Final Results

RNS Number : 0937L

Corporate Services Group (The) Ltd

30 April 2010

 

The Corporate Services Group Limited

 

30 April 2010

 

The Corporate Services Group Limited ("CSG") today announces its financial statements for the year ended 31 December 2009.

 

The financial statements presented in this announcement have been prepared in accordance with UK Generally Accepted Accounting Practice. These financial statements relate to CSG only and are not, and should not be read as being, representative of the financial statements of CSG's parent, Impellam Group plc ("Impellam") for the period ending 31 December 2009, the preliminary results for which were released on 22 February 2010.

 

For further information please contact:

 

Impellam Group plc
Cheryl Jones - Executive Chairman	Tel: 01582 692658
Andrew Burchall - Group Finance Director	Tel: 01582 692658
Cenkos Securities plc
Nicholas Wells	Tel: 020 7397 8900
Beth McKiernan	Tel: 020 7397 8900

 

About The Corporate Services Group Limited

 

CSG is a subsidiary of Impellam, a human capital resource solutions group whose shares are admitted to trading on the AIM market of the London Stock Exchange plc. Impellam was formed in May 2008 when Carlisle Group Limited ("Carlisle") merged with The Corporate Services Group plc ("CSG plc"). Upon completion of the merger CSG plc became a subsidiary of Impellam and subsequently re-registered as a private company

The Corporate Services Group Limited

Directors' Report for the Year Ended 31 December 2009

The directors present their report and the audited financial statements for the year ended 31 December 2009.

Directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

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

In preparing those financial statements, directors are required to:

-	select suitable accounting policies and apply them consistently;
-	make judgements and estimates that are reasonable and prudent;
-	state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-	prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will continue in business.

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

 

The directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Directors' statement regarding disclosure of information to auditors

Each of the persons who is a director at the date of approval of this report confirms that:

a)	so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and
b)	they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Principal activity

The principal activity of the company is that of an investment holding company.

Business review and future developments

The loss for the year of £9,521,000 (2008: profit of £13,406,000) has been transferred to reserves. As at the year end the balance sheet of the company, in terms of net assets and equity shareholders' funds was £63,572,000 (2008: £73,093,000). The company is expected to continue primarily as an investment holding company.

Results and dividends

The results for the company are set out in the financial statements.

The directors do not recommend the payment of a dividend (2008: £nil).

Insurance

Impellam Group plc ("the group"), of which the company is a member, maintains a comprehensive insurance programme with a number of reputable third party underwriters. These insurance policies are reviewed annually to ensure that there is adequate cover for insurable risks and that the terms of those policies are optimised.

Regulatory environment

The staffing industry is governed by an increasing level of compliance which varies from market to market. Additionally our clients require more complex levels of compliance in their contractual arrangements. The company takes its responsibilities seriously, is committed to meeting all of its regulatory responsibilities, and continues to strengthen its internal controls and processes with respect to legal and contractual obligations.

Principal risks facing the business

The principal risks and uncertainties of the group, which include those of the company, are discussed in the Group Financial Director's Report in the group's annual report which does not form part of this report. The group's business and financial risks are managed at a group level, rather than at an individual company level. For this reason, the company's directors believe that a discussion of the group's risks would not be appropriate for an understanding of the development, performance or position of the company.

Fixed assets

In the opinion of the directors no fixed assets have a significant difference in value between the book value reported and the market value.

Supplier payment policy

The company's policy, which is also applied by the group of which the company is a member, is to settle terms of payment with suppliers when agreeing the terms of each transaction and to ensure that suppliers are made aware of the terms of payment. The company abides by the terms of payment. The company's trade creditors are settled by another group company.

Donations

There were no charitable or political donations made by the company in either 2009 or 2008.

Directors

The directors who held office during the year under review and up to the date of signing the financial statements were as follows:

-	D M C Doyle	(resigned 14 May 2009)
-	A Burchall
-	R J Watson
-	N J Millinson	(appointed 14 May 2009)

Directors' indemnity provisions

During the year and to the date of these accounts, the group had in force an indemnity provision in favour of one or more Directors of the company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006.

Retirement of directors

In accordance with the Articles of Association, N Millinson has been appointed as a Director since the last Annual General Meeting and will retire at the next Annual General Meeting and, being eligible, has offered himself for re-election at that meeting. No other directors are required to retire by rotation.

Auditors

The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office and so are deemed to be re-appointment in accordance with section 487 of the Companies Act 2006.

Election to dispense laying accounts

The company has elected to dispense with laying accounts before the members in general meeting. Members, however, may by notice in writing to the company at its registered office require that accounts are laid before the members in general meeting.

By order of the Board:

A Burchall Director Date: 20 April 2010

 

The Corporate Services Group Limited

Profit and Loss Account for the Year Ended 31 December 2009

 

	Note	2009 £ 000			2008 £ 000
Turnover			-			-
Administrative expenses including exceptional items of £4,462,000 (2008: £1,764,000)			(7,937)			9,941
Operating (loss)/profit:
Excluding exceptional items			(3,475)			11,705
Exceptional costs	3		(4,462)			(1,764)
Operating (loss)/profit	2		(7,937)			9,941
Interest receivable	5		1,839			3,270
Interest payable and similar charges	6		(2,717)			(2,523)
(Loss)/profit on ordinary activities before taxation			(8,815)			10,688
Tax on (loss)/profit on ordinary activities	7		(706)			2,718
(Loss)/profit for the financial year	16		(9,521)			13,406

Turnover and operating (loss)/profit derive wholly from continuing operations.

The company has no recognised gains or losses for the year other than the results above. There is no difference between the results reported above and their historical cost equivalents.

The Corporate Services Group Limited

 

Balance Sheet at 31 December 2009

 

			2009						2008
	Note		£ 000			£ 000			£ 000			£ 000
Fixed assets
Investments	8						73,834						73,834
Current assets
Debtors	9			64,210						53,638
Cash at bank and in hand				128						4,198
				64,338						57,836
Creditors: Amounts falling due within one year	10			(55,777)						(38,722)
Net current assets							8,561						19,114
Total assets less current liabilities							82,395						92,948
Creditors: Amounts falling due after more than one year	11						(18,823)						(19,855)
Net assets							63,572						73,093
Capital and reserves
Called up share capital	15						10,772						10,772
Share premium reserve	16						-						280,816
Other reserves	16						46,613						46,613
Profit and loss reserve	16						6,187						(265,108)
Shareholders' funds	17						63,572						73,093

The financial statements were approved by the Board of Directors on 20 April 2010 and were signed on its behalf by:

A Burchall Director

The Corporate Services Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2009

1 Accounting policies

Basis of preparation

The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with applicable UK accounting standards and the Companies Act 2006. The principal accounting policies have been applied consistently during the year and are set out below.

Significant accounting judgements

In applying the company's accounting policies the following judgement has been made that may have a significant effect on the amounts recognised in the financial statements:

 

Recoverability of debtors

The company determines whether debtors are impaired if events or changes in circumstances indicate that the carrying value may not be recoverable at least on an annual basis.

Fixed asset investments

Fixed asset investments are stated at cost less a provision for impairment. The carrying values of investments are reviewed for impairment at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit to which the assets are allocated. Estimating the value in use requires the company to make an estimate of the future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Taxation

Current tax is recognised at the amounts estimated to be payable or recoverable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets and liabilities are recognised, subject to certain exceptions, in respect of all material timing differences between the recognition of gains and losses in the accounts and for tax purposes. Those timing differences recognised may include accelerated capital allowances, unrelieved tax losses and short term timing differences. Timing differences not recognised include those relating to the revaluation of fixed assets in the absence of a commitment to sell the revalued assets and the gain on sale of assets rolled over into replacement assets in the absence of a commitment to sell the replacement assets.

Deferred tax assets are recognised to the extent that they are regarded as recoverable. They are regarded as recoverable to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is calculated on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Foreign currencies

Profit and loss account transactions in foreign currencies are translated into sterling at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the closing rates at the balance sheet date and the exchange differences are included in the profit and loss account.

Pensions

The company operates a defined contribution pension scheme. Contributions are charged in the profit and loss account as they become payable in accordance with the rules of the scheme.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Financial assets and financial liabilities are recorded at fair value on the transaction date, on the company's balance sheet when the company has become a party to the contractual provisions of the instrument and derecognised when this is no longer the case.

Capital instruments

Shares are included in shareholders' funds. Other instruments are classified as liabilities if they contain an obligation to transfer economic benefits and if not they are included in shareholders' funds. The finance cost recognised in the profit and loss account in respect of capital instruments other than equity shares is allocated to periods over the term of the instrument at a constant rate on the carrying amount.

Cash flow statement

The company has taken advantage of the exemption under Financial Reporting Standard No. 1 (revised 1996) not to publish a cash flow statement as it is a wholly owned subsidiary of Impellam Group plc, which has prepared consolidated financial statements which are publicly available.

Consolidation

The company is exempt under Section 400 of the Companies Act 2006 from the requirement to prepare group accounts because it is a wholly owned subsidiary of Impellam Group plc which prepares consolidated accounts which are publicly available. Accordingly, these accounts are those of the company and not of its group.

2 Operating (loss)/profit

Operating (loss)/profit is stated after charging/(crediting):

 

	2009			2008
	£ 000			£ 000
The audit of the company's annual accounts		-			10
Foreign currency losses/(gains)		3,674			(12,122)
Impairment of investment in group shares		-			10

Auditor's remuneration for the current year has been borne by a fellow Group company.

3 Exceptional items

 

	2009 £ 000			2008 £ 000
Exceptional administrative expenses		4,462			1,764

In 2008 various costs were incurred as a result of the purchase of the company by Impellam Group plc. These costs related mainly to legal costs on acquisition which were expensed. Also included within exceptional costs was an amount of £757,000 relating to movements on the impairment of various loans to subsidiaries.

In 2009 exceptional costs of £4,461,938 were incurred relating to movements on the impairment of various loans to subsidiaries.

4 Particulars of employees

The average number of persons employed by the company (including directors) during the year, analysed by category, was as follows:

 

	2009  No.			2008  No.
Directors		3			6
Administration		-			4
		3			10

The aggregate payroll costs of these persons were as follows:

 

	2009 £ 000			2008 £ 000
Wages and salaries		(208)			718
Social security costs		(1)			51
Other pension costs		-			45
		(209)			814

The emoluments of the directors are paid by the ultimate parent company, or by another group company. The directors' services to this company are of a non-executive nature and are deemed to be attributable to services to the remunerating company. Accordingly, the directors received no remuneration for services to the company in the year (2008: £nil). During the year there was a release of an accrual for bonuses which had not been used since 31 December 2008, the bonus having been paid by the ultimate parent company.

5 Interest receivable

 

	2009 £ 000			2008 £ 000
Income from group companies		1,822			3,206
Other interest receivable		17			64
		1,839			3,270

6 Interest payable and similar charges

 

	2009 £ 000			2008 £ 000
Interest on loans from group undertakings		38			373
Interest on other loans		173			277
Other interest payable		2,506			1,873
		2,717			2,523

 

7 Taxation

Analysis of current period tax charge/(credit)

 

	2009 £ 000			2008 £ 000
Deferred tax
Origination and reversal of timing differences		706			(2,718)

The effective current tax rate on the loss on ordinary activities before tax can be reconciled to the standard rate of corporation tax (taken to be the standard rate of corporation tax in the UK) as follows:

 

		2009	2008
		%	%
Standard rate of tax		28.0	28.5
Transfer pricing adjustments (see below)		0.5	4.4
Profit apportionment from controlled foreign companies		(16.2)	-
Impairment of intra-group balances		(14.2)	-
Other permanently disallowable/taxable items		-	2.6
Timing differences:
	Utilisation of losses brought forward	1.9	(35.5)
Effective current tax rate		-	-

 

UK legislation requires, in broad terms, that most transactions between connected parties be at an arm's length price for tax purposes (commonly known as 'transfer pricing'). As a result, this company is entitled to a deduction on deemed net interest payable that has not been recognised in the accounts.

8 Investments held as fixed assets

 

	Group shares £ 000
Cost
As at 1 January 2009 and 31 December 2009		291,584
Provision
As at 1 January 2009 and 31 December 2009		217,750
Net book value
As at 31 December 2009		73,834
As at 31 December 2008		73,834

The company holds more than 20% of the share capital of the following companies:

 

	Country of incorporation	Principal activity	Class	%
Subsidiary undertakings
Austin Benn Group Limited	England & Wales	Holding Company	Ordinary	100
Blue Arrow Holdings Limited	England & Wales	Holding Company	Ordinary	100
Comensura Limited	England & Wales	Vendor procurement	Ordinary	100
Laybridge Limited	England & Wales	Dormant	Ordinary	100
Kenard Investments Limited	Gibraltar	Investment activity	Ordinary	100
Corporate Services Group Holdings Inc	United States of America	Holding Company	Ordinary	100
Medacs Healthcare Pty Limited	Australia	Dormant	Ordinary	100
Healthlink New Zealand Group Limited	New Zealand	Holding Company	Ordinary	100

9 Debtors

 

	2009 £ 000			2008 £ 000
Amounts owed by group undertakings		61,695			50,420
Other debtors		500			500
Deferred tax		2,012			2,718
Prepayments and accrued income		3			-
		64,210			53,638

Amounts owed by group undertakings are unsecured and repayable on demand. Within this amount is a loan to a subsidiary undertaking of £85,267,162 - $137,697,939 (2008: £93,800,000 - $134,886,000), including outstanding interest, which bears interest at 1.75% above the US Dollar one month LIBOR rate. This loan has provisions against it of £45,753,499 - $73,887,000 (2008: £52,442,000 - $73,887,000). Also within amounts owed by group undertakings is a loan to a subsidiary undertaking of £600,000 (2008: £600,000) which bears interest at 1% above the Royal Bank of Scotland base rate and has been fully provided for. All other inter-company balances are not interest bearing.

10 Creditors: Amounts falling due within one year

 

	2009 £ 000			2008 £ 000
Amounts owed to group undertakings		55,444			37,629
Accruals and deferred income		333			1,093
		55,777			38,722

 

Amounts owed to subsidiary undertakings are unsecured and repayable on demand. Within this balance is an amount of £13,622,720 (2008: £6,048,543) payable to a subsidiary undertaking on which interest is charged at the Bank of England Base Rate. All other amounts owed to subsidiary undertakings are not interest bearing.

11 Creditors: Amounts falling due after more than one year

 

	2009 £ 000			2008 £ 000
Convertible debenture loans		18,823			19,855

 

The 10 per cent guaranteed secured loan notes are repayable in April 2011. The notes may be redeemed at the option of the company on or after 29 April 2006 at 105 per cent of their principal amount. The notes are secured by subordinated guarantees from the company's principal operating subsidiaries, and also subordinated security interest over the present and future assets of the company and its principal operating subsidiaries.

12 Maturation of borrowings

Amounts repayable:

 

	Convertible debenture loans £ 000
As at 31 December 2009
Between one and two years		18,823
		18,823

 

As at 31 December 2008
Between two and five years		19,855
		19,855

 

13 Deferred taxation

 

	Recognised		Unrecognised
The total recognised and unrecognised deferred tax asset is as follows:	2009	2008	2009	2008
	£ 000	£ 000	£ 000	£ 000
Tax losses	(2,012)	(2,718)	(7,338)	(6,507)
	(2,012)	(2,718)	(7,338)	(6,507)

The net deferred tax balance moved during the year as follows:

 

	2009	2008
	£ 000	£ 000
Balance at 1 January	(2,718)	-
Charged / (credited) to profit and loss	706	(2,718)
Balance at 31 December	(2,012)	(2,718)

The unrecognised assets relating to losses are recoverable in the event of the company making sufficient taxable profits of the right type. They may be subject to legislation restricting the right to offset them.

14 Pension scheme

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £nil (2008: £45,000).

There were no outstanding or prepaid contributions at either the beginning or end of the financial year.

15 Share capital

 

	2009 £			2008 £
Authorised
Equity
1,132,826,031 Ordinary shares of 1 pence each		11,328,260			11,328,260
274,130,441 Deferred shares of 9 pence each		24,671,740			24,671,740
		36,000,000			36,000,000
Allotted, called up and fully paid
Equity
1,077,215,856 Ordinary shares of 1 pence each		10,772,159			10,772,159

 

16 Reserves

 

	Share premium reserve £ 000			Other reserves £ 000			Profit and loss reserve £ 000			Total £ 000
Balance at 1 January 2009		280,816			46,613			(265,108)			62,321
Transfer between reserves		(280,816)			-			280,816			-
Transfer from profit and loss account for the year		-			-			(9,521)			(9,521)
Balance at 31 December 2009		-			46,613			6,187			52,800

Other reserves

The other reserves represent:

a) Unrealised profits arising from the transfer at estimated market value of certain subsidiaries to sub-holding companies.

b) Under one of the conditions imposed by the High Court of Justice for approval of the reduction in share premium, the profit of the Company accruing in the period 1 January 1999 to 30 June 1999 has also been transferred to this special, non-distributable, other reserve.

c) A non-distributable profit arising upon the purchase for nil consideration, and cancellation, of Deferred Shares created as part of the Placing and Open Offer in January 2003.

Transfer between reserves

On 8 July 2009 the company reduced its share premium reserve by the sum of £280,815,747 under s641 of the Companies Act 2006. The Companies (Reduction of Share Capital) Order 2008 allows any reserve arising from such a reduction to be treated as a realised profit.

17 Reconciliation of movements in shareholders' funds

 

	2009 £ 000			2008 £ 000
(Loss)/profit attributable to members of the company		(9,521)			13,406
Other recognised gains for the year		280,816			14
Reduction in share premium		(280,816)			-
Net (reduction)/addition to shareholders' funds		(9,521)			13,420
Opening shareholders' funds		73,093			59,673
Closing shareholders' funds		63,572			73,093

18 Contingent liabilities

The company has given cross guarantees as follows:

a) Over the group's invoice discounting facility of the group of which the company is a member; the net aggregate amount outstanding against this facility at 31 December 2009 was £50,438,632 (2008: £47,711,535).

b) Over the group's overdraft facility; the net aggregate amount outstanding against this facility at 31 December 2009 was £2,709,881 (2008: £6,748,210).

19 Related parties

Controlling entity

The company's immediate parent undertaking is Impellam Group plc, a company incorporated in Great Britain.

 

The directors regard Impellam Group plc, a company incorporated in Great Britain, as the ultimate parent undertaking. This is also the parent undertaking of the largest and smallest group which includes the company and for which group accounts are prepared. Copies of the group accounts of Impellam Group plc will be delivered to, and be available from, the Registrar of Companies, Companies Registration Office, Crown Way, Maindy, Cardiff, CF14 3UZ.

 

At 31 December 2009, Lord Ashcroft, KCMG was interested in and controlled 57.2% of Impellam Group plc. On 6 April 2010, following a transfer of an indirect interest in the Company, Lord Ashcroft no longer had a beneficial interest in the Company. The transfer of this indirect interest was made to the Lombard Trust (the "Trust") which now has a beneficial interest of 57.2%, representing its entire interest in the Company. The beneficiaries of the Trust are Lord Ashcroft's children and remoter issue.

Related party transactions

The company has taken advantage of the exemption granted to 90% subsidiaries not to disclose transactions with group undertakings under the provisions of Financial Reporting Standard No. 8 "Related Party Disclosures".

 

This information is provided by RNS

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