The Directors present the strategic report for the year ended 30 June 2023.
The group consists of the non trading parent company Tacit Holdings Limited and its trading subsidiary, TIML Limited, which trades as Tacit Investment Management and throughout this report references to Tacit are interchangeable. TIML Limited continues to be regulated by the Financial Conduct Authority (FCA) as a Small and Non-Interconnected (SNI) firm.
Tacit’s principal activity is the investment management of (mostly) discretionary portfolios for private individuals and for some corporate entities in the form of pension funds. Known as Tacit Investment Management in the industry, the firm has a clear and consistent approach to investment which focuses first on the preservation of investors’ capital and, for those investors willing and able to take a higher level of risk, to grow their wealth in absolute terms. Tacit offers four core strategies in which investment risk is managed using the Growth/Stabiliser investment philosophy which Tacit has espoused consistently since its inception. These four strategies now have nearly thirteen complete years of public performance history.
The group continued to acquire new clients through the year and has been successful in winning new business from private investors in a higher net worth bracket, confirming the appeal of high quality personalised professional service, and the depth of market experience of the senior managers in Tacit.
Investment markets were resilient in the face of an increasingly complex geopolitical landscape, the entrenched war in Ukraine, and persistent core inflation leading to further rises in the cost of borrowing. However, they were unable to break into higher levels and remained range-bound through the year. This limited the market growth in assets under management and total revenue decreased by 2.1% from £2.12m to £2.07m. Operating costs were higher than in the previous year, due to a range of factors, including increases in advertising spend, wages and salaries, professional fees, and rent. The Directors agreed a policy of increasing reserves in the trading subsidiary to fund future growth of the business and to provide maximum resilience; whilst the subsidiary's reserves have increased by £288k, the parent company has declared dividends totalling £770,000, which has resulted in an overall decrease in group net assets of £404k.
Business plan
From its inception, Tacit has acknowledged the role of financial advisers in structuring client investments. As Tacit’s business has matured, and consolidation of IFA businesses has intensified the move to large network-type operations, the Directors have recognised the opportunity to broaden the range of services to clients who regard Tacit as their trusted adviser. The Directors have embarked on a business plan to expand the permitted regulated business of the group to provide financial advice to clients who require investment management supported by financial planning expertise, particularly in relation to pensions and inter-generational wealth planning.
To achieve this, Tacit Holdings Limited agreed to acquire a small, directly regulated, IFA business, Lucus Wealth Limited. The FCA approved the change of control for Lucus Wealth during the year under review. The acquisition of Lucus Wealth Limited was completed after the year-end.
Another component of the business plan was a decision by the Directors and shareholders to simplify the share classes in Tacit Holdings Limited into a single class of Ordinary shares. Preference shares had been issued in 2017 and in 2019 which ‘locked in’ the deemed value of the company at those dates to the benefit of the Preference shareholders. A number of different classes of Ordinary shares were issued in 2019 with differing dividend rights, and the Directors concluded that the complexity of the structure was a potential deterrent to new investors in the business. The Directors took professional advice on restructuring, and this is reflected in higher professional fees in the year. Although the decision to simplify the share classes was taken in the year, the implementation was a post-balance sheet event.
Principal risks & uncertainties
Operational Risk
Operational risks arise from the people, processes, and systems in use within Tacit, or from external events. The firm has continued to develop operational processes and procedures, using workflow technology and a range of Management Information (MI), to mitigate operational risks directly under the control of the business.
Regulatory environment
The new FCA Consumer Duty regulations came into effect during the year. Tacit has invested time in ensuring that it is fully equipped to meet its obligations under Consumer Duty. Although Consumer Duty brings with it additional reporting requirements and a different way of thinking about the delivery of investment services to retail investors, Tacit has approached the changes with confidence that the principles underlying the new regulations are already firmly embedded in how Tacit delivers its services, and the Directors see opportunities for the firm to benefit from Consumer Duty, particularly as small IFA firms conclude that the new environment is not one in which they can continue to operate profitably.
Staff training will be critical to embedding Consumer Duty principles into the operations and client culture of Tacit. The quarterly Team Day gatherings have become the forum for collective training and communication of new principles and procedures in the delivery of Tacit products and services.
This is the first full financial year for the group operating under the FCA’s Investment Firms’ Prudential Regime (IFPR) which came into force on 1 January 2022. The Directors have agreed to build the group balance sheet to improve resilience and provide flexibility for future growth.
Technological environment
Tacit relies heavily on digital technology and believes in making the best use of technology to remain competitive and to provide an excellent service to clients. The Directors are very conscious of the risks of cybercrime and data breaches. Tacit employs a professional IT support firm to advise on security measures and to maintain system protection software on all devices. An encryption process is used for the transmission of all sensitive client information and clients can view details of their investments through a secure portal supported by AJ Bell.
The Directors have implemented cybercrime insurance cover and will continue to tighten the firm’s digital security measures as the IT support consultant advises.
At the operational level, TIML Limited has incorporated the UK Government’s 10 Steps to Cyber Security into our day-to-day management of the firm.
Economic environment
A changing geopolitical environment increasingly sets the context for global economic and market conditions. Russia’s invasion of Ukraine is now an entrenched war and has become a trigger for the potential reshaping of international alliances, with China promoting a stronger grouping of BRICS nations as an alternative economic power bloc to the Western nations aligned with the US. Oil and natural gas supplies are the principal instruments of economic influence and in the absence of a common purpose between producing and consuming nations, restrictions to output risks prolonging the inflationary impulse in the global economy. Forecasts for economic growth reflect the higher cost of capital for businesses and constraints on consumers adjusting to higher mortgage costs.
The Tacit strategy remains consistent with a bias within growth assets to businesses with strong balance sheets, brand superiority, and the ability to generate strong cash flows, regardless of a weakening in consumer demand or investor confidence. The Tacit preference for index linked and shorter duration bonds to conventional fixed interest assets have worked well in the Stabiliser component of strategies and have contributed positive if modest returns. The regional composition of growth assets in the Tacit strategies favours the United States and selected Asian economies, where we perceive greater opportunity for companies to trade profitably.
Political Environment
Political changes, being so closely linked to the economy, can affect the group in three main ways:
1. A rise or fall in the markets in which firms invest.
2. An increase or decrease in demand for the products which the industry sells.
3. Changes to the legislative and regulatory environment in which financial services firms operate.
The changing structure of global political conditions has been noted above. In the UK, the political environment is shaped around the prospect of a General Election which might be called early but, in any case, must be held by 28 January 2025. The high level of government borrowing, combined with the cost of necessary national infrastructure renewal, and a call for higher spending on defence, all point to higher taxes at some point. This could mean that the tax rules relating to personal pensions and estate planning arrangements will change and this will be particularly relevant to most Tacit clients. The Directors are confident that the new capacity of the firm to give expert financial advice in addition to investment management will be highly relevant.
Capital adequacy
The regulated subsidiary, TIML Limited, is required to maintain minimum regulatory capital and liquidity levels as identified in the firm’s ICARA report.
The Directors have taken the decision to grow capital reserves above the levels required for regulatory purposes to build resources for future growth and expansion. This will be achieved progressively by moderating the dividends paid to shareholders, and thereby retaining more profits in the business.
Competitive environment, social and market forces
The group continues to operate in a competitive marketplace with many larger competitors focusing on asset growth rather than investment management as their primary objective. The Directors perceive that the Consumer Duty regulations are already causing smaller firms to reassess their ability to compete in this new regulatory environment and that this presents opportunities for Tacit to acquire established books of business. The performance of the Tacit investment strategies affords it this opportunity and therefore the Directors see the competitive environment as a significant positive factor for its future growth.
Development and performance
The Directors intend to continue to assess relevant opportunities to develop or expand the firm’s activities, provided these are consistent with the group’s business strategy and direction.
The Group's key financial performance indicators during the year were as follows:
Unit 2023 2022
Turnover £ 2,073,768 2,118,048
Operating profit £ 587,719 759,071
Investment outcomes and client retention
The four Tacit strategies performed well in absolute and relative terms when compared to the Asset Risk Consultants Private Client Indices. This was achieved by strictly adhering to the Growth/Stabiliser framework which underpins the Tacit Investment Philosophy as well as the ability to pivot towards technology companies following the sharp declines experienced by the Nasdaq during the preceding twelve-month period as interest rates rose sharply. Liquidity was an important factor also as it allowed the team to recycle monies from more defensive holdings towards our longer-term preferred investments. All strategies provided positive returns, outperforming the peer group by 0.73% (Conservative), 3.56% (Real Return), 5.08% (Steady Growth) and 5.37% (Total Return).
Operational matters
The return to more normal social conditions after the Covid restrictions on meeting in person has helped with cultivating prospective new clients, and with providing our personalised services to established clients. Tacit’s Investment Directors now have many more meetings in person.
Hybrid working from home and office locations is now embedded in most businesses, including in Tacit. However, in the course of the year, the Directors decided that training new operational staff is most effective with regular office-based team working, which allows learning through observation and engenders a stronger team ethos. To this end, the Client Services operation was consolidated in the year into Ipswich where the team manager is based and where a pool of experienced financial services administrators exists for future recruitment.
Section 172 Statement and engagement with stakeholders
The group is a discretionary investment management firm which depends on the trust and confidence of its stakeholders to operate sustainably in the long term. It seeks to put its clients’ best interests first, invests in its employees, supports the communities in which it operates and strives to generate sustainable profits for shareholders.
The Directors of the group consider that they have acted in accordance with their duties codified in law, in particular their duty to act in the way in which they consider, in good faith, would be most likely to promote the success of the group for the benefit of its members as a whole, having regard to the stakeholders and matters set out in section 172(1) of the Companies Act 2006.
Clients
The group considers our clients to be one of the most important stakeholder groups of our business model. Tacit places the highest emphasis on personal service to each client and regularly reviews the processes by which we establish the individual needs of each client and respond to them with investment propositions and regular communications which meet their objectives and enable them to understand the basis on which our investment decisions are made.
Suppliers
The group recognises that key suppliers and outsourced service providers can have a material impact on the long-term success of the business and so incorporates the interests of these stakeholders when making strategic long-term decisions. The group believes that having due regard to the interests of these suppliers is a dynamic and ongoing process which requires thoughtful monitoring and assessment, and a willingness to engage with those suppliers to better understand their operating constraints and business development plans.
Employees
The group is committed to being a responsible employer and recognises that for our business to succeed, we need to manage our employees’ performance through mentoring and structured training, and develop and encourage talent, ensuring that we operate as efficiently as possible.
High standards of business conduct
Maintaining a high standard of business conduct when dealing with stakeholders such as regulatory bodies is vital for the subsidiary. The subsidiary is regulated by the FCA and the Directors are very aware of the need to keep up to date with industry regulations and best practice. The subsidiary recognises the importance of meeting its reporting obligations to the FCA and takes client confidentiality and data protection very seriously as set out in our privacy notice on our website which is reviewed regularly.
The community and the environment
In their decision making, the Directors need to have regard to the impact of the group’s operations on the community and environment. Wherever possible, the group encourages carbon friendly business practices as evidenced by giving all staff the ability to work from home if possible.
On behalf of the board
The Directors present their annual report and financial statements for the year ended 30 June 2023.
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
The business’s principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the business's operations.
In respect of bank balances, the liquidity risk is managed by maintaining a sufficient cash reserve at the bank to allow for short term net cash outflows. The firm’s cash is held in accounts that pay a competitive rate of interest.
Trade debtors are managed in respect of credit and cash flow risk through the Terms & Conditions of our engagement with clients and professional advisers, and through the regular monitoring of amounts outstanding for both time and credit limits. Retail client fees are taken directly by the custodian from client accounts operated by the custodian, thus mitigating credit risk associated with this aspect of the business. Trade creditors’ liquidity risk is managed by ensuring sufficient funds are available to meet liabilities when they fall due.
At all times the Directors must ensure that they meet the capital adequacy requirements stipulated by the Financial Conduct Authority, which must be reported periodically via the FCA Gateway.
The Directors have developed a business plan through the year that envisages offering financial advice services alongside the existing investment advice business of TIML Limited. The plan takes account of the new FCA Consumer Duty regulations as the Directors believe that providing wider, more holistic advice will become necessary to the client segment the group targets. The acquisition of Lucus Wealth Limited, noted in the Strategic Report, will be the means by which this objective is achieved.
Just Audit Limited has completed the fourth year of appointment and the Directors intend to appoint Just Audit Limited for a further year.
After making enquiries, the Directors have a firm expectation that the group has resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and group financial statements.
The Directors' responsibilities statement that the Directors agree to is detailed on page 8.
We have audited the financial statements of Tacit Holdings Limited (the 'parent company') and its subsidiaries (the 'group') the year ended 30 June 2023 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
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's and the 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.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the Strategic Report and Directors' 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.
In connection with our audit of the financial statements, 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.
Opinions on other matters 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 the Directors' Report have been prepared in accordance with applicable legal requirements.
In the 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 in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
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.
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:
We gained an understanding of the legal and regulatory framework applicable to the parent company and the group and the industry in which it operates and considered the risk of acts by the parent company and the group that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £443,864 (2022 - £777,521 profit).
In the application of the group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The preparation of the financial statements can require management to make judgements, estimates and
assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the
amounts reported for revenues and expenses during the year.
(i) Impairment of Goodwill
The group establishes a reliable estimate of the useful life of goodwill arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business and the expected useful life of the cash generating units to which the goodwill is attributed. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired, in accordance with the accounting policy.
Tacit Holdings Limited (“the company”) is a private limited company limited by shares domiciled and incorporated in England and Wales. The registered office is 17 Hanover Square, London, W1S 1BN.
The group consists of Tacit Holdings Limited and all of its subsidiaries.
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.
The financial statements are prepared in sterling, which is the functional currency of the group. 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.
The consolidated financial statements consist of the financial statements of the parent company Tacit Holdings Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2023.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
After making enquiries, the Directors have a firm expectation that income is expected to continue at at least current levels and that together with reserves the group has resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements.
Discretionary fund management income
Ongoing discretionary portfolio management charges and fund management charges, based on the value of assets invested, are recognised during the period the assets are held in the portfolio of investment fund. Turnover is shown net of VAT and other sales related taxes.
Investment consultancy services
Turnover is recognised at the fair value of the consideration received or receivable for consultancy services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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 group’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.
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.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease.
The average monthly number of persons (including Directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The Directors received no remuneration (2022: £nil)
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Factors affecting future tax charges
The corporation tax main rate for non-ring-fenced profits increased to 25%, applying to profits over £250,000, from 1 April 2023.
Details of the company's subsidiaries at 30 June 2023 are as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A-G Ordinary shares
These share classes carry the right to receive notice of, attend, speak and vote at all general meetings of the company (each carrying the right to one vote).
These share classes each carry the right to be paid an equal amount of any dividend that the company or the Directors may by a 60% majority decision agree to pay.
These share classes each carry the right to participate equally with the other classes of A-G Ordinary shares on a return of assets on liquidation, capital reduction or otherwise, after distributions have been made to the holders of the A Preference shares and to the holders of the B Preference shares.
The G Ordinary shares shall be liable to be redeemed in accordance with the provisions of the articles of association.
A Preference shares
These shares carry the right to receive notice of all general meetings of the company but not the right to attend or vote at such meetings.
They do not carry any rights to receive dividends.
They are each entitled to be paid an amount up to their agreed A Preference share price of £9,615.38 per A Preference share on a return of assets on liquidation, capital reduction or otherwise before any amounts are paid on the B Preference shares or any class of Ordinary share.
B Preference shares
These shares carry the right to receive notice of all general meetings of the company but not the right to attend or vote at such meetings.
They do not carry any right to receive dividends.
They are each entitled to be paid an amount up to their agreed B Preference share price of £5,000 per B Preference share on a return of assets on liquidation, capital reduction or otherwise after any amounts are paid on the A Preference shares and before any class of Ordinary share.
Dividends of £461,298 (2022: £426,733) were paid to the Directors and £308,698 (2022: £270,266) to other related parties by virtue of being close family members of the Directors.
Other reserves arose upon acquisition of the subsidiary and represent the excess of fair value over nominal value of shares issued as consideration.
The profit and loss account includes all retained profits and losses.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
On 9 August 2023, Tacit Holdings Limited acquired a new subsidiary, Lucus Wealth Limited. The consideration for this was £600,000 in the form of shares issued in Tacit Holdings Limited. The new subsidiary is 100% owned and will be included in the consolidated financial statements for the year ended 30 June 2024, from the date of acquisition. Lucus Wealth Limited's turnover is in the region of £200,000 per annum.
Also after the year end, the share classes in Tacit Holdings Limited were simplified into a single class of Ordinary shares. The effect of this was to reduce the aggregate nominal value of shares issued to £17, prior to the issue of new shares in connection with the acquisition.
Further details are included in the Strategic Report.