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Registered number: 01119817









FROST & SULLIVAN, LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
FROST & SULLIVAN, LIMITED
 
 
COMPANY INFORMATION


Directors
W N Bravard 
D Frigstad 




Company secretary
W N Bravard



Registered number
01119817



Registered office
John Eccles House
Robert Robinson Avenue

Oxford Science Park

Oxford

Oxfordshire

OX4 4GP




Independent auditor
CLA Evelyn Partners Limited
Chartered Accountants & Statutory Auditor

103 Colmore Row

Birmingham

B3 3AG





 
FROST & SULLIVAN, LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 3
Directors' Report
4 - 7
Directors' Responsibilities Statement
8
Independent Auditor's Report
9 - 12
Consolidated Statement of Comprehensive Income
13 - 14
Consolidated Statement of Financial Position
14 - 15
Company Statement of Financial Position
16 - 17
Consolidated Statement of Changes in Equity
18
Company Statement of Changes in Equity
18
Consolidated Statement of Cash Flows
19
Consolidated Analysis of Net Debt
20
Notes to the Financial Statements
21 - 42


 
FROST & SULLIVAN, LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The directors present the Group Strategic Report for the year ended 31 December 2022.

Business review
 
For over 60 years Frost & Sullivan has been enabling clients to accelerate growth through the provision of disciplined market intelligence and the creation of innovative growth strategies. Founded in 1961, Frost & Sullivan operates on a truly global perspective, with over 1,300 employees across more than 40 offices globally, offering clients strategic insights and expertise in multiple vertical markets, industries, technologies, econometrics, and demographics. The world is experiencing a once-in-a-lifetime disruption. Rules have been shattered. Technologies are evolving faster than expected. Old habits are giving way to new normal. And both uncertainty and opportunity hang in the balance.
Frost & Sullivan has spent the last 60 years learning how to navigate disruption and transformation to create growth opportunities that allow business to thrive. We’ve come to believe that the growth of companies cannot be separated from the stakeholders around us, and that when properly managed, company growth not only impacts the bottom line but addresses many global challenges that face society as a whole, including economic inequality, climate change, and social inclusion.
We intend to spend the next 60 years enabling growth opportunities that don’t just make good business sense – they become a moral imperative.
With a European headquarters situated in the UK, we support the business and service our customers' needs from branches in France and Italy, together with the subsidiary in Germany established in the first quarter of 2021. We have previously operated a representative office within Germany for a number of years; it is felt that a greater presence will allow us to exploit potential opportunities following the United Kingdom’s departure from the European Union on 31 January 2020 (“Brexit”).
We deliver value to our customers through the provision of four core service lines. Firstly, Growth Partnership Services (GPS), an online, subscription-based platform that provides clients with disciplined research covering a broad range of market verticals and industries, to support the generation and evaluation of growth opportunities. Secondly, our Growth Consulting program provides clients with customised consulting that supports a visionary understanding of the market, the development of growth strategies, and the implementation of growth strategies. Our third core service is Best Practice Awards where we identify exemplary industry achievements and best in class performance by company, product and process, and are licensed by customers to demonstrate and build brand awareness. The final service line is the running of events focused on helping companies transform their organisation through best practice and experimental teaming.
Revenue for the year ended 31 December 2022 was £22.4m, an increase of 7.2% on the prior year
 (2021 -  £20.9m). The gross profit was £14.9m (2021 - £15.1m) with a gross profit margin on sales of 67% (2021 - 72%). Total profit for the financial year was £2,124k (2021 - £1,596k). The net liabilities of the Group at 31 December 2022 were £10.1m (2021 - £11.7m).
After signs of recovery last year from the effects of the COVID-19 pandemic, the onset of the Ukraine war in early 2022 meant that trading conditions remained challenging throughout the year. Increased uncertainty over the European economy resulted in clients taking longer to commit to projects with Frost & Sullivan. Despite these challenges overall revenues increased 7.2% over 2021 levels, and total profit for the year increased to £2.1m.   

Page 1

 
FROST & SULLIVAN, LIMITED
 

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

Future developments

The Group will continue to pursue its strategy of expanding its client base through the delivery of high-quality consulting and research services.  
The Group continues to make significant use of technology to enable it to continue to provide services to its clients in the wake of the COVID 19 lock down period. Whilst the office locations across Europe have begun to open again, albeit on a reduced capacity, the Group has demonstrated the flexibility built into its operational framework to be able to operate its Sales, Consulting, Research and supporting functions remotely through the use of emails and video conferencing facilities. Flexible hybrid working has been embraced and rolled out as a global policy.
The impact of the COVID 19 pandemic on the Group continues to be monitored as global supply issues continue to improve. However, future developments will likely be affected by the wider macro economic and political issues discussed in more detail in the next section. 

Principal risks and uncertainties
 
The principal risks currently facing the Group are the ongoing war in Ukraine, increasing interest and inflation rates, the energy crisis and the likely approaching European recession. 
The Group recognises that these factors could result in clients delaying their investment decision making due to uncertainty. However, we remain optimistic that we will continue to work with our client base in those industries that are less vulnerable to recessionary pressures, helping them to identify and exploit potential growth opportunities.
The Group is subject to a number of other risks and uncertainties including market risk, financial risk and operating risks. The continued challenge of competition in the market by lower priced competitors is a key risk. The directors have implemented systems to identify and assess these risks and to ensure that reasonable mitigation strategies and action plans are in place. 
The main risks arising from the Group's financial instruments are explained in the Directors' Report.

Development and performance

The Group sets KPls for each financial year which are designed to ensure continuous improvement in all of its operational and financial activities, including growth, and operational efficiency. For financial purposes the key KPls are Revenue and net profit margin as noted below.

Financial key performance indicators
 

2022
2021
% Change

£'000
£'000





Revenue
22,404
20,854
7
Profit after tax
2,124
1,596
33
Debtor days
100 days
92 days
9


Page 2

 
FROST & SULLIVAN, LIMITED
 

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

Environmental and social matters

The Group's corporate responsibility specific to the environment and communities in which it operates are considered by the board within their strategic decisions.
The Group's policy is to provide an environment for all employees to fully develop their individual potential and thereby contribute to the success of the Group. The Group is committed to a work environment free of all forms of discrimination. Frost & Sullivan recruits and hires without regard to race, colour, religion, sex, marital status, age, disability, national origin or sexual orientation.

Anti-corruption and bribery matters

The Group complies with the Bribery Act 2010, in line with which all staff are prohibited from offering, giving, soliciting and/or accepting any bribe, whether cash or other inducement to or from any person or company, in order to gain any commercial or contractual advantage for the Group.


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



W N Bravard
Director

Date: 6 February 2024

Page 3

 
FROST & SULLIVAN, 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.

Principal activity

The principal activity of the Group continued to be that of the provision of disciplined market intelligence and the creation of innovative growth strategies.

Results and dividends

The profit for the year, after taxation, amounted to £2,123,559 (2021 - £1,596,323).

No dividends have been paid or proposed in the year (2021 - £Nil).

Directors

The directors who served during the year were:

W N Bravard 
D Frigstad 

Qualifying third party indemnity provisions

During the year ended 31 December 2022 and at the date of this report, the company has made an indemnity for the benefit of the statutory directors which is a qualifying indemnity provision for the purposes of Section 234 of the Companies Act 2006.

Page 4

 
FROST & SULLIVAN, LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Going concern

In assessing the appropriateness of the going concern basis, the directors have taken account of all relevant information covering a period of at least twelve months from the date of approval of the Group’s financial statements. During the year the UK Group made a profit of £2,123,559 (2021 - £1,596,323) and at the reporting date had net current liabilities of £8,817,558 (2021 - £10,582,697) and net liabilities of £10,081,038 (2021 - £11,665,192). The UK Group is dependent on the cash resources of its parent company (Frost & Sullivan Inc.) and the rest of the Frost & Sullivan Group. The parent company has confirmed its continued cash flow support to the Group and has subordinated the Group’s indebtedness to the parent, for at least 12 months from the date of signing of the financial statements. Without that continued support, the UK Group may not potentially continue as a going concern.
Due to macro-economic issues in the markets in which the wider group operates, the parent company directors are currently updating the cash flow forecasts and budgets for the next 12 months for the wider group. The directors acknowledge that there is a risk that due to those market conditions the parent company may be unable to fulfil its commitment to either provide funding, if required, or may need to extract cash resources within the UK group by calling for repayment, in part or in full, of the intragroup loan.
A material uncertainty therefore exists which may cast significant doubt upon the parent company ability to provide the necessary support to the Group, when it is needed, for a period of at least 12 months from the date of signing of these financial statements. Consequently, this condition gives rise to a material uncertainty which may cast significant doubt on the UK Group's ability to continue as a going concern. 
However, after making inquiries and considering uncertainty described above, the directors still believe that the parent company has ability to fulfil above mentioned commitment and have a reasonable expectation that the Group will continue in operational existence for the foreseeable future. 
Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the Group’s financial statements.

Financial instruments

Financial risk management objectives and policies
The Group's operations expose it to a variety of financial risks that include the effects of credit risk, liquidity  risk, interest rate risk and currency risk. The directors do not consider that financial instrument price risk is significant to the Group.

Page 5

 
FROST & SULLIVAN, LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Financial instruments (continued)

Liquidity risk
The Group’s parent maintains short-term debt finance through an overdraft facility to support any potential shortfalls. 
Interest rate cash flow risk
The Group has both interest-bearing assets and interest-bearing liabilities. Interest bearing assets include only cash balances, all of which earn interest at a variable rate. Loans from employees bear a fixed rate of interest. Interest on equipment leases are variable and at current market rates.
Foreign currency risk
The Group operates through a subsidiary, number of overseas branches and liaison offices in Europe which exposes it to currency exchange risk. These are based in France, Germany, Italy and Turkey. There are also transactions with the Group's parent based in the United States. The Group mitigates its exposure to currency risk as it both incurs expenses and receives revenue in the local currencies. Therefore, the directors do not consider  this to be a significant risk.
Credit risk
Credit risk is a risk for the Group to the extent that debtors do not pay on time. The Group has resources dedicated to the collection of debt and has been very successful at collecting within the terms of the contracts. The client profile of the Group is generally large, multi-national organisations with inherently low credit risk.

Matters covered in the Group Strategic Report

Where necessary, disclosures relating to future developments have been made in the Group Strategic Report and have not been repeated here in accordance with Section 414C of the Companies Act 2006.

Disclosure of information to auditor

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 and the Group's auditor is 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 and the Group's auditor is aware of that information.

Post balance sheet events

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

Independent auditors

The auditors, CLA Evelyn Partners Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 6

 
FROST & SULLIVAN, LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

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




W N Bravard
Director

Date: 6 February 2024

Page 7

 
FROST & SULLIVAN, LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

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', 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 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;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

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

Page 8

 
img4290.png 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FROST & SULLIVAN, LIMITED
 

Opinion
We have audited the Financial Statements of Frost & Sullivan, Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2022 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Financial Position, the Consolidated and Parent Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Consolidated Analysis of Net Debt and the 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 FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:
give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 December 2022 and of the Group's 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

Material uncertainty relating to going concern 
We draw attention to note 2.4 in the financial statements, which indicates that as at 31 December 2022 there is a risk that the Group may not have adequate funding from the parent company for financial support should it be required. 
This eventuality would, if it arose, adversely impact the liquidity and solvency of the company. As stated in note 2.4, this condition represents a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 
Notwithstanding the above, 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. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Page 9

 
FROST & SULLIVAN, LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FROST & SULLIVAN, LIMITED (CONTINUED)

Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the Financial Statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. 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 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.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors’ Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 7, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group's and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. 

Page 10

 
FROST & SULLIVAN, LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FROST & SULLIVAN, LIMITED (CONTINUED)

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. 

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:

We obtained an understanding of the Group and Parent Company’s legal and regulatory framework through enquiry of management of their understanding of the relevant laws and regulations, the company’s policies and procedures regarding compliance and how they identify, evaluate and rectify any instances of noncompliance. We also drew on our existing understanding of the Group and Parent Company’s industry and regulation.
We understand the Group and Parent Company complies with requirements of the framework through:
The directors' close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly; and
The engagement of external experts to ensure ongoing tax compliance and to assist with the preparation of the statutory accounts.
 
In the context of the audit, we have considered those laws and regulations which determine the form and content of the financial statements, which are central to the Group and Parent Company's ability to conduct business and where failure to comply could result in material penalties.
 
We have identified the following laws and regulations as being of significance in the context of the Group and Parent Company:
The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
 
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to the manipulation of the financial statements through manual journals and incorrect recognition of revenue. This was communicated to the other members of the engagement team who were not present at the discussion.
 
The procedures carried out to gain evidence in the above areas included:
Testing of revenue transactions to underlying documentation; and
Testing of manual journal entries, selected based on specific risk assessments applied based on the client processes and controls surrounding manual journals.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Page 11

 
FROST & SULLIVAN, LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FROST & SULLIVAN, LIMITED (CONTINUED)

Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.



Stephen Drew (Senior Statutory Auditor)
  
for and on behalf of
CLA Evelyn Partners Limited
 
Chartered Accountants
Statutory Auditor
  
103 Colmore Row
Birmingham
B3 3AG

7 February 2024
Page 12

 
FROST & SULLIVAN, LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
£
£

  

Turnover
 4 
22,404,466
20,854,310

Cost of sales
  
(7,471,154)
(5,796,598)

Gross profit
  
14,933,312
15,057,712

Administrative expenses
  
(12,684,340)
(12,932,561)

Operating profit
 5 
2,248,972
2,125,151

Interest receivable and similar income
 9 
-
8

Interest payable and similar expenses
 10 
(6,250)
(20,615)

Profit before taxation
  
2,242,722
2,104,544

Tax on profit
 11 
(119,163)
(508,221)

Profit for the financial year
  
2,123,559
1,596,323

  

Currency translation differences
  
(539,405)
617,666

Other comprehensive (loss)/income for the year
  
(539,405)
617,666

Total comprehensive income for the year
  
1,584,154
2,213,989

  

The notes on pages 21 to 42 form part of these financial statements.

Page 13

 
FROST & SULLIVAN, LIMITED
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 12 
11,333
28,320

Tangible assets
 13 
78,029
110,932

  
89,362
139,252

Current assets
  

Debtors: amounts falling due within one year
 15 
6,651,043
9,826,333

Cash at bank and in hand
  
1,332,713
1,797,185

  
7,983,756
11,623,518

Creditors: amounts falling due within one year
 16 
(16,801,314)
(22,206,215)

Net current liabilities
  
 
 
(8,817,558)
 
 
(10,582,697)

Total assets less current liabilities
  
(8,728,196)
(10,443,445)

Creditors: amounts falling due after more than one year
 17 
(19,689)
(225)

Provisions for liabilities
  

Provisions
 20 
(1,333,153)
(1,221,522)

Net liabilities
  
(10,081,038)
(11,665,192)


Capital and reserves
  

Called up share capital 
 21 
3,575,000
3,575,000

Foreign exchange reserve
 22 
(631,697)
(92,292)

Profit and loss account
 22 
(13,024,341)
(15,147,900)

Shareholders' deficit
  
(10,081,038)
(11,665,192)


Page 14

 
FROST & SULLIVAN, LIMITED
REGISTERED NUMBER:01119817
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022

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




W N Bravard
Director

Date: 6 February 2024

The notes on pages 21 to 42 form part of these financial statements.

Page 15

 
FROST & SULLIVAN, LIMITED
REGISTERED NUMBER:01119817

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 12 
11,333
28,320

Tangible assets
 13 
71,693
107,227

Investments
 14 
22,171
21,596

  
105,197
157,143

Current assets
  

Debtors: amounts falling due within one year
 15 
22,291,636
8,642,773

Cash at bank and in hand
  
943,819
1,727,017

  
23,235,455
10,369,790

Creditors: amounts falling due within one year
 16 
(31,941,205)
(20,617,371)

Net current liabilities
  
 
 
(8,705,750)
 
 
(10,247,581)

Total assets less current liabilities
  
(8,600,553)
(10,090,438)

  

Creditors: amounts falling due after more than one year
 17 
(19,689)
(225)

Provisions for liabilities
  

Provisions
 20 
(1,333,153)
(1,221,522)

Net liabilities
  
(9,953,395)
(11,312,185)


Capital and reserves
  

Called up share capital 
 21 
3,575,000
3,575,000

Foreign exchange reserve
 22 
(612,835)
(92,292)

Profit and loss account carried forward
  
(12,915,560)
(14,794,893)

Shareholders' deficit
  
(9,953,395)
(11,312,185)


Page 16

 
FROST & SULLIVAN, LIMITED
REGISTERED NUMBER:01119817
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022

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




W N Bravard
Director

Date: 6 February 2024

The notes on pages 21 to 42 form part of these financial statements.

Page 17

 
FROST & SULLIVAN, LIMITED
 

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


Called up share capital
Foreign exchange reserve
Profit and loss account
Total equity

£
£
£
£


At 1 January 2021
3,575,000
(709,958)
(16,744,223)
(13,879,181)


Comprehensive income for the year

Profit for the year
-
-
1,596,323
1,596,323

Currency translation differences
-
617,666
-
617,666



At 1 January 2022
3,575,000
(92,292)
(15,147,900)
(11,665,192)


Comprehensive income for the year

Profit for the year
-
-
2,123,559
2,123,559

Currency translation differences
-
(539,405)
-
(539,405)


At 31 December 2022
3,575,000
(631,697)
(13,024,341)
(10,081,038)



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


Called up share capital
Foreign exchange reserve
Profit and loss account
Total equity

£
£
£
£


At 1 January 2021
3,575,000
(709,958)
(16,744,223)
(13,879,181)


Comprehensive income for the year

Profit for the year
-
-
1,949,330
1,949,330

Currency translation differences
-
617,666
-
617,666



At 1 January 2022
3,575,000
(92,292)
(14,794,893)
(11,312,185)


Comprehensive income for the year

Profit for the year
-
-
1,879,333
1,879,333

Currency translation differences
-
(520,543)
-
(520,543)


At 31 December 2022
3,575,000
(612,835)
(12,915,560)
(9,953,395)


Page 18

 
FROST & SULLIVAN, LIMITED
 

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

2022
2021
£
£

Cash flows from operating activities

Profit for the financial year
2,123,559
1,596,323

Adjustments for:

Amortisation of intangible assets
16,987
16,750

Depreciation of tangible assets
97,536
120,765

Interest expense
6,250
20,615

Interest received
-
(8)

Taxation charge
119,163
508,221

Increase in debtors
(428,721)
(1,168,818)

Increase in amounts owed by groups undertakings
(2,053,391)
(3,403,138)

(Decrease)/increase in creditors
(210,848)
326,331

Corporation tax paid
(129,765)
-

Increase in provisions
6,895
558,126

Net cash used in operating activities

(452,335)
(1,424,833)


Cash flows from investing activities

Purchase of intangible fixed assets
-
(8,520)

Purchase of tangible fixed assets
(21,874)
(66,365)

Interest received
-
8

HP interest paid
(6,250)
5,283

Net cash used in investing activities

(28,124)
(69,594)

Cash flows from financing activities

Repayment of finance leases
(19,225)
(61,967)

Interest paid
-
(25,898)

Net cash used in financing activities
(19,225)
(87,865)

Net decrease in cash and cash equivalents
(499,684)
(1,582,292)

Cash and cash equivalents at beginning of year
1,797,185
3,388,200

Foreign exchange gains and losses
35,212
(8,723)

Cash and cash equivalents at the end of year
1,332,713
1,797,185


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,332,713
1,797,185


Page 19

 
FROST & SULLIVAN, LIMITED
 

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





At 1 January 2022
Cash flows
New finance leases
At 31 December 2022
£

£

£

£

Cash at bank and in hand

1,797,185

(464,472)

-

1,332,713

Debt due within 1 year

(62,500)

-

-

(62,500)

Finance leases

(10,527)

19,225

(42,759)

(34,061)


1,724,158
(445,247)
(42,759)
1,236,152

Page 20

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Frost & Sullivan, Limited is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 01119817). The registered office address is John Eccles House, Robert Robinson Avenue, Oxford Science Park, Oxford, Oxfordshire, OX4 4GP.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise 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:

  
2.2

Financial reporting standard 102 - reduced disclosure exemptions

In preparing the separate financial statements of the Parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:

Only one reconciliation of the number of shares outstanding at the beginning and end of the year has been presented as the reconciliation for the Group and the Parent Company would be identical; and
No disclosures have been given for the aggregate remuneration of the key management personnel of the Parent Company as their remuneration is included in the totals for the Group as a whole.


 
2.3

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 21

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.4

Going concern

In assessing the appropriateness of the going concern basis, the directors have taken account of all relevant information covering a period of at least twelve months from the date of approval of the Group’s financial statements. During the year the UK Group made a profit of £2,123,559 (2021 - £1,596,323) and at the reporting date had net current liabilities of £8,817,558 (2021 - £10,582,697) and net liabilities of £10,081,038 (2021 - £11,665,192). The UK Group is dependent on the cash resources of its parent company (Frost & Sullivan Inc.) and the rest of the Frost & Sullivan Group. The parent company has confirmed its continued cash flow support to the Group and has subordinated the Group’s indebtedness to the parent, for at least 12 months from the date of signing of the financial statements. Without that continued support, the UK Group may not potentially continue as a going concern.
Due to macro-economic issues in the markets in which the wider group operates, the parent company directors are currently updating the cash flow forecasts and budgets for the next 12 months for the wider group. The directors acknowledge that there is a risk that due to those market conditions the parent company may be unable to fulfil its commitment to either provide funding, if required, or may need to extract cash resources within the UK group by calling for repayment, in part or in full, of the intragroup loan.
A material uncertainty therefore exists which may cast significant doubt upon the parent company ability to provide the necessary support to the Group, when it is needed, for a period of at least 12 months from the date of signing of these financial statements. Consequently, this condition gives rise to a material uncertainty which may cast significant doubt on the UK Group's ability to continue as a going concern. 
However, after making inquiries and considering uncertainty described above, the directors still believe that the parent company has ability to fulfil above mentioned commitment and have a reasonable expectation that the Group will continue in operational existence for the foreseeable future. 
Accordingly, the directors continue to adopt the going concern basis of accounting in preparing the Group’s financial statements.

Page 22

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.5

Foreign currency translation

Functional and presentation currency

The Group'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.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 23

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.6

Turnover

Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. 
Turnover is recognised from services that are performed for customers or from the provision of information delivered to customers.
Subscription turnover is recognised rateably over the subscription term. Turnover from events and Best Practice Awards are recognised on delivery to the client.
Turnover from contracts for the provision of Growth Consulting 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, turnover is recognised only to the extent of the expenses recognised that are recoverable.
Amounts billed in advance of turnover being recognised are deferred and turnover is accrued to the extent it is expected to be recovered.

 
2.7

Operating leases: the Group as lessee

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

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.9

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.

 
2.10

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 24

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.11

Intangible assets

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

At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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:

Software
-
3
years

Page 25

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.12

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.

At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis:.

The estimated useful lives range as follows:

Long-term leasehold property
-
3 to 5 years, or the period of the lease
Fixtures and fittings
-
3 to 10 years
Computer equipment
-
3 years

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.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.14

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Group. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Page 26

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

  
2.15

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 Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

 
2.16

Pensions

Defined contribution pension plan

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

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

 
2.17

Provisions for liabilities

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

Page 27

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.18

Financial instruments

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. 
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the group will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Group’s cash management.
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the bank, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.

Page 28

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.19

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

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

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

 
2.20

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 29

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Leases
In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the Group as lessee.
Critical accounting estimates
Debtors
Trade debtors are reviewed regularly for collectability and if any such debtors are deemed doubtful, a provision is made in the period in which the determination is made.
Turnover
Turnover from contracts for the provision of Growth Consulting 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, turnover is recognised only to the extent of the expenses recognised that are recoverable.
Dilapidation provision
The dilapidation provision requires management's best estimate of the costs that will be incurred based on contractual requirements. See note 20 for further information. 

Page 30

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Turnover

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


2022
2021
£
£

Subscriptions
9,178,276
7,918,171

Consulting
12,292,296
11,779,100

Best Practice Awards
812,073
945,108

Events
121,821
211,931

22,404,466
20,854,310


Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
12,531,048
14,005,202

Overseas
9,873,418
6,849,108

22,404,466
20,854,310



5.


Operating profit

The operating profit is stated after charging/(crediting):

2022
2021
£
£

Exchange differences
(505,013)
34,290

Other operating lease rentals
387,146
456,939


6.


Auditor's remuneration

2022
2021
£
£

Fees payable to the Group's auditor for the audit of the Group's financial statements

79,750
49,370

Page 31

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Employees

Staff costs were as follows:


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£


Wages and salaries
9,280,933
9,180,328
8,095,915
8,092,743

Social security costs
1,509,994
1,520,303
1,411,233
1,659,491

Cost of defined contribution scheme
498,293
451,919
454,214
209,564

11,289,220
11,152,550
9,961,362
9,961,798


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


        2022
        2021
            No.
            No.







Administrative staff
117
111


8.


Directors' remuneration

No remuneration was paid to directors throughout the year due to them being remunerated through other group companies. For the year ended 31 December 2022, amounts payable to the directors by other group companies in relation to their services provided to Frost & Sullivan, Limited were £Nil (2021 - £64,201). 




9.


Interest receivable

2022
2021
£
£


Interest on financial assets not measured at fair value through profit or loss
-
8


10.


Interest payable and similar expenses

2022
2021
£
£


Bank interest and other loan interest payable
-
25,898

Finance leases and hire purchase contracts
6,250
(5,283)

6,250
20,615

Page 32

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

11.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
119,163
508,221


Total current tax
119,163
508,221

Deferred tax


Origination and reversal of timing differences
-
(815)

Adjustments in respect of prior periods
-
619

Effect of tax rate change on opening balance
-
196

Total deferred tax
-
-


Taxation on profit on ordinary activities
119,163
508,221
Page 33

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - higher than) the standard rate of corporation tax in the UK of19% (2021 -19%). The differences are explained below:

2022
2021
£
£


Profit on ordinary activities before tax
2,242,722
2,104,544


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
424,206
399,863

Effects of:


Expenses not deductible for tax purposes
29,937
90,316

Capital allowances for year in excess of depreciation
190
3,183

Other permanent differences
(17,122)
-

Adjustments to tax charge in respect of prior periods
-
619

Foreign tax credits
43,704
479,077

Change in deferred tax rates
114,237
(874,315)

Deferred tax not recognised
(475,989)
409,478

Total tax charge for the year
119,163
508,221


Factors that may affect future tax charges

The Group has estimated losses of £12,183,674 (2021 - £12,518,018) available for carry forward against future trading profits.
There is a potential deferred tax asset of £3,254,558
 (2021 - £3,650,734). The asset has not been recognised due to the uncertainty of the timing of its realisation.
Finance Act 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.

Page 34

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Intangible assets

Group and Company





Software

£



Cost


At 1 January 2022
208,841


Disposals
(157,881)



At 31 December 2022

50,960



Amortisation


At 1 January 2022
180,521


Charge for the year
16,987


On disposals
(157,881)



At 31 December 2022

39,627



Net book value



At 31 December 2022
11,333



At 31 December 2021
28,320



Page 35

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Tangible fixed assets

Group






Leasehold property improvements
Fixtures and fittings
Computer equipment
Total

£
£
£
£



Cost 


At 1 January 2022
204,378
129,698
165,670
499,746


Additions
-
-
64,633
64,633


Disposals
-
(104,690)
(114,965)
(219,655)



At 31 December 2022

204,378
25,008
115,338
344,724



Depreciation


At 1 January 2022
204,377
71,146
113,291
388,814


Charge for the year
1
57,259
40,276
97,536


Disposals
-
(104,690)
(114,965)
(219,655)



At 31 December 2022

204,378
23,715
38,602
266,695



Net book value



At 31 December 2022
-
1,293
76,736
78,029



At 31 December 2021
1
58,552
52,379
110,932

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2022
2021
£
£



Fixtures and fittings
-
33,022

Computer equipment
38,139
12,755

38,139
45,777

Page 36

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

           13.Tangible fixed assets (continued)


Company






Leasehold property improvements
Fixtures and fittings
Computer equipment
Total

£
£
£
£

Cost


At 1 January 2022
204,378
129,698
161,726
495,802


Additions
-
-
56,264
56,264


Disposals
-
(104,690)
(114,965)
(219,655)



At 31 December 2022

204,378
25,008
103,025
332,411



Depreciation


At 1 January 2022
204,377
71,146
113,052
388,575


Charge for the year
1
57,259
34,538
91,798


Disposals
-
(104,690)
(114,965)
(219,655)



At 31 December 2022

204,378
23,715
32,625
260,718



Net book value



At 31 December 2022
-
1,293
70,400
71,693



At 31 December 2021
1
58,552
48,674
107,227






The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2022
2021
£
£



Fixtures and fittings
-
33,022

Computer equipment
38,139
12,755

38,139
45,777

Page 37

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost


At 1 January 2022
21,596


Additions
575



At 31 December 2022
22,171




The additions relate to an increase in share capital in Frost & Sullivan GmbH i. Gr.


Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Frost & Sullivan GmbH i. Gr.
Clemensstrasse 9 60487 Frankfurt am Main Germany
Ordinary
100%

Page 38

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Debtors

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£


Trade debtors
6,156,104
5,233,975
5,216,347
4,060,736

Amounts owed by group undertakings
-
3,941,357
16,622,019
3,941,357

Other debtors
107,818
114,584
107,818
114,584

Prepayments and accrued income
387,121
536,417
345,452
526,096

6,651,043
9,826,333
22,291,636
8,642,773


Trade debtors are stated after provisions for impairment of £97,789 (2021 - £167,339).


16.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Other loans
62,500
62,500
62,500
62,500

Trade creditors
657,690
463,160
655,338
449,902

Amounts owed to group undertakings
4,723,010
10,254,979
21,728,624
10,288,450

Corporation tax
547,560
558,162
546,714
558,162

Other taxation and social security
1,386,959
1,233,560
1,184,392
1,024,934

Obligations under finance lease and hire purchase contracts
14,372
10,302
14,372
10,302

Other creditors
93,166
186,338
92,738
73,441

Accruals and deferred income
9,316,057
9,437,214
7,656,527
8,149,680

16,801,314
22,206,215
31,941,205
20,617,371


Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.


17.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Net obligations under finance leases and hire purchase contracts
19,689
225
19,689
225



Page 39

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

18.


Loans


Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Amounts falling due within one year

Other loans
62,500
62,500
62,500
62,500


The other loans include a number of unsecured arrangements which carry a fixed interest of 10%. The loans are repayable at par at the option of the Company or on maturity. Maturity ranges between 2022 and 2023. Some of the loans are with related parties, please see note 25 for further information.


19.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Within one year
14,372
10,302
14,372
10,302

Between 1-5 years
19,689
225
19,689
225

34,061
10,527
34,061
10,527

Page 40

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

20.


Provisions


Group






Dilapidation provision
Legal provision
Total

£
£
£





At 1 January 2022
133,803
1,087,719
1,221,522


Charged to profit or loss
(114,430)
226,061
111,631



At 31 December 2022
19,373
1,313,780
1,333,153

A provision of £1,313,780 has been recognised in relation to an ongoing legal case in France. The provision represents the Company's liability in respect of the required settlement in the case, based on the most recent court ruling. The amount provided represents management's best estimate of the future cash outflows in respect of this matter. The amount charged to profit or loss during the year represents an  additional accrual in line with the court ruling, although the Group continues to appeal the ruling.


21.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



3,575,000 Ordinary shares of £1.00 each
3,575,000
3,575,000


All shares are ordinary equity shares with no special rights attached. Each share ranks equally for any dividend declared, and distribution made in dividing or winding up, and are not redeemable.



22.


Reserves

Foreign exchange reserve
The foreign exchange reserve represents the cumulative movements in foreign exchange.
Profit and loss account
This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.

Page 41

 
FROST & SULLIVAN, LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

23.


Pension commitments

The Group operates a defined contribution 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 £498,293 (2021 - £209,564). Contributions totalling £24,016 (2021 - £37,652) were payable to the fund at the reporting date and are included in creditors.


24.


Commitments under operating leases

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


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Not later than 1 year
311,406
337,801
231,005
337,801

Later than 1 year and not later than 5 years
348,320
546,854
341,619
546,854

659,726
884,655
572,624
884,655


25.


Related party transactions

Loan capital of £Nil was redeemed during 2022 (2021 - £Nil). The remaining loan capital of £62,500 represents two agreements which are repayable on 15 January 2023.
The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities 
The aggregate compensation for key management personnel during the year was £1,704,908 
(2021 - £1,228,953).


26.


Post balance sheet events

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


27.


Controlling party

The immediate & ultimate parent undertaking is Frost & Sullivan, a company registered in the USA.
The largest and smallest group of undertakings for which group accounts for the year ending 31 December 2022 have been drawn up, is that headed by Frost & Sullivan. Copies of the group accounts are available from Frost & Sullivan, 7550 IH West, Suite 400, San Antonio, TX 78229-5616, USA.

Page 42