Company registration number 03191078 (England and Wales)
Claritas Solutions Limited
Annual Report and Financial Statements
For the year ended 30 April 2023
CLARITAS SOLUTIONS LIMITED
COMPANY INFORMATION
Directors
Mrs K J Sutton
Mr G Scaife
Mr D G Baker
Mrs J Battersby
Secretary
Mrs K J Sutton
Company number
03191078
Registered office
2 Deighton Close
Wetherby
West Yorkshire
LS22 7GZ
Auditor
Azets Audit Services Limited
33 Park Place
Leeds
LS1 2RY
CLARITAS SOLUTIONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
CLARITAS SOLUTIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 1 -
The directors present the strategic report for the year ended 30 April 2023.
Review of the business
During the year to 30 April 2023, the company underwent another year of growth and is reporting its healthiest figures to date.
The company has continued to invest heavily in research and development in the form of the software team writing and further developing our own systems and products, adding to the already extensive knowledge base of the team. Combined the technical team developing and building our in house secure cloud offering to further bolster our own product set offering.
Performance at the year end
At 30 April 2023 turnover was up on the 2022 figures by £6m, with Gross Profit up by £1.9m due to the increased revenue streams from consultancy work, support services and our own hosting offerings. This is not a growth trend we expect to continue in the immediate future as we see turnover level off but it has been a good bedding in time to fund investment in our team and product offerings.
The emphasis for the board is to again grow those more profitable revenue streams and focus our investments in the own product / service sales.
Principal risks and uncertainties
The Board continues to monitor the risks and uncertainties especially on the back of the pandemic and cost of living crisis. Our primary services rely heavily on our staff base and that is the key risk. We mitigate these risks by building good employee, supplier, and customer relationships along with compliance with the relevant laws and regulations. Further steps have been taken this year to enhance the workforce benefits packages with continued contributions to home fuel costs, travel to work costs and increased holiday allowances as well as improved statutory pay rates and other Benefits.
The Board's principle key risks are the loss of its skilled workforce and client base. While we are exposed to this further as the business grows the risks are mitigated by the implementation of operational systems and processes which continue to evolve. Some of which we are looking to obtain additional accreditations for in the form of ISO’s over the coming 12 to 18 months.
Key performance indicators
Profit margins have increased by 28% from the previous year. Net profit is up £930k and the staff head count continues to rise. These are all in line with the Boards expectations given the continued success of the year for growth and contract wins.
Future Developments
The Board took the decision to invest in a new Secure Cloud solution this financial year which was developed and built by Claritas. This has resulted in investment of hardware and kit to the tune of £1.5m. This was on the back of an opportunity to provide a secure UK sovereign cloud hosting platform being one of its kind in the UK and driving the growth of the company into another area. The plan will ensure revenues for 5 years but will require a period of settling in and investment to get the infrastructure in place and useable. The kit has been implemented and we have already seen an upturn in hosting revenues for the current year.
Plans are also in place to amend the office space to house more staff on site. This is in response to a need to extend support and provide further technical support to current and new customers. An additional 20 desk spaces are being created to help service the growth areas for 2024 and beyond.
CLARITAS SOLUTIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 2 -
Mrs K J Sutton
Director
9 November 2023
CLARITAS SOLUTIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 3 -
The directors present their annual report and financial statements for the year ended 30 April 2023.
Principal activities
The principal activity of the company continued to be the provision of independent IT services and support.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £3,909,500. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs K J Sutton
Mr G Scaife
Mr D G Baker
Mrs J Battersby
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mrs K J Sutton
Director
9 November 2023
CLARITAS SOLUTIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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 and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.
CLARITAS SOLUTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARITAS SOLUTIONS LIMITED
- 5 -
Opinion
We have audited the financial statements of Claritas Solutions Limited (the 'company') for the year ended 30 April 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The 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 30 April 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CLARITAS SOLUTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLARITAS SOLUTIONS LIMITED
- 6 -
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
CLARITAS SOLUTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLARITAS SOLUTIONS LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jessica Lawrence
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
9 November 2023
Chartered Accountants
Statutory Auditor
33 Park Place
Leeds
LS1 2RY
CLARITAS SOLUTIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
22,540,116
16,280,332
Cost of sales
(13,178,761)
(8,799,297)
Gross profit
9,361,355
7,481,035
Administrative expenses
(5,149,507)
(4,200,171)
Other operating income
700
251
Operating profit
4
4,212,548
3,281,115
Interest receivable and similar income
7
19,710
474
Interest payable and similar expenses
8
(20,098)
Profit before taxation
4,212,160
3,281,589
Tax on profit
9
546,731
112,436
Profit for the financial year
4,758,891
3,394,025
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
CLARITAS SOLUTIONS LIMITED
BALANCE SHEET
AS AT
30 APRIL 2023
30 April 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
39,440
59,161
Tangible assets
12
2,850,284
1,645,763
2,889,724
1,704,924
Current assets
Stocks
13
-
30,994
Debtors
14
10,067,718
13,656,208
Cash at bank and in hand
7,974,562
5,190,875
18,042,280
18,878,077
Creditors: amounts falling due within one year
16
(11,450,549)
(10,231,553)
Net current assets
6,591,731
8,646,524
Total assets less current liabilities
9,481,455
10,351,448
Creditors: amounts falling due after more than one year
17
(2,999,959)
(4,719,343)
Net assets
6,481,496
5,632,105
Capital and reserves
Called up share capital
20
1,000
1,000
Profit and loss reserves
6,480,496
5,631,105
Total equity
6,481,496
5,632,105
The financial statements were approved by the board of directors and authorised for issue on 9 November 2023 and are signed on its behalf by:
Mrs K J Sutton
Director
Company Registration No. 03191078
CLARITAS SOLUTIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2021
1,000
5,402,133
5,403,133
Year ended 30 April 2022:
Profit and total comprehensive income for the year
-
3,394,025
3,394,025
Dividends
10
-
(3,165,053)
(3,165,053)
Balance at 30 April 2022
1,000
5,631,105
5,632,105
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
4,758,891
4,758,891
Dividends
10
-
(3,909,500)
(3,909,500)
Balance at 30 April 2023
1,000
6,480,496
6,481,496
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
- 11 -
1
Accounting policies
Company information
Claritas Solutions Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2 Deighton Close, Wetherby, West Yorkshire, LS22 7GZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of GS Properties Yorkshire Limited. These consolidated financial statements are available from its registered office, 2 Deighton Close, Wetherby, LS22 7GZ.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for the supply of IT services net of VAT and trade discounts.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
10 years straight line
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold buildings
50 years straight line
Plant and equipment
3 - 5 years straight line
Fixtures and fittings
3 - 5 years straight line
Motor vehicles
7 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 14 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 16 -
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation and amortisation
The depreciation policy has been set according to managements' experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £443,694 (2022 - £229,305), which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the year.
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 17 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
IT Services and support
22,540,116
16,280,332
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
22,540,116
16,280,332
2023
2022
£
£
Other revenue
Interest income
19,710
474
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,200
10,100
Depreciation of owned tangible fixed assets
269,839
209,584
Depreciation of tangible fixed assets held under finance leases
154,134
-
Loss/(profit) on disposal of tangible fixed assets
10,350
(867)
Amortisation of intangible assets
19,721
19,721
Operating lease charges
82,527
37,163
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
General
58
52
Finance
3
4
Directors
4
4
Total
65
60
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,134,226
4,475,987
Social security costs
655,582
587,086
Pension costs
114,689
98,123
5,904,497
5,161,196
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
2,239,395
2,034,440
Company pension contributions to defined contribution schemes
23,751
20,869
2,263,146
2,055,309
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
974,672
567,932
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
19,710
474
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
20,098
-
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 19 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(542,837)
(111,539)
Adjustments in respect of prior periods
(3,894)
(897)
Total current tax
(546,731)
(112,436)
The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
4,212,160
3,281,589
Expected tax charge based on the standard rate of corporation tax in the UK of 19.50% (2022: 19.00%)
821,371
623,502
Tax effect of expenses that are not deductible in determining taxable profit
514
14,130
Tax effect of utilisation of tax losses not previously recognised
(16,382)
Permanent capital allowances in excess of depreciation
(303,000)
Depreciation on assets not qualifying for tax allowances
3,846
6,136
Research and development tax credit
(1,049,586)
(707,254)
Under/(over) provided in prior years
(3,894)
Other
400
(48,950)
Taxation credit for the year
(546,731)
(112,436)
10
Dividends
2023
2022
£
£
Interim paid
3,909,500
3,165,053
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 20 -
11
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 May 2022 and 30 April 2023
112,504
197,208
309,712
Amortisation and impairment
At 1 May 2022
112,504
138,047
250,551
Amortisation charged for the year
19,721
19,721
At 30 April 2023
112,504
157,768
270,272
Carrying amount
At 30 April 2023
39,440
39,440
At 30 April 2022
59,161
59,161
12
Tangible fixed assets
Leasehold buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 May 2022
1,422,215
332,593
1,099,836
15,737
2,870,381
Additions
181,206
1,175,024
327,717
1,683,947
Disposals
(45,103)
(10,350)
(55,453)
At 30 April 2023
1,558,318
1,507,617
1,417,203
15,737
4,498,875
Depreciation and impairment
At 1 May 2022
106,816
330,035
776,159
11,608
1,224,618
Depreciation charged in the year
39,218
172,565
209,942
2,248
423,973
At 30 April 2023
146,034
502,600
986,101
13,856
1,648,591
Carrying amount
At 30 April 2023
1,412,284
1,005,017
431,102
1,881
2,850,284
At 30 April 2022
1,315,399
2,558
323,677
4,129
1,645,763
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
873,424
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 21 -
13
Stocks
2023
2022
£
£
Raw materials and consumables
-
30,994
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,459,365
3,033,726
Corporation tax recoverable
542,837
111,539
Amounts owed by group undertakings
3,005,000
Other debtors
12,155
4,043
Prepayments and accrued income
6,053,361
7,501,900
10,067,718
13,656,208
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
369,317
In two to five years
369,317
738,634
Less: future finance charges
(60,295)
678,339
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
342,519
Trade creditors
1,119,332
685,415
Taxation and social security
212,751
495,426
Deferred income
18
8,114,752
7,456,062
Other creditors
184,875
152,746
Accruals and deferred income
1,476,320
1,441,904
11,450,549
10,231,553
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 22 -
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
335,820
Deferred income
18
2,664,139
4,719,343
2,999,959
4,719,343
18
Deferred income
2023
2022
£
£
Other deferred income
10,778,891
12,175,405
Included in the financial statements as follows:
Current liabilities
8,114,752
7,456,062
Non-current liabilities
2,664,139
4,719,343
10,778,891
12,175,405
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
114,689
98,123
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are £18,892 (2022 - £16,134)
CLARITAS SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 23 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
1,000
1,000
1,000
1,000
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
129,753
134,384
Between two and five years
829,571
845,258
959,324
979,642
22
Directors' transactions
The amounts below are included in the company balance sheet within other debtors.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
Director's Loan Account
-
543
(679)
(136)
543
(679)
(136)
23
Ultimate controlling party
The ultimate controlling party of the company is GS Properties Yorkshire Limited, a company registered in the United Kingdom. GS Properties Yorkshire Limited is the smallest and largest group into which the company is consolidated.
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