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Registered number: 04273597










ESI UK LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022



 
ESI UK LIMITED
 

COMPANY INFORMATION


Directors
Cristel de Rouvray -  ESI Group SA 
Corinne-Romefort Regnier 
Olfa Zorgati 




Registered number
04273597



Registered office
James Cowper Kreston
2 Chawley Park

Cumnor Hill

Oxford

Oxfordshire

OX2 9GG




Independent auditors
Richardsons

30 Upper High Street

Thame

Oxfordshire

OX9 3EZ




Accountants
James Cowper Kreston
Chartered Accountants

2 Chawley park

Cumnor Hill

Oxford

Oxfordshire

OX2 9GG





 
ESI UK LIMITED
 

CONTENTS



Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 25


 
ESI UK LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
ESI UK Limited is a fully owned subsidiary of ESI Group. 
ESI Group is the world’s foremost creator of Virtual Prototyping software and services. Specializing in the physics of materials, ESI Group has developed unique expertise to help industrial players replace physical prototypes with virtual ones, thus making it possible to virtually manufacture and test the products of the future, ensuring pre-certification. Used together with latest-generation technologies, today Virtual Prototyping is part of an overarching approach to the Product Performance LifecycleTM (PPL), which addresses products’ operating performance throughout its useful lifecycle, from rollout to withdrawal. The creation of Hybrid TwinTM incorporating simulation, physics and data analysis makes it possible to create smart products, particularly using connected objects, as well as to predict their performance and anticipate their maintenance requirements. 
ESI Group is a French company listed in compartment B of NYSE Euronext Paris. It is the parent company of some 30 subsidiaries operating throughout the world. Present in more than 40 countries, and addressing every major industrial sector, ESI Group employs about 1200 high-level specialists around the world.

Business review
 
ESI UK Limited has two main activities: the distribution of software, and the delivery of consulting services related to its software products.
Licenses Distribution is the ESI UK Limited’s main activity, accounting for around 63% of revenue in 2022. In addition to its main business activity of software distribution, ESI UK Limited also provides consulting services directly related to Virtual Prototyping. The services activity, which accounted for around 37% of 2022 revenue, includes Consulting and other services.

Principal risks and uncertainties
 
From a commercial perspective the nature of the business means it is responding to ad hoc demand from its main customers on a long business cycle (3-6 months to close opportunities). It remains vulnerable to the economic situation and investment from major industrial companies. However, such risk is inherent in the industry sector and remains unchanged when compared with previous years.
As of today the main uncertainties remain the impacts of the Brexit and of the Covid-19 pandemic.
The global pandemic related to Covid-19 is expected to impact our financial year results, however the resilience of our business model solidly anchored on renewable and critical software licenses will help us manage risks. There are currently no doubts about the company’s ability to continue as a going concern, we see no threat of the company not being able to realize its assets and therefore also see no additional risk for its suppliers and employees.

Page 1

 
ESI UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

The position at the year end
 
ESI UK revenue amounted to 5,285kGBP for 2022, compared with 3,971kGBP for 2021.
 
The net result for 2022 is a profit of 289kGBP, compared with a profit of 203kGBP in 2021.

An analysis of the business using KPI's
 
a. High seasonality of licensing revenue confirmed.
b. Licenses repeat business stable compared to 2021, showing the strength of the business model (lease model).


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



Olfa Zorgati
Director

Date: 3 November 2023

Page 2

 
ESI UK LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 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 of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company'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 Company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £326,004 (2021 - £203,525).

No dividends will be distributed for the year ended 31 December 2022.

Directors

The directors who served during the year were:

Cristel de Rouvray -  ESI Group SA 
Corinne-Romefort Regnier 
Olfa Zorgati 

Future developments

The industrial market is deeply changing while new challenges appear for its players. Draconian regulations, disruptive technologies (Artificial Intelligence, big data, Internet of Things…), competition more and more numerous, shorter time to market, constrain industrial players to change and to look to really competitive and performing partners. 
For ESI UK Limited and its customers, this highlights more than ever the clear need for Virtual Prototyping. With Virtual Prototyping, manufacturing industries have the means necessary to rise to the foremost industrial challenge: delivering innovative products at a lower cost, more quickly, with greater reliability, while ensuring their lifetime in a transformation of the economy to focus more on the experience (“the Outcome Economy”).
The ESI Group’s product portfolio is being continuously expanded by new solutions in the area of simulation and virtual reality for industrial applications. For this reason, the group ESI invests heavily in new solutions and technologies, which are expected to generate revenue in the next years.

Page 3

 
ESI UK LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

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'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's auditors are aware of that information.

Auditors

The auditorsRichardsonswill 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.
 





Olfa Zorgati
Director

Date: 3 November 2023

Page 4

 
ESI UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESI UK LIMITED
 

Opinion


We have audited the financial statements of ESI UK Limited (the 'Company') for the year ended 31 December 2022, which comprise the Statement of comprehensive income, the Balance sheet, the 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 Company's affairs as at 31 December 2022 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.


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 Company 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 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

 
ESI UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESI UK 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 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 Company and its 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 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 Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
ESI UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ESI UK 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 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:
-Enquiry of management and those charged with governance around actual and potential litigation and claims.
- Enquiry of the company's staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
 


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.





Jemima King (Senior statutory auditor)
  
for and on behalf of
Richardsons
 
30 Upper High Street
Thame
Oxfordshire
OX9 3EZ

3 November 2023
Page 7

 
ESI UK LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
£
£

  

Turnover
  
5,285,775
3,971,325

Cost of sales
  
(2,714,207)
(2,385,736)

Gross profit
  
2,571,568
1,585,589

Administrative expenses
  
(2,282,071)
(1,348,593)

Operating profit
 3 
289,497
236,996

Interest payable and similar expenses
 6 
-
(83)

Profit before tax
  
289,497
236,913

Tax on profit
 7 
36,507
(33,388)

Profit for the financial year
  
326,004
203,525

There was no other comprehensive income for 2022 (2021:£NIL).

The notes on pages 11 to 25 form part of these financial statements.

Page 8

 
ESI UK LIMITED
REGISTERED NUMBER: 04273597

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible assets
 8 
29,108
20,175

  
29,108
20,175

Current assets
  

Debtors: amounts falling due within one year
 10 
2,944,151
3,030,479

Cash at bank and in hand
 11 
482,090
637,912

  
3,426,241
3,668,391

Creditors: amounts falling due within one year
 12 
(1,495,835)
(2,057,358)

Net current assets
  
 
 
1,930,406
 
 
1,611,033

Total assets less current liabilities
  
1,959,514
1,631,208

Provisions for liabilities
  

Deferred tax
 13 
(7,067)
(4,765)

  
 
 
(7,067)
 
 
(4,765)

Net assets
  
1,952,447
1,626,443


Capital and reserves
  

Called up share capital 
 14 
100,000
100,000

Profit and loss account
  
1,852,447
1,526,443

  
1,952,447
1,626,443


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




Olfa Zorgati
Director

Date: 3 November 2023

The notes on pages 11 to 25 form part of these financial statements.

Page 9

 
ESI UK LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2021
100,000
1,322,918
1,422,918



Profit for the year
-
203,525
203,525



At 1 January 2022
100,000
1,526,443
1,626,443



Profit for the year
-
326,004
326,004


At 31 December 2022
100,000
1,852,447
1,952,447


The notes on pages 11 to 25 form part of these financial statements.

Page 10

 
ESI UK LIMITED
 

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

1.


General information

ESI UK Limited is a private company limited by share capital and incorporated in England and Wales. The address of its registered office is James Cowper Kreston, 2 Chawley Park, Cumnor Hill, Oxford, OX2 9GG.
The principal activity of the Company is providing software support and associated services and the carrying out of studies in numerical simulation.

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 management to exercise judgment in applying the Company's accounting policies.

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of ESI Group SA as at 31 January 2019 and these financial statements may be obtained from 100 Avenue de Suffren, 75015, Paris, France..

Page 11

 
ESI UK LIMITED
 

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

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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:

Revenues from services consist mainly of consulting and training fees. They are recognised according to the percentage of completion method with regard to projects, such as the margin. Costs are recorded as soon as they are incurred. A provision for losses on completion is recorded if necessary.
Licence fees (up-front fees charged on the grant of a new licence) are governed by the group policy and have been taken into turnover in the year the licence is signed.
Where a licence is assigned to a third party, this is treated as a one-off sale and the benefit taken at the date of the transfer, as both the risks and rewards of the licence are passed to the licensee.
Where licence agreements incorporate termination clauses, turnover only recognises those amounts contractually due to the company. Expenditure will recognise the associated costs up to the date of termination.
When turnover from a licence agreement can be recognised in relation to costs and the costs are measurable, income will be matched against those costs and deferred.
Costs relating to these sales are included in cost of sales.
Turnover also includes revenue recognise by the company in respect of goods and services supplied during the year, exclusive of value added tax and trade discounts.

 
2.5

Operating leases

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

  
2.6

Government grants

Grants received to finance development projects are recognized as income on the basis of completion of related developments.

Page 12

 
ESI UK LIMITED
 

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

2.Accounting policies (continued)

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.9

Current and deferred taxation

The tax expense for the year 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 balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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 balance sheet date.

 
2.10

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 13

 
ESI UK LIMITED
 

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

2.Accounting policies (continued)


2.10
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

L/Term Leasehold Property
-
20%
Fixtures & fittings
-
25%
Computer equipment
-
25%

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.

 
2.11

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

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

Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.

 
2.12

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.

 
2.13

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.

 
2.14

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 14

 
ESI UK LIMITED
 

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

2.Accounting policies (continued)

 
2.15

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company 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 Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet 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 Balance sheet.

Page 15

 
ESI UK LIMITED
 

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

2.Accounting policies (continued)

 
2.16

Financial instruments

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

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

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

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

Basic financial assets

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 Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

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 Company after the deduction of all its liabilities.

Page 16

 
ESI UK LIMITED
 

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

2.Accounting policies (continued)


2.16
Financial instruments (continued)

Basic financial liabilities, which include trade and other payables, bank loans and other loans 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 Company 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 Company 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 Company's contractual obligations expire or are discharged or cancelled.

Page 17

 
ESI UK LIMITED
 

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

3.


Operating profit

The operating profit is stated after charging:

2022
2021
£
£

Depreciation of tangible fixed assets
11,430
9,440

Exchange differences
23,492
30,597

Other operating lease rentals
58,686
43,987

Defined contribution pension cost
44,145
28,110


4.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2022
2021
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements

11,873
5,400


5.


Employees

Staff costs were as follows:


2022
2021
£
£

Wages and salaries
1,281,438
909,249

Social security costs
162,656
112,479

Cost of defined contribution scheme
44,145
28,110

1,488,239
1,049,838


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


        2022
        2021
            No.
            No.







Employees
13
10



Directors
3
2

16
12

Page 18

 
ESI UK LIMITED
 

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

6.


Interest payable and similar expenses

2022
2021
£
£


Other loan interest payable
-
83


7.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
-
21,786

Adjustments in respect of previous periods
(38,809)
8,804


(38,809)
30,590


Total current tax
(38,809)
30,590

Deferred tax


Origination and reversal of timing differences
2,302
2,176

Changes to tax rates
-
622

Total deferred tax
2,302
2,798


Taxation on (loss)/profit on ordinary activities
(36,507)
33,388
Page 19

 
ESI UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
7.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is the same as (2021 - the same as) the standard rate of corporation tax in the UK of 19% (2021 - 19%) as set out below:

2022
2021
£
£


Profit on ordinary activities before tax
289,497
236,913


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
55,004
45,013

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
22
-

Capital allowances for year in excess of depreciation
(1,048)
(505)

Adjustments to tax charge in respect of prior periods
(38,809)
-

Adjust opening deferred tax to average rate of 19%
552
1,145

Group relief
(52,228)
(12,265)

Total tax charge for the year
(36,507)
33,388

Page 20

 
ESI UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
7.Taxation (continued)


Factors that may affect future tax charges

In the Spring Budget 2021, the Government announced that from 1 April 2023 the main corporation tax rate will increase to 25%.


8.


Tangible fixed assets





L/Term Leasehold Property
Fixtures & fittings
Computer equipment
Total

£
£
£
£



Cost or valuation


At 1 January 2022
33,210
16,863
151,830
201,903


Additions
-
-
20,363
20,363



At 31 December 2022

33,210
16,863
172,193
222,266



Depreciation


At 1 January 2022
33,210
16,863
131,655
181,728


Charge for the year on owned assets
-
-
11,430
11,430



At 31 December 2022

33,210
16,863
143,085
193,158



Net book value



At 31 December 2022
-
-
29,108
29,108



At 31 December 2021
-
-
20,175
20,175

Page 21

 
ESI UK LIMITED
 

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

9.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2022
92,277



At 31 December 2022

92,277



Impairment


At 1 January 2022
92,277



At 31 December 2022

92,277



Net book value



At 31 December 2022
-



At 31 December 2021
-

Page 22

 
ESI UK LIMITED
 

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

10.


Debtors

2022
2021
£
£


Trade debtors
1,263,007
553,561

Amounts owed by group undertakings
1,488,874
2,278,268

Other debtors
182,049
187,910

Prepayments and accrued income
10,221
10,740

2,944,151
3,030,479



11.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
482,090
637,912

482,090
637,912



12.


Creditors: Amounts falling due within one year

2022
2021
£
£

Trade creditors
90,921
18,113

Amounts owed to group undertakings
618,014
1,008,446

Corporation tax
-
38,809

Other taxation and social security
189,453
207,904

Other creditors
23,672
43,400

Accruals and deferred income
573,775
740,686

1,495,835
2,057,358


Page 23

 
ESI UK LIMITED
 

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

13.


Deferred taxation




2022
2021


£

£






At beginning of year
(4,765)
(1,967)


Charged to profit or loss
(2,302)
(2,798)



At end of year
(7,067)
(4,765)

The provision for deferred taxation is made up as follows:

2022
2021
£
£


Accelerated capital allowances
(7,067)
(1,967)

Short term timing differences
-
(2,798)

(7,067)
(4,765)


14.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



100,000 (2021 - 100,000) Ordinary shares of £1.00 each
100,000
100,000



15.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £44,145 (2021 - £28,110). Contributions totalling £nil (2021 - £nil) were repayable to the fund at the balance sheet date and are included in debtors.


16.


Commitments under operating leases

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

2022
2021
£
£


Not later than 1 year
24,988
22,989

Later than 1 year and not later than 5 years
38,951
63,968

63,939
86,957

Page 24

 
ESI UK LIMITED
 

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

17.


Related party transactions

The Company is exempt under Paragraph 33.1A of FRS 102 from disclosing related party transactions with entities that are part of the group headed by ESI Group SA, where 100% of the voting rights are controlled within the group.


18.


Controlling party

It is the opinion of the directors that the ultimate parent of the Company and its controlling party is ESI Group SA, a company incorporated in France. Consolidated accounts are available from ESI Group SA, 100 Avenue de Suffren, 75015, Paris, France.


Page 25