Registered number:
FOR THE YEAR ENDED 31 MARCH 2023
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SQW GROUP NEWCO 2018 LIMITED
COMPANY INFORMATION
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SQW GROUP NEWCO 2018 LIMITED
CONTENTS
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SQW GROUP NEWCO 2018 LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The annual report and financial statements presented here are for SQW Group Newco 2018 Limited (‘the Company’) and its subsidiaries (together ‘the Group’).
The principal activity of the Company during the period was that of a holding company. The activities of the Group during the year were carried out via the Group’s trading subsidiaries: • the provision of economic and social development consultancy services (via SQW Limited); • business coaching and support (via Oxford Innovation Services Limited and Oxford Innovation Limited); • the management of innovation centres (via Oxford Innovation Limited); and • the facilitation of investment into early-stage businesses (via Oxford Investment Opportunity Network Limited).
2022/23 was another busy year for the Group and one during which good progress was made towards achieving key strategic objectives in all parts of the Group. The Board were pleased that the financial results were above budget in all trading divisions and strong cash management continued. In a year of challenging macro-economic conditions, this was a particularly impressive result. The redemption one year ago of all remaining equity interests held by the previous shareholders of the Group has enabled the Group’s current leadership to focus solely on the growth of value in its businesses, with attention now wholly focused on making judicious investment choices to realise the group’s full potential.
The year saw the successful rebranding of the three ‘Oxford’ companies in the group; the clarification of each company’s purpose and inter-connection has been energising internally and very helpful externally; we now have individual and connected brands for Oxford Innovation Space (trading name of Oxford Innovation Limited), Oxford Innovation Advice (trading name of Oxford Innovation Services Limited) and Oxford Innovation Finance (which houses the OION Angel Investment Network and the Oxford Innovation EIS Growth Fund). The Group generated post-tax profit of £669,666 (2021/22: £565,098). The Board were pleased with the financial performance of the group overall, particularly the financial and operational effectiveness of Oxford Innovation Advice in delivery of both commercial and grant-funded contracts, and a second year of continued improvement in underlying trading patterns for Oxford Innovation Space, whose business was most significantly affected by the Covid pandemic. As we embark on a new financial year, the Group faces many opportunities but also notable uncertainty in its business support arm due to greater delays than anticipated in the flow of Shared Prosperity Funded contracts across the UK. Oxford Innovation Advice is well positioned to adapt and move from predominantly European funding and LEPs to the new Shared Prosperity Fund and new structures for commissioning business support programmes in 2023/24, but the delays experienced so far present a material disruption for the team, have been greater than hoped for and, sadly, can only be expected to have a negative effect on the more than 2,000 SMEs we supported in 2022/23 across the Country. SQW Limited (‘SQW’) 2022/23 was a good year for SQW and the company continues to be well positioned and regarded in all its markets. The company generated turnover of £5,306,225 (2021/22: £5,789,218) and post-tax profit of £211,039 (2021/22: £480,184) was generated. Although the year-on-year financial results show a reduction in revenues and profit, the balance of work and busyness of the growing consultant team means this is not a cause for concern. Client disruption was again a feature during parts of the year as government attentions were diverted elsewhere and we foresee this continuing to be a pattern at certain points in the year. As we begin 2023/24, the company’s order book is very strong, the team’s strategic ambitions are aligned and recruitment plans are on track, indicating solid foundations for the year ahead.
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SQW GROUP NEWCO 2018 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Oxford Innovation Advice (trading name of Oxford Innovation Services Ltd)
In spite of 2022/23 being the last full year of ERDF funding, and the uncertainties that have surrounded the move to the Shared Prosperity Fund, Oxford Innovation Advice had a strong year operationally, with the usual high standard of work delivered and recognised by clients and funders, all of which is accompanied by solid financial returns. As the business support organisation delivering programmes across more LEP regions than any other provider, delivering programmes of support aimed at SMEs accessing finance, enhancing innovation and growth and for SME manufacturers, 2022/23 was a year in which the Board were delighted with the quality, range and breadth of service delivery. Although turnover reduced slightly from £9.93m in 2022 to £9.88m in 2023, the Board were very pleased with the company’s performance this year. In addition to exemplary business support delivery, the experience and insight the team provided to the new holders of SPF funding allocations as they seek to deploy those funds to best support and grow their local economies, was notable. Oxford Innovation Finance (trading name of Oxford Investment Opportunity Network Ltd) OI Finance had another successful year which saw closure and deployment of its second EIS fund and continued active investment from our angel community into around half of the exciting young business that presented at this year’s 7 showcase events. Fundraising commenced for the third EIS Fund in December 2022; that fund closed during the first quarter of 2023/24 and deployment has already begun. We are seeing no reduction in the flow of promising tech companies for us to engage with, both for the growing fund management business and the core angel investment network arm of the division. The Board were very pleased with the company’s financial and operational delivery, especially in light of the challenging and uncertain economic climate which can impact investing decisions. Turnover totalling £331,608 (2021/22: £351,151) was generated in the year of which £159,098 (2021/22: £115,200) was attributable directly to the Fund’s activities. Oxford Innovation Space (trading name of Oxford Innovation Ltd) 2022/23 has been a transformative year for Oxford Innovation Space, the innovation centres division. The year saw the final recovery from Covid’s disturbance, as occupancy continued to rise steadily each month for the second year in a row. In addition, two new centres were mobilised bringing the number of centres under management in the portfolio to 27 as at 31 March 2023. Following, in some cases, years of effective partnering and business development activity, mobilisation plans are on course to bring an additional 7 centres into the portfolio next year. Turnover of £7.1m was generated in 2022/23 (2021/22: £6.4m) which included like-for-like improvement of 15% (2021/22: 13%). Operating profit of £98,746 was generated during the year (a notable improvement compared to a 2021/22 loss of £60,156). High inflation, growing interest rates, and volatile utility prices have been a feature of 2022/23; anticipating and mitigating these external risks as best as we can continues to be a top priority for our centre customers and clients, as well as the Company. With evidence of a record-breaking number of mobilisations planned for 2023/24 and a strong pipeline of centres beyond that, the Board echo the management team’s confidence that it is in a good position to deliver well for clients and continue to grow its profitability. Looking ahead for the Group Overall, the Board are positive about prospects for the Group in, and beyond, 2023/24. Although we are ever mindful and cautious about the impact that the current macro-economic environment and political decision-making has on key parts of our operations, grounds for optimism come from management’s demonstration of agility and proactivity, in addition to recent trading experience and growth in many parts of the Group over the last few years.
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SQW GROUP NEWCO 2018 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The Group is exposed to a variety of financial risks resulting from its operating activities. The board is
responsible for determining the group’s financial risk management policy and focuses on securing the Group’s cash flows. The Group does not actively engage in the trading of financial assets and has no financial derivatives. The most significant risks to which the Group is exposed to are described below: Credit Risk The Group’s credit risk is primarily attributable to its trade debtors. The amounts presented in the balance sheet are net of any allowance for doubtful debts, as estimated by the directors. The Group has no significant concentration of credit risk, with exposure spread over a large number of customers. Cash Flow Risk The Group seeks to manage risks to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short term flexibility is achieved by Management actively monitoring future cash flow requirements on a regular basis. Interest rate risk Following final repayment during 2022/23 of the £0.5m debt facility that was put in place between the Company and HSBC in 2019, interest rate risk presents a much lower risk to the Group. However, we are alert to the pressure that inflation is having on interest rates, as we consider different funding options that may be available as we explore new investment opportunities in the near future. People risk The Group is at all times exposed to the risk that the most critical contributors among its people may decide to pursue other careers or paths. We would pay tribute to the establishment of a scheme for our leaders to become shareholders of the Group; this being a means of both aligning interests as well as ensuring a deepening of commitment by, and therefore retention of, our senior people. We pay careful attention through processes of salary adjustment, bonus awards, feedback and development in seeking to retain our key people. To date we feel satisfied with the outcomes achieved; however, this risk is one that requires constant attention most particularly in this period of high inflation and cost of living pressures.
Group turnover for the year was £22,599,794 (2022: £22,479,877).
Group gross profit for the year was £4,868,704, (2022: £4,634,248). Group operating profit for the year was £829,362 (2022: £727,811). Group profit on ordinary activities before taxation for the period was £825,113 (2022: £721,370). Earnings per share based on retained profit for the year (the standard method of calculation) was 0.21p (2022:0.33p) and based on profits before tax 0.26p (2022:0.42p). Group cash at bank at 31 March 2023 was £2,899,244 (2022: £2,565,284). Net Current Assets were £2,838,715 as at 31 March 2023 (2022: £2,315,192). Dividends of £90,500 were paid during the year (2022: nil)
The Group does not currently monitor any non-financial performance indicators.
This report was approved by the board and signed on its behalf.
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SQW GROUP NEWCO 2018 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their report and the financial statements for the year ended 31 March 2023.
The directors who served during the year were:
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make 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 Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £669,666 (2022 - £565,098).
No final dividend has been proposed to shareholders by the directors for the period ended 31 March 2023.
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SQW GROUP NEWCO 2018 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
As highlighted within the Strategic Report, the Group is enjoying periods of growth as well as uncertainty in its markets at this current time;
• Oxford Innovation Space’s high growth remains a key focus for management as it seeks to maximize new centre opportunities whilst also ensuring that clients and occupants within the existing centre portfolio continue to received first class service; delivering for both new and existing clients means management are investing in system and process improvements and deploying new tools to enhance collaboration for all occupants across its centres. • OI Finance plan to continue raising, and growing, its EIS Fund whilst also maintaining focus on attracting and supporting entrepreneurs and its angel investor community. The team will be growing to enable delivery of these objectives. • OI Advice continues to focus on finding opportunities to deliver outstanding business support for ambitious small businesses and will be adapting internal structures and processes to best deliver that support in an effective and efficient manner over the coming year. • SQW have an outstanding reputation for quality and expertise, continuing to deliver for current clients, as well as expanding their reach in well-established and adjacent markets, will require continued investment in people, including recruitment, processes and technology.
Employee engagement
The Group’s employees (‘our people’) are at the heart of our business. The engagement and motivation of our +260 people are not only important to us as an employer, but also matter to our customers and clients. The Group is employee-owned, with the current senior management team having led a Management Buyout in 2018, for which final payments to former shareholders were settled in March 2022. This management ownership structure puts our people at the heart of not only the management of the business, but also its ultimate financial success. We believe the Group is best driven by a motivated team and, as such, the Board is constantly looking to the next generation, via Employee Share Options awards, to motivate and retain its management talent for the good of the future of the business. During 2022/23, employees continued to receive formal monthly updates on a company-by-company-basis via the mode of communication that best suits; whether via monthly call, email note, or newsletter, key information continues to be shared by each Divisional Managing Director (or Managing Partners in the case of SQW) with all their staff. These formal monthly touchpoints for all staff continue to be the most important way for management to engage and update employees on matters that affect them most – this includes financial performance, staff movements, contract wins and any notable impacts of external economic factors that may affect the business. In addition, other less formal company-wide updates, including company away-days which act as important events for communication as well as team and confidence-building, take place and groupwide updates are also made by the Group CEO, usually via email, when events suggest it would be helpful. Feedback and two-way communication is an important part of the Group’s approach to ensuring the engagement, well-being and motivation of our people. The Board considers the Employee Surveys undertaken by each trading division to be one of its principal tools to measure employee engagement, motivation, affiliation, and commitment to the Group. The new online engagement platform invested in by the Group’s largest and most geographically spread division during 2022 has been very successful and well received; it has facilitated greater levels of communication and more frequent, real-time engagement data. Surveys are tailored to the activities of each division and the results are shared with staff; both feedback and any resulting actions to be taken in light of them are fed back via monthly updates. The surveys provide critical insights into employee views and all have a consistently high response rate. It is important to the Board that employees are encouraged to not only receive updates, and provide feedback through monthly meetings, or Employee Surveys, but also be part of forums that enable consultation over key matters. Consultative forums are set up on particular topic areas from time to time in all parts of the Group – led at a divisional level. In addition, a number of formal team structures are in place across the group – from junior forums, middle management teams and senior Management Boards within each division, to the Executive Board at Group level – all have collaboration and consultation at their heart.
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SQW GROUP NEWCO 2018 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Equal opportunities
The Board firmly believes that a diverse workforce is an asset to the business and is key to our ability to respond to the needs of our clients and the wide range of small businesses we support. The Group takes, and will continue to take, active measures to maintain a diverse and inclusive culture. This forms part of our policy on Environmental, Social and Governance (‘ESG’). The Group gives full and fair consideration to applications for employment made by disabled persons, having regard to their particular aptitudes and abilities. We proactively ask all new staff to inform us if they have any specific needs with which we can support them, and if they consider themselves to be disabled. Staff are able to update HR at any time via the self-service HR portal should circumstances change during the course of someone’s employment with the Group. Any additional support required is assessed and, where possible, provided in order to enable staff to continue in their role whether that be via making reasonable adjustments, training or emotional support. We have trained Mental Health First Aiders across the Group and provide an Employee Assistance Programme and access to digital medical appointments – or, in certain circumstances, financial support via Permanent Health Insurance offered to all staff. Any disabled person would receive the same training, career development and promotion opportunities as any other employee.
After the year-end, Oxford Investment Opportunity Network Limited and their respective partnered nominee formally closed on a funding round valued at £1,740k.
Post year end, SQW Limited signed a lease renewal for the Stockport premises. The lease term is for a period of 5 years commencing 7 June 2023 and attracts annual rental payments of £31,000. There have been no other material developments or events which have occurred after the balance sheet date.
The auditor, James Cowper Kreston Audit, will 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.
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SQW GROUP NEWCO 2018 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SQW GROUP NEWCO 2018 LIMITED
We have audited the financial statements of SQW Group Newco 2018 Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2023, which comprise the Group Statement of comprehensive income, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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SQW GROUP NEWCO 2018 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SQW GROUP NEWCO 2018 LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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SQW GROUP NEWCO 2018 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SQW GROUP NEWCO 2018 LIMITED (CONTINUED)
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 Group financial statements.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows: • Enquiry of management and those charged with governance around actual and potential litigation and claims; • Enquiry of management and those charged with governance to identify any material instances of non- compliance with laws and regulations; • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; • Performing audit work to address the risk of irregularities due to management 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 evidence of bias.
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 Auditor's report.
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SQW GROUP NEWCO 2018 LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SQW GROUP NEWCO 2018 LIMITED (CONTINUED)
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.
for and on behalf of
Chartered Accountants and Statutory Auditor
2 Chawley Park
Cumnor Hill
Oxfordshire
OX2 9GG
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SQW GROUP NEWCO 2018 LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
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SQW GROUP NEWCO 2018 LIMITED
REGISTERED NUMBER: 11560281
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 35 form part of these financial statements.
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SQW GROUP NEWCO 2018 LIMITED
REGISTERED NUMBER: 11560281
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 35 form part of these financial statements.
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SQW GROUP NEWCO 2018 LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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SQW GROUP NEWCO 2018 LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
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SQW GROUP NEWCO 2018 LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2023
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
SQW Group Newco 2018 Limited is a limited liability company incorporated in the United Kingdom and registered in England & Wales. The Company's registered office is Oxford Centre for Innovation, New Road, Oxford OX1 1BY.
The principal activity of the Company is that of a holding company. The activities of the Group during the year were the provision of economic and social development consultancy services, business coaching and support, the management of innovation centres and the facilitation of investment into early stage businesses.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (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 bases:
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.
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the 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. Revenue recognition (note 5) Revenue and costs have been recognised based on management's assessment of the stage of completion for each project, taking in to account the amounts repayable to customers. Taxation (note 11) Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that ban be recognised, based upon likely timing and the level of future taxable profits, together with future planning strategies. Contract obligations (note 21) The directors have considered the obligations arising from contracts and have provided for liabilities where costs can be reliably estimated.
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The Directors of the Group have assessed the revenue recognition policy around the timing of recognition of revenue for success fees, to ensure that recognition is in line with FRS102 in respect of Oxford Investment Opportunity Network Limited.
As a result of this, management have modified the revenue recognition policy for success fees. Previously this was recognised upon the invoice. Following the review, revenue for success fees will be recognised according to the stage of completion of the contract, in line with the company's recognition policy for rendering of services. No restatement has been included in the accounts relating to this change in policy, as there is no impact on profits or net assets for either the 2022 or 2023 financial year.
Analysis of turnover by country of destination:
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 24
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 25
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 26
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
11.Taxation (continued)
The main rate of corporation tax will rise from 19% to 25% from 1 April 2023. On this basis deferred tax is
provided at the future rate of 25%.
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 28
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 29
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 30
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 31
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 32
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 33
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
During the year, the Group issued 9,000,000 Ordinary shares of £0.001 for a total value of £38,700.
Share premium account
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £303,428 (2022: £323,721). Contributions totalling £90,223 (2022: £81,474) were payable to the fund at the balance sheet date and are included in creditors.
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SQW GROUP NEWCO 2018 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
26.Other financial commitments
There is a Group guarantee in favour of HSBC plc ("the Bank") from SQW Group Limited, SQW Group Newco 2018 Limited, Oxford Innovation Limited, SQW Limited and Oxford Innovation Services Limited guaranteeing the obligations of each other to the Bank. The outstanding amount due to the Bank at 31 March 2023 across the Group was Nil (2022: £192,308).
There is also a debenture comprising fixed and floating charges over all the assets and undertakings of SQW Group Newco 2018 Limited including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Post year end, SQW Limited signed a lease renewal for the Stockport premises. The lease term is for a period of 5 years commencing 7 June 2023 and attracts annual rental payments of £31,000. There have been no other material developments or events which have occurred after the balance sheet date.
Page 35
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