Company registration number 07671308 (England and Wales)
APAM LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
APAM LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
APAM LTD
COMPANY INFORMATION
Directors
S Cooke
T Nurminen
M Baldwin
S Kenny
C Abramson
J Bjarnemyr
Company number
07671308
Registered office
4th Floor
84 Grosvenor Street
London
W1K 3JZ
Auditor
UHY Hacker Young Manchester LLP
St James Building
79 Oxford Street
Manchester
M1 6HT
Business address
4th Floor
84 Grosvenor Street
London
W1K 3JZ
Bankers
Barclays Bank UK PLC
P O Box 299
Birmingham
B1 3PF
Solicitors
Forsters LLP
31 Hill Street
Mayfair
London
W1J 5LS
APAM LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Background and business model

APAM Ltd is a part of the Catella Group. APAM is a specialist real estate asset manager, operating since 2011 and providing end to end real estate services to our clients. APAM’s strategy is to further broaden, enhance and extend its services and client base to maintain and solidify its reputation as a best in class UK Asset and Investment Management business.

 

APAM’s platform is built to be market and cycle agnostic and performs well in any market conditions and through all parts of the cycle. APAM's expertise is across a broad range of real estate classes and sectors. APAM have a diverse client base with institutional clients, banks and special services, and private equity clients based both in the UK and abroad. APAM's agility and ability to be flexible to clients’ needs has been integral to our success. APAM’s services include asset management, investment management, property and facilities management, portfolio management, corporate and client accounting services as well as debt and tenant advisory services. APAM operates a number of subsidiaries to deliver procurement services, principal contracting and development management.

Fair Review of the business

APAM returned a solid financial performance, maintaining core revenues despite market conditions and downwards pressures on values. Assets under APAM's management remained stable at circa £1.9Bn over the course of the year. A number of performance fees were delivered on real estate asset sales.

 

APAM secured a prestigious advisory mandate with a local authority as well as acquiring two real estate assets during the year.

 

APAM continued to manage its Principal Investments Programme, utilising both Catella’s and its own balance sheet. APAM’s co-investments through all investment programmes was £3.2m at year end.

 

The underlying business grew with the set up of two additional subsidiary services, as well as the recruitment of key staff to broaden our business development strategy. APAM continued to invest in systems to focus on business efficiency and ensure the platform for growth remains in place as market conditions improve. Profit margin was adversely impacted by this continued investment in the business as well as higher staff remuneration and retention costs affected by increased inflationary and market salary conditions.

 

Financial Performance

The directors track the progress of the business using various key performance indicators (“KPIs”):-

                 Current year (£)          Prior year (£)

 

Turnover                7,568,416            7,899,177

 

Operating profit             1,000,212            1,835,509

Net assets                5,673,275            5,168,642

APAM LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Risk management

APAM’s strategy is to follow an appropriate risk policy, which effectively manages risk exposures in a commercially conscious manner and in progress of the achievement of our core business objectives. APAM are regulated by the Royal Institute of Chartered Surveyors, registered with the Information Commissioners Office and registered with HMRC for Real Estate Lettings and Estate Agency Anti-Money Laundering Supervision. APAM’s Corporate Governance is based generally on external statutory and regulatory frameworks, such as the Companies Act 2006 and professional guidelines issued by regulators (such as the Royal Institute of Chartered Surveyors) from time to time. APAM’s Articles of Association, and associated policy documents support these external frameworks and govern the prudent operation of APAM’s Executive Board and Committees. Additionally, as part of the Catella Group, a listed entity on the Nasdaq Stockholm, APAM provides regular financial, compliance and employee related disclosures under Group reporting requirements.

 

APAM maintains a business level risk register, where all risks are evaluated based on estimated probability and impact as well as the effectiveness of established measures to mitigate identified risks. APAM’s Risk Committee meets quarterly and provides a status independent forum to make streamlined risk management decisions and to evaluate the effectiveness of mitigation strategies. Legal and Risk reports are considered by the Executive Board at each meeting of the Board.

 

The key risks which management face are detailed as follows:

 

Macroeconomic risks

Instability and volatility of the commercial property investment market

Ongoing instability in UK real estate markets may dampen investor appetite and pose challenges to growing AUM during periods of uncertainty. APAM mitigate this risk by operating a predominantly non-discretionary and “market agnostic” segregated account mandate business. Revenue generated from non-discretionary real estate management services on a segregated account basis is flexible and allows APAM to adapt to market cycles.

 

Strategic risks

Margin pressure

A persistent high inflationary environment and fee revenues linked to declining real estate values, reduction in rents payable by tenants and delayed decision making put downward pressure on margins. APAM looks to mitigate this risk by diversifying revenue streams in new service lines – in FY23 we opened a Principal Contracting subsidiary and seeded an equities fund with Catella. Fees and margins are reviewed regularly and rebased where appropriate.

 

Operational risks

Key personnel

Overreliance on key-personnel may cause business disruption in the event of key personnel departures. APAM mitigate this risk by; (1) expanding and diversifying the senior leadership team in FY23 (2) operating as a fully integrated team across Manchester, London, Ireland and a number of remote locations; (3) systemisation of core client contacts, handbooks, procedures and processes; and (4) succession planning and talent management through our annual review process and performance development process.

 

Business continuity

Serious business disruption events may significantly impact service continuity if not appropriately planned for. APAM are completely cloud-based, our data is hosted securely by market leading providers and is regularly backed meaning employees can work easily, from anywhere. A disaster recovery and business continuity plan has been drawn up, including annual staff training, is tested annually and regularly updated to ensure APAM as an evolving business are prepared in the event of serious business disruption events.

 

Regulatory and Compliance risk

Regulatory or compliance breach that has a significant negative impact reputationally or financially on the business. APAM mitigate this by regularly updating, reviewing and communicating business policies (including the Employee Handbook and Compliance Manual) and best practices to all employees. All employees receive compliance training as part of their onboarding and this training is refreshed at least annually. In addition, APAM operates a Whistleblowing policy and Speak Up scheme encouraging employees to report any concerns confidentially and anonymously.

APAM LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

Business performance risk

Business performance risk is the risk that the company may not perform as expected either due to internal factors or due to competitive pressures in the market in which they operate. This risk is managed through a number of measures: ensuring the appropriate management team is in place; diversification of services; budget and business planning; key performance indicators; and regular forecasting; contract price management.

 

Health and safety risk

The company is committed to ensuring a safe working environment. The risks arising from inadequate management of health and safety matters are the exposure of employees and third parties to the risk of injury, potential liability and/or loss of reputation. These risks are managed by the company through: the strong promotion of a health and safety culture; and well defined health and safety policies.

 

Employee development

Long term growth of the business depends on the company’s ability to retain and attract personnel of high quality. This risk is managed through development plans which are regularly reviewed and updated. These are accompanied by specific policies in areas such as training, management development and performance management.

 

Financial and business control

Strong financial and business controls are necessary to ensure the integrity and reliability of financial and other information on which the company relies for day-to-day operations, external reporting and for longer term planning. The company exercises financial and business control through a combination of: qualified and experienced financial teams; performance analysis; budgeting and cash flow forecasting; monthly reporting and variance commentary and clearly defined approval limits. The external auditors provide advice on specific accounting and tax issues as they arise.

 

Social, ethical and environmental risk

Due to the company’s nature and size no significant social, ethical or environmental risks have been identified by the management. APAM operates a DE&I Committee, is a member of Real Estate Balance and volunteers with a number of charities. The company operates to the Catella ESG policy and reports on ESG metrics annually.

 

On behalf of the board

S Cooke
Director
15 February 2024
APAM LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of real estate management which is not anticipated to change in the foreseeable future.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

S Cooke
W Powell
(Resigned 30 June 2023)
T Nurminen
M Baldwin
S Kenny
C Abramson
B Brodin
(Resigned 15 March 2023)
J Bjarnemyr
Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £183,550. Preferred dividends in arrears totalled £51,420. The directors do not recommend payment of a final dividend.

Financial instruments
Liquidity risk

Expenditure is approved at board level and flexibility is maintained by retaining surplus cash in a readily accessible bank account.

Credit risk

Credit risk arises principally on third party derived revenues. Company policy is aimed at minimising such risk and requires that deferred terms are granted only to customers who demonstrate an appropriate payment history and satisfy creditworthiness procedures. Individual exposures are monitored with customers subject to credit limits to ensure that the company’s exposure to bad debts is not significant.

Financial risk management objectives and the exposure

The company has a normal level of exposure to price, credit, liquidity, commodity and cash flow risks arising from its trading activities which are conducted in sterling. The company does not enter into any complex financial instruments.

Future developments

There were no significant events arising after the year-end affecting the company. The company is developing opportunities contributing to its growth and the business is expected to continue its development over the next twelve months through domestic markets.

APAM LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
S Cooke
Director
15 February 2024
APAM LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF APAM LTD
- 6 -
Opinion

We have audited the financial statements of APAM Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

APAM LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF APAM LTD
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting irregularities including fraud

Irregularities, including fraud, are instances of non compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.

APAM LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF APAM LTD
- 8 -

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

 

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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

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.

Zoë Duffy BFP FCA
Senior Statutory Auditor
For and on behalf of UHY Hacker Young Manchester LLP
15 February 2024
Chartered Accountants
Statutory Auditor
St James Building
79 Oxford Street
Manchester
M1 6HT
APAM LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
7,568,416
7,899,177
Administrative expenses
(6,749,158)
(6,381,839)
Other operating income
180,954
318,171
Operating profit
5
1,000,212
1,835,509
Interest receivable and similar income
7
342,669
-
0
Interest payable and similar expenses
8
(5,295)
-
0
Amounts written off investments
9
(297,147)
-
Profit before taxation
1,040,439
1,835,509
Tax on profit
10
(300,836)
(341,462)
Profit for the financial year
739,603
1,494,047

The profit and loss account has been prepared on the basis that all operations are continuing operations.

APAM LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
205,848
276,678
Investments
14
3,216,993
3,102,511
3,422,841
3,379,189
Current assets
Debtors
17
2,229,764
1,586,281
Cash at bank and in hand
1,179,995
1,743,583
3,409,759
3,329,864
Creditors: amounts falling due within one year
18
(1,038,879)
(1,390,818)
Net current assets
2,370,880
1,939,046
Total assets less current liabilities
5,793,721
5,318,235
Creditors: amounts falling due after more than one year
19
(108,359)
(120,399)
Provisions for liabilities
Deferred tax liability
20
12,087
29,194
(12,087)
(29,194)
Net assets
5,673,275
5,168,642
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
5,673,175
5,168,542
Total equity
5,673,275
5,168,642

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 15 February 2024 and are signed on its behalf by:
S Cooke
Director
Company registration number 07671308 (England and Wales)
APAM LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
100
5,820,995
5,821,095
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,494,047
1,494,047
Dividends
12
-
(2,146,500)
(2,146,500)
Balance at 31 December 2022
100
5,168,542
5,168,642
Year ended 31 December 2023:
Profit and total comprehensive income
-
739,603
739,603
Dividends
12
-
(234,970)
(234,970)
Balance at 31 December 2023
100
5,673,175
5,673,275
APAM LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

APAM Ltd is a private company limited by the shares incorporated in England and Wales. The registered office is 4th Floor, 84 Grosvenor Street, London, England, W1K 3JZ.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

APAM Ltd is a majority-owned subsidiary of Catella AB and the results of APAM Ltd are included in the consolidated financial statements of Catella AB which are available from its registered office, Birger Tarlsgatan 6 PO BOX 5894, Stockholm, Sweden, SE 102 40.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

Turnover is stated net of VAT and trade discounts. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the value of the consideration due. Where a contract had only been partially completed at the balance sheet date turnover represents the value of the service provided to date based on a proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings & equipment
5 years straight line
Computer equipment
3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Fixed asset investments

Investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment. The investments are assessed for impairment at each reporting date and any impairment losses, or reversals of impairment losses, are recognised immediately in profit or loss.

1.6
Impairment of fixed assets

At each reporting date an assessment is made for impairment. Any excess at the carrying amount of fixed assets over fair value is recognised as an impairment loss in the profit and loss account.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

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

 

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Share-based payments

For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Investments

Investments in equity instruments that are not publicly traded are measured at cost less impairment and not fair value. The fair value information available is not deemed to be reliable, due to not accurately reflecting the minority interest in investments, that APAM hold.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Share based payment scheme

The total carrying amount at the end of the period, relating to cash-settled share-based payments, is calculated with reference to the expected value per share to be paid to the holders, at both the 'Exit Event One' and 'Exit Event Two'. These exit event value calculations are based on the estimated future financial results of the company, and as such are subject to change. Further details with regards to this cash-settled share-based payment arrangement can be seen in note 22.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Management fees
5,854,580
5,470,954
Service fees
879,091
1,189,442
Performance and sale fees
736,745
717,868
Consultancy fees
98,000
426,374
Acquisition fees
-
93,977
Commissions
-
562
7,568,416
7,899,177
2023
2022
£
£
Other revenue
Interest income
159,647
-
Dividends received from investments and group companies
183,022
121,500
Profit on disposal of investments
-
196,671
APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 17 -

All turnover was generated from the UK.

4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
64
58

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,313,260
3,771,836
Social security costs
494,079
480,239
Pension costs
80,436
88,898
4,887,775
4,340,973
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
11
-
0
Fees payable to the company's auditor for the audit of the company's financial statements
13,230
12,590
Depreciation of owned tangible fixed assets
90,571
88,359
Share-based payments
(12,040)
96,163
Operating lease charges
388,147
364,925
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
556,395
502,366
Company pension contributions to defined contribution schemes
5,278
14,629
561,673
516,995

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 4).

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
173,531
166,748
Company pension contributions to defined contribution schemes
1,508
1,508
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
159,647
-
0
Income from fixed asset investments
Income from shares in group undertakings
183,022
-
0
Total income
342,669
-
0
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
5,295
-
0
9
Amounts written off investments
2023
2022
£
£
Loss on disposal of investments
(137,500)
-
Other gains and losses
(159,647)
-
(297,147)
-
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
292,926
355,020
Adjustments in respect of prior periods
25,017
-
0
Total current tax
317,943
355,020
APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
2023
2022
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
(17,107)
(13,558)
Total tax charge
300,836
341,462

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,040,439
1,835,509
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
244,711
348,747
Tax effect of expenses that are not deductible in determining taxable profit
78,073
34,723
Tax effect of income not taxable in determining taxable profit
(45,880)
(37,367)
Under/(over) provided in prior years
25,017
-
0
Deferred tax adjustments in respect of prior years
-
0
(3,253)
Other differences
(1,085)
(1,388)
Taxation charge for the year
300,836
341,462
11
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Fixed asset investments
14
159,647
-
Recognised in:
Amounts written off investments
159,647
-

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Dividends
2023
2022
£
£
Preferred dividend
51,420
-
0
Interim paid
183,550
2,146,500
234,970
2,146,500

Preferred dividends in arrears total £51,420. This relates to the ordinary B shareholding and is equal to 5% of annual profit before tax, less all salaries and compensation under incentive scheme and any accruals for E Shareholders.

13
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2023
352,807
91,357
444,164
Additions
5,903
13,838
19,741
At 31 December 2023
358,710
105,195
463,905
Depreciation and impairment
At 1 January 2023
108,288
59,198
167,486
Depreciation charged in the year
69,478
21,093
90,571
At 31 December 2023
177,766
80,291
258,057
Carrying amount
At 31 December 2023
180,944
24,904
205,848
At 31 December 2022
244,519
32,159
276,678
14
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
15
423
422
Investments in joint ventures
16
50
50
Unlisted investments
3,216,520
3,102,039
3,216,993
3,102,511
APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Fixed asset investments
(Continued)
- 21 -
Movements in fixed asset investments
Shares in subsidiaries and joint ventures
Other investments
Total
£
£
£
Cost or valuation
At 1 January 2023
472
3,102,039
3,102,511
Additions
1
411,628
411,629
Disposals
-
(137,500)
(137,500)
At 31 December 2023
473
3,376,167
3,376,640
Impairment
At 1 January 2023
-
-
-
Impairment losses
-
159,647
159,647
At 31 December 2023
-
159,647
159,647
Carrying amount
At 31 December 2023
473
3,216,520
3,216,993
At 31 December 2022
472
3,102,039
3,102,511
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
APAM UK Property Services Ltd
4th Floor 84 Grosvenor Street, London, United Kingdom, W1K 3JZ
Ordinary
100.00
APAM Property Limited
Rosenberg 31 Silchester Road, Glenageary, Dublin, A96 T9C7, Ireland
Ordinary
50.10
Catella APAM Capital Partners Limited
4th Floor 84 Grosvenor Street, London, United Kingdom, W1K 3JZ
Ordinary
100.00
APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Joint ventures

Details of the company's joint ventures at 31 December 2023 are as follows:

Name of undertaking
Registered office
Interest
% Held
held
Direct
Bankfoot APAM Limited
4th Floor 84 Grosvenor Street, London, England, W1K 3JZ
Ordinary
50.00
17
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,052,781
695,999
Amounts owed by group undertakings
392,345
89,744
Amounts owed by undertakings in which the company has a participating interest
128,333
40,942
Other debtors
5,947
1,140
Prepayments and accrued income
650,358
758,456
2,229,764
1,586,281
18
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
3,857
51,040
Amounts owed to group undertakings
50,488
32,501
Corporation tax
13,177
118,171
Other taxation and social security
193,880
242,677
Dividends payable
51,420
-
0
Other creditors
19,502
20,092
Accruals and deferred income
706,555
926,337
1,038,879
1,390,818
19
Creditors: amounts falling due after more than one year
2023
2022
£
£
Ordinary share capital classified as a liability
10
10
Liability for share based payments
108,349
120,389
108,359
120,399

The total carrying amount at the end of the period, relating to cash-settled share-based payments, is calculated with reference to the expected value per share to be paid to the holders, at both the 'Exit Event One' and 'Exit Event Two'. Further details with regards to this cash-settled share-based payment arrangement can be seen in note 22.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
12,087
29,194
2023
Movements in the year:
£
Liability at 1 January 2023
29,194
Credit to profit or loss
(17,107)
Liability at 31 December 2023
12,087
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
80,436
88,898

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 1p each
8,750
7,500
88
75
Ordinary B shares of 1p each
1,250
2,500
12
25
10,000
10,000
100
100
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary E shares of 1p each
1,000
1,000
10
10
Ordinary shares classified as liabilities
10
10
APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Share capital
(Continued)
- 24 -

The ordinary A shares and ordinary B shares carry the same voting rights. Each share is intitled to one vote.

 

Up to 12 April 2023 the directors could declare a dividend on both the ordinary A shares and ordinary B shares, in such proportions as the directors determined, between the different classes of ordinary A shares and ordinary B shares. All dividends declared in respect of ordinary A shares and ordinary B shares, should be distributed among the holders of such shares, in proportion to the number of shares held.

 

On 12 April 2023 the ordinary B shares became entitled to a preferred dividend, equal to 5% of annual profit before tax, less all salaries and compensation under incentive scheme and any accruals for E Shareholders.

 

On 3 July 2023 1,250 ordinary B shares were redesignated as ordinary A shares.

 

The ordinary E shares have been issued to employees and represent a long term cash-settled share based payment arrangement. The ordinary E shares will not have any voting rights or the right to receive any dividends.

 

A buyback of all ordinary E shares is proposed to take place no later than 120 days from 31 December 2025. Two mandatory buyback events will apply to the ordinary E shares. The first mandatory buyback event will occur no later than 120 days from 31 December 2024 (Exit Event One) and the second mandatory buyback event will occur no later than 120 days from 31 December 2025 (Exit Event Two). It is proposed that 30 per cent of the ordinary E shares per E shareholder will be repurchased by the company under 'Exit Event One' and 70 per cent (or the remainder of the ordinary E shares) will be repurchased by the company under 'Exit Event Two'.

 

The valuations of the ordinary E Shares at 'Exit Event One' and 'Exit Event Two' will be based on 8x the financial results of the company for the preceding two-year average. The ordinary E share proceeds will be based on the increase in value of the ordinary E shares above the specific entry hurdle value, applicable to those ordinary E shares (defined as the "Relevant Hurdle"). The Share Scheme Committee will determine the value of the company at the exit / buyback date (as applicable) and the value of each ordinary E share will be equal to 0.01 per cent of the amount by which the exit / buyback date valuation exceeds the 'Relevant Hurdle'.

23
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
257,607
281,929
Between two and five years
811,146
1,068,754
Total commitment
1,068,753
1,350,683
24
Related party transactions

Sales of £60,000 (2022: £983,166) were made to companies under common directorships.

25
Directors' transactions

Dividends totalling £234,970 (2022 - £721,500) were paid in the year in respect of shares held by the company's directors.

APAM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
25
Directors' transactions
(Continued)
- 25 -

Interest free loans have been granted by the company to its directors as follows:

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan
-
4,252
2,650
(4,852)
2,050
4,252
2,650
(4,852)
2,050
26
Ultimate controlling party

The immediate and ultimate parent company is Catella AB, a company registered in Sweden.

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