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Registered number: 13989294
















SOLUM SW HOLDINGS LIMITED




ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2022

































SOLUM SW HOLDINGS LIMITED

 
COMPANY INFORMATION


Directors
Roger John Glew (appointed 22 March 2022)
Robert Mark Higginbottom (appointed 22 March 2022)
Thomas Frederick Reeves (appointed 19 March 2022)
Jonathan Mark Rose (appointed 22 March 2022)




Registered number
13989294



Registered office
Upper Buckover Farm

Wotton-Under-Edge

South Gloucestershire

GL12 8DZ






SOLUM SW HOLDINGS LIMITED


CONTENTS



Page
Group strategic report
 
 
1 - 2
Directors' report
 
 
3 - 4
Independent auditors' report
 
 
5 - 8
Consolidated statement of comprehensive income
 
 
9
Consolidated statement of financial position
 
 
10
Company statement of financial position
 
 
11
Consolidated statement of changes in equity
 
 
12
Company statement of changes in equity
 
 
13
Consolidated statement of cash flows
 
 
14
Consolidated analysis of net debt
 
 
15
Notes to the financial statements
 
 
16 - 32



SOLUM SW HOLDINGS LIMITED

 
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022

Introduction
 
The Directors present their Strategic Report for the period ending 31 December 2022.

Business review
 
Sales opportunities continue to strengthen leading to a solid order book with reputable clients with interesting and varied tender opportunities.
Confidence in the trading potential has grown through the period and an increased turnover has been achieved.
Challenges regarding the availability and cost increases of material resources were recognised and the primary risks were well managed, and ring fenced.
Potential challenges regarding labour availability are a consistent part of the company’s management considerations and were well met in the period. Beyond these challenges a semblance of stability and known context continued to return to the sector following the extreme disruption from Covid.
No material bad debt has been recorded in the period.
The mitigation of potential societal health risks in relation to Covid previously have established a more stable and efficient working environment, from which improved performances, both operationally and financially have been possible.
Solum SW Holdings Limited acquired Solum (SW) Ltd during the period as part of a Management Buy Out. The Directors are confident in the position of the group, net assets amount to £1.7m.

Principal risks and uncertainties
 
The group is involved in a highly competitive market and margins continue to be tight. Fixed price contracts are susceptible to fluctuations in material supply and human resource costs, presenting a risk of impacting on delicate and thin margins.
Punitive contract conditions and erroneous amendments to standard forms of contract are commonplace and present significant risks if they are not re-negotiated, managed or ring fenced.
Perpetual revisions to supplier credit levels can put pressure on working capital without diligent management, particularly as a consequence of a growing turnover. 

Financial key performance indicators
 
The key performance indicators of the company are turnover and gross profit margin, which are detailed in the Statement of Income and Retained Earnings on page 9. No other KPI analysis is considered necessary for an understanding of the development, performance and position of the company.

Page 1


SOLUM SW HOLDINGS LIMITED


GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022

Going concern
 
The Directors consider that the group is well placed and with sufficient working capital and resources to continue trading for the next 12 months.
In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. They have considered the cash position of the group and its forecasted cash flows.
A continual review of Cash Flow and P&L Forecasts is undertaken, and various scenarios are considered to ensure the group can be most effectively managed.
Communications with key suppliers is ongoing to maintain all critical supplies.
The group's working capital remains positive and it is well placed to weather external threats.
Based on this information the directors believe the group can meet all its financial obligations as they fall due for the foreseeable future and for this reason, they adopt the going concern basis in presenting the accounts for 2022.


This report was approved by the board on 19 September 2023 and signed on its behalf.



Thomas Frederick Reeves
Director

Page 2


SOLUM SW HOLDINGS LIMITED

 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the period ended 31 December 2022.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 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'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group 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 for the Group's financial statements and then apply them consistently;

make judgments 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 Group will continue in business.

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

Results and dividends

The profit for the period, after taxation, amounted to £1,681,923.

Preference share dividends paid during the year amounted to £14,999.

Directors

The directors who served during the period were:

Roger John Glew (appointed 22 March 2022)
Robert Mark Higginbottom (appointed 22 March 2022)
Thomas Frederick Reeves (appointed 19 March 2022)
Jonathan Mark Rose (appointed 22 March 2022)

Future developments

All future developments are included within the strategic report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 3


SOLUM SW HOLDINGS LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsBishop Fleming LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 






Thomas Frederick Reeves
Director

Date: 19 September 2023

Upper Buckover Farm
Wotton-Under-Edge
South Gloucestershire
GL12 8DZ

Page 4


SOLUM SW HOLDINGS LIMITED

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED
Opinion


We have audited the financial statements of Solum SW Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 December 2022, which comprise the Consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 of the parent Company's affairs as at 31 December 2022 and of the Group's profit for the period 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.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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 or 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 other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 5


SOLUM SW HOLDINGS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED (CONTINUED)

Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Group 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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 set out on page 3, 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.


Page 6


SOLUM SW HOLDINGS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED (CONTINUED)

Auditors' 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 Auditors' 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 Group 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:

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
• the nature of the industry and sector, control environment and business performance;
• the results of our enquiries of management and the directors about their own identification and assessment of the risk of irregularities; 
• any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to:
• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
• detecting and responding to the risk of fraud and whether they have knowledge of actual, suspected, or alleged fraud; and
• the internal controls established to mitigate the risks of fraud or non-compliance with laws and regulations.
• the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud, and incorrect recognition of revenue was identified as the greatest potential area for fraud. 
In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures within the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Financial Reporting Standard 102 and UK tax legislation. 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty. These included health and safety regulations, employment legislation and data protection laws.

Our procedures to respond to the risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation claims;
reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue;
reviewing Board meeting minutes; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgments made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

Page 7


SOLUM SW HOLDINGS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLUM SW HOLDINGS LIMITED (CONTINUED)

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed 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.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.






Ria Burridge FCCA (Senior statutory auditor)
for and on behalf of
Bishop Fleming LLP
Chartered Accountants
Statutory Auditors
10 Temple Back
Bristol
BS1 6FL

27 September 2023
Page 8


SOLUM SW HOLDINGS LIMITED

 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022

2022
Note
£

  

Turnover
 4 
12,848,254

Cost of sales
  
(9,382,285)

Gross profit
  
3,465,969

Administrative expenses
  
(1,361,864)

Operating profit
 5 
2,104,105

Interest payable and similar expenses
  
(14,999)

Profit before tax
  
2,089,106

Tax on profit
  
(407,183)

Profit for the financial period
  
1,681,923

Profit for the year attributable to:
  

Owners of the parent company
  
1,681,923

  
1,681,923

There was no other comprehensive income for 2022.

The notes on pages 16 to 32 form part of these financial statements.

Page 9


SOLUM SW HOLDINGS LIMITED
REGISTERED NUMBER:13989294

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
Note
£

Fixed assets
  

Intangible assets
 9 
1,920,748

Tangible assets
 10 
125,751

  
2,046,499

Current assets
  

Debtors
 12 
2,219,299

Cash at bank and in hand
  
2,610,735

  
4,830,034

Creditors: amounts falling due within one year
 14 
(3,119,256)

Net current assets
  
 
 
1,710,778

Total assets less current liabilities
  
3,757,277

Creditors: amounts falling due after more than one year
 15 
(2,049,000)

Provisions for liabilities
  

Deferred tax
 16 
(25,355)

  
 
 
(25,355)

Net assets
  
1,682,922


Capital and reserves
  

Called up share capital 
 17 
999

Profit and loss account
 18 
1,681,923

  
1,682,922


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 





Thomas Frederick Reeves
Director

Date: 19 September 2023

The notes on pages 16 to 32 form part of these financial statements.

Page 10


SOLUM SW HOLDINGS LIMITED
REGISTERED NUMBER:13989294

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
Note
£

Fixed assets
  

Investments
 11 
4,019,999

  
4,019,999

Current assets
  

Debtors
 12 
1,134

  
1,134

Creditors: amounts falling due within one year
 14 
(1,971,134)

Net current (liabilities)
  
 
 
(1,970,000)

Total assets less current liabilities
  
2,049,999

  

Creditors: amounts falling due after more than one year
 15 
(2,049,000)

  

Net assets
  
999


Capital and reserves
  

Called up share capital 
 17 
999

  
999


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 





Thomas Frederick Reeves
Director

Date: 19 September 2023

The notes on pages 16 to 32 form part of these financial statements.

Page 11


SOLUM SW HOLDINGS LIMITED


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£


Comprehensive income for the period

Profit for the period

-
1,681,923
1,681,923
1,681,923


Contributions by and distributions to owners

Shares issued during the period
999
-
999
999


At 31 December 2022
999
1,681,923
1,682,922
1,682,922

The notes on pages 16 to 32 form part of these financial statements.

Page 12


SOLUM SW HOLDINGS LIMITED


COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022


Called up share capital
Total equity

£
£

Result for the period

-
-


Contributions by and distributions to owners

Shares issued during the period
999
999


At 31 December 2022
999
999

The notes on pages 16 to 32 form part of these financial statements.

Page 13


SOLUM SW HOLDINGS LIMITED


CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2022
£

Cash flows from operating activities

Profit for the financial period
1,681,923

Adjustments for:

Amortisation of intangible assets
155,737

Depreciation of tangible assets
33,208

Loss on disposal of tangible assets
(8,310)

Interest paid
14,999

Taxation charge
407,183

(Increase)/decrease in debtors
(925,103)

Increase in creditors
109,521

Corporation tax (paid)/received
(5,853)

Net cash generated from operating activities

1,463,305


Cash flows from investing activities

Net cash inflow on acquisition
1,179,914

Purchase of tangible fixed assets
(59,233)

Sale of tangible fixed assets
41,748

Net cash from investing activities

1,162,429

Cash flows from financing activities

Interest paid
(14,999)

Net cash used in financing activities
(14,999)

Net increase in cash and cash equivalents
2,610,735

Cash and cash equivalents at the end of period
2,610,735


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
2,610,735

2,610,735


The notes on pages 16 to 32 form part of these financial statements.

Page 14


SOLUM SW HOLDINGS LIMITED


CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 DECEMBER 2022




Cash flows
Acquisition and disposal of subsidiaries
At 31 December 2022
£

£

£

Cash at bank and in hand

1,430,821

1,179,914

2,610,735

Debt due after 1 year

-

(999,000)

(999,000)



1,430,821
180,914
1,611,735

The notes on pages 16 to 32 form part of these financial statements.

Page 15


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

1.


General information

Solum SW Holdings Limited is a private company, limited by shares, incorporated in England and Wales. The registered office is Upper Buckover Farm, Wotton-Under-Edge, South Gloucestershire, GL12 8DZ and the registered number is 13989294.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The company was incorporated on 19 March 2022. The accounting period is from 19 March 2022 to 31 December 2022.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 19 March 2022.

Page 16


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Going concern

The Directors consider that the group is well placed and with sufficient working capital and resources to continue trading for the next 12 months.
In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. They have considered the cash position of the group and its forecasted cash flows.
A detailed review of Cash Flow and P&L Forecasts has been undertaken, and various scenarios are considered to ensure the group can be most effectively managed in changing circumstances.
Communications with key suppliers is ongoing to maintain all critical supplies.
The group's working capital remains positive and it is well placed to weather external threats.
Based on this information the directors believe the group can meet all its financial obligations as they fall due for the foreseeable future and for this reason, they adopt the going concern basis in preparing the accounts.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Amounts recoverable on long term contracts, which are included in debtors, are stated at the net sales value of the work done less payments on account. Payments on account which exceed the revenue recognised are included in creditors as payments on account.

 
2.5

Pensions

DEFINED CONTRIBUTION PENSION PLAN

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

Page 17


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.6

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.7

Intangible assets

GOODWILL

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.

OTHER INTANGIBLE ASSETS

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 18


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.8
Tangible fixed assets (CONTINUED)



Depreciation is provided on the following basis:

Plant and machinery
-
25%
Reducing balance
Motor vehicles
-
25%
Reducing balance
Fixtures and fittings
-
25%
Straight line
Computer equipment
-
33%
Straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.9

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each Statement of financial position. Gains and losses on remeasurement are recognised in the Consolidated statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

 
2.10

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.11

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.12

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 19


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.13

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

 
2.14

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Group's Statement of financial position when the Group becomes party to the contractual provisions of the instrument.

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

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Page 20


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.14
Financial instruments (CONTINUED)

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

  
2.15

Preference shares

The preference shares are classified as debt. The preference share dividends are recorded within interest payable and similar charges.

 
2.16

Dividends

Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.

Page 21


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts report for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Any revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period. If the revision affects both current and future periods, then it is recognised in both the current and future period.
The key estimates in the accounts relate to the company’s revenue recognition and long-term service contracts policies are set out in note 2.4. These policies are central to the way in which the company values the work it has carried out at each reporting date and the estimation of the percentage completion of the contract. These policies require forecasts to be made of the outcome of long-term service contracts and require assessments and judgements to be made on the recovery of precontract costs, variations in work scopes, claim recoveries, expected contract costs to complete and the progress on contract programmes. The company has appropriate control procedures in place to ensure estimates are calculated on a consistent basis.


4.


Turnover

An analysis of turnover by class of business is as follows:


2022
£

General construction and civil engineering contracting
12,848,254

12,848,254


Analysis of turnover by country of destination:

2022
£

United Kingdom
12,848,254

12,848,254



5.


Operating profit

The operating profit is stated after charging:

2022
£

Depreciation of tangible fixed assets
33,208

Loss on disposal
8,310

Auditors remuneration
22,500

Page 22


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

6.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
2022
£


Wages and salaries
2,930,341

Social security costs
318,152

Cost of defined contribution scheme
55,351

3,303,844


The average monthly number of employees, including the directors, during the period was as follows:


        2022
            No.






Employees
61

The Company has no employees other than the directors, who did not receive any remuneration (NIL)

7.


Directors' remuneration

2022
£

Directors' emoluments
409,058

409,058


The highest paid director received remuneration of £107,399.

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL.

Page 23


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

8.


Taxation


2022
£

CORPORATION TAX


Current tax on profits for the year
407,870


407,870


TOTAL CURRENT TAX
407,870

DEFERRED TAX


Origination and reversal of timing differences
(687)

TOTAL DEFERRED TAX
(687)


TAX ON PROFIT
407,183

Factors affecting tax charge for the period

The tax assessed for the period is higher than the standard rate of corporation tax in the UK of 19%. The differences are explained below:

2022
£


Profit on ordinary activities before tax
2,089,106


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19%
396,930

EFFECTS OF:


Fixed asset differences
72

Expenses not deductible for tax purposes
10,346

Other differences leading to an increase (decrease) in the tax charge
(165)

TOTAL TAX CHARGE FOR THE PERIOD
407,183


Factors that may affect future tax charges

The tax rate will increase to 25% from 2023.

Page 24


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

9.


Intangible assets

Group and Company




Goodwill

£



COST


Additions
2,076,485



At 31 December 2022

2,076,485



AMORTISATION


Charge for the period on owned assets
155,737



At 31 December 2022

155,737



NET BOOK VALUE



At 31 December 2022
1,920,748



Page 25


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

10.


Tangible fixed assets

Group






Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£



COST OR VALUATION


Additions
-
59,233
-
-
59,233


Acquisition of subsidiary
98,361
185,948
5,661
5,244
295,214


Disposals
-
(80,117)
-
-
(80,117)



At 31 December 2022

98,361
165,064
5,661
5,244
274,330



DEPRECIATION


Charge for the period on owned assets
9,443
23,667
98
-
33,208


Disposals
-
(46,679)
-
-
(46,679)


Acquisition of subsidiary
60,594
90,940
5,272
5,244
162,050



At 31 December 2022

70,037
67,928
5,370
5,244
148,579



NET BOOK VALUE



At 31 December 2022
28,324
97,136
291
-
125,751


11.


Fixed asset investments

Company





Investments in subsidiary companies

£



COST OR VALUATION


Additions
4,019,999



At 31 December 2022
4,019,999




Page 26


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Solum (SW) Ltd
Upper Buckover Farm, Wotton-Under-Edge, South Gloucestershire, United Kingdom, GL12 8DZ
Ordinary
100%


12.


Debtors

Group
Company
2022
2022
£
£


Trade debtors
1,752,524
-

Other debtors
194,837
1,134

Prepayments and accrued income
16,645
-

Amounts recoverable on long-term contracts
255,293
-

2,219,299
1,134



13.


Cash and cash equivalents

Group
2022
£

Cash at bank and in hand
2,610,735

2,610,735


Page 27


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

14.


Creditors: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group
Company
2022
2022
£
£

Payments received on account
632,039
-

Trade creditors
400,171
-

Amounts owed to group undertakings
-
621,134

Corporation tax
539,784
-

Other taxation and social security
100,378
-

Other creditors
1,411,621
1,350,000

Accruals and deferred income
35,263
-

3,119,256
1,971,134


Disclosure of the terms and conditions attached to the non-equity shares is made in note 17.


15.


Creditors: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group
Company
2022
2022
£
£

Other creditors
1,050,000
1,050,000

Share capital treated as debt
999,000
999,000

2,049,000
2,049,000


Disclosure of the terms and conditions attached to the non-equity shares is made in note 17.




16.


Deferred taxation


Group



2022


£






Arising on business combinations
(26,042)


Charged to profit or loss
687



AT END OF YEAR
(25,355)

Page 28


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
 
16.Deferred taxation (continued)

Group
2022
£

Accelerated capital allowances
(25,355)

(25,355)


17.


Share capital

2022
£
SHARES CLASSIFIED AS EQUITY

ALLOTTED, CALLED UP AND FULLY PAID


999 Ordinary shares of £1.00 each
999

2022
£
SHARES CLASSIFIED AS DEBT

ALLOTTED, CALLED UP AND FULLY PAID


999,000 Preference shares of £1.00 each
999,000


During the period 999 £1 ordinary shares and 999,000 £1 preference shares were issued in connection with the acquisition of Solum (SW) Ltd.


18.


Reserves

Profit and loss account

Includes all retained profits and losses.

Page 29


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

19.
 

Business combinations

On 29 March 2022, the group acquired 100% of the ordinary share capital of Solum (SW) Ltd for total consideration of £4,019,999.

Acquisition of Solum (SW) Ltd

RECOGNISED AMOUNTS OF IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED

Book value
Fair value adjustments
Fair value
£
£
£

FIXED ASSETS

Tangible
133,164
-
133,164

133,164
-
133,164

CURRENT ASSETS

Debtors
1,294,196
-
1,294,196

Cash at bank and in hand
1,779,914
-
1,779,914

TOTAL ASSETS
3,207,274
-
3,207,274

CREDITORS

Due within one year
(1,237,718)
-
(1,237,718)

Deferred taxation
(26,042)
-
(26,042)

TOTAL IDENTIFIABLE NET ASSETS
1,943,514
-
1,943,514


Goodwill
2,076,485

TOTAL PURCHASE CONSIDERATION
4,019,999

CONSIDERATION

£


Cash
600,000

Equity instruments
999

Debt instruments
999,000

Deferred consideration
2,400,000

Directly attributable costs
20,000

TOTAL PURCHASE CONSIDERATION
4,019,999

Page 30


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

19.Business combinations (continued)

CASH OUTFLOW ON ACQUISITION

£


Purchase consideration settled in cash, as above
600,000

600,000

Less: Cash and cash equivalents acquired
(1,779,914)

NET CASH INFLOW ON ACQUISITION
(1,179,914)

The results of  Solum (SW) Ltd since acquisition are as follows:

Current period since acquisition
£

Turnover
12,848,255

Profit for the period since acquisition
1,852,660


20.


Pension commitments

The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. At the year end, £15,014 remained payable to the fund.


21.


Commitments under operating leases

At 31 December 2022 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
2022
£

Not later than 1 year
60,018

Later than 1 year and not later than 5 years
54,841

114,859

22.


Related party transactions

The group maintains interest free current accounts with the directors which are unsecured and repayable on demand. At the balance sheet date £12,819 was owed to the directors. During the period, the directors also received preference dividends totalling £14,999.
The company has taken advantage of the exemption included within FRS102 not to disclose transactions with other wholly owned members of the group. 

Page 31


SOLUM SW HOLDINGS LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

23.


Controlling party

The ultimate controlling party is Thomas Frederick Reeves.

Page 32