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Company No: 03445703 (England and Wales)

TOM FRENCH & ASSOCIATES LIMITED

Unaudited Financial Statements
For the financial year ended 31 December 2023
Pages for filing with the registrar

TOM FRENCH & ASSOCIATES LIMITED

Unaudited Financial Statements

For the financial year ended 31 December 2023

Contents

TOM FRENCH & ASSOCIATES LIMITED

STATEMENT OF FINANCIAL POSITION

As at 31 December 2023
TOM FRENCH & ASSOCIATES LIMITED

STATEMENT OF FINANCIAL POSITION (continued)

As at 31 December 2023
Note 2023 2022
£ £
Restated - note 2
Fixed assets
Intangible assets 4 231,000 262,500
Tangible assets 5 16,799 24,644
Investments 6 1 1
247,800 287,145
Current assets
Stocks 0 428
Debtors 7 476,942 540,147
Cash at bank and in hand 282,976 213,421
759,918 753,996
Creditors: amounts falling due within one year 8 ( 536,947) ( 502,578)
Net current assets 222,971 251,418
Total assets less current liabilities 470,771 538,563
Creditors: amounts falling due after more than one year 9 ( 80,125) ( 172,375)
Provision for liabilities 10 ( 20,000) ( 20,000)
Net assets 370,646 346,188
Capital and reserves
Called-up share capital 12 4,140 4,140
Share premium account 37,337 37,337
Profit and loss account 329,169 304,711
Total shareholders' funds 370,646 346,188

For the financial year ending 31 December 2023 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The financial statements of Tom French & Associates Limited (registered number: 03445703) were approved and authorised for issue by the Board of Directors on 25 April 2024. They were signed on its behalf by:

Christopher Grant Glazier
Director
TOM FRENCH & ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
TOM FRENCH & ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Tom French & Associates Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is Prudence House Langage Business Park, Plympton, Plymouth, PL7 5JX, United Kingdom.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

Change in accounting policies

Revenue recognition: See below under turnover.

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.

Revenue recognition: During the year the Company has adopted the policy of recognising renewals and trail income, where performance obligations have already been met, but where the related income has been received post year end. The total amount of this income stream has been estimated based on historic data. Related amounts of commission due to the Company's Financial Advisers based on this accrued income is also calculated and included in cost of sales accruals.

Employee benefits

Defined contribution schemes
The Company operates a defined contribution scheme. The amount charged to the Statement of Income and Retained Earnings in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Statement of Financial Position.

Finance costs

Finance costs are charged to the Statement of Income and Retained Earnings over the term of the debt using the effective interest method so the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Taxation

Current tax
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Statement of Financial Position date.

Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Intangible assets

Intangible assets are stated at cost or valuation, net of amortisation and any provision for impairment. Amortisation is provided on all intangible assets at rates to write off the cost or valuation of each asset over its expected useful life as follows:

Goodwill 10 years straight line
Website costs 5 years straight line
Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis over its useful economic life of 10 years.

Other intangible assets

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

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.

Tangible fixed assets

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended. Depreciation is provided on all tangible fixed assets, other than investment properties and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line or reducing balance basis over its expected useful life, as follows:

Vehicles 3 years straight line
Office equipment 25 % reducing balance
Computer equipment 4 years straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Borrowing costs

Borrowing costs are recognised in the Statement of income and retained earnings in the year in which they are incurred.

Leases

The Company as lessee
Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower, the present value of the minimum lease payments as determined at the inception of the lease) and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the Statement of Income and Retained Earnings over the period of the leases to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each Statement of Financial Position date. If there is objective evidence of impairment, an impairment loss is recognised in the Statement of Income and Retained Earnings as described below.

Fixed asset investments

Investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently, they are measured at fair value through profit or loss if the shares are publicly traded or their fair value can otherwise be measured reliably. Other investments are measured at cost less impairment.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based on normal levels of activity. Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts, except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts.

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 creditors: amounts falling due within one year.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

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.

Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the Statement of Financial Position date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

2. Prior year adjustment

The Company entered into two contracts to purchase client portfolio's from self-employed advisers for a fixed sum over a period of 4 years. One contract commenced in 2021 and the other in 2022. The total value of these two contracts is £315,000. Payments under these contracts, of £109,375, had been expensed as cost of sales, rather than the entire contract value being capitalised as an intangible asset and the recognition of the related creditor. The amounts previously expensed to the profit and loss account have been reversed and the intangible asset has been recognised.

The corporation tax position has been updated to reflect the fact that the payments were allowed as a deduction from taxable profits, when in fact they were not eligible for deduction. Amortisation of £52,500 has been provided on the intangible asset, which was not previously recognised.

Interest has been calculated and posted in respect of the late payment of corporation tax for the period.

The Company has changed it's accounting policy in respect of accounting for renewals and trail income. Previously this was recognised on receipt. The Company policy is now to recognise trail income where performance of service has taken place but receipt of funds is in arrears. Trail income of £156,806 has been recognised as accrued income, with an associated cost of sale of £103,951 commissions due to the Company Financial Advisers.

As previously reported Adjustment As restated
Year ended 31 December 2022 £ £ £
Intangible assets - cost (SoFP) 11,250 315,000 326,250
Goodwill - amortisation (SoFP) 0 52,500 52,500
Other debtors (SoFP) 1,112 67,500 68,612
Prepayments and accrued income (SoFP) 61,880 156,806 218,686
Other creditors due within one year (SoFP) 0 132,750 132,750
Accruals (SoFP) 8,643 103,950 112,593
Creditors - Corporation tax (SoFP) 0 22,212 22,212
Other creditors due in more than one year (SoFP) 32,000 140,375 172,375
Turnover (SoIRE) 3,523,097 (3,543) 3,519,554
Cost of sales (SoIRE) 2,302,679 (73,811) 2,228,868
Administrative expenses - Amortisation (SoIRE) 0 31,500 31,500
Interest payable and similar expenses - Other interest payable (SoIRE) 13,499 248 13,747
Corporation tax (SoIRE) (5,453) 8,104 2,651

3. Employees

2023 2022
Number Number
Monthly average number of persons employed by the Company during the year, including directors 18 20

4. Intangible assets

Goodwill Website costs Total
£ £ £
Cost
At 01 January 2023 315,000 11,250 326,250
At 31 December 2023 315,000 11,250 326,250
Accumulated amortisation
At 01 January 2023 52,500 11,250 63,750
Charge for the financial year 31,500 0 31,500
At 31 December 2023 84,000 11,250 95,250
Net book value
At 31 December 2023 231,000 0 231,000
At 31 December 2022 262,500 0 262,500

5. Tangible assets

Vehicles Office equipment Computer equipment Total
£ £ £ £
Cost
At 01 January 2023 9,923 100,313 25,998 136,234
At 31 December 2023 9,923 100,313 25,998 136,234
Accumulated depreciation
At 01 January 2023 7,347 85,774 18,469 111,590
Charge for the financial year 910 3,635 3,300 7,845
At 31 December 2023 8,257 89,409 21,769 119,435
Net book value
At 31 December 2023 1,666 10,904 4,229 16,799
At 31 December 2022 2,576 14,539 7,529 24,644

6. Fixed asset investments

Other investments Total
£ £
Cost or valuation before impairment
At 01 January 2023 1 1
At 31 December 2023 1 1
Carrying value at 31 December 2023 1 1
Carrying value at 31 December 2022 1 1

7. Debtors

2023 2022
£ £
Trade debtors 257,090 245,486
Prepayments and accrued income 201,933 218,686
Deferred tax asset 3,307 2,181
Corporation tax 0 5,182
Other debtors 14,612 68,612
476,942 540,147

8. Creditors: amounts falling due within one year

2023 2022
£ £
Trade creditors 243,271 217,161
Accruals 130,984 112,593
Corporation tax 55,187 22,212
Other taxation and social security 15,255 17,055
Obligations under finance leases and hire purchase contracts 0 807
Other creditors 92,250 132,750
536,947 502,578

9. Creditors: amounts falling due after more than one year

2023 2022
£ £
Other creditors 80,125 172,375

Other creditors falling due in more than one year are made up of loans which are subordinated in favour of the general creditors of the company. These loans are repayable only at the instigation of the company, are interest free, and there is no set repayment date.

10. Provision for liabilities

2023 2022
£ £
Other provisions 20,000 20,000

Clawback provision:
The provision of £10,000 (2022: £20,000) represents an expected level of clawbacks of commissions received on "indemnity" terms whereby commission amounts are repayable if policies are cancelled subsequent to their sale. The provision is estimated based on historic data, the number of clawbacks, the emergence period of the clawback and the amount of clawback within a 4 year period of the indemnity policy being written.

Claims provision:
A provision of £10,000 (2022: Nil) represents specific customer services cost claims and is calculated in reference to the excess on the Professional Indemnity Insurance policy in respect of two potential claims.

11. Deferred tax

2023 2022
£ £
At the beginning of financial year 2,181 1,910
Credited to the Statement of Income and Retained Earnings 1,126 271
At the end of financial year 3,307 2,181

12. Called-up share capital

2023 2022
£ £
Allotted, called-up and fully-paid
4,140 Ordinary shares of £ 1.00 each 4,140 4,140

13. Financial commitments

Commitments

Total future minimum lease payments under non-cancellable operating leases are as follows:

2023 2022
£ £
within one year 20,330 35,412
between one and five years 67,767 81,320
after five years 0 6,777
88,097 123,509

Pensions

The Company operates a defined contribution pension scheme for the directors and employees. The assets of the scheme are held separately from those of the Company in an independently administered fund. There were no outstanding contributions due at the year end (2022: £nil).

14. Related party transactions

Transactions with the entity's directors

At the year end, the Company owed a director £32,000 (2022: £32,000) which is a subordinated loan due in greater than one year.