The Bridge (IT Recruitment) Limited - Limited company accounts 16.3

REGISTERED NUMBER: 04403730

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2016

FOR

THE BRIDGE (IT RECRUITMENT) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Financial Statements

10

Reconciliation of Equity

17

Reconciliation of Profit

19

DIRECTOR:

J M Goddard

SECRETARY:

K P Wackerbarth

REGISTERED OFFICE:

Cliffe House

Keighley Road

Hebden Bridge

West Yorkshire

HX7 8HH

REGISTERED NUMBER:

04403730

AUDITORS:

Revell Ward Limited

Chartered Accountants and Statutory Auditors

7th Floor

30 Market Street

Huddersfield

HD1 2HG

The director presents his strategic report for the year ended 31 July 2016.

REVIEW OF BUSINESS

The year to 31 July 2016 has been one of transition. And, for all that the word "transition" implies difficulties having

been faced, there is much to celebrate. But let's first confront those challenges. First and foremost has been the

collapse in demand for specialist skills in the oil and gas market. The drought has been going on for 18 months now,

and our decision to leave highly trained recruiters in that market in the hope of an earlier turnaround has not paid off.

The meagre revenue of only £33k across the year reflects the parlous state of the market and it was not a difficult

decision, made halfway through this year just concluded, to wind down the oil and gas division.

Such a dramatic decline in income (from in excess of £0.4m GP in the year to July 2015 and £0.7m GP back in July

2013) could hardly avoid weighing on our full P/L. Total GP fell from £3.3m to £3.2m. Overheads remained steady at

£1.7m, inflationary rises in costs being balanced by lower commission payments on the reduced GP. The result, net

P/L fell from last year's high of £1.6m to this year's total of £1.45m.

That a near £400k shortfall of GP in one collapsed division did not produce a comparable drop in profit takes us to the

good news: our IT division continues its relentless march. 8% growth in contract recruitment revenues was

outstripped by 11% growth in cash-generative permanent fees. Even better news, the prognosis for the first half of

next year is exceptionally positive. Casting off doubts surrounding Brexit, the IT marketplace has gone into a

contracting frenzy. Permanent hiring may be more sensitive to the weekly headlines but we are experiencing

exceptional demand for new contractors. The early signs are for record numbers of concurrent contracts. Can we crack

the 200 barrier?

With this prospect in mind, it is worth focusing for a moment on the cash management strategy adopted throughout

the Bridge's lifetime. A minimum of a year's profits are retained as a matter of principle and at all times in order that

growth never be constrained by a lack of cash, nor profits by the cost of financing. As we grow our contractor

numbers, the sizeable cash float will stand us in good stead.

We are not blind, however, to the risks posed, above all, by the UK's secession from the EU, or rather from the

uncertainties surrounding it. We expect a bumpy ride, particularly in the area of permanent recruitment, and it is a

great comfort that the ability of all our consultants to dual-desk, flipping from one form of supply to the other as

demand vacillates, protects us from some of the uncertainty. Notwithstanding these risks, we firmly expect in the

forthcoming year to reverse this year's rare downward trend in our profits. In fact we have high hopes for a record

year.

In a year marked by a number of exceptional personal achievements by colleagues I'd like to pick out the contribution,

not just in this year, but over the Bridge's whole lifetime, of our original employee, Simon Barratt, who will join the

management board of the company from October 2016. Simon, with his loyalty and hard work, as well as his lusty

engagement in our social functions, is a model for all our employees, and welcoming him to the board is one of the

highlights of my year. All that remains is for me to thank all colleagues for their contributions and we look forward to

widening the benefits of working for the Bridge by introducing a pension scheme for all employees in the Autumn.

ON BEHALF OF THE BOARD:

J M Goddard - Director

4 April 2017

The director presents his report with the financial statements of the company for the year ended 31 July 2016.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a recruitment consultant.

DIVIDENDS

The following dividends were paid during the year ended 31 July 2016:

Ordinary A £1 shares

Dividend of £2,500 per share paid on 10 February 2016

Ordinary B £1 shares

Dividend of £331.91 per share paid on 11 February 2016

Dividend of £2,500 per share paid on 1 April 2016

Dividend of £152.27 per share paid on 10 April 2016

Cumulative preference £1 shares

Dividend of £90,000 per share paid on 10 February 2016

Dividend of £45,000 per share paid on 8 April 2016

The director does not recommend any further dividends in respect of the year ended 31 July 2016. The total

distribution of dividends for the year is £3,011,609.

DIRECTOR

J M Goddard held office during the whole of the period from 1 August 2015 to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT

The following information is not shown in the Report of the Directors as it is shown in the Strategic Report in

accordance with S414C(11) of the Companies Act 2006:

- an indication of likely future developments in the business of the company.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements

in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director

has 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 director must not

approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the

company and of the profit or loss of the company for that period. In preparing these financial statements, the director

is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a

director in order to make himself aware of any relevant audit information and to establish that the company's auditors

are aware of that information.

AUDITORS

The auditors, Revell Ward Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J M Goddard - Director

4 April 2017

We have audited the financial statements of The Bridge (IT Recruitment) Limited for the year ended 31 July 2016 on

pages six to nineteen. The financial reporting framework that has been applied in their preparation is applicable law

and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including

Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

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 a Report of the Auditors 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.

Respective responsibilities of director and auditors

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the FRC's website at

www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 July 2016 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and the Report of the Director for the financial year for

which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to

you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Karen Borowski FCA (Senior Statutory Auditor)

for and on behalf of Revell Ward Limited

Chartered Accountants and Statutory Auditors

7th Floor

30 Market Street

Huddersfield

HD1 2HG

4 April 2017

TURNOVER

16,326,471

15,494,272

Cost of sales

13,158,261

12,209,040

GROSS PROFIT

3,168,210

3,285,232

Administrative expenses

1,712,615

1,676,316

OPERATING PROFIT

4

1,455,595

1,608,916

Interest receivable and similar income

1,503

457

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

1,457,098

1,609,373

Tax on profit on ordinary activities

5

283,322

336,609

PROFIT FOR THE FINANCIAL YEAR

1,173,776

1,272,764

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,173,776

1,272,764

FIXED ASSETS

Tangible assets

7

821

1,094

CURRENT ASSETS

Debtors

8

2,690,794

2,278,648

Cash at bank and in hand

2,671,807

2,282,102

5,362,601

4,560,750

CREDITORS

Amounts falling due within one year

9

4,799,853

2,160,442

NET CURRENT ASSETS

562,748

2,400,308

TOTAL ASSETS LESS CURRENT LIABILITIES

563,569

2,401,402

CAPITAL AND RESERVES

Called up share capital

12

1,002

1,002

Retained earnings

13

562,567

2,400,400

SHAREHOLDERS' FUNDS

563,569

2,401,402

The financial statements were approved by the director on 4 April 2017 and were signed by:

J M Goddard - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 August 2014

1,002

1,327,636

1,328,638

Changes in equity

Dividends

-

(200,000

)

(200,000

)

Total comprehensive income

-

1,272,764

1,272,764

Balance at 31 July 2015

1,002

2,400,400

2,401,402

Changes in equity

Dividends

-

(3,011,609

)

(3,011,609

)

Total comprehensive income

-

1,173,776

1,173,776

Balance at 31 July 2016

1,002

562,567

563,569

Cash flows from operating activities

Cash generated from operations

18

989,767

1,651,129

Tax paid

(336,609

)

(295,303

)

Net cash from operating activities

653,158

1,355,826

Cash flows from investing activities

Interest received

1,284

457

Net cash from investing activities

1,284

457

Cash flows from financing activities

Amounts introduced by shareholders

28,625

1,759

Amounts withdrawn by shareholders

(163,362

)

(5,365

)

Equity dividends paid

(130,000

)

(200,000

)

Net cash from financing activities

(264,737

)

(203,606

)

Increase in cash and cash equivalents

389,705

1,152,677

Cash and cash equivalents at beginning of year

19

2,282,102

1,129,425

Cash and cash equivalents at end of year

19

2,671,807

2,282,102

1.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

The company has continued to trade profitably and has a positive cash position. No reliance is placed on bank

facilities or other borrowings. The director has considered the current position of the company and, after

making appropriate enquiries, he has a reasonable expectation that the company has adequate resources to

continue in operational existence for the foreseeable future. He therefore continues to adopt the going concern

basis of accounting in preparing the annual financial statements.

Significant judgements and estimates

Accounting estimates, by definition, will often vary from the actual results. They 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. The nature of the estimates and assumptions that have a significant

risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial

year are addressed below. The carrying amount of the estimates and assumptions at the year end are disclosed

in the relevant note to the accounts.

Debtors balances

The company makes an estimate of the recoverable value of trade and other debtors. When assessing

impairment, management considers factors including the ageing profile and recent correspondence with the

debtors and historical experience. In addition, when a credit balance arises on a customer's account, the

company assesses the likelihood of the balance being utilised by the customer and carries forward credit

balances accordingly.

Turnover

The company's turnover derives wholly from the supply of services. Turnover represents the fair value of the

consideration receivable, net of VAT and trade discounts. When a contract straddles a period end, income is

allocated pro rata based on the number of working days in each period.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost

includes the original purchase price and any costs directly attributable to bringing the asset to its working

condition for its intended use.

Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual

value, over their expected useful lives on the following basis:

Plant and machinery

- 25% reducing balance

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange

ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating

result.

Leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

3.	STAFF COSTS

31.7.16

31.7.15

£

£

Wages and salaries

1,265,139

1,243,343

Social security costs

148,148

145,487

Other pension costs

17,428

17,428

1,430,715

1,406,258

The average monthly number of employees during the year was as follows:

31.7.16

31.7.15

Management

1

1

Administration

24

23

25

24

Key management compensation

Key management includes the director and others who are involved in the control and direction of the

company. The compensation paid or payable to key management for employment services was £12,000 (2015 -

£12,000).

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.7.16

31.7.15

£

£

Other operating leases

45,089

46,334

Depreciation - owned assets

273

365

Auditors' remuneration

4,000

-

Foreign exchange differences

(9,611

)

1,388

Director's remuneration

-

-

5.

TAXATION

Analysis of the tax charge

The tax charge on the profit on ordinary activities for the year was as follows:

31.7.16

31.7.15

£

£

Current tax:

UK corporation tax

283,322

336,609

Tax on profit on ordinary activities

283,322

336,609

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

31.7.16

31.7.15

£

£

Profit on ordinary activities before tax

1,457,098

1,609,373

Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20% (2015 - 21%)

291,420

337,968

Effects of:

Expenses not deductible for tax purposes

1,631

1,665

Depreciation in excess of capital allowances

7

15

Other timing differences leading to a decrease in tax

(9,736

)

(3,039

)

Total tax charge

283,322

336,609

During the period the UK corporation tax rate was decreased. Following confirmation in the 2017 Budget, the

main rate of corporation tax is expected to reduce to 19% with effect from 1 April 2017 (17% from 1 April

2020).

6.

DIVIDENDS

31.7.16

31.7.15

£

£

Ordinary A shares of £1 each

Dividends

1,252,500

100,200

Ordinary B shares of £1 each

Dividends

1,489,109

99,800

Cumulative preference shares of £1 each

Dividends

270,000

-

3,011,609

200,000

7.	TANGIBLE FIXED ASSETS

Plant and

machinery

£

COST

At 1 August 2015

and 31 July 2016

14,581

DEPRECIATION

At 1 August 2015

13,487

Charge for year

273

At 31 July 2016

13,760

NET BOOK VALUE

At 31 July 2016

821

At 31 July 2015

1,094

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.7.16

31.7.15

£

£

Trade debtors

2,681,756

2,275,206

Other debtors

9,038

-

Director's loan account

-

3,442

2,690,794

2,278,648

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.7.16

31.7.15

£

£

Trade creditors

1,425,713

1,457,452

Tax

283,322

336,609

Social security and other taxes

47,871

53,767

VAT

62,789

115,082

Other creditors

1,476,006

31,223

Director's loan account

1,355,685

-

Accruals and deferred income

148,467

166,309

4,799,853

2,160,442

10.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

31.7.16

31.7.15

£

£

Within one year

34,880

34,880

Between one and five years

223,347

204,260

In more than five years

-

53,967

258,227

293,107

11.	FINANCIAL INSTRUMENTS

12.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.7.16

31.7.15

value:

£

£

501

Ordinary A

£1

501

501

499

Ordinary B

£1

499

499

2

Cumulative preference

£1

2

2

1,002

1,002

The Ordinary A shares and the Ordinary B shares rank pari passu in terms of voting rights and dividend

rights. There are no restrictions on the distribution of dividends or the repayment of capital (on a winding up).

The cumulative preference shares have no voting rights but do have rights to a preferential fixed dividend and

to repayment of capital (on a winding up).

13.

RESERVES

Retained

earnings

£

At 1 August 2015

2,400,400

Profit for the year

1,173,776

Dividends

(3,011,609

)

At 31 July 2016

562,567

Retained earnings represent all accumulated profits and losses, less dividends paid.

14.	DIRECTOR'S ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 31 July 2016 and

31 July 2015:

31.7.16

31.7.15

£

£

J M Goddard

Balance outstanding at start of year

3,442

(164

)

Amounts advanced

63,562

105,565

Amounts repaid

(1,551,125

)

(101,959

)

Balance outstanding at end of year

(1,484,121

)

3,442

15.	RELATED PARTY DISCLOSURES

Key management personnel of the entity or its parent (in the aggregate)

31.7.16

31.7.15

£

£

Dividends declared

3,011,609

200,000

Expenses paid on behalf of related party

63,562

5,365

Amounts repaid by related party

28,625

1,759

Interest charged

219

-

Amounts repaid to related party

229,800

200,000

Amount due from related party

-

3,442

Amounts due to related party

2,743,211

-

The outstanding amounts are unsecured, interest-free and payable on demand.

16.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is J M Goddard.

17.	SHARE-BASED PAYMENT TRANSACTIONS

The company has granted options under an EMI share option scheme over Ordinary C Shares, as follows:

- in November 2012, options were granted to 9 employees over a total of 40 shares

- in October 2013, options were granted to 11 employees over a total of 40 shares

- in November 2014, options were granted to 10 employees over a total of 40 shares

- in February 2016, options were granted to 7 employees over a total of 44 shares.

The exercise price for all the options is £5,417 per share. The options can be exercised on a sale of the

business by the existing shareholders.