IDGATEWAY_LIMITED - Accounts

The Chairman presents his comments on the progress made by the Company during the year ended 31 January 2022.

Summary

The Company has continued its journey of growth, buoyed by the recovery of air travel and airport activity in the wake of the Covid-19 pandemic. Airports which had held-back their migration to the Company’s AirportGateway platform (due to the pandemic) came-forward once again, which led to some strategically important customer-gains for the Company. During the same period, the Company’s new product, VettingGateway, entered the marketplace, immediately gaining traction with some blue-chip customers and affirming the demand for a background-checking SaaS.

Markets

Airport activity trended upwards during the reporting period, albeit with a few ‘stops-and-starts’ as various travel restrictions were imposed and subsequently lifted. For many airports, the staffing cutbacks made during the pandemic enabled a rethink of certain aspects of their future operating models. This played to the Company’s advantage, as technology was seen as a way to offset new headcount, reduce operating costs and facilitate remote working. New regulations also entered the Company’s market, increasing the administrative burden in airports in the issuance of security passes. The Company quickly responded by integrating its AirportGateway platform with the relevant stakeholders, which led to further customer-gains and greater market share.

Finance

Sales revenue grew 24% during the reporting period to £2.0m whilst gross profits grew 38% to £1.45m. The Company expanded its overhead, predominantly in the people and skills domain, delivering a pre-tax operating profit of £455k and an EBITDA equivalent to 38% of revenue. Total equity on the balance sheet rose to £1.73m with net current assets rising to £780k, true to the Company’s healthy, cash-generative business model.

People & Management

Having pivoted to a remote working model during the pandemic lockdowns, the Company began its return to the office towards the end of the reporting period. The success of remote working enabled the Company to widen its radius of talent acquisition and source new skills from previously untapped parts of the UK. The blend of office, hybrid and remote working is now a key feature of the Company’s operating model which will ensure it can continue to access all the skills required to continue its journey of growth.

There were no changes to the Executive Board or leadership team during the reporting period.

The Year Ahead

The next reporting period should see further strategic customer-gains for the Company’s AirportGateway product, as well as a concentrated customer-acquisition push for VettingGateway. As buoyancy return to the air travel industry - and to wider recruitment markets - the Company stands poised for further growth, with aspirations to top £3.0m in revenue if favourable market conditions prevail.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 January 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

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

IDGateway Limited is a private company limited by shares incorporated in England and Wales. The registered office is Athenia House, 10-14 Andover Road, Winchester, Hampshire, United Kingdom, SO23 7BS.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, and this remains unchanged when considering the Covid-19 pandemic. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

The average monthly number of persons (including directors) employed by the company during the year was:

Only A, B and C share classes are eligible to receive dividends. Ordinary A and B shares confer full voting rights while C, D and E shares hold no voting rights. C shares are entitled to a fixed non-cumulative dividend, while D and E shares have no rights to dividends. All shares have varying rights to a distribution of capital.

The company bought back 200 D shares which were then cancelled on 30 March 2021.

The company also issued 325 new £0.01 E shares on 4 May 2021 at par.

Aeroprofessional Limited

Aeroprofessional Limited is a related party by virtue of the fact that it is under the common control of the directors and shareholders of IDGateway Limited.

During the year IDGateway Limited was charged for management fees and other costs amounting to £218,309 (2021: £231,788) by Aeroprofessional Limited. At the year end, IDGateway Limited owed £51,003 (2021: £24,007) to Aeroprofessional Limited in relation to these costs. During the year the company provided services to Aeroprofessional Limited totaling £24,770 (2021: £11,682). As at the year end the company was owed £2,859 (2021: £741) by Aeroprofessional Limited.

Six Six (Holdings) Limited

Six Six (Holdings) Limited is a related party by virtue of the fact that it is under the common control of the directors and shareholders of IDGateway Limited.