in place to safeguard the
Group’s assets and to ensure the reliability of information used within the business and for publication.
Key elements of the system of internal control are as follows:
Group Organisation
The Board of Directors meets up to six times a year and more frequently when required focusing mainly on
strategic issues, operational and financial performance. The Directors have in place an organisational structure
with clearly defined levels of responsibility and delegation of authority.
The Operational Management Board meets quarterly. It acts as a conduit between the Board of Directors and
the Group subsidiaries by providing information, advice and guidance to all staff. It has responsibilities for
setting up, monitoring and control of the business operations globally.
Annual Business Plan
The Group has a comprehensive budgeting system with an annual budget approved by the Board.
Monthly Forecasting
The Group prepares monthly fee income forecasts by individual businesses which are compared to budget.
Financial Reporting
Detailed monthly reports are produced showing a comparison of results against budget, forecast and the prior
year with performance monitoring and explanations provided for significant variances. Any significant adverse
variances are examined, and remedial action taken where necessary.
Capital Expenditure
Capital expenditure requests are reviewed by the Board. Appropriate due diligence work will be carried out if
a business is to be acquired.
17
PRIME PEOPLE PLC
Corporate Governance
Internal Controls (continued)
Levels of authority
There are clear levels of authority, delegation and management structure.
Risk Management
The Directors and operating Company management have a clear responsibility for identifying risks facing each
of the businesses and for putting in place procedures to mitigate and monitor risks. Risks are assessed during
the annual budget process, which is monitored by the Board, and the ongoing Group strategy process.
Whistle blowing Policy
The Company is committed to maintaining the highest ethical standards and the personal and professional
integrity of its employees, suppliers, contractors and consultants. It encourages all individuals to raise any
concerns that they may have about the conduct of others in the business or the way in which the business is run.
The aim of the policy is to ensure that, as far as is possible, our employees are able to tell us about any
wrongdoing at work which they believe has occurred or is likely to occur.
Dialogue with shareholders
Many of those who continue to hold shares in the Company are, or have been, employed within the business.
The original owners of Macdonald & Company Group still hold considerable share interests and retain a strong
interest in the Company’s success and reputation.
The Board consider that the Annual Report and Accounts, in its entirety is fair, balanced and understandable
and provides the information necessary for shareholders to assess the company’s position and performance,
business model and strategy.
Robert Macdonald
Chairman
22 July 2021
18
PRIME PEOPLE PLC
Audit Committee Report
Audit Committee
The Audit Committee comprises the two Non-Executive Directors of the Company and is chaired by Chris
Heayberd. During the year the committee met once which was considered sufficient by both committee
members to deal with matters referred to it in the year. By invitation, the meetings are also attended by senior
members of the executive team and also the company secretary.
The Audit Committee’s principal tasks are to ensure the integrity of the Company’s financial reporting process,
review the effectiveness of the Group’s internal controls including risk management, review the effectiveness
and scope of the work of the external auditor and their independence, consider issues raised by the external
auditor, review audit effectiveness and review the half-yearly and Annual Report focusing in particular on
accounting policies and compliance and on areas of management judgement and estimates.
During the year ended31 March 2021, the Committee’s primary activity involved meeting with the external
auditors, considering material issues and areas of judgement, and reviewing and approving the interim and
Annual Report. The Audit Committee:
• met with the external Auditors to review and approve the annual audit plan and receive their findings
and report on the annual audit;
considered significant matters and areas of judgement with the potential to have a material impact on
the financial statements;
considered the integrity of the published financial information and whether the Annual Report and
Accounts taken are fair and balanced and provide the information necessary to assess the Group’s
performance, business model and strategy; and
reviewed and approved the Interim and Annual Report and Financial Statements
•
•
•
External Audit
The Committee has primary responsibility for the relationship between the Group and its external auditor.
The independence of the auditor is kept under review and is reported on as part of the Audit Findings Report
presented to the Committee by the Auditor.
To safeguard the objectivity and independence of the external auditor, the Committee monitors the external
auditor’s proposed scope of work and the value of fees paid, to ensure that independence is not compromised.
The Committee concluded that Crowe UK LLP are delivering the necessary audit scrutiny and that the taxation
services provided did not pose a threat to their objectivity and independence.
The Committee recommended to the Board that Crowe UK LLP be re-appointed as the Group’s statutory
Auditor for the next financial year.
Whistle blowing and anti-corruption Policy
There were no “whistleblowing” (public interest) disclosures during the year.
This report was approved by the Audit Committee and the Board on 22 July 2021 and was signed on its behalf
by:
Chris Heayberd
Chairman of the Audit Committee
19
PRIME PEOPLE PLC
Remuneration Report
The role of the Remuneration Committee
The Remuneration Committee met once this year and comprises Sir John Lewis and Mr Chris Heayberd. The
Committee is chaired by Sir John Lewis OBE.
The purpose of the Remuneration Committee is to review, on behalf of the Board, the remuneration policy for
the Chairman, Executive Directors and other Senior Executives and to determine the level of remuneration,
incentives and other benefits, compensation payments and terms of employment of the Executive Directors and
other Senior Executives. It seeks to provide a remuneration structure that strongly aligns the interests of
management with those of shareholders.
Remuneration Policy
The main aim of the Committee is to attract, retain and motivate high calibre individuals with a compensation
comprising of basic salary, incentives and rewards which are linked to the overall performance of the Group
and which are comparable to pay levels in companies of similar size and in similar business sectors.
Directors’ Service Contracts
The Executive Chairman and Managing Director have service contracts which contain a notice period of one
year which are terminable by either party giving one year’s notice. The service contracts also contain restrictive
covenants preventing them from competing with the Group for one year following the termination of
employment and preventing both Directors from soliciting key employees, clients and candidates of the
employing Group and Group companies for 12 months following termination of employment. There are no
provisions for liquidated damages on the early termination of any of the Directors’ service contracts, nor
provisions for mitigating damages.
The Commercial Director, Dugald Macdonald, who was appointed a Director of the Company on 1 April 2021,
has a service contract which contains a notice period of 6 months which is terminable by either party giving 6
months’ notice. The service contract also contained restrictive covenants preventing him from competing with
the Group for 6 months following the termination of employment and preventing him from soliciting key
employees, clients and candidates of the employing Group and Group companies for 6 months following
termination of employment.
The previous Finance Director, Donka Zaneva-Todorinksi, had a service contract which was terminable by
either party giving 6 months’ notice. This notice period was waived through mutual agreement when she left
the Group’s employment on 31 March 2021 with only serving 1 months’ notice. The service contract also
contained restrictive covenants preventing her from competing with the Group (with the exclusion of real estate
or property sectors in competition with the company) for 6 months following the termination of employment
and preventing her from soliciting key employees, clients and candidates of the employing Group and Group
companies for 6 months following termination of employment.
Non-Executive Directors’ Remuneration and Terms of Services
All Non-Executive Directors have letters of appointment which entitle either party to give three months’ notice.
The remuneration of the Non-Executive Directors is determined by the Board. The Non-Executive Directors do
not receive any pension or other benefits, other than out of pocket expenses, from the Group, nor do they
participate in any bonus schemes.
Executive Remuneration
The remuneration agreed by the Committee for the Executive Directors contains some or all of the following
elements: a base salary and benefits, defined pension contributions, an annual bonus reflecting Group and
individual performance and share options.
20
PRIME PEOPLE PLC
Remuneration Report
Base Salary and Benefits
The Committee establishes salaries and benefits by reference to those prevailing in the employment market
generally for Executive Directors of companies of comparable status and market value. Reviews of such base
salary and benefits are conducted annually by the Remuneration Committee.
Emoluments of Directors
The aggregate emoluments of Directors who served during the year are shown in the table below. Emoluments
include management salaries, pension contributions, fees as Directors and benefits. Emoluments shown are in
respect of each Director's period in office during the year as a Board member of Prime People Plc and include
emoluments from the Company and its subsidiary undertakings.
Notes
Salaries
and fees
Benefits
Pension
Loss of
office
2021
Total
2020
Total
Executive Chairman
£
£
Robert Macdonald
126,807
9,329
Executive Directors
Peter Moore
1, 2 & 3
203,607
3,457
2, 3 & 4
120,000
1,922
Donka Zaneva-
Todorinski
Non-Executive Directors
Sir John Lewis
OBE
Simon Murphy
5
-
Chris Heayberd
26,458
26,457
-
-
-
£
-
1,313
1,313
-
-
-
£
£
£
136,136
133,121
208,377
209,979
80,000
203,235
122,961
26,457
26,458
-
22,048
26,458
23,812
503,329
14,708
2,626
80,000
600,663
538,379
Notes to the emoluments:
1. Peter Moore is the highest paid Director.
2. Benefits include subscriptions, medical and travel allowance.
3. Pension includes the cash value of the Group contribution to defined contribution pension plans.
4. Donka Zaneva-Todorinski stepped down from the Board on 31 March 2021.
5. Simon Murphy stepped down from the Board on 3 February 2020.
6. Dugald Macdonald was appointed on 1st April 2021 – after the year end
21
PRIME PEOPLE PLC
Remuneration Report
Directors’ interests in shares
Directors’ beneficial interest in the shares of the Company at 31 March 2021 were as follows:
Ordinary
shares of 10p
each held at
31 March 2021
Percentage of issued
share capital at
31 March
2021
Ordinary shares of
10p each held at
31 March 2020
Percentage of issued
share capital at
31 March
2020
Robert Macdonald
Peter Moore
Donka Zaneva-
Todorinski
Sir John Lewis
Simon Murphy
Chris Heayberd
Share option schemes
2,794,000
2,909,221
17,500
1,094,750
n/a
24,000
23.06%
24.01%
0.14%
9.03%
n/a
0.20%
2,794,000
2,907,721
17,500
1,094,750
100,000
24,000
22.70%
23.63%
0.14%
8.90%
0.81%
0.20%
As at 31 March 2021 Directors’ options on ordinary shares of 10p each granted under the Prime People
Enterprise Management Incentive Scheme, were as follows:
Director
Year of
grant
Exercise
price
Number of
options
31 March
2020
Cancelled Number of options
31 March 2021
Donka Zaneva-
Todorinski
Directors’ Insurance
2015/16
58.00p
10,000
(10,000)
-
Directors’ and Officers’ liability insurance is provided at the cost of the Group for all Directors.
Annual Resolution
Shareholders will be given the opportunity to approve the Remuneration Report at the next Annual General
Meeting.
Sir John Lewis OBE
Chairman of the Remuneration Committee
22 July 2021
22
PRIME PEOPLE PLC
Independent Auditor’s Report
Independent Auditor’s Report to the Members of Prime People Plc
Opinion
We have audited the financial statements of Prime People Plc (the “Parent Company”) and its subsidiaries
(the “Group”) for the year ended 31 March 2021, which comprise:
•
•
•
•
•
the Group statement of comprehensive income for the year ended 31 March 2021;
the Group and parent company statements of changes in equity for the year then ended
the Group and parent company statements of financial position as at 31 March 2021;
the Group and parent company statements of cash flows for the year then ended; and
the notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is
applicable law and International Accounting Standards in conformity with the requirements of the Companies
Act 2006 and, as regards the parent company, as applied 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 31 March 2021 and of the Group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act 2006 as applied in
accordance with the provisions 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
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of
accounting in the preparation of the financial statements for the Group and parent company is appropriate.
Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to adopt the
going concern basis of accounting included:
• Gain an understanding of how management prepares their going concern assessment and review the
underlying assumptions
• Reviewing the forecasted period from July 2021 – July 2022 against the prior year forecast from
October 2020 – October 2021 to detect any significant movements between the two periods
• Performing a stress test on assumptions included within the forecast, for cash collections and debtor
days, to see what change would result in there being nil cash within the group at different points
throughout the period to July 2022.
In addition to the above stress testing, a stress test model was performed to see if the CBILs loan was
recalled, what reduction in cash collections would result in a nil cash balance as at March 2022 as the
CBILs covenants is assessed based on year end financial statements
•
• Confirming the opening cash balance for July 2021 back to bank statements for all balances above
£100,000
23
PRIME PEOPLE PLC
Independent Auditor’s Report (continued)
• Reviewing the covenant associated to the CBILs loan in association with the forecast period for
March 2022
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group and parent company's
ability to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if
it could reasonably be expected to change the economic decisions of a user of the financial statements. We
used the concept of materiality to both focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements as
a whole to be £80,000 (FY20 £150,000). Due to COVID-19, the profit for the 2021 financial year is not
considered normal and because of this, we have taken the prior year revenue of £29.3M and compared it
against the current year revenue £17.8m and applied a similar reduction in revenue against the prior year
materiality to bring it to a current year materiality of £80,000.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for
the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted
for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having
regard to the internal control environment. Performance materiality has been set at £57,000 (2020: £107,000).
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related
party transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £5,000 (2020: £4,500).
Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required
on qualitative grounds.
Overview of the scope of our audit
The Group’s operations are mainly based in the UK, Hong Kong and Singapore. We performed a full scope
Group audit on all trading components of the Group. The finance function is based in the UK at one central
operating location. Due to the impact of the COVID-19 pandemic, the team were unable to physically visit this
location and so the full scope audit has been performed remotely.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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) that we identified. These matters included 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.
In addition to the key audit matters listed below, going concern was also identified as a key audit matter
which is commented upon in the section conclusions relating to going concern above.
This is not a complete list of all risks identified by our audit.
24
PRIME PEOPLE PLC
Independent Auditor’s Report (continued)
Key audit matter
How the scope of our audit addressed the key audit matter
Impairment
investment
of
goodwill
and
There is a risk that the carrying
value of goodwill may be higher
than the recoverable amount.
Management has performed a full
impairment review for goodwill and
have identified a £0.02m impairment
in respect of the Hong Kong CGU
but have chosen not to recognise the
impairment on the basis of
materiality.
Linked to this goodwill is the value
of investment carried in the
company statement of financial
position in respect of its immediate
subsidiary where there has been no
impairment recognised.
impairment
When a review for
is
conducted, the recoverable amount is
determined based on value in use (VIU)
calculations which rely on the directors’
assumptions and estimates of future
trading performance.
The key assumptions applied by the
directors in the impairment reviews are
country-specific discount rates, future
growth and the terminal value applied to
the VIU calculations.
Due to the potential significance and
subjectivity of the above judgements
to the group, this is deemed to be a
key audit matter.
We evaluated the process in which directors’ future cash
flow forecasts were produced and challenged the underlying
assumptions. In addition, there were a number of challenges
around the calculation of the value in use the directors
produced. We compared management’s forecast against
market data and compared to pre-pandemic levels of trade.
We challenged management regarding:
- The key assumptions for short- and long-term
growth rates in the forecasts by comparing them
with economic and industry forecasts for the UK
recruitment market; and
- The discount rate used in the calculations by
assessing the cost of capital for the Group and
comparable organisations.
- The calculation behind the terminal value and
reasonableness of the inputs behind this
We performed sensitivity analysis on the key assumptions
within the cash flow forecasts to support the conclusions
reached. This included sensitising the discount rate applied
to the future cash flows, the short and longer-term growth
rates, and the terminal value.
We ascertained the extent to which a change in these
assumptions, either individually or combined, would result
in a material change to the value of impairment arising, and
considered the likelihood of such events occurring. We also
ensured that sufficient and appropriate disclosure regarding
such events was included in the Group’s financial
statements.
25
PRIME PEOPLE PLC
Independent Auditor’s Report (continued)
Revenue recognition
The group generates revenue from the
provision of recruitment consultancy
services, which consists of revenue from
contractors and permanent placements.
In respect of revenue recognition, the
accounting policy is described on page
41.
The risk of material misstatement in
relation to revenue recognition concerns
the recognition around the year end,
particularly in relation to contractor
placements.
a
is
Revenue is recognised for contractor
placements when the service has been
significant
provided. There
judgement involved at the period end as
to the amount of accrued cost for these
contractors that the group are liable to
of
and
corresponding revenue that should be
recognised.
therefore
amount
the
In view of the judgements involved and
the significance of this matter to the
determination of group revenue, we
consider this to be an area giving rise to
significant risk of material misstatement
in the financial statements.
Our audit procedures included comparing management’s
accounting policy with the accounting standard and its
disclosure requirements. We reviewed the terms included in
the Group’s Terms of Business to ensure these were aligned
standard.
with
accounting
policy
and
the
the
We performed following procedures on all
components:
trading
- We assessed the design and implementation of key
controls around all streams of revenue recognised.
- We selected a sample of revenue transactions for
detailed transaction testing to verify that the revenue
recognition criteria had been met and to verify that the
transaction had actually occurred and was recorded at
the correct value. We performed analytical procedures
including comparing revenue both to the prior year on a
monthly basis, and in the year from month to month,
together with a comparison of current year performance
to budgeted figures. Where we identified unusual or
unexpected variances or anomalies we investigated
these further seeking, and evaluating, explanations from
management.
- We tested the accrued income associated with work
performed by contractors and temporary workers before
the year end, by comparing the amounts to timesheets
submitted after year end.
- We performed period-end cut off testing focusing on
material items to check all revenue recognition criteria
had been met and revenue had been recognised in the
correct period.
- We considered whether the revenue and cost recognition
policies comply with Accounting Standards, with
specific reference to IFRS 15.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion on these matters individually and we express no
such opinion.
Other information
The directors are responsible for the other information contained within the annual report. The other
information comprises the information included in the annual report, other than the financial statements and
our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
26
PRIME PEOPLE PLC
Independent Auditor’s Report (continued)
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
•
•
the information given in the strategic report and the directors' report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the strategic report and directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their 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 where the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 14, 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 parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
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.
27
PRIME PEOPLE PLC
Independent Auditor’s Report (continued)
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
•
•
•
•
•
•
•
completing a risk-assessment process during planning for this audit that specifically considered the
risk of fraud;
enquiry of management about the Group’s policies, procedures and related controls regarding
compliance with laws and regulations and if there are any known instances of non-compliance;
examining supporting documents for all material balances, transactions and disclosures;
review of the Board of Directors’ minutes;
enquiry of management, about litigation and claims and inspection of relevant correspondence
specific audit testing on and review of areas that could be subject to management override of controls
and potential bias, most notably around the key judgement and estimates including goodwill and
investment impairment, revenue recognition and recoverability of trade receivables;
consideration of management override of controls outside of the normal operating cycles including
testing the appropriateness of journal entries recorded in the general ledger and other adjustments
made in the preparation of the financial statements
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company
and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Matthew Stallabrass (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
22 July 2021
28
PRIME PEOPLE PLC
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2021
Note
2, 3
2, 3
11
4
7
Revenue
Cost of sales
Net Fee Income
Administrative expenses
Goodwill impairment
Other operating income (Covid related
Governmental support)
Operating loss
Net interest payable
Loss before taxation
Income tax credit/(expense)
Loss for the year
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Exchange loss on translating foreign
operations
Other Comprehensive loss for the
year, net of tax
Total comprehensive loss for the year
Loss attributable to:
Equity shareholders of the parent
Non-controlling interest
Total comprehensive loss attributable
to:
Equity shareholders of the parent
Non-controlling interest
Loss per share
Basic loss per share
Diluted loss per share
9
The above results relate to continuing operations.
29
2021
£’000
17,802
(6,870)
2020
£’000
23,992
(8,471)
10,932
15,521
(11,756)
-
707
(13,560)
(4,018)
-
(117)
(56)
(2,057)
(76)
(173)
(2,133)
5
(175)
(168)
(2,308)
(267)
(105)
(267)
(435)
(36)
(132)
(303)
(132)
(105)
(2,413)
(2,384)
76
(2,489)
76
(0.30)p
(0.30)p
(19.36)p
(19.36)p
PRIME PEOPLE PLC
Consolidated Statement of Changes in Equity
For the year ended 31 March 2020
Called up
share
capital
Capital
Redemption
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Translation
reserve
Retained
Earnings
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Total
attributable to
equity holders
of the parent
£’000
Non-
controlling
interest
Total
equity
£’000
£’000
At 31 March 2019
1,229
9
(161)
5,371
173
337
596
6,857
14,411
588
14,999
Loss for the year
Other comprehensive
loss
Total Comprehensive
loss for the year
IFRS16 adjustment for
leases
-
-
-
-
Transactions with owners of the company
Adjustment in respect of
share options
Issue of ordinary shares
Capital repayment
Shares purchased for
treasury
Shares issued from
treasury
Adjustment on share
disposal
Dividend
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 31 March 2020
1,231
9
-
-
-
-
-
-
-
(23)
34
150
-
-
-
-
-
-
5
-
(2,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(150)
-
-
-
-
-
-
-
(2,384)
(105)
(105)
-
(2,384)
(2,384)
(105)
(2,489)
-
-
-
-
-
-
-
-
(297)
(297)
236
-
-
-
-
(150)
(948)
91
2
(2,000)
(23)
34
-
(948)
76
-
76
-
-
-
-
-
-
-
-
(2,308)
(105)
(2,413)
(297)
91
2
(2,000)
(23)
34
-
(948)
3,376
173
187
491
3,314
8,781
664
9,445
30
PRIME PEOPLE PLC
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
Called up
share
capital
Capital
Redemption
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Translation
reserve
Retained
Earnings
At 31 March 2020
Loss for the year
Other comprehensive
loss
Total Comprehensive
loss for the year
£’000
1,231
-
-
-
Transactions with owners of the company
Adjustment in respect of
minority dividend
Adjustment in respect of
share schemes
Shares purchased for
treasury
Adjustment in respect of
share options
-
-
-
-
£’000
£’000
£’000
£’000
£’000
£’000
9
-
-
-
-
-
-
-
-
-
-
-
-
-
(103)
-
3,376
173
187
491
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76
-
(24)
-
(267)
(267)
-
-
-
-
Total
attributable to
equity holders
of the parent
£’000
Non-
controlling
interest
Total
equity
£’000
£’000
8,781
664
9,445
(36)
(267)
(132)
-
(168)
(267)
(303)
(132)
(435)
£’000
3,314
(36)
-
(36)
(152)
(152)
-
-
24
76
(103)
-
-
-
-
-
(152)
76
(103)
-
At 31 March 2021
1,231
9
(103)
3,376
173
239
224
3,150
8,299
532
8,831
31
PRIME PEOPLE PLC
Consolidated Statement of Financial Position
As at 31 March 2021
Assets
Non – current assets
Goodwill
Property, plant and equipment
Current assets
Trade and other receivables
Deferred tax asset
Cash at bank and in hand
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Current tax liability
Deferred tax liability
Non-current liabilities
Borrowings
Lease liabilities
Total liabilities
Net assets
Note
11
10
13
17
22
15
17
16
32
2021
£’000
6,509
1,284
7,793
3,061
40
3,980
7,081
2020
£’000
6,509
1,890
8,399
3,868
40
2,055
5,963
14,874
14,362
3,140
533
95
22
3,790
1,733
520
6,043
8,831
3,205
497
166
22
3,890
-
1,027
4,917
9,445
PRIME PEOPLE PLC
Consolidated Statement of Financial Position
As at 31 March 2021
Capital and reserves attributable to the
Company’s equity holders
Called up share capital
Capital redemption reserve
Treasury shares
Share premium account
Merger reserve
Share option reserve
Translation reserve
Retained earnings
Note
18
19
19
19
19
19
19
19
Non-controlling interest
Total equity
2021
£’000
1,231
9
(103)
3,376
173
239
224
3,150
8,299
532
8,831
2020
£’000
1,231
9
-
3,376
173
187
491
3,314
8,781
664
9,445
The financial statements on pages 29 to 71 were approved by the Board of Directors and authorised for issue
on 22 July 2021 and are signed on its behalf by:
R J G Macdonald
P H Moore
33
PRIME PEOPLE PLC
Company Statement of Financial Position
As at 31 March 2021
Assets
Non-current assets
Investment in subsidiaries
12
Note
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Current tax liability
Non-current liabilities
Borrowings
Total liabilities
Net assets
Capital and reserves attributable to the
Company’s equity holders
Called up share capital
Capital redemption reserve fund
Treasury shares
Share premium account
Merger reserve
Share option reserve
Retained earnings
Total equity
13
22
15
16
18
19
19
19
19
19
19
34
2021
£’000
7,189
7,189
4,054
556
4,610
2020
£’000
7,137
7,137
3,145
876
4,021
11,799
11,158
2,580
-
2,580
1,733
1,733
4,313
7,486
1,231
9
(103)
3,376
173
239
2,561
7,486
3,912
3
3,915
-
-
3,915
7,243
1,231
9
-
3,376
173
187
2,267
7,243
PRIME PEOPLE PLC
Company Statement of Financial Position
As at 31 March 2021
The Company’s retained earnings includes profit/(loss) for the year of £294,034 (2020: (£524,296)).
The financial statements of Prime People Plc, Company Number 01729887 were approved by the Board and
authorised for issue on 22 July 2021 and are signed on its behalf by:
R J G Macdonald
D J G Macdonald
35
PRIME PEOPLE PLC
Company Statement of Changes in Equity
For the year ended 31 March 2021
Company
Called
up
share
capital
Capital
Redemp-
tion
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
1,229
9
(161)
5,371
173
337
3,576
10,534
At 31 March 2019
Total comprehensive
loss for the year
Issue of ordinary
shares
Adjustment for share
schemes
Capital repayment
Shares purchased for
treasury
Shares issued from
treasury
Adjustment on share
disposal
Dividend
-
2
-
-
-
-
-
-
At 31 March 2020
1,231
Total comprehensive
loss for the year
Shares purchased for
treasury
Adjustment in
respect of share
options
-
-
-
-
-
-
-
-
-
-
-
9
-
-
-
-
-
-
-
(23)
34
150
-
-
-
(103)
-
-
-
5
(2,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(524)
(524)
-
(5)
-
-
-
2
-
(2,000)
(23)
34
(150)
(150)
(150)
-
-
(630)
(630)
3,376
173
187
2,267
7,243
-
-
-
-
-
-
-
-
52
294
294
-
-
(103)
52
At 31 March 2021
1,231
9
(103)
3,376
173
239
2,561
7,486
36
PRIME PEOPLE PLC
Group and Company Cash Flow Statement
For the year ended 31 March 2021
Cash generated from (used in)
underlying operations
Corporation tax paid
Net cash from/ (used in) operating
activities
Cash flows (used in)/ from investing
activities
Interest received
Net purchase of property, plant and
equipment, and software
Dividend received
Net cash (used in)/from investing
activities
Cash flows from financing activities
Interest paid
Issue of ordinary share capital
Shares issued from treasury
Shares purchased for treasury
Shares issued and moved to treasury
Return of capital from share premium
Dividend paid to shareholders
Dividend paid to non-controlling interest
Repayment of intercompany debt
Repayment of Invoice discounting loan
Coronavirus Business Interruption Loan
Lease payments
Net cash from / (used in) financing
activities
Net (decrease)/ increase in cash and
cash equivalents
Cash and cash equivalents at
beginning of the year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end
of the year
Note
21
Group
2021
£’000
2,016
(125)
2020
£’000
3,642
(160)
1,891
3,482
5
(75)
-
(122)
-
Company
2021
£’000
10
(9)
1
5
-
300
2020
£’000
(276)
(8)
(284)
-
3,450
(70)
(122)
305
3,450
(13)
-
-
(103)
-
-
-
(152)
-
(822)
2,000
(519)
-
2
-
(21)
-
(2,000)
(948)
-
-
-
-
(566)
-
-
-
(103)
-
-
-
-
(2,523)
-
2,000
-
-
2
34
(21)
(2)
(2,000)
(625)
-
-
-
-
-
22
391
(3,533)
(626)
(2,612)
2,212
(173)
(320)
2,055
(287)
2,309
(81)
876
-
23
3,980
2,055
556
37
554
322
-
876
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
1 Nature of Operations
Prime People Plc (‘the Company’) and its subsidiaries (together ‘the Group’) is an international recruitment
services organisation with offices in the United Kingdom, the Middle East and the Asia Pacific region from
which it serves an international client base. The Group offers both Permanent and Contract specialist
recruitment consultancy for large and medium sized organisations.
The Company is a public limited company which is quoted as an AIM Company and is incorporated and
domiciled in the UK. The address of the registered office and the principal place of business is 2 Harewood
Place, London W1S 1BX. The registered number of the Company is 01729887.
2 Summary of Significant Accounting Policies
Basis of Preparation
The financial statements of Prime People Plc consolidate the results of the Company and all its subsidiary
undertakings. As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company
has not been included as part of these financial statements. The financial statements have been prepared on a going
concern basis.
The consolidated financial statements of the Group and Company have been prepared on going concern basis,
and in accordance with International Financial Reporting Standards (“IFRS”) in conformity with the
requirement of the Companies Act and comply with IFRIC interpretations and Company Law applicable to
Companies reporting under IFRS, and in accordance with the Companies Act 2006. During the reporting year,
the UK left the European Union and therefore the standards will be adopted by the UK. The consolidated
financial statements have been prepared under the historical cost convention modified as necessary to include
certain items at fair value, as required by accounting standards.
The Parent Company’s Financial Statements have also been prepared in accordance with IFRS and the
Companies Act 2006. The consolidated financial statements for the year ended 31 March 2021 (including
comparatives) are presented in GBP ’000.
The accounting polices applied by the Group in these consolidated financial statements are the same as those
applied in its consolidated Financial Statements as at and for the year ended 31 March 2020.
International Accounting Standards (IAS/IFRS) and Interpretations in issue but not yet UK approved
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations
to existing standards have been published by the IASB but are not yet effective. These have not been adopted
early by the Group and the initial assessment indicates that either they will not be relevant or will not have a
material impact on the Group. The effective dates below are for reporting periods beginning on or after that
point:
International Accounting Standards (IAS/IFRS) and Amendments adopted by the UK but not yet
effective in the UK
• Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions (issued on 28 May 2020), effective
1 June 2020
• Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond 30 June 2021 (issued on
31 March 2021), effective 1 April 2021
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current (issued on 23 January 2020) and Classification of Liabilities as Current or Non-current
(issued on 15 July 2020), deferral of effective date to 1 January 2023
38
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure
of Accounting policies (issued on 12 February 2021), effective 1 January 2023
• Amendments to: IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37
Provisions, Contingent Liabilities and Contingent Assets; and Annual Improvements 2018-2020 (all
issued 14 May 2020), effective 1 January 2023
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition
of Accounting Estimates (issued on 12 February 2021), effective 1 January 2023
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (issued on 7 May 2021), effective 1 January 2023
IAS 1 – Presentation of Financial Statements
Amendments to IAS 1 clarify the criteria used to determine whether liabilities are classified as current or non-
current. This will be based on the Group’s right at the end of the reporting period to defer settlement of the
liability for at least twelve months after the reporting period. ‘Settlements’ include the transfer of cash, goods,
services, or equity instruments unless the obligation to transfer equity instruments arises from a conversion
feature classified as an equity instrument separately from the liability component of a compound financial
instrument. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.
The Group does not believe that the amendments to IAS 1 will have a significant impact on the classification
of its liabilities.
Consolidation
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date
that control ceases.
Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition
is measured at the aggregate of the fair value of the assets given, equity instruments issued, and liabilities
incurred or assumed at the date of exchange. Acquisition related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition date fair value. The excess of the cost of acquisition
over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill.
Inter-company transactions and balances on transactions between Group companies are eliminated in preparing
the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
39
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
Going Concern
The directors have taken consideration of the impact of Covid-19 on the business and the withdrawal of the
United Kingdom from the European Union.
The Group’s activities are funded by a combination of its operating cashflows, a £2m CBILS loan and an invoice
finance facility in the UK of £2m. The Board has reviewed the Group’s profit and cash flow forecasts, and
applied sensitivities to the underlying assumptions including impact of Covid-19 outbreak and the potential
consequences for the Group. These projections indicate that the Group expects to meet its obligations as they
fall due with the use of existing facilities and to continue to meet its covenant requirements for a period of not
less than 12 months from the date of issue of the Annual Report and Accounts. The Directors note that the
Group is trading adequately and has sufficient working capital and other finance available to continue trading
for a period of not less than 12 months from the date of issue of the Annual Report and Accounts. As such, the
Directors consider it appropriate to continue to prepare the financial statements on a Going Concern basis.
Revenue recognition
a) Revenue
Revenue, which excludes value added tax (“VAT”), constitutes the value of services undertaken by the Group
from its principal activities, which are recruitment consultancy and other ancillary services. These consist of:
- Revenue from Contract placements, which represents amounts billed for the services of contract staff,
including the salary of these staff. This is recognised over the duration of the placement contract as the
service is provided; and
- Revenue from Permanent placements, which is based on a percentage of the candidate’s remuneration
package and is derived from retained assignments (income is recognised after an offer is accepted and
candidate commences employment). Revenue is recognised once value has been received by the customer
and when the above performance obligation has been satisfied. A provision is made for certain
circumstances where a client may be entitled to a refund based on variable consideration if a candidate that
has been placed leaves the role within 3 months; and
- Revenue from franchise, is recognised on an accruals basis in line with the period to which it relates
b) Cost of Sales
Cost of sales consists of the salary cost of contract staff and costs incurred on behalf of clients, principally
advertising costs.
c) Net Fee Income
Net Fee Income represents Revenue less Cost of Sales and consists of the total placement fees of Permanent
candidates and the margin earned on the placement of Contract candidates.
40
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
d) Foreign Currency Translation
(i)
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in Sterling, which is the Company’s functional and presentation currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the consolidated statement of comprehensive income.
(iii) Group Companies
On consolidation the results and financial position of all the Group entities that have a functional currency
different from the presentation currency are translated into the presentation currency as follows:
•
•
•
assets and liabilities for each year end presented are translated at the closing rate of that year end;
income and expenses for each statement of comprehensive income are translated at average exchange
rates; and
all resulting exchange differences are recognised in other comprehensive income.
e) Government grants
Grants are accounted for under the accruals model. Grants of a revenue nature are recognised in the statement
of comprehensive income in the same period as the related expenditure and are shown within other operating
income.
f) Intangible Assets
(i)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries
is included in ‘intangible’ assets.
Separately recognised goodwill is reviewed annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed. Determining whether goodwill is impaired
requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated.
The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to calculate present value.
41
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
Intangible assets that are acquired separately are carried at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful life. The
estimated useful life and amortisation method are reviewed at the end of each reporting period, with any changes
being accounted for on a prospective basis.
g) Property, Plant and Equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation less provisions for
impairment. Depreciation is provided on all property, plant and equipment using the straight-line method at
rates calculated to write off the cost less estimated residual values over their estimated useful lives, as follows:
• Furniture, fittings and computer equipment 25% – 33%
The gain or loss arising on disposal or retirement of an asset is determined by comparing the sales proceeds
with the carrying amount of the asset and is recognised within profit and loss.
h) Impairment of Assets
Assets that have an indefinite useful economic life are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units).
i) Taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported
in the statement of comprehensive income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability
for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of
financial position reporting date.
Deferred income tax is provided in full, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined
using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
42
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
j) Leases
The Group recognises within the balance sheet a right-of-use asset and a corresponding lease liability for all
applicable leases except for short term leases (lease term of 12 months or less) and leases of low value assets
(less than £5,000). For those leases the Group has opted to recognise a leases expense on a straight line basis.
New right-of-use assets are measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
•
•
lease payments made at or before commencement of the lease.
initial direct costs incurred; and
the amount of any provision recognised where the group is contractually required to dismantle, remove
or restore the leased asset (typically leasehold dilapidations).
• using hindsight in determining the lease term where the lease agreement contains options to extend or
terminate the contract
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the
case) this is not readily determinable, in which case applying a single discount rate to leases with reasonably
similar characteristics. The Group does not have any leases with variable lease payments.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate of
return on the balance outstanding and are reduced for lease payments made. Right of use assets are depreciated
on a straight line basis over the remaining term of the lease.
When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability
of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted using a revised discount rate. An
equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount
being depreciated over the revised remaining lease term.
k) Pension Costs
The Group operates a defined contribution pension scheme. The Group adopts both the minimum legally
required employer contribution rate of 3% of qualifying earnings, and the maximum earning threshold for
automatic enrolment for 2020-21, as set by the Pension Regulator.
The assets of the scheme are held separately from those of the Group in independently administered workplace
pension - NEST. The pension costs charged to the income statement represent the contributions payable by the
Group to NEST during the year.
The Pension liabilities at the Balance Sheet date represent employer and employee pension contributions, that
are payable to the pension provider by the 22nd day of each month.
43
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
l) Segmental Reporting
IFRS 8 requires operating segments to be identified based on internal reports that are regularly reviewed by the
Board of Directors to allocate resources to the segment and to assess their performance.
m) Financial instruments
Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to
the contractual provision of the instrument.
n) Financial assets
The Group’s financial assets comprise cash and various other receivable balances that arise from its operations.
This includes the Group’s trade and other receivables. They are initially recorded at fair value and subsequently
measured at amortised cost. For trade receivables amortised cost includes an allowance for expected credit
losses. This is assessed applying a provision percentage of expected loss to each of these which is assessed by
reference to past default experience. Trade receivables are only written off once the potential of collection is
considered to be nil and any local requirements such as withholding sales taxes are met.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets
except for trade receivables, where the carrying amount is reduced using an allowance account. When a trade
receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against the allowance account. Changes in the carrying amount of
the allowance account are recognised in the profit or loss account.
Cash and cash equivalents include cash in hand and bank deposits that are readily convertible to a known amount
of cash and are subject to an insignificant risk of changes in value. Bank overdrafts are classified with current
liabilities in the statement of financial position.
o) Financial liabilities and equity
The Group’s operating activities in the UK are part funded by Invoice Financing facilities. Movements in the
Invoice Discounting balance are shown within financing activities in the Group’s Cash flow Statement. Interest
charges on invoice discounting are included in finance costs and service charges are included in administrative
costs in the Group’s Income Statement.
Financial liabilities and equity instruments are initially measured at fair value and are classified according to
the substance of the contractual arrangements entered. Financial liabilities are subsequently measured at
amortised cost. The Group’s financial liabilities comprise trade payables, bank overdrafts and other payable
balances that arise from its operations. They are classified as ‘financial liabilities measured at amortised cost’.
p) Share-Based Compensation
The Group operates equity-settled, share-based compensation plans. The fair value of the employee services
received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed
over the vesting period is determined by reference to the fair value of the options granted, excluding the impact
of any non-market vesting conditions (for example, profitability and sales growth targets). At the balance sheet
date, the number of outstanding options is adjusted to reflect those options that have been granted during the
year or have lapsed in the year.
44
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
Summary of Significant Accounting Policies (continued)
q) Dividend Distribution
A final dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders. Interim dividend
distributions are recognised in the period in which they are approved and paid.
r) Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates and judgements. It also requires management to exercise judgement in the process of applying the
Company’s accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amount recognised in the financial statements are described
below:
Critical judgements in applying the Group’s policies
Revenue Recognition
Revenue from permanent placements is recognised when a candidate commences employment as management
considers that to be when the performance obligation is satisfied.
Key sources of estimation uncertainty
Goodwill Impairment
The Group tests goodwill for impairment at least annually. The recoverable amount is determined based on
value-in-use calculations. This method requires the estimation of future cash flows and the assessment of a
suitable discount rate in order to calculate their present value. Details of the impairment review are disclosed in
note 11.
Trade Receivables
There is uncertainty regarding customers who may not be able to pay as their debts fall due. In reviewing the
appropriateness of the provisions in respect of recoverability of trade receivables, consideration has been given
to the ageing of the debt and the potential likelihood of default, considering current economic conditions. Details
of the total amount of receivables past due and the movement in allowance for doubtful debts are disclosed in
note 13.
Included within receivables are amounts due of £328k against which a provision of £263k has been made. These
amounts are due from one entity which has a history of taking extended credit terms, management has
considered this when deciding upon the appropriate level of provision. In the event that the debt is not repaid a
further provision of £65k will be required, in the event that it is paid the provision of £263k will be released.
45
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
3
Segment Reporting
a) Revenue and Net Fee Income, by Geographical Region
Information provided to the Board is focused on regions and as a result, reportable segments are on a regional
basis.
UK
Asia
Revenue
2021
£’000
2020
£’000
Net fee income
2021
£’000
2020
£’000
11,668
15,677
4,894
7,262
5,105
8,176
5,009
8,120
Rest of World
1,029
139
1,029
139
17,802
23,992
10,932
15,521
All revenues disclosed by the Group are derived from external clients and are for the provision of recruitment
services. The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in note 2. Segment profit before taxation shown below represents the profit earned by each segment
after allocations of central administration costs.
b) Revenue and Net Fee Income, by Classification
Permanent
- UK
- Asia
- Rest of World
Contract
- UK
- Asia
Total
Revenue
2021
£’000
4,257
4,995
1,029
7,411
110
2020
£’000
6,344
8,110
139
9,333
66
Net fee income
2021
£’000
2020
£’000
4,257
4,995
1,029
637
14
6,344
8,110
139
918
10
17,802
23,992
10,932
15,521
46
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
3
Segment Reporting (continued)
c) Profit before Taxation by Geographical Region
UK - operations
UK – impairment of investment asset
Asia
Rest of World
Operating loss
Net finance income
Loss before taxation
2021
£’000
(33)
-
47
(131)
(117)
(56)
2020
£’000
299
(4,018)
1,672
(10)
(2,057)
(76)
(173)
(2,133)
Operating profit is the measure of profitability regularly reviewed by the Board, which collectively acts as the
Chief Operating Decision Maker. Consequently, no segmental analysis of interest or tax expenses is provided.
Segment operating profit is the profit earned by each operating unit and includes inter-segment revenues
totalling £1.29m (2020: £0.80m) for the UK, and charges of £1.11m (2020: £0.80m) for Asia and £0.18m for
the rest of the world (2020: £nil).
Intersegmental revenue and charges relate to transfer of services from one subsidiary of the Group to another.
They are based on arm’s length calculations and in proportion to segmental headcount as percentage of the total
Group headcount.
d) Segment Assets and Liabilities by Geographical Region
UK
Asia
Rest of World
Total
Total assets
2021
£’000
9,288
5,363
223
2020
£’000
9,418
4,867
77
Total liabilities
2021
£’000
3,768
1,910
365
2020
£’000
386
4,522
9
14,874
14,362
6,043
4,917
The analysis above is of the carrying amount of reportable segment assets and liabilities. Segment assets and
liabilities include items directly attributable to a segment and include income tax assets and liabilities.
47
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
4 Loss on ordinary activities before taxation
Operating loss for the year is arrived at after charging:
Depreciation - owned assets and leased assets
Loss/(profit) on disposal of fixed assets
Exchange rate loss
The analysis of auditor’s remuneration is as follows:
Audit of Company
Audit of subsidiaries
Total audit fees
5 Directors’ emoluments
Emoluments for qualifying services
Loss of office
Highest paid Director:
Emoluments for qualifying services
2021
£’000
2020
£’000
701
-
49
31
53
84
737
374
29
31
53
84
2021
£’000
2020
£’000
521
80
538
-
601
538
208
210
Details of Directors’ emoluments and interests, which form part of these financial statements, are provided in the
Director’s Remuneration report on pages 20 to 22.
48
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
6 Employees
Group
The average monthly number of employees of the Group during the year,
including Directors, was as follows:
Consultants
Management and administration
Temporary staff
Company
2021
Number
2020
Number
87
30
23
107
30
30
140
167
2021
Number
2020
Number
The average monthly number of employees of the Company during the
year, including Directors, was as follows:
Management
6
6
Staff costs for all employees, including Directors, but excluding contract staff placed with clients are as follows
and have been included in Administration expenses in the Consolidated statement of comprehensive income:
Group
Wages and salaries
Social security costs
Pension contributions
Share option charge
Remuneration of key management
Short-term employee benefits
Social security costs
Share-based payments
Pension contributions
Key management includes executive Directors and senior divisional managers.
49
2021
£’000
6,973
608
43
76
2020
£’000
8,795
741
65
49
7,700
9,650
2021
£’000
1,283
119
76
9
2020
£’000
1,568
151
38
11
1,487
1,768
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
7 Taxation on Profits on Ordinary Activities
a) Analysis of tax charge in the year
Current tax
UK Corporation tax
Over provision in prior year
Foreign tax
Foreign tax over-provision in prior years
Total current tax
Deferred tax
Deferred tax on fair value share option charge
Total (credit)/charge on (loss)/profit for the year
2021
£’000
2020
£’000
50
(41)
(14)
-
(5)
-
(5)
118
-
97
(40)
175
-
175
UK corporation tax is calculated at 19% (2020: 19%) of the estimated assessable profits for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
b) The charge for the year can be reconciled to the profit per the consolidated statement of
comprehensive income as follows:
(Loss) / profit before taxation
Tax at UK corporation tax rate of 19% (2020: 19%) on profit on ordinary
activities
Effects of:
Expenses not deductible for tax purposes
Decelerated / (accelerated) capital allowances
Depreciation on non-qualifying assets
Increase in general debt provision
Difference on Right of use asset
Tax rate differences
Exchange rate differences
Tax losses carried forward
Temporary differences recognised
Permanent timing differences
Share option charge/exercised
Total current tax
Over provision in prior year
Tax (credit)/charge for the year
50
2021
£’000
2020
£’000
(173)
(2,133)
(33)
(405)
4
19
-
-
22
-
-
24
-
-
14
50
(55)
(5)
18
(22)
116
26
-
(250)
(23)
-
(3)
727
(9)
175
-
175
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
8 Dividends
Final dividend for 2020: 0.00p per share (2019: 3.40p per share)
Interim dividend for 2021: 0.00p per share (2020: 1.80p per share)
Command Recruitment Group (HK) Limited dividend to non-controlling
shareholders
2021
£’000
2020
£’000
-
-
-
-
411
220
317
948
The Board did not and will not recommend any final dividend for the year to 31 March 2021.
51
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
9
(Loss)/earnings per share
Earnings per share are calculated by dividing the profit attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the year.
Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by
existing share options assuming dilution through conversion of all potentially dilutive existing options.
Earnings and weighted average number of shares from continuing operations used in the calculations are shown
below.
Loss for the year and earnings used in basic and diluted earnings per share
2021
£’000
(36)
2020
£’000
(2,384)
Number
Number
Weighted average number of shares used for basic (loss) per share
Dilutive effect of share options
12,266,005
-
12,307,273
-
Diluted weighted average number of shares used for diluted (loss) per share
12,266,005
12,307,273
Basic (loss) per share
Diluted (loss) per share
Pence
(0.30) p
(0.30) p
Pence
(19.36) p
(19.36) p
The following table shows earnings per share as they would be without the effect of goodwill impairment.
(Loss)/profit for the year and earnings used in basic and diluted
(loss)/earnings per share prior to goodwill impairment
Weighted average number of shares used for basic (loss)/earnings per share
Dilutive effect of share options
£’000
(36)
£’000
1,635
Number
Number
12,226,005
-
12,307,273
-
Diluted weighted average number of shares used for diluted (loss)/earnings
per share
12,226,005
12,307,273
Basic (loss)/earnings per share prior to goodwill impairment
Diluted (loss)/earnings per share prior to goodwill impairment
Pence
(0.30) p
(0.30) p
Pence
13.28p
13.28p
52
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
10 Property, Plant and Equipment
Group
Cost
At 1 April 2019
Additions
Disposals
Exchange difference
At 1 April 2020
Additions
Disposals
Exchange difference
At 31 March 2021
Depreciation
At 1 April 2019
Provision for the year
Disposals
Exchange difference
At 1 April 2020
Provision for the year
Disposals
Exchange difference
Fixtures,
fittings, and
equipment
Right-of-use
assets - Land
and buildings
Total
£’000
£’000
£’000
1,980
122
(28)
37
2,111
75
-
(64)
2,932
212
-
62
3,206
107
(93)
(104)
4,912
334
(28)
99
5,317
182
(93)
(168)
2,122
3,116
5,238
1,228
283
(28)
22
1,505
258
-
(34)
1,469
440
-
13
1,922
443
(93)
(47)
2,697
723
(28)
35
3,427
701
(93)
(81)
At 31 March 2021
1,729
2,225
3,954
Net book value
At 31 March 2021
At 31 March 2020
At 31 March 2019
393
606
752
891
1,284
1,284
1,890
-
752
53
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
11 Goodwill
Cost
At 1 April 2020
Goodwill impairment
At 31 March 2021
£’000
6,509
-
6,509
The total carrying value of goodwill is £6.51m, which relates to the acquisition of the Macdonald & Company
Group in January 2006 and Command Recruitment Group (H.K.) Limited in October 2017. Goodwill is
reviewed and tested for impairment on an annual basis. Goodwill has been tested for impairment by comparing
the carrying amount of the group of cash generating units (CGUs) the goodwill has been allocated to, with the
recoverable amount of those CGUs. The recoverable amounts of the CGUs are their value in use.
The assessment for Macdonald & Company Group is based on UK projected operating profit. Whilst the
assessment model has remained consistent in prior years, the impact of Covid- 19 has influenced the forecasting
methodology that has been applied. The recoverable amount is determined on a value-in-use basis utilising the
value of cash flow projections over four years with a terminal value based on a growth rate in perpetuity. This
has changed from prior years’ model, where an earnings multiple of six times year 5 earnings of the UK CGU
was used with a forecast period of 5 years.
Goodwill recognised on the business combination in 2018 with Command recruitment Group (HK) limited was
£758k. The assessment of Command CGU is based on projected results in Hong Kong. The approach is the
same as that used above for Macdonald & Company Group. The recoverable amount is determined on a value-
in-use basis utilising the value of cash flow projections over four years with a terminal value based on a growth
rate in perpetuity. This has changed from prior years’ model, where an earnings multiple of eight times year 5
earnings of the Command CGU was used with a forecast period of 5 years.
As the business has been impacted by Covid-19, the forecast results for the first year are significantly reduced
from previous years in both the UK and Command CGUs. Between 2020-21 and 2021-22, management has
applied a 13% NFI growth rate for the UK CGU and 49% for Command which reflects a return to more normal
levels of activity as the impact of the pandemic recedes. Thereafter, in subsequent years, management expect
the initial growth rate to stabilise and have projected NFI growth to return to its long term trend of 5% per
annum through to 2025.
In the same respect, as NFI increases, management expects operating profit to return to pre-pandemic levels.
Historic conversion rates of NFI to operating profit have been in the range of 11-16% and forecast operating
profit for 2021-22 is 11% of NFI for the UK and 5% for the Command CGUs respectively. The conversion rate
is projected to increase to 15% for the UK CGU over the period as senior management work with local
management to realise ongoing efficiencies whereas it will remain the same for the Command CGU.
The value-in-use for the terminal value in the model has been determined based on a growth rate of 2.00% in
perpetuity. This is deemed reasonable and represents the average rate of growth in the markets in which the
Group operates. A pre-tax discount rate of 11.67% (2020: 6.49%) has been applied, representing the weighted
average cost of capital for the Group. The rate has increased as it is more closely aligned to other listed
recruitment companies.
54
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
11 Goodwill (Continued)
The profit growth rate used for the UK & Command CGUs in the first year are -1941% and -137% respectively,
which reflects a return to more normal levels of activity as the impact of the pandemic recedes. The first year
growth rates are, therefore, augmented as we started with a loss of £0.03m and £0.33m in 2021 in UK and
Command respectively. Thereafter, in subsequent years, management expect the initial growth rate to stabilise
with projected profit growth rates.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned
to the key assumptions represent management’s assessment of future trends in the industry the Group operates
in and have been based on historical data from internal sources.
Assumptions
Terminal growth rate
Profit growth rate (Year 1 - 4)
Growth rate (NFI) (Year 1 - 4)
Discount rate
Macdonald & Company Group
Command recruitment
Group (HK)
2%
-1941%, 34%, 11%, 6%
13%, 5%, 5%, 5%
11.67%
2%
-137%, 5%, 5%, 5%
49%, 5%, 5%, 5%
11.67%
As a result of the impairment reviews carried out at 31 March 2021, no impairment charge (2020: £4m) has
been recognised for the UK CGU, since the ‘recoverable amount’ (being the greater of the net realisable value
and the value in use) exceeds the carrying amount. A number of sensitivity scenarios have been considered. If
the discount rate increased to 12.67% and the projected profit decreased by 15% then this would still leave
headroom of £0.5m. Management are confident the assessment is reasonable as the NFI generated in the first
three months post 31 March 2021 by the UK CGI is in line with the forecast applied.
The impairment reviews carried out at 31 March 21 for the Command CGU indicated a small impairment of
£0.02m which is not deemed material to recognise. Several sensitivity scenarios have been considered. If the
discount rate increased to 12.67% and the projected profit decreased by 1% then this would indicate an
impairment of £0.1m. However, management is confident that performance will return to historic levels over
the forecast period.
12
Investments
Company shares in subsidiary undertakings
Cost
At 1 April 2020
Impairment of investment asset
Increase / (decrease) in shares from subsidiary from share
option reserve
At 31 March 21
2021
£’000
2020
£’000
7,137
11,213
-
52
(3,926)
(150)
7,189
7,137
The investment value is linked to the Goodwill. The model and assumptions applied to assessing the Goodwill
impairment have been applied to the carrying value of the investment and based on that no impairment has been
recognised in the period.
55
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
12
Investments (Continued)
Non-Controlling Interest
The following table summarises the information relating to Command Recruitment Group (HK) Limited, that
is a subsidiary with material non-controlling interest (“NCI”), before any intra-group eliminations.
NCI percentage
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Net assets attributable to NCI
Revenue
Operating profit
Profit after interest and tax
Other comprehensive (loss)/ income
Total comprehensive income
Profit after interest and tax allocated to NCI
Other comprehensive (loss)/ income allocated to NCI
Cash flows from operating activities
Cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
2021
£’000
40%
175
1,749
(753)
(64)
1,107
443
1,700
(322)
(330)
(158)
(448)
(132)
(63)
(300)
-
(300)
2020
£’000
40%
288
1,892
(440)
(145)
1,596
638
3,596
1,412
1,407
(35)
1,372
563
(14)
4,831
(318)
4,513
56
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
12
Investments (Continued)
The following are subsidiary undertakings at the end of the year and have all been included in the consolidated
financial statements:
Country of
incorporation
England and Wales
Holding Company
Principal activity
Registered address
Macdonald & Company
Group Limited
Macdonald & Company
Property Limited
Macdonald and Company
Freelance Limited
Macdonald & Company
(Overseas) Limited
Macdonald & Company Ltd
England and Wales
Recruitment
England and Wales
Recruitment
England and Wales
Dormant
Hong Kong
Recruitment
Ru Yi Consulting Limited
Hong Kong
Dormant
Macdonald & Company
(Shenzhen) Limited
P.R. China
Recruitment
Macdonald and Company
Pte Limited
Macdonald & Company Pty
Ltd
Macdonald & Company
Recruitment Proprietary Ltd
Singapore
Recruitment
Australia
Dormant
South Africa
Dormant
The Prime Organisation Ltd
England and Wales
Dormant
Command Recruitment
Group (H.K.) Limited
Hong Kong
Recruitment
Prime People Inc.
U.S.A.
Recruitment
Macdonald Consulting GmbH Germany
Dormant
2 Harewood Place, Hanover
Square, London, W1S 1BX
2 Harewood Place, Hanover
Square, London, W1S 1BX
2 Harewood Place, Hanover
Square, London, W1S 1BX
2 Harewood Place, Hanover
Square, London, W1S 1BX
29th Floor
3 Lockhart Road
Wan Chai, Hong Kong
29th Floor
3 Lockhart Road
Wan Chai, Hong Kong
1503M, 15/F, Tower 2, Kerry
Plaza, No.1 Zhong Xin Si Road,
Futian District, Shenzhen 518048,
P.R. China
63 Market Street #05-02, Bank of
Singapore Centre, Singapore
048942
Storey Blackwood & Co, Level 4,
222 Clarence Street, Sydney NSW
2000 Australia
1 Emfuleni, 79 Crassula Crescent,
Woodmead, Johannesburg, 2052
South Africa
2 Harewood Place, Hanover
Square, London, W1S 1BX
29th Floor
3 Lockhart Road
Wan Chai, Hong Kong
1209 Orange Street, Wilmington,
New Castle County, Delaware
19801
District Court, Frankfurt am Main,
HRB 121950
For all undertakings listed above, the country of operation is the same as its country of incorporation.
The Group holds 100% of all classes of issued share capital except in the case of Command Recruitment Group
(H.K.) Limited, where it owns 60%, The percentage of the issued share capital held is equivalent to the
percentage of voting rights for all companies.
57
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
13 Trade and other receivables
Current
Trade receivables
Allowance for doubtful debts
Other receivables
Amounts owed by subsidiary company
Prepayments and accrued income
Group
Company
2021
£’000
2,582
(380)
453
-
406
2020
2021
2020
£’000
£’000
£’000
3,312
(340)
284
-
612
-
-
159
3,868
27
-
-
133
3,000
12
3,061
3,868
4,054
3,145
At 31 March 2021 the average credit period taken on sales of recruitment services was 48 days (2020: 75 days)
from the date of invoicing. An allowance of £380,000 (2020: £340,000) has been made for estimated
irrecoverable amounts. Due to the short-term nature of trade and other receivables, the Directors consider that
the carrying value approximates to their fair value.
A provision for impairment of trade receivables has been made. In reviewing the appropriateness of the
provision, consideration has been given to the ageing of the debt and the potential likelihood of default, taking
into account current economic conditions.
The ageing of group trade receivables at the reporting date was:
Gross trade
receivables
Provisions Expected
Loss rate
Gross trade
receivables
Provisions
Expected
Loss rate
due
past
Not
0 -30 days
Past due 30-90 days
Past due more than
90 days
2021
£’000
2021
£’000
2021
%
2020
£’000
2020
£’000
2020
%
1,475
71
4.8%
631
476
18
291
2.9%
61.1%
1,548
792
972
50
80
210
3.2%
10.1%
21.6%
2,582
380
3,312
340
The expected loss rates for trade receivables are based on the payment profile and the shared credit risk
characteristics arising in the different industries in which the Group operates. The Company has incorporated
forward-looking information based on the clients’ industries and financial position, including the assessment of
any perceived impact of Covid-19.
58
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
13 Trade and other Receivables (continued)
Movement in allowance for doubtful debts:
1 April 2020
Impairment losses recognised
Amounts written off as uncollectable
Amounts paid by the client
Impairment losses reversed
31 March 2021
14 Financial Instruments
2021
£’000
340
164
(63)
(22)
(39)
380
Group
Company
Note
13
13
2021
£’000
2,655
-
3,980
2020
£’000
3,256
-
2,055
2021
£’000
159
3,868
556
Financial assets at amortised cost
Trade and other receivables
Amounts owed by subsidiary company
Cash and cash equivalents
2020
£’000
621
340
(38)
(452)
(131)
340
2020
£’000
133
3,000
876
Cash is held either on current account or on short-term deposits at floating rates of interest determined by the
relevant bank's prevailing base rate.
6,646
5,311
4,583
4,009
Financial liabilities at amortised cost
Trade and other payables
Accruals
Coronavirus Business Interruption
Loan
Note
15
15
Group
Company
2021
£’000
742
1,335
2,000
2020
£’000
1,619
901
-
2021
£’000
2020
£’000
2,247
65
2,000
3,873
35
-
4,077
2,520
4,312
3,908
There is no material difference between the book values of the Group's financial assets and liabilities and their
fair values.
The Group and the Company do not hold any derivative financial instruments.
59
PRIME PEOPLE PLC
Notes to the financial statements
For the year ended 31 March 2021
15 Trade and other Payables
Current
Trade payables
Other payables
Amount owed to subsidiary
undertakings
Taxation and social security
Coronavirus Business Interruption
Loan
Accruals
Group
Company
2021
£’000
203
539
-
796
267
1,335
2020
£’000
371
1,248
-
685
-
901
2021
£’000
30
-
2,217
1
267
65
2020
£’000
1
-
3,872
4
-
35
3,140
3,205
2,580
3,912
Due to the short-term nature of the trade and other payables, the Directors consider that the carrying value
approximates to their fair value. Trade payables are generally on 30–60-day terms. No payables are past their
due date.
16 Borrowings due after more than one year
Borrowings due after more than one year
Coronavirus Business Interruption Loan
Group
Company
2021
£’000
2020
£’000
1,733
1,733
-
-
2021
£’000
1,733
1,733
2020
£’000
-
-
The loan is repaid in 60 equal instalments from August 2021 to July 2026.
60
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
17 Deferred Tax
Group (Liability)
At 1 April 2019
Credit to income
At 31 March 2020
Debit to income
At 31 March 2021
Group (Asset)
At 1 April 2019
Debit to income
At 31 March 2020
Debit to income
At 31 March 2021
18 Share Capital
ALLOTTED CALLED UP
Ordinary shares of 10p each
As at 1 April
Shares
during the year
(purchased
for
treasury)/issued
Other
temporary
differences
£’000
Total
£’000
22
-
22
-
22
Share
Options
£’000
40
-
40
-
40
2021
2020
Number
£’000
Number
22
-
22
-
22
Total
£’000
45
(5)
40
-
40
£’000
12,307,273
(190,000)
1,231
(103)
12,290,199
17,074
1,229
2
At 31 March
12,117,273
1,128
12,307,273
1,231
Share capital includes unpaid shares of nil (2020: nil).
61
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
18 Share Capital (continued)
The Company has one class of ordinary shares which carries no right to fixed income and which represents
100% of the total issued nominal value of all share capital.
Each share carries the right to one vote at general meetings of the Company. No person has any special rights
of control over the company’s share capital and all its issued shares are fully paid.
Pursuant to shareholder resolutions at the AGM of the Company on 22 September 2020, the Company has the
following authorities during the period up to the next AGM:
-
-
-
-
-
to issue new/additional ordinary shares to existing shareholders through a rights issue up to a maximum
nominal amount of £410,242 representing one- third of the Company’s issued share capital;
to issue new/additional ordinary shares to new shareholders up to a maximum nominal amount of £410,242
representing one third of the issued shares capital of the Company;
to allot equity securities for cash, without the application of pre-emption rights, up to a maximum nominal
amount of £184,609 representing 15% of the Company’s issued share capital of the Company;
to purchase through the market up to 15% of the Company’s issued share capital, subject to certain
restrictions on price; and
to make off-market purchases of its ordinary shares for the purposes of or pursuant to an employee ‘share
scheme with the maximum aggregate number of ordinary shares authorised to be purchased is 4,102,424
representing approximately one-third of the Company’s issued ordinary share capital.
Capital Risk Management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising
returns to shareholders through the optimisation of debt and equity balances. The capital structure of the Group
consists of cash and cash equivalents and equity attributable to equity holders of the parent comprising issued
capital reserves and earnings.
The Group manages the capital structure and adjusts it in the light of changes to economic conditions and risks.
In order to manage capital, the Group has continued to consider and adjust the level of dividends paid to
shareholders and made purchases of its own shares which are held as Treasury Shares.
Employee Share Schemes
The Company operates two share options schemes with one of them, the Save as You Earn scheme, being
dormant.
62
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
18 Share Capital (continued)
Enterprise Management Incentive Share Option Scheme
At 31 March 2021 the following options had been granted and remained outstanding in respect of the
Company’s ordinary shares:
Granted
Exercised
Cancelled Number of
Options 31
March 2021
Year of
grant
Exercise
Price
Pence
Exercise
Period
2011/12
68.00
2014-2019
2013/14
10.00
10.00
2016-2021
2019-2021
2014/15
10.00
10.00
2016-2021
2019-2021
2015/16
2016/17
10.00
58.00
58.00
50.00
90.00
90.00
2020-2022
2017-2022
2020-2022
2022-2027
2019-2024
2022-2027
Number of
options
31 March
2020
3,000
9,000
6,000
10,000
25,000
30,000
15,000
50,000
10,000
15,000
20,000
2018/19
10.00
2020-2028
80,000
2019/20
50.00
50.00
42.50
2022-2029
2024-2029
2022-2029
15,000
50,000
30,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020/21
50.00
10.00
2022-2029
2023-2033
-
-
20,000
725,000
Total 2021
368,000
745,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(10,000)
-
-
-
3,000
9,000
6,000
10,000
25,000
30,000
15,000
40,000
10,000
15,000
20,000
(30,000)
50,000
-
-
-
-
-
15,000
50,000
30,000
20,000
725,000
(40,000)
1,073,000
Weighted average exercise price
2021
35.73p
11.07p
-
22.00p
19.68p
Total 2020
604,750
95,000
(231,750)
(100,000)
368,000
Weighted average exercise price
2020
26.96p
47.63p
17.25p
36.80p
35.73p
63
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
18 Share Capital (continued)
There were 1,073,000 options outstanding at 31 March 2021 (2020: 368,000) which had a weighted average
price per share of 19.68p (2020: 35.73p) and a weighted average contractual life of 2.4 years. The options vest
over a period of two to four years conditional upon the option holders continued employment with the Company.
The conditions applying to those options which are fully vested have been achieved. The number of outstanding
options that will vest is dependent on the achievement of several key performance measures of the group,
measured at a regional and consolidated level for the financial years 2020 and 2021. The fair value of the
employee services received in exchange for the grant of the share options is charged to the profit and loss
account over the vesting period of the share option, based on the number of options which are expected to
become exercisable.
Option pricing model used
Weighted average share price at grant date (in pence)
Exercise price (in pence)
Fair value of options granted during the year
Expected volatility (%)
Risk-free interest rate (%)
Vesting period of options (years)
2021
Black-Scholes
57.50 & 61.00
50.00 & 10.00
25.53 & 51.29
67 & 40
1
2 & 2.7
2020
Black-Scholes
91.00 & 81.50
50.00 & 42.50
46.44
20
4
2 & 5
Expected volatility was determined by reference to historical volatility of the Company’s share price.
The share-based payment expense recognised within the income statement during the period was £75,974
(2020: expense £48,836).
64
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
19 Reserves
Capital Redemption Reserve Fund
The capital redemption reserve relates to the cancellation of the Company’s own shares.
Treasury Shares
At 31 March 2021, the total number of ordinary shares of 10p held in Treasury and their values were as follows:
2021
2020
Number
£’000
Number
£’000
As at 1 April
Shares purchased for treasury
Shares issued from treasury
Loss on treasury shares disposal
As at 31 March
Nominal value
Market value
-
190,000
-
-
190,000
195,676
36,074
(231,750)
-
-
-
103
-
-
103
-
-
161
23
(34)
(150)
-
-
-
The maximum number of shares held in treasury during the year was 190,000 shares representing 1.6% of the
called-up ordinary share capital of the Company (2020: 195,676 representing 1.6% of the called-up ordinary
share capital of the Company).
Merger Reserve
The merger reserve represents the fair value of the consideration given in excess of the nominal value of ordinary
shares issued to acquire subsidiaries.
Share Option Reserve
The reserve represents the cumulative amounts charged to profit in respect of employee share option
arrangements where the scheme has not yet been settled by means of an award of shares to an individual.
Share Premium Account
The balance on the share premium account represents the amounts received in excess of the nominal value of
the ordinary shares.
Translation Reserve
The foreign currency translation reserve comprises all presentation foreign exchange differences arising from
translation of the financial statements of foreign operations into the presentation currency of the Group accounts.
Retained Earnings
The balance held on this reserve is the accumulated retained profits of the Group/Company.
65
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
20 Leases
The Group adopted IFRS 16 Leases for the first time in the prior-year financial statements.
The Group’s leases are property leases. These include leases for the offices from which the businesses across
the Group operate and these have terms of typically 1 to 10 years. The movements in the carrying value of right-
of-use assets is provided below.
Right-of-use asset - Property
Cost
At 1 April 2020
Exchange differences
Additions
Disposals
At 31 March 2021
Accumulated depreciation
At 1 April 2020
Exchange differences
Depreciation
Disposals
At 31 March 2021
Net Book Value as at 31 March 2021
2021
£’000
3,206
(104)
107
(93)
3,116
1,922
(47)
443
(93)
2,225
891
Additional disclosures as required under IFRS 16 Leases are provided in the table below:
Depreciation of right-of-use assets
Interest on lease obligations
Cash outflow for leases
Additions to right-of-use-assets
Disposals of right-of-use assets
2021
£’000
443
48
562
107
(93)
2020
£’000
2,994
-
212
-
3,206
1,482
-
440
-
1,922
1,284
2020
£’000
440
71
566
212
-
66
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
21 Reconciliation of Profit before Tax to Net Cash Inflow from Operating Activities
Group
2021
£’000
2020
£’000
Company
2021
£’000
2020
£’000
Loss before taxation
(173)
(2,133)
(5)
(3,965)
Adjust for:
Depreciation of property, plant and equipment and
software amortisation
Depreciation of right-of-use assets
Impairment of goodwill
Share-based payment expense
Loss on sale of tangible asset
Interest receivable
Interest payable
258
443
-
76
-
(5)
61
737
-
4,018
49
1
-
76
-
-
-
-
-
-
-
-
-
3,926
-
-
-
-
Operating cash flow before changes in working
capital
660
2,748
(5)
(39)
Decrease/(increase) in receivables
(Decrease)/increase in payables
866
(332)
778
116
(41)
56
(3,021)
2,784
Cash generated from / (used by) underlying
operations
1,194
3,642
10
(276)
22 Reconciliation of movements of liabilities to cash flows arising from financing activities
Group
Borrowings
Invoice finance
Lease liabilities
At 1 April
New loan
2020
Net
Repayments
At 31 March
2021
£’000
£’000
£’000
-
2,000
806
1,524
-
-
-
(822)
(471)
£’000
2,000
(16)
1,053
Total financing liabilities
2,330
2,000
(1,293)
3,037
67
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
22 Reconciliation of movements of liabilities to cash flows arising from financing activities (continued)
Company
Borrowings
Total financing liabilities
23 Analysis of Cash less overdrafts
At 1 April
New loan
2020
Net
Repayments
At 31 March
2021
£’000
£’000
£’000
-
-
2,000
2,000
-
-
£’000
2,000
2,000
Group
At 1 April
Cash flow
Exchange
At 31 March
Cash at bank and in hand
2020
£’000
2,055
£’000
2,212
£’000
(287)
2021
£’000
3,980
Total cash
2,055
2,212
(287)
3,980
Company
At 1 April 2020 Cash flow
At 31 March 2021
Cash at bank and in hand
Total cash
24 Financial Risk Management
£’000
£’000
876
876
(320)
(320)
£’000
556
556
The Board of Directors has overall responsibility for the risk management policies that are applied by the
business to identify and control the risks faced by the Group. The Group has exposure from its use of financial
instruments to foreign currency risk, credit risk and liquidity risk.
Foreign Currency
The Group publishes its consolidated financial statements in Sterling. The functional currencies of the Group’s
main operating subsidiaries are Sterling, the Singapore Dollar, the Hong Kong Dollar and the UAE Dirham.
The Group’s international operations account for approximately 34.46% (2020: 34.66% of revenue and
approximately 29.12% (2020: 24.27%) of the Group’s assets and consequently the Group has a degree of
translation exposure in accounting for overseas operations.
68
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
24 Financial Risk Management (continued)
Foreign Currency (continued)
The Group exposure to foreign currency risk is as follows:
As at 31 March 2021
Cash at bank
Trade and other
receivables
Trade and other payables
Net exposure
Euro
£’000
410
46
(165)
291
AUD
£’000
26
-
-
26
USD
£’000
634
HK$
£’000
313
S$
£’000
877
AED
£’000
6
CNY
£’000
378
SAR
£’000
104
28
(146)
516
952
(735)
530
293
(236)
934
28
(32)
2
-
-
378
-
-
104
As at 31 March 2020
Euro
£’000
AUD
£’000
USD
£’000
Cash at bank
Trade and other
receivables
Trade and other payables
Net exposure
66
-
-
66
7
-
-
7
1
-
-
1
HK$
£’000
259
S$
£’000
211
AED
£’000
410
1,350
299
336
(1,101)
508
(117)
393
(115)
631
CNY
£’000
SAR
£’000
-
-
-
-
-
-
-
-
Sensitivity analysis – currency risk
A 10% weakening or strengthening of Sterling against the above currencies at 31 March 2021 would have
increased/(decreased) equity and profit or loss by the amounts shown below. This analysis is applied currency
by currency in isolation, i.e. ignoring the impact of currency correlation, and assumes that all other variables,
interest rates, remain constant. The amounts generated from the sensitivity analysis are forward-looking
estimates of market risk assuming certain adverse market conditions occur. Actual results in the future may
differ materially from those projected, due to developments in the global financial markets which may cause
fluctuations in interest and exchange rates to vary from the hypothetical amounts disclosed in the table below,
which therefore should not be considered a projection of likely future events and losses.
Foreign Currency
Euro
US dollar
Hong Kong dollar
Singapore dollar
UAE dirham
Australian dollar
Chinese yuan renminbi
Saudi riyal
Strengthening
2021 PBT
£'000
(26)
(47)
(48)
(85)
-
(2)
(34)
(9)
2021 equity
£'000
25
37
5
50
-
1
4
2
2021 PBT
£'000
25
37
5
50
-
1
4
2
Weakening
2021 equity
£'000
(26)
(47)
(48)
(85)
-
(2)
(34)
(9)
69
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
24 Financial Risk Management (continued)
Foreign Currency (continued)
Currently the Group’s policy is not to hedge against this exposure, but it does seek to minimise this exposure
by converting into sterling all cash balances in foreign currency that are not required for capital monetary needs.
The settlement of intercompany balances held with foreign operations is neither planned nor likely to occur in
the foreseeable future. Therefore, exchange differences arising from the translation of the net investments are
recognised in Other Comprehensive income.
Credit Risk
The Group’s principal financial assets are bank balances, trade and other receivables. The Group’s credit risk
is primarily in respect of trade receivables. Credit risk refers to the risk that a client will default on its contractual
obligations resulting in financial loss to the Group. The Group’s largest credit risk exposure to a single client is
in the UK and represents 10.05% of the Group trade receivables balance. Although there is no indication that
the debt is uncollectable, the Directors are of the opinion that adequate provision is in place to cover any
potential default by this client. A public investment funds in Saudi Arabia accounted for 4.13% of Group trade
receivables respectively. Apart from this exposure, at the year-end no other customer represented more than
4.01% (2020: 5.73%) of the total balance of trade receivables.
In reviewing the appropriateness of the provisions in respect of recoverability of trade receivables, consideration
has been given to the ageing of the debt and the potential likelihood of default, considering current economic
conditions.
It is the Directors’ opinion that no further provision for doubtful debts is required.
Liquidity Risk
The Group manages its liquidity risk by maintaining adequate cash and or credit facilities to meet forecast cash
requirements of the Group. Management monitors its forecasted cash flow requirements at a Group level based
on monthly returns made by the Group’s operating units.
The Group has short-term trade and other payables and accruals as disclosed in note 15, all due within one year
of the year end. In addition it has lease liabilities and a loan under the Coronavirus Business Interruption Loan
Scheme as set out below.
The Group has net funds of £3.98m (2020: £2.06m), which the Board considers are more than adequate to meet
future working capital requirements and to take advantage of business opportunities.
As at 31 March 2021, the Group’s financial liabilities have contractual maturities as follows:
At 31 March 21
Trade payables and other
payables
Lease liabilities
CBILS
Total contractual
cash flows
Less than
6 months
£'000
6 – 12
months
£'000
Between 1
and 2 years
£'000
Between 2
and 5 years Over 5 years
£'000
£'000
2,676
281
81
197
281
239
3,038
717
70
-
437
466
903
-
99
1,298
1,397
-
-
135
135
PRIME PEOPLE PLC
Notes to the Financial Statements
For the year ended 31 March 2021
24 Financial Risk Management (continued)
At 31 March 20
Trade payables and other
payables
Taxation and social security
Accruals
Lease liabilities
Total contractual
cash flows
Less than
6 months
£'000
6 – 12
months
£'000
Between 1
and 2 years
£'000
Between 2
and 5 years Over 5 years
£'000
£'000
1,619
440
901
254
3,214
-
245
-
243
488
-
-
-
500
500
-
-
-
508
508
-
-
-
20
20
25 Related Party Transactions
The Company provides corporate guarantees on the subsidiary bank accounts. At 31 March 2021 amounts
overdrawn by subsidiary bank accounts were £nil (2020: £nil).
The Group owes a director £40,330 (2020: £nil). There is no interest charged on this loan and no fixed date for
repayment.
The Directors receive remuneration from the Group, which is disclosed in the Directors’ Remuneration Report.
As shareholders, the Directors also eligible to receive dividends from the Company. In the year these amounted
to £nil (2020: £318,213).
71
PRIME PEOPLE PLC
Directors and Advisers
Directors
Robert Macdonald
Peter Moore
Chris Heayberd
Sir John Lewis OBE
Dugald Macdonald
Secretary and Registered Office
(Executive Chairman)
(Managing Director)
(Non-Executive Director)
(Non-Executive Director)
(Commercial Director)
Indigo Corporate Secretary Limited, Monometer House, Rectory Grove, Leigh-On-Sea, England, SS9 2HL.
Registered Number
01729887
Nominated Adviser & Broker
Cenkos Securities Plc, 6.7.8 Tokenhouse Yard, London, EC2R 7AS
Solicitors
Charles Russell Speechlys LLP, 5 Fleet Place, London EC4M 7RD
Auditor
Crowe U.K. LLP, 55 Ludgate Hill, London EC4M 7JW
Principal Bankers
HSBC Bank PLC, Oxford Circus, 196 Oxford Street, Fitzrovia, London W1D 1NT
Registrars
Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, West Midlands, B62 8HD
72
PRIME PEOPLE PLC
Board of Directors
Directors' Biographies
Robert Macdonald - Executive Chairman
Robert has held senior positions within the recruitment industry since 1973 when he founded Reuter Simkin
Limited, a recruitment business in both the legal and property sectors. Reuter Simkin had both Kleinwort
Benson Development Capital and Charterhouse Development Capital as investors. After the sale of Reuter
Simkin in 1989, he acquired shares in and was Chairman of two other recruitment companies one of which
acquired the legal business of Reuter Simkin in the West of England from PSD in 1992 and traded as Macdonald
& Company. In 1994, he established Macdonald & Company as a specialist property recruitment consultancy
in London. Lead by Robert and Peter Moore, Macdonald & Company Group Ltd completed the reverse takeover
of Prime People Plc in January 2006.
Peter Moore MRICS - Managing Director
Peter graduated from the Royal Agricultural University and then worked with Strutt & Parker from 1992 to
1995, qualifying as a Charted Surveyor in 1994. He joined Macdonald & Company in 1995 and was appointed
Managing Director in 1996. Under Peter’s management Macdonald & Company became the largest and most
respected real estate focused recruitment provider in the market and the RICS’s preferred recruitment partner.
Lead by Robert Macdonald and Peter Moore, Macdonald & Company Group Ltd completed the reverse
takeover of Prime People Plc in January 2006. Since then Peter has been instrumental in developing Prime
People into a global specialist recruitment business spanning real estate, energy & environmental and insight &
analytics.
Dugald Macdonald – Commercial Director
Mr Macdonald joined the Company in 2013 and is responsible for driving operational excellence and
profitability for the Group as well as overseeing global commercial and operational functions and the appraisal
of strategic investments. Based in London, Mr Macdonald was based in the Group’s Hong Kong office in 2013
and 2014, where he managed operations for the Group’s Asia business units. Before joining the Company, Mr
Macdonald worked in the technology practice of two leading executive search firms. Mr Macdonald holds an
MSc in Management from Birkbeck College and a BA in Philosophy and Spanish from Kings College, London.
Chris Heayberd BA ACA – Non-executive Directors
Chris qualified as a Chartered Accountant in 1980 and after that date held a few financial positions in a broad
range of industries. Since 1989 his focus has been the business services sector. This included 4 years as Finance
Director of PSD Group plc, during which time the company was admitted to trading on the London Stock
Exchange. Chris joined the Board of Prime People in June 1995 and for a period of five years combined the
role of Finance Director with other business interests. In May 2005 he took up a full-time role as Finance
Director of Prime People retiring from this post in 2015 but remained on the Board in a non-executive capacity.
Sir John Lewis OBE LLB (Hons) - Non-executive Director
John is a solicitor (Non-practising) who previously served as a partner in Lewis Lewis & Co which became part
of Eversheds (to which he was a Consultant until 2019) after a series of mergers. John is currently Chairman of
Photo-Me International Plc and several private companies. He has served as Chairman of Cliveden Plc and
Principal Hotels Plc and as deputy Chairman of John D Wood & Co Plc, retiring in each case when the Company
was sold.
73
Prime People Plc
2 Harewood Place Hanover Square
London W1S 1BX
T: +44 (0) 20 7318 1785
F: +44 (0) 870 442 1737
E: connect@prime-people.com
W: prime-people.co.uk