eSynergy Holdings Limited
Annual Report and Financial Statements
For the year ended 30 June 2023
Company Registration No. 11849065 (England and Wales)
eSynergy Holdings Limited
Company Information
Directors
PJ Crompton
Company number
11849065
Registered office
New London House
6 London Street
London
EC3R 7LP
Auditor
Moore Kingston Smith LLP
Orbital House
20 Eastern Road
Romford
Essex
RM1 3PJ
eSynergy Holdings Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 29
eSynergy Holdings Limited
Strategic Report
For the year ended 30 June 2023
Page 1
The directors present the strategic report for the year ended 30 June 2023.
Fair review of the business
Turnover has picked up from last year, rising from £23,556,859 to £27,775,106. As we pivoted our business model we have had to learn new ways of working and hire new skills to achieve the outcomes desired by changing our business model.
Our new business model has proved extremely successful so far. We retained over 80% of our existing customers, secured contracts with an influx of new customers and increased our Gross Profit Margin from 21.9% to 29.2%. This has led to a rise in Gross Profit to £8,100,846 from last year’s £5,157,908.
Our headcount increased by 6% as we continued to strengthen our Leadership team..
Our customer spread is primarily in the enterprise sector and we have a fair spread without any reliance on any one customer. Our primary focus continues to be identifying and delivering measurable value to agreed outcomes and deliverables across our customers and Statements of Work.
We continue to adhere to ISO 27001 and ISO 9001 certifications that demonstrate we have thorough and robust working practices; this has led us to securing multiple contracts with significant value.
Principal risks and uncertainties
The principal risks and uncertainties faced by the group are primarily external and largely outside of our direct control.
Brexit has further hindered our ability to attract talent based in the UK because of the drain on tech skills to Europe. Conversely, Covid lead us to improve our ability to deliver outcomes remotely and globally, hence actually widening the talent pool in many cases.
The recent banking crisis shines light on the risks within the financial services industry to which it would seem no one is immune. We have strong credit control procedures which have led to healthy debtor day ratios below industry average and continue to be supported & serviced well by our invoice discount and banking partner, National Westminster Bank to mitigate these risks.
Hybrid / remote working causes risks and uncertainties within our communities and hinders upskilling, learning & building relationships. We have addressed this by investing in the best of breed collaboration tools such as clack, Trello and others and facilitating regular community events face to face.
There is a significant lack of global talent for the work we deliver which is still one of our biggest risks and uncertainties. We are investing significantly in our attraction, onboarding and community building to counter this.
War in Ukraine:
The group has seen no direct impact as a result of the war in Ukraine; our business supply chain continues to be stable.
Brexit:
The group continues to prosper in a post Brexit era, with readily available access to our associates.
eSynergy Holdings Limited
Strategic Report (Continued)
For the year ended 30 June 2023
Page 2
Financial risk management objectives and policies
The business' principal financial instruments comprise of bank balances, confidential invoice discount facility, trade debtors, trade creditors, development loans, Director loans and finance lease agreements. The main purpose of these instruments is to finance the business' operations. After review of availability and pricing of working capital funding in the UK, the Directors concluded that the mix of financial instruments is correct but regular review of the suppliers of banking arrangements and confidential invoice discount facilities is undertaken. We aspirations to move in value based consulting due top higher margins and revenues it will be imperative we look for banking solutions to better suit this model.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers, prior to supply of recruitment services and the regular monitoring of amounts outstanding for both time, expressed as customers' payment terms, and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.
Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. Payment runs are produced bi-monthly and controls are in place to ensure correctly received and authorised invoices are settled within payment terms.
The business is a lessee in respect of finance leased assets. The liquidity risk in respect of these is managed by ensuring that there are sufficient funds to meet the payments.
Key performance indicators
The key financial performance indicators of the Group are:
2023 2022
£ £
Turnover 27,775,106 23,556,859
Gross Profit 8,100,846 5,157,908
Gross Profit Margin 29.2% 21.9%
Future developments
The group has a well-established and growing firm client base within the enterprise sector. With our mission to link the value of what we deliver with the customers value will lead to deeper and stronger relationships with existing & new customers.
We expect to see significant growth in our margins and growth within existing and new customers, as we link the value of the work we do back to our customers value.
The group now has an established team and highly engaged community of tech experts delivering value to our customers. We expect to add further to these communities with more strategic appointments in 2024.
P J Crompton
Director
25 October 2023
eSynergy Holdings Limited
Directors' Report
For the year ended 30 June 2023
Page 3
The directors present their annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of a holding company. The principal activity of the group continued to be that of design and implemention of technology solutions that support our clients’ business objectives. Services revolve around 4 core areas: Cloud & Platforms, Data, Business Agility Solutions and Technical Agility Solutions.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £673,242 (2022: £277,500). The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P J Crompton
Research and development
The company did not carry out any research or development activities in the year to 30 June 2023.
Auditor
The auditor, Moore Kingston Smith LLP, is deemed to be appointed under section 487 (2) of the Companies Act 2006.
Statement of 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting 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 ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
eSynergy Holdings Limited
Directors' Report (Continued)
For the year ended 30 June 2023
Page 4
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
On behalf of the board
P J Crompton
Director
25 October 2023
eSynergy Holdings Limited
Independent Auditor's Report
To the Members of eSynergy Holdings Limited
Page 5
Opinion
We have audited the financial statements of eSynergy Holdings Limited (the 'parent company') and its subsidiary (the 'group') for the year ended 30 June 2023 which comprise the Group Statement of Comprehensive Income, 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).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 30 June 2023 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.
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 and parent company 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 or 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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.
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 course of 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.
eSynergy Holdings Limited
Independent Auditor's Report (Continued)
To the Members of eSynergy Holdings Limited
Page 6
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.
Matters on which we are required to report by exception
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.
Responsibilities of directors
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 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 parent company or to cease operations, or have no realistic alternative but to do so.
eSynergy Holdings Limited
Independent Auditor's Report (Continued)
To the Members of eSynergy Holdings Limited
Page 7
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
eSynergy Holdings Limited
Independent Auditor's Report (Continued)
To the Members of eSynergy Holdings Limited
Page 8
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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
Paul Springfield (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
25 October 2023
Chartered Accountants
Statutory Auditor
Orbital House
20 Eastern Road
Romford
Essex
RM1 3PJ
eSynergy Holdings Limited
Group Statement of Comprehensive Income
For the year ended 30 June 2023
Page 9
2023
2022
Notes
£
£
Turnover
3
27,775,106
23,556,859
Cost of sales
(19,674,260)
(18,398,951)
Gross profit
8,100,846
5,157,908
Administrative expenses
(6,881,338)
(5,026,818)
Operating profit
4
1,219,508
131,090
Interest receivable and similar income
8
6,344
232
Interest payable and similar expenses
9
(81,235)
(29,173)
Profit before taxation
1,144,617
102,149
Tax on profit
10
(300,206)
(70,020)
Total comprehensive income for the year
844,411
32,129
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
eSynergy Holdings Limited
Group Balance Sheet
As at 30 June 2023
Page 10
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
1,619,001
1,900,567
Other intangible assets
12
93,219
90,421
Total intangible assets
1,712,220
1,990,988
Tangible assets
13
207,544
96,525
1,919,764
2,087,513
Current assets
Debtors
17
5,260,840
3,466,272
Cash at bank and in hand
599,317
583,035
5,860,157
4,049,307
Creditors: amounts falling due within one year
18
(5,448,880)
(3,661,942)
Net current assets
411,277
387,365
Total assets less current liabilities
2,331,041
2,474,878
Creditors: amounts falling due after more than one year
19
(40,895)
(355,901)
Net assets
2,290,146
2,118,977
Capital and reserves
Called up share capital
23
100
100
Share premium account
1,649,900
1,649,900
Profit and loss reserves
640,146
468,977
Total equity
2,290,146
2,118,977
The financial statements were approved by the board of directors and authorised for issue on 25 October 2023 and are signed on its behalf by:
25 October 2023
P J Crompton
Director
eSynergy Holdings Limited
Company Balance Sheet
As at 30 June 2023
30 June 2023
Page 11
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
14
3,300,001
3,300,000
Current assets
Cash at bank and in hand
40
70
Creditors: amounts falling due within one year
18
(15,101)
(394,100)
Net current liabilities
(15,061)
(394,030)
Net assets
3,284,940
2,905,970
Capital and reserves
Called up share capital
23
100
100
Share premium account
1,649,900
1,649,900
Profit and loss reserves
1,634,940
1,255,970
Total equity
3,284,940
2,905,970
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 period was £1,052,212 (2022 - £642,470 profit).
The financial statements were approved by the board of directors and authorised for issue on 25 October 2023 and are signed on its behalf by:
25 October 2023
P J Crompton
Director
Company Registration No. 11849065 (England and Wales)
eSynergy Holdings Limited
Group Statement of Changes in Equity
For the year ended 30 June 2023
Page 12
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2021
100
1,649,900
714,348
2,364,348
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
-
32,129
32,129
Dividends
11
-
-
(277,500)
(277,500)
Balance at 30 June 2022
100
1,649,900
468,977
2,118,977
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
844,411
844,411
Dividends
11
-
-
(673,242)
(673,242)
Balance at 30 June 2023
100
1,649,900
640,146
2,290,146
eSynergy Holdings Limited
Company Statement of Changes in Equity
For the year ended 30 June 2023
Page 13
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2021
100
1,649,900
891,000
2,541,000
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
-
642,470
642,470
Dividends
11
-
-
(277,500)
(277,500)
Balance at 30 June 2022
100
1,649,900
1,255,970
2,905,970
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
1,052,212
1,052,212
Dividends
11
-
-
(673,242)
(673,242)
Balance at 30 June 2023
100
1,649,900
1,634,940
3,284,940
eSynergy Holdings Limited
Group Statement of Cash Flows
For the year ended 30 June 2023
Page 14
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,830,274
238,110
Interest paid
(81,235)
(29,173)
Income taxes paid
(70,020)
(183,274)
Net cash inflow from operating activities
1,679,019
25,663
Investing activities
Purchase of intangible assets
(36,116)
(76,934)
Purchase of tangible fixed assets
(164,837)
(26,519)
Proceeds on disposal of tangible fixed assets
1,720
-
Interest received
6,344
232
Net cash used in investing activities
(192,889)
(103,221)
Financing activities
Repayment of convertible loans
(385,000)
(370,000)
Repayment of bank loans
(402,500)
(80,500)
Payment of finance leases obligations
(9,106)
(5,312)
Dividends paid to equity shareholders
(673,242)
(277,500)
Net cash used in financing activities
(1,469,848)
(733,312)
Net increase/(decrease) in cash and cash equivalents
16,282
(810,870)
Cash and cash equivalents at beginning of year
583,035
1,393,905
Cash and cash equivalents at end of year
599,317
583,035
eSynergy Holdings Limited
Notes to the Financial Statements
For the year ended 30 June 2023
Page 15
1
Accounting policies
Company information
eSynergy Holdings Limited ("the company") is a private limited company domiciled and incorporated in England and Wales. The registered office is New London House, 6 London Street, London, EC3R 7LP.
The group consists of eSynergy Holdings Limited and all of its subsidiaries.
1.1
Accounting convention
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 company. Monetary amounts in these financial statements are rounded to the nearest pound.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
The consolidated group financial statements consist of the financial statements of the parent company eSynergy Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
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.
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and for a period of not less than 12 months following the approval of these financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 16
1.4
Turnover
Turnover represents amounts receivable for services net of VAT and trade discounts.
Fee income represents revenue earned under a variety of contracts to provide technology consultancy services. Revenue is recognised as earned when, and to the extent that, the firm obtains the right to consideration in exchange for its performance under these contracts. It is measured at the fair value of the right to consideration, which represents amounts chargeable to clients, including expenses and disbursements but excluding value added tax.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. 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. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
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:
Software
25% straight line basis
1.7
Tangible fixed assets
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:
Fixtures and fittings
25% straight line basis
Motor vehicles
25% straight line basis
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.
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 17
1.8
Cash at bank and in hand
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.
1.9
Financial instruments
All of the company's financial assets and liabilities are basic and measured at amortised cost.
1.10
Equity instruments
Equity instruments issued by the group 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 group.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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
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 if, and only if, there is 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.
1.12
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 18
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.14
Foreign exchange
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.
2
Judgements and key sources of estimation uncertainty
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.
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 19
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful economic lives of tangible fixed assets
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 13 for the carrying amount of the property, plant and equipment and note 1.7 for the useful economic lives for each class of asset.
Useful economic life of goodwill
The annual amortisation charge goodwill is sensitive to changes in the estimated useful economic lives and residual values of the asset. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments and economic utilisation. See note 12 for the carrying amount of goodwill and note 1.5 for the useful economic lives for goodwill.
Useful economic lives of intangible fixed assets
The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. Goodwill impairment reviews are also performed annually. These reviews require an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise for the cash generating unit and a suitable discount rate to calculate present value. See note 12 for the carrying amount of the intangible assets and note 1.6 for the useful economic lives for each class of asset.
Recoverable value of trade debtors
The company makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 17 for the net carrying amount of the debtors and associated impairment provision.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Consultancy services
27,639,063
23,405,492
Permanent placements
136,043
151,367
27,775,106
23,556,859
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
3
Turnover and other revenue
(Continued)
Page 20
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
22,795,826
20,893,218
Europe
3,027,383
2,663,641
North America
1,951,897
-
27,775,106
23,556,859
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
34,393
22,522
Depreciation of tangible fixed assets held under finance leases
17,355
11,570
Amortisation of intangible assets
314,884
304,552
Operating lease charges
182,333
146,400
Loss on disposal
350
140
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
6,000
5,000
Audit of the financial statements of the company's subsidiaries
26,000
23,000
32,000
28,000
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
1
2
1
1
Sales
14
11
-
-
Administration
20
18
-
-
35
31
1
1
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
6
Employees
(Continued)
Page 21
Their aggregate remuneration comprised:
Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,856,083
2,593,554
Social security costs
481,563
320,909
-
-
Pension costs
81,904
65,497
4,419,550
2,979,960
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
16,525
9,000
Company pension contributions to defined contribution schemes
18,000
18,000
34,525
27,000
Remuneration paid to key management personnel in the year was £764,136 (2022: £480,901).
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
6,344
232
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
19,568
11,207
Other interest
61,667
17,966
Total finance costs
81,235
29,173
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
300,206
70,020
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
10
Taxation
(Continued)
Page 22
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:
2023
2022
£
£
Profit before taxation
1,144,617
102,149
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
286,154
19,408
Tax effect of expenses that are not deductible in determining taxable profit
109,517
63,132
Effect of change in corporation tax rate
(65,658)
-
Permanent capital allowances in excess of depreciation
(31,773)
(18,997)
Depreciation on assets not qualifying for tax allowances
540
6,477
Taxation charge
298,780
70,020
Taxation charge in the financial statements
300,206
70,020
Reconciliation - the current year tax charge does not reconcile to the above analysis. Please review figures in the database.
(1,426)
-
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
673,242
277,500
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 23
12
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 1 July 2022
2,815,656
115,661
2,931,317
Additions
36,116
36,116
At 30 June 2023
2,815,656
151,777
2,967,433
Amortisation and impairment
At 1 July 2022
915,089
25,240
940,329
Amortisation charged for the year
281,566
33,318
314,884
At 30 June 2023
1,196,655
58,558
1,255,213
Carrying amount
At 30 June 2023
1,619,001
93,219
1,712,220
At 30 June 2022
1,900,567
90,421
1,990,988
The company had no intangible fixed assets at 30 June 2023 or 30 June 2022.
13
Tangible fixed assets
Group
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 July 2022
105,346
69,419
174,765
Additions
164,837
164,837
Disposals
(6,293)
(6,293)
At 30 June 2023
263,890
69,419
333,309
Depreciation and impairment
At 1 July 2022
66,670
11,570
78,240
Depreciation charged in the year
34,393
17,355
51,748
Eliminated in respect of disposals
(4,223)
(4,223)
At 30 June 2023
96,840
28,925
125,765
Carrying amount
At 30 June 2023
167,050
40,494
207,544
At 30 June 2022
38,676
57,849
96,525
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
13
Tangible fixed assets
(Continued)
Page 24
The company had no tangible fixed assets at 30 June 2023 or 30 June 2022.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2023
2022
2023
2022
£
£
£
£
Motor vehicles
57,849
69,419
Depreciation charge for the year in respect of leased assets
17,355
11,570
-
-
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Unlisted investments
3,300,001
3,300,000
Movements in fixed asset investments
Company
Investments other than loans
£
Cost or valuation
At 1 July 2022 and 30 June 2023
3,300,000
Additions
1
At 30 June 2023
3,300,001
Carrying amount
At 30 June 2023
3,300,001
At 30 June 2022
3,300,000
15
Subsidiaries
Details of the company's subsidiaries at 30 June 2023 are as follows:
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
15
Subsidiaries
(Continued)
Page 25
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
eSynergy Solutions Limited
England and Wales
Technology Consultancy
Ordinary
100.00
eSynergy Solutions Inc
United States of America
Technology Consultancy
Ordinary
100.00
The registered address of eSynergy Solutions Limited is New London House, 6 London Street, London, EC3R 7LP.
The registered address of eSynergy Solutions Inc is 11601 Wilshire Blvd, Los Angeles, California, CA 90025.
On 16 May 2023 the group purchased the entire shareholding of eSynergy Solutions Inc for consideration of $1.
16
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
3,816,998
2,345,333
-
-
Instruments measured at fair value through profit or loss
-
-
3,300,001
3,300,000
Carrying amount of financial liabilities
Measured at amortised cost
4,870,251
3,770,307
15,101
394,100
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
3,814,348
2,221,832
Other debtors
2,650
123,501
Prepayments and accrued income
1,443,842
1,120,939
5,260,840
3,466,272
-
-
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 26
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Loan notes
385,000
385,000
Bank loans and overdrafts
20
96,600
Obligations under finance leases
21
9,106
9,106
Trade creditors
1,869,970
1,636,437
Amounts due to group undertakings
15,101
9,100
Corporation tax payable
300,206
70,020
Other taxation and social security
269,317
118,410
-
-
Other creditors
1,906,688
776,829
Accruals and deferred income
1,093,593
569,540
5,448,880
3,661,942
15,101
394,100
The Royal Bank of Scotland PLC has fixed and floating charges over all assets of the business. The company's invoice discount facility is also secured by personal guarantees and indemnities from PJ Crompton a director of the company.
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
20
305,900
Obligations under finance leases
21
40,895
50,001
40,895
355,901
The previous CBIL's loan obligation was paid off in full during the year.
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
402,500
Payable within one year
96,600
Payable after one year
305,900
See note 18 for details on the loan securities and terms.
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 27
21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
9,106
9,106
In two to five years
40,895
50,001
50,001
59,107
-
-
Finance lease payments represent rental payable by the company or group for a motor vehicle. The lease includes a purchase option at the end of the lease period, and no restrictions are placed on the use of the asset. The lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
81,904
65,497
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.
Contributions outstanding at the year end total £11,897 (2022: £nil).
23
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
There is a single class of ordinary shares, there are no restrictions on distributions or repayment of capital.
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 28
24
Operating lease commitments
Lessee
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:
Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
93,177
112,138
-
-
Between two and five years
163,078
253
-
-
256,255
112,391
-
-
25
Related party transactions
The company has elected to take advantage of the exemption from the requirements of FRS 102 to disclose transactions with other wholly owned members of that group. Details of the subsidiary companies can be found in note 15.
There were no other related party transactions during the year.
26
Controlling party
The ultimate controlling party is PJ Crompton by virtue of his majority shareholding in the company.
27
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
844,411
32,129
Adjustments for:
Taxation charged
300,206
70,020
Finance costs
81,235
29,173
Investment income
(6,344)
(232)
Loss on disposal of tangible fixed assets
350
140
Amortisation and impairment of intangible assets
314,884
304,552
Depreciation and impairment of tangible fixed assets
51,748
34,092
Movements in working capital:
(Increase)/decrease in debtors
(1,794,567)
389,786
Increase/(decrease) in creditors
2,038,351
(621,550)
Cash generated from operations
1,830,274
238,110
eSynergy Holdings Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 29
28
Analysis of changes in net funds/(debt) - group
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
583,035
16,282
599,317
Borrowings excluding overdrafts
(402,500)
402,500
-
Obligations under finance leases
(59,107)
9,106
(50,001)
Convertible loan notes
(385,000)
385,000
-
(263,572)
812,888
549,316
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