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COMPANY REGISTRATION NUMBER: 07124618
InvestAcc Group Limited
Financial Statements
31 October 2023
InvestAcc Group Limited
Financial Statements
Year ended 31 October 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
5
Independent auditor's report to the members
7
Consolidated income statement
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of cash flows
16
Notes to the financial statements
17
InvestAcc Group Limited
Officers and Professional Advisers
The board of directors
Mr N Gardner
Mrs J Barnes
Mr G Mirfin
Mr N Bennett
Company secretary
Mrs J Barnes
Registered office
Solway House
Kingstown
Carlisle
Cumbria
CA6 4BY
Auditor
Riverside Accountancy Lancaster Limited
Chartered accountants & statutory auditor
Second Floor, Riverside Offices
26 St George's Quay
Lancaster
LA1 1RD
Bankers
Handelsbanken
1 Merchant's Drive
Parkhouse
Carlisle
Cumbria
CA3 0JW
InvestAcc Group Limited
Strategic Report
Year ended 31 October 2023
The Group has continued to perform well; by increasing turnover, and despite one off exceptional cost in respect of office relocation, profit levels have been maintained and Balance Sheet strengthened whilst continuing to provide high levels of customer service standards across all Companies in the Group. The Directors are confident that the Group will continue to grow organically, however will consider potential acquisition opportunities, if the customer base is suitable and does not pose a risk to the continued success of the Group. The Directors consider the exposure to regulatory, credit and market risk for the Group is very low, having built up cash reserves, our capital adequacy for each Company within the Group well exceeds the regulatory requirements and does not rely on any external borrowing. Key performance indicator measurements for 2023 were as follows: 2023 2022 Turnover £8.92m £7.87m Profit before Tax £2.92m £2.91m Profit Margin 31.2% 33.7% Shareholder Funds £8.21m £6.95m
InvestAcc Pension Administration Limited 2023 was another progressive year for the company with turnover increasing by 28% and profit before tax increasing by 35%, the Pre-Tax Profit Margin (PTM) remains above our industry Peer group at 40% with EBITDA increasing by 35% to £2.41m Assets under Administration (AUA) increased to £4bn as both SIPP member numbers and SSAS schemes increased. Our staff are our best asset and employee numbers rose during the year to 85 (2022: 76), whilst recruitment remains challenging we will continue to seek new talent and invest in training into 2024 to ensure our recognised service standards are maintained, this being evidenced by member satisfaction with attrition rates continuing to be well below competitor levels at 3.48% in 2023. The exceptional personal service reputation that the company has acquired was again recognised by industry awards in 2023, including, winner of Moneyfacts Best Pension Service, for the fourth year in a row, and being awarded Best SIPP Service. At the Financial Adviser Service Awards (FASA) we were awarded 5 stars for the sixth year. Our stance of not accepting non-standard assets, other than fixed term bank deposits, will continue and we maintain a strong, liquid balance sheet with cash reserves exceeding £5m ensuring the company regulatory capital exceeds 250% of requirements which will be maintained around this level. The Directors consider the Company's exposure to regulatory, credit and market risk is very low, having built up cash reserves, our capital adequacy significantly exceeds the regulatory requirement, and the Company does not rely on any external borrowing.
Vesta Wealth Limited The global economic turmoil of 2022 continued into 2023 with successive interest rate rises and volatile stockmarkets producing conditions not conducive to attracting new client investments, 2023 was therefore a year of consolidation ensuring clients with existing investment funds remained informed. We stand out from our peers as the only Independent Financial Adviser in our region to offer DFM services and will look to increase the breadth of services in 2024. The Directors are confident that the Company will continue to grow organically, however will consider potential acquisition opportunities, if the client base is suitable and does not pose a risk to the continued success of the Company. SECTION 172(1) STATEMENT The Directors fully understand their responsibilities under Section 172(1) of the Companies Act 2006 to promote the success of the Company, having regard to: - the likely consequences of any decision in the long-term; - the interests of the Company's employees; - the need to foster the Company's business relationships with suppliers, customers and others; - the impact of the Company's operations on the community and the environment; - the desirability of the Company in maintaining a reputation for high standards of business conduct; and - the need to act fairly between members of the Company. The board has identified our key stakeholders which are set out below, along with details of the forms of engagement undertaken by the board. Shareholders The Group holds monthly board meetings and as there are common shareholding Directors between all companies the interests of the Shareholders and Directors are cojoined. Suppliers Wherever possible the group endeavours to identify and engage with suppliers from the local community, serving to support the local community and reducing environmental impact. The group does not seek payment terms always ensuring payment in a prompt timely manner for all goods and services provided. Clients The board considers that the long-term sustainability of the business depends upon client relationships based on delivering the best outcomes. The business continues to operate an independent model giving access to whole of market choice and the highest quality and best value independent financial advice. The board maintains and reviews the Company's strategy to ensure that it is aligned with delivering the best outcomes for clients. Our investment committee is focused on delivering the best value and outcomes while our Chartered status ensures that best practice is always maintained. Client survey's give us a unique insight into their thoughts and future needs, and we maintain regular contact with our clients via our service commitment and through a monthly newsletter. Colleagues We have a number of ways of engaging with colleagues both in person via quarterly reviews and social events in addition to general day-to-day interactions so that we can understand their needs and views. Product providers and platforms The board understands that the success of the Group is dependent upon having high quality financial products for clients and platforms on which to manage them. The Board maintains oversight over the product providers and platforms which as part of our whole of market offering. Regulator The Group has an open and transparent relationship with our regulator. At each Board meeting a regulatory update report is presented including significant interactions with the regulators and future regulatory changes. The Group responds promptly and fully to any enquiries the regulators make.
This report was approved by the board of directors on 9 February 2024 and signed on behalf of the board by:
Mr N Gardner
Director
Registered office:
Solway House
Kingstown
Carlisle
Cumbria
CA6 4BY
InvestAcc Group Limited
Directors' Report
Year ended 31 October 2023
The directors present their report and the financial statements of the group for the year ended 31 October 2023 .
Directors
The directors who served the company during the year were as follows:
Mr N Gardner
Mrs J Barnes
Mr G Mirfin
Mr N Bennett
Dividends
Particulars of recommended dividends are detailed in note 14 to the financial statements.
Future developments
The Group will continue to develop organically although the Directors will consider any potential acquisitions if such an opportunity is a good strategic fit and offers potential of good investment returns.
Greenhouse gas emissions and energy consumption
Information not included
The group consumed 40,000kWh of energy or less in the UK during the period
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments 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; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 9 February 2024 and signed on behalf of the board by:
Mr N Gardner
Director
Registered office:
Solway House
Kingstown
Carlisle
Cumbria
CA6 4BY
InvestAcc Group Limited
Independent Auditor's Report to the Members of InvestAcc Group Limited
Year ended 31 October 2023
Opinion
We have audited the financial statements of InvestAcc Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the consolidated income statement, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows 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 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 October 2023 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept 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, 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.
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: - A review of directors minutes and review of nominal postings for legal and professional fees ensured we identified any regulatory compliance issues and laws that the group must follow in the year and to the date of signing the financial statements - Discuss with Directors any instances of non-compliance in respect of the FCA and reviewing capital adequacy calculations - The assessment of fraud was consider as low due to the segregation of duties seen, the low levels of cash handled and the regular reporting required of the relevant companies to the FCA. - A review of journal entries and consideration of their appropriateness was carried out throughout the audit - During the audit we speak to management, test the systems and speak to various members of the finance function to understand the group's processes and the nature of trade to assist in determining if the financial statements are true and fair. - Challenging assumptions made by management in making their significant accounting estimates. - Reviewing financial statement disclosure and testing to supporting documentation to assess compliance with applicable laws and regulations As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 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.
Lyndsay Nicholson ACA
(Senior Statutory Auditor)
For and on behalf of
Riverside Accountancy Lancaster Limited
Chartered accountants & statutory auditor
Second Floor, Riverside Offices
26 St George's Quay
Lancaster
LA1 1RD
9 February 2024
InvestAcc Group Limited
Consolidated Income Statement
Year ended 31 October 2023
2023
2022
Note
£
£
Turnover
4
8,924,861
7,868,111
Cost of sales
996,693
1,204,893
------------
------------
Gross profit
7,928,168
6,663,218
Administrative expenses
5,141,316
4,008,688
Other operating income
5
2,500
------------
------------
Operating profit
6
2,786,852
2,657,030
Income from other fixed asset investments
10
249,685
Other interest receivable and similar income
11
131,890
2,459
Interest payable and similar expenses
12
1,033
876
------------
------------
Profit before taxation
2,917,709
2,908,298
Tax on profit
13
659,280
482,483
------------
------------
Profit for the financial year
2,258,429
2,425,815
------------
------------
All the activities of the group are from continuing operations.
The group has no other recognised items of income and expenses other than the results for the year as set out above.
InvestAcc Group Limited
Consolidated Statement of Financial Position
31 October 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
15
1
1
Tangible assets
16
316,425
259,364
Investments
17
9,080
33,855
---------
---------
325,506
293,220
Current assets
Debtors
18
868,085
643,080
Cash at bank and in hand
7,833,266
6,668,034
------------
------------
8,701,351
7,311,114
Creditors: amounts falling due within one year
19
803,721
641,630
------------
------------
Net current assets
7,897,630
6,669,484
------------
------------
Total assets less current liabilities
8,223,136
6,962,704
Creditors: amounts falling due after more than one year
20
7,000
Provisions
22
( 8,834)
( 1,831)
------------
------------
Net assets
8,214,302
6,953,873
------------
------------
Capital and reserves
Called up share capital
26
22,322
22,322
Profit and loss account
27
8,191,980
6,931,551
------------
------------
Shareholders funds
8,214,302
6,953,873
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 9 February 2024 , and are signed on behalf of the board by:
Mrs J Barnes
Director
Company registration number: 07124618
InvestAcc Group Limited
Company Statement of Financial Position
31 October 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
15
1
1
Investments
17
72,222
72,222
--------
--------
72,223
72,223
Current assets
Debtors
18
425,000
280,000
Cash at bank and in hand
1,192,812
1,202,185
------------
------------
1,617,812
1,482,185
Creditors: amounts falling due within one year
19
3,068
24
------------
------------
Net current assets
1,614,744
1,482,161
------------
------------
Total assets less current liabilities
1,686,967
1,554,384
------------
------------
Capital and reserves
Called up share capital
26
22,322
22,322
Profit and loss account
27
1,664,645
1,532,062
------------
------------
Shareholders funds
1,686,967
1,554,384
------------
------------
The profit for the financial year of the parent company was £ 1,130,583 (2022: £ 1,585,401 ).
These financial statements were approved by the board of directors and authorised for issue on 9 February 2024 , and are signed on behalf of the board by:
Mrs J Barnes
Director
Company registration number: 07124618
InvestAcc Group Limited
Consolidated Statement of Changes in Equity
Year ended 31 October 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 1 November 2021
22,322
5,531,616
5,553,938
Profit for the year
2,425,815
2,425,815
--------
------------
------------
Total comprehensive income for the year
2,425,815
2,425,815
Dividends paid and payable
14
( 1,025,880)
( 1,025,880)
--------
------------
------------
Total investments by and distributions to owners
( 1,025,880)
( 1,025,880)
At 31 October 2022
22,322
6,931,551
6,953,873
Profit for the year
2,258,429
2,258,429
--------
------------
------------
Total comprehensive income for the year
2,258,429
2,258,429
Dividends paid and payable
14
( 998,000)
( 998,000)
----
---------
---------
Total investments by and distributions to owners
( 998,000)
( 998,000)
--------
------------
------------
At 31 October 2023
22,322
8,191,980
8,214,302
--------
------------
------------
InvestAcc Group Limited
Company Statement of Changes in Equity
Year ended 31 October 2023
Called up share capital
Profit and loss account
Total
£
£
£
At 1 November 2021
22,322
972,541
994,863
Profit for the year
1,585,401
1,585,401
--------
------------
------------
Total comprehensive income for the year
1,585,401
1,585,401
Dividends paid and payable
14
( 1,025,880)
( 1,025,880)
--------
------------
------------
Total investments by and distributions to owners
( 1,025,880)
( 1,025,880)
At 31 October 2022
22,322
1,532,062
1,554,384
Profit for the year
1,130,583
1,130,583
--------
------------
------------
Total comprehensive income for the year
1,130,583
1,130,583
Dividends paid and payable
14
( 998,000)
( 998,000)
----
---------
---------
Total investments by and distributions to owners
( 998,000)
( 998,000)
--------
------------
------------
At 31 October 2023
22,322
1,664,645
1,686,967
--------
------------
------------
InvestAcc Group Limited
Consolidated Statement of Cash Flows
Year ended 31 October 2023
2023
2022
£
£
Cash flows from operating activities
Profit for the financial year
2,258,429
2,425,815
Adjustments for:
Depreciation of tangible assets
74,225
69,280
Government grant income
( 2,500)
Income from other fixed asset investments
( 249,685)
Other interest receivable and similar income
( 131,890)
( 2,459)
Interest payable and similar expenses
1,033
876
Gains on disposal of tangible assets
( 16,968)
( 20,008)
Tax on profit
659,280
478,240
Accrued expenses/(income)
2,962
( 569)
Changes in:
Trade and other debtors
( 225,005)
( 138,500)
Trade and other creditors
( 21,442)
50,862
Provisions and employee benefits
30
311
------------
------------
Cash generated from operations
2,600,654
2,611,663
Interest paid
( 1,033)
( 876)
Interest received
131,890
2,459
Tax paid
( 475,238)
( 453,624)
------------
------------
Net cash from operating activities
2,256,273
2,159,622
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 160,548)
( 140,705)
Proceeds from sale of tangible assets
77,300
22,719
Purchases of other investments
( 8,250)
( 20,550)
Proceeds from sale of other investments
1,957
267,425
------------
------------
Net cash (used in)/from investing activities
( 89,541)
128,889
------------
------------
Cash flows from financing activities
Government grant income
2,500
Payments of finance lease liabilities
( 3,500)
( 3,500)
Dividends paid
( 998,000)
( 1,025,880)
------------
------------
Net cash used in financing activities
( 1,001,500)
( 1,026,880)
------------
------------
Net increase in cash and cash equivalents
1,165,232
1,261,631
Cash and cash equivalents at beginning of year
6,668,034
5,406,403
------------
------------
Cash and cash equivalents at end of year
7,833,266
6,668,034
------------
------------
InvestAcc Group Limited
Notes to the Financial Statements
Year ended 31 October 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Solway House, Kingstown, Carlisle, CA6 4BY, Cumbria.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the entity. The financial statements are rounded to the nearest £1.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The financial statements consolidate the financial statements of InvestAcc Group Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are addressed below. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to change in the estimated useful economic lives and residual value of the assets. The useful economic lives and residual values are reviewed annually and amended where necessary to reflect current estimates, based on economic conditions and the physical condition of the assets.
Revenue recognition
Turnover represents fees and commissions, net of claw backs, due to the Group and Company during the year, including commission earned on policies proposed and accepted on risk before the year end. Commissions received on an indemnity basis which are repaid to insurance companies following the cancellation of policies are written off in the year against profits. Provision at the year end is made to estimate the amount of claw back which may arise on the business written to that date. It is calculated as being 5% of commission receivable during the year on indemnity terms. Turnover also represents annual fees in respect of the provision of pension administration services. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Fixtures and fittings
-
20% straight line
Motor vehicles
-
25% straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Rendering of services
7,685,106
7,868,111
Commissions
1,239,755
------------
------------
8,924,861
7,868,111
------------
------------
5. Other operating income
2023
2022
£
£
Government grant income
2,500
----
-------
6. Operating loss
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
74,225
69,281
Gains on disposal of tangible assets
( 16,968)
( 20,008)
Operating lease rentals
112,822
113,267
---------
---------
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the financial statements
18,385
17,685
--------
--------
Fees payable in respect of the company's pension scheme:
Audit of the pension scheme
4,700
4,475
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2023
2022
No.
No.
Administrative staff
95
85
Number of directors
5
5
----
----
100
90
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
2,792,129
2,467,130
Social security costs
263,152
250,221
Other pension costs
747,053
126,127
------------
------------
3,802,334
2,843,478
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
351,707
337,545
Company contributions to defined contribution pension plans
3,012
2,992
---------
---------
354,719
340,537
---------
---------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
2
2
----
----
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
£
£
Aggregate remuneration
87,963
83,307
Company contributions to defined contribution pension plans
1,895
--------
--------
87,963
85,202
--------
--------
During the year the group contributed £442,000 (2022 - £60,000) to a directors pension scheme.
10. Income from other fixed asset investments
2023
2022
£
£
(Gain)/loss on disposal of other fixed asset investments
249,685
----
---------
11. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
116,674
2,117
Other interest receivable and similar income
15,216
342
---------
-------
131,890
2,459
---------
-------
12. Interest payable and similar expenses
2023
2022
£
£
Interest on obligations under finance leases and hire purchase contracts
876
876
Other interest payable and similar charges
157
-------
----
1,033
876
-------
----
13. Tax on profit
Major components of tax expense/(income)
2023
2022
£
£
Current tax:
UK current tax expense
652,307
482,621
Adjustments in respect of prior periods
( 138)
---------
---------
Total current tax
652,307
482,483
---------
---------
Deferred tax:
Origination and reversal of timing differences
6,973
---------
---------
Tax on profit
659,280
482,483
---------
---------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK of 22.50 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
2,917,709
2,908,298
------------
------------
Profit on ordinary activities by rate of tax
656,981
552,576
Adjustment to tax charge in respect of prior periods
( 138)
Effect of expenses not deductible for tax purposes
119
62
Effect of capital allowances and depreciation
( 4,793)
( 22,547)
Effect of revenue exempt from tax
( 47,440)
Utilisation of tax losses
( 30)
Deferred tax
6,973
------------
------------
Tax on profit
659,280
482,483
------------
------------
14. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
998,000
1,025,880
---------
------------
15. Intangible assets
Group and company
Goodwill
£
Cost
At 1 November 2022 and 31 October 2023
1
----
Amortisation
At 1 November 2022 and 31 October 2023
----
Carrying amount
At 1 November 2022 and 31 October 2023
1
----
At 31 October 2022
1
----
16. Tangible assets
Group
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 November 2022
166,369
273,957
440,326
Additions
15,048
145,500
160,548
Disposals
( 113,361)
( 113,361)
---------
---------
---------
At 31 October 2023
181,417
306,096
487,513
---------
---------
---------
Depreciation
At 1 November 2022
100,797
80,165
180,962
Charge for the year
23,857
50,368
74,225
Disposals
( 84,099)
( 84,099)
---------
---------
---------
At 31 October 2023
124,654
46,434
171,088
---------
---------
---------
Carrying amount
At 31 October 2023
56,763
259,662
316,425
---------
---------
---------
At 31 October 2022
65,572
193,792
259,364
---------
---------
---------
The company has no tangible assets.
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Group
Fixtures and fittings
£
At 31 October 2023
5,305
-------
At 31 October 2022
10,792
--------
17. Investments
Group
Other investments other than loans
£
Cost
At 1 November 2022
33,855
Additions
8,250
Disposals
( 33,025)
--------
At 31 October 2023
9,080
--------
Impairment
At 1 November 2022 and 31 October 2023
--------
Carrying amount
At 31 October 2023
9,080
--------
At 31 October 2022
33,855
--------
Company
Shares in group undertakings
£
Cost
At 1 November 2022 and 31 October 2023
72,222
--------
Impairment
At 1 November 2022 and 31 October 2023
--------
Carrying amount
At 1 November 2022 and 31 October 2023
72,222
--------
At 31 October 2022
72,222
--------
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Registered office
Class of share
Percentage of shares held
Subsidiary undertakings
Investacc Pension Administration Limited
Solway House, Solway House Business Park, Carlisle, Cumbria, CA6 4BY
Ordinary
100
Investacc Limited
Unit 2, The Sidings, Port Road Business Park, Carlisle, Cumbria, CA2 7AF
Ordinary
100
Vesta Wealth Limited
Unit 2, The Sidings, Port Road Business Park, Carlisle, Cumbria, CA2 7AF
Ordinary
100
Other significant holdings
HGH Wealth Management Limited
Club Chambers, Museum Street, York, YO1 7DN
Ordinary A Shares
33
18. Debtors
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade debtors
225,554
293,074
Amounts owed by undertakings in which the company has a participating interest
425,000
280,000
425,000
280,000
Prepayments and accrued income
73,847
55,183
Other debtors
143,684
14,823
---------
---------
---------
---------
868,085
643,080
425,000
280,000
---------
---------
---------
---------
19. Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
30,854
27,463
Amounts owed to connected parties
727
727
Accruals and deferred income
55,703
52,741
Corporation tax
51,742
96,267
Social security and other taxes
564,771
326,438
3,068
24
Obligations under finance leases and hire purchase contracts
7,000
3,500
Other creditors
92,924
134,494
---------
---------
-------
----
803,721
641,630
3,068
24
---------
---------
-------
----
20. Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Obligations under finance leases and hire purchase contracts
7,000
----
-------
----
----
21. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
7,000
3,500
Later than 1 year and not later than 5 years
7,000
-------
--------
----
----
7,000
10,500
-------
--------
----
----
22. Provisions
Group
Deferred tax (note 23)
Clawback provision
Total
£
£
£
At 1 November 2022
1,831
1,831
Additions
6,973
707
7,680
Charge against provision
( 677)
( 677)
-------
-------
-------
At 31 October 2023
6,973
1,861
8,834
-------
-------
-------
The company does not have any provisions.
Provision has been made for commissions on indemnity terms amounting to 5% of the total amount received during the period in accordance with the recommendations of the FCA. As at 31 October 2023 the amount provided was £1,861 (2022: £1,831).
23. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Included in provisions (note 22)
6,973
-------
----
----
----
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2023
2022
2023
2022
£
£
£
£
Accelerated capital allowances
6,973
-------
----
----
----
24. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 302,041 (2022: £ 63,135 ).
25. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
2,500
----
-------
----
----
26. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary A shares of £ 1 each
22,000
22,000
22,000
22,000
Ordinary B shares of £ 1 each
22
22
22
22
Ordinary C shares of £ 1 each
100
100
100
100
Ordinary D shares of £ 1 each
100
100
100
100
Ordinary E shares of £ 1 each
100
100
100
100
--------
--------
--------
--------
22,322
22,322
22,322
22,322
--------
--------
--------
--------
27. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
28. Analysis of changes in net debt
At 1 Nov 2022
Cash flows
At 31 Oct 2023
£
£
£
Cash at bank and in hand
6,668,034
1,165,232
7,833,266
Debt due within one year
(4,227)
(3,500)
(7,727)
Debt due after one year
(7,000)
7,000
------------
------------
------------
6,656,807
1,168,732
7,825,539
------------
------------
------------
29. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
43,167
117,500
Later than 1 year and not later than 5 years
22,000
256,417
--------
---------
----
----
65,167
373,917
--------
---------
----
----
2019 2018 2019 2018
£ £ £ £
30. Related party transactions
Company
As at the reporting date, balances owed to the group by connected parties were £443,184 (2022 - £316,563). As at the reporting date, balances owed by the group to connected parties were £39,384 (2022 - £83,686). During the year the group charged management fees to connected parties totalling £41,952 (2022 - £70,146). During the year the group recharged administrative expenses to connected parties totalling £20,839 (2022 - £38,344).
31. Controlling party
The Group is controlled by Mr & Mrs N Gardner who own 99% of the share capital with voting rights.