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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
The principal activity during the year was, and continues to be, the supply of computer hardware and software, and the provision of consultancy services, training, software platforms, health & wellbeing products, accessibility services, installation services, assistive technology and workplace adjustment products and services, and on-going technical support of computer and technological solutions for people with disabilities.
The Group’s main trading subsidiary, Microlink PC (UK) Limited, incurred an EBITDA for the year of £314,489 (2022 – £282,623 loss). At the year end, its total Capital and reserves had changed from £14,487,904 to £14,755,891. Overall, the Group’s consolidated accounts report a net loss of £1,590,266 (2022 - loss £1,740,671) which is stated after the amortisation of intangible assets of – principally the deduction of goodwill arising on consolidation - of £1,383,333 (2022 - £1,133,333). The student market has continued to be aggressively competitive with the Student Loans Company (SLC) continuing to use an E Quote portal. This has continued to put pressure on revenues and margins from this business line. The Department for Education (DFE) tender for the supply of the above services was issued in February 2022. We came third in this competition, but unfortunately the decision of the DFE was to award all four regions only to those tenderers in first and second place. Meanwhile, however, new revenue streams continue to be developed. In addition, the Group has continued adding new corporations to its customer base which is driving growth going forward. We have not seen significant adverse impacts from Brexit as most of our business is currently within the UK. Going forward, the Group continues to grow its business globally.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
Risk is present in all businesses and the board regularly reviews the risks faced by the Group and by the Company. The directors consider the following to be the major risks and uncertainties faced by the Group and the Company:
Coronavirus (Covid-19) The Group continues to be impacted by the legacy of the virus and the changes in the working patterns of our customers. The directors have carefully considered the situation and have concluded that the resources of the Group are adequate to withstand the impact of the virus. Market uncertainties The assistive technology sector by its very nature is one of rapid change and development creating both uncertainty and opportunity. Accordingly, the Group constantly seeks to look at expanding its range of products and its service offerings as well as maintaining its service levels and differentiating itself from its competitors. Operational risk Operational efficiency is of paramount importance in a business dedicated to delivering best value in quality and service. Our risk management approach encourages a proportionate response to each area of operational risk, with a combination of generic standards and local ownership. Supply chain resilience and product quality management are regarded as two key operational risks. Supply of components The Group configures its hardware to customer order on short lead time. There is, therefore, a potential risk to order fulfilment during times of industry wide component constraints. This is mitigated by multi-sourcing, strong long term supply arrangements including planning, forecasting and buffer stocks where appropriate. Interest rate risks Deposits are placed on fixed and variable rate terms for periods from overnight to one month based on forecasted cash flows and interest rate trends. The directors consider that the interest rate risk is at an acceptable level, and the appropriate safeguards are in place to mitigate these risks. Credit risk The bulk of our customers are Student Finance, Local Education Authorities, large listed companies, Schools and other government funded institutions. Because of this, the risk of financial loss to the Group and Company arising from the failure of the Group's customers to meet their financial obligations for the services provided by the Group is very low. Liquidity risks The Group retains sufficient cash to ensure sufficient funds are available for operations. The Group's shareholders are committed and in principle have funds available to provide additional ongoing financial support for further development or any other requirement of the Group.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
The key financial performance indicators for the Group are centred around turnover, gross margin and EBITDA. There is also a continued focus on the operational cost base to ensure that it remains at the correct level to support the ongoing business requirement.
Key performance indicators:
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2023
The directors present their report and the financial statements for the year ended 31 July 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £1,590,266 (2022 - loss £1,740,671).
The directors do not recommend the payment of a dividend.
The directors who served during the year were:
The directors will continue to focus on the growth of the Group, whilst ensuring they maintain a high level of service. Regional hubs are being created to support the Group’s global growth.
The Group has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out within the Group's Strategic Report the Group's Strategic Report Information Required by Schedule 7 of the large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
An Indian subsidiary company was incorporated on 18 August 2023, as disclosed further by note 27.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MLPC PARENT LIMITED
We have audited the financial statements of MLPC Parent Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 July 2023, which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MLPC PARENT LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MLPC PARENT LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
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:
∙The Group and parent Company are subject to laws and regulations that directly affect the financial statements including financial reporting legislation, and general regulations such as health and safety. There are no industry specific laws and regulations which would be deemed to have a significant impact on the financial statements. We assessed the extent of compliance with the appropriate laws and regulations as part of our procedures on the related financial statement items.
∙We understood how the Group and parent Company are complying with the legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the Group's and parent Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
°Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
°Challenging assumptions and judgments made by management in its significant accounting estimates; and
°Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
°Posting of unusual journals and complex transactions;
°Misappropriation of funds through fraudulent purchase ledger and payroll activity; and
°Manipulation of amounts subject to significant judgment or estimate.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MLPC PARENT LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
3000a Parkway
Hampshire
PO15 7FX
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CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 JULY 2023
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2023
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 JULY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 38 form part of these financial statements.
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 38 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2023
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CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
These financial statements have been prepared in compliance with FRS102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
MLPC Parent Limited is a private company, limited by shares, which is incorporated and domiciled in the United Kingdom. The address of the Company's registered office, which is also its principal place of business, is disclosed on the Company Information page.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Income Statement in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Income Statement from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 August 2014.
The Group and Company have net current liabilities of £9,933,343 and £24,451,630 respectively. Included within current liabilities are creditors due to the directors, shareholders and the wider group that are providing continuing financial support.
The directors have carefully reviewed the uncertainties facing the Group and the actions taken to mitigate these risks and they believe that the Group should be well able to continue its operational existence for a period of at least 12 months from the approval of these accounts, and thus they consider the going concern basis of preparation continues to be appropriate.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Consolidated Income Statement in the same period as the related expenditure.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position. that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Goodwill amortisation The directors have considered the useful life of the consolidated goodwill at 20 years and have based the amortisation over this period based upon the term of the benefits gained from the consolidation. Impairment for goodwill and investments The directors have considered whether there are any indications that goodwill and investments assets may have been impaired at the reporting date. The directors have completed an exercise of comparing the carrying value of the goodwill and investments to the expected recoverable amount based upon approved budgets that exist for each relevant business. Warranty provision The directors have reviewed the historical return rate and review this on a regular basis. The level of this has remained constant and accordingly, the Directors have concluded the level of the provision remains appropriate.
The turnover and profit before tax are attributable to the one principal activity of the Group.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
12.Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 31
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
14.Tangible fixed assets (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Preference shares are non-voting and carry a preferential dividend.
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions totalling £17,041 (2022 - £17,620) were payable to the fund at the balance sheet date and are included in creditors.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
The Company and Group is under the control of Mr V Ganjavian.
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