Company registration number 06824959 (England and Wales)
TALOS360 LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
TALOS360 LIMITED
COMPANY INFORMATION
Directors
Mr S Rundell
Mr S Adjepong
Mrs J Martin
Secretary
A G Secretarial Limited
Company number
06824959
Registered office
4 Webster Court
Carina Park
Westbrook
Warrington
Auditor
Barlow Andrews LLP
Carlyle House
78 Chorley New Road
Bolton
TALOS360 LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
TALOS360 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
Talos360 Limited (‘The Company’) is the main UK trading entity of the Eiger Bidco Limited Group (‘Group’)
The Company provides talent SaaS solutions for clients in all sectors through its own Talent Operating System. Its proprietary recruitment and engagement technology allows businesses to attract, manage and engage candidates and employees. The Company also provides traditional recruitment services including recruitment advertising and vacancy filling (‘Fulfilment’).
The business has become a market leader in SaaS talent solutions through the quality of its product and the service its team provides. Technology is at the forefront of the Talos360 brand and we are continually developing our products to ensure they are revolutionising the talent software industry.
The Company has continued to grow its revenue year on year. Growth in software revenue remains the primary focus for the Company, and this goal was successfully met, achieving 55% growth in software revenue compared to prior year and 10% growth in overall company revenue.
Software revenue now represents 44% of total revenue in 2023, compared to 24% two years ago. A strong product strategy driving innovation and integrations across the talent and HR sectors has been integral to driving this growth.
Operating costs in 2022 were high due to extensive investment across all areas of the business including management, software development teams, marketing and sales structure in order to position the company for its growth trajectory.
The benefits of this have been reaped in 2023 with significant growth in software revenue as well as a return to profitability on an adjusted operating profit basis, moving from a loss of £0.26m in 2022 to a profit of £0.80m in 2023.
During the prior year, the business partnered with leading mid-market private equity firm LDC to support the next stage of its growth journey. One-off legal and professional fees of £2.4m relating to group reconstruction were incurred during the prior year. There were no such costs in the current year. Due to the significant level of one-off non-trading costs incurred in 2022, the accounts showed a statutory loss of £4m in 2022 as well as net liabilities of £3.6m. These costs were fully considered and funded as part of the acquisition deal and were paid by cash inflows from Eiger Bidco Limited, Talos360 Limited’s new parent company.
Therefore the Company shows on its balance sheet a £3.5m long term creditor owed to Eiger Bidco Limited. This has no specified repayment term and can remain outstanding as long as required. As such, the net liabilities position of the company reflects inter-group funding arrangements for these one-off costs rather than being reflective of trading performance.
The Company and the Group are both cash generative from operating activities.
The overall result is in line with the expectations of the company’s stakeholders and in line with the growth plan for the Company.
Principal risks and uncertainties
The execution of the Company’s strategy and the management of its business are subject to a number of risks and uncertainties. The principal risks and uncertainties are identified below:
Business interruption risk: The Company has a comprehensive disaster recovery plan in the event of any interruption to the business. This is especially relevant to any potential cyber risks which could impact SAAS software provided to clients and internal software. To mitigate this risk the Company has high level security and data backup protocols in place, including GDPR compliance.
TALOS360 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
The Company uses a range of performance measures to monitor and manage the business effectively.
The key performance indicators are considered to be turnover, software revenue, gross profit, gross margin and adjusted operating profit. These are summarised below:
| | |
| | |
| | |
| | |
| | |
Adjusted operating profit/(loss) (£’000) | | |
The Directors believe that adjusted operating profit is more reflective of the underlying performance of the Company than equivalent GAAP measures because it excludes non-operating costs and non-cash items and is therefore a better proxy for underlying operating cash. Adjusted operating profit is defined as operating profit adjusted to add back depreciation of property, plant and equipment, amortisation of intangible assets, management charges and non-operating costs. Non-operating costs are those items believed to be exceptional in nature by virtue of their size and/or incidence and include professional fees, redundancy and restructuring costs. This provides the shareholders and other users of the financial statements with the most representative year-on-year comparison of underlying operating performance attributable to shareholders.
Refer below for details of the reconciliation of adjusted operating profit to operating profit.
| | |
| | |
| | |
Amortisation (£’000) Management charges (£’000) | | |
Non-operating costs (£’000) | | |
Adjusted operating profit/(loss) (£’000) | | |
TALOS360 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Other information and explanations
Employment
The Company is an equal opportunities employer and is committed to a policy of treating employees and job applicants fairly and equally.
All employees go through an induction into the business as well as to their individual teams so they are aware of the Company goals and values. All employees also receive regular ongoing training to ensure competence and expertise within their role in the organisation.
The Company is committed to giving all employees the opportunity to thrive and grow as their careers progress.
The Company also uses its own Talos Engage EVP software to receive regular feedback on employee wellbeing, work-life balance, benefits on offer, career opportunities etc. to ensure there is always a focus on people with the business.
During the year the Company was awarded three awards by Great Places To Work including No. 1 Best Workplace UK (Medium Category), No. 1 Best Workplace in Tech (Medium Category), No. 1 Best Workplace for Development (Medium Category). These awards are based on anonymous feedback from employees and are a reflection of the inclusive culture, strong sense of team spirit and shared vision.
A strong leadership team is in place including a CEO who has been the recipient of the Talint Partners TIARA Talent Tech Leader Of The Year for 3 consecutive years and in 2023 was the recipient of the Business Desk North West CEO Of the Year award.
Environmental and social impact
The Company strives to minimise the impact on the environment as much as possible by utilising technology wherever practical including offering hybrid working to reduce commuting.
The Company also carefully considers suppliers to ensure they are responsible and ethical businesses.
Financial risk management objectives and policies
The Company uses various financial instruments including deposit accounts and cash, and items such as trade debtors and trade creditors that arise directly from its operations. The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail below. The main risk arising from the Company’s financial instruments is credit risk.
Credit risk
The Company’s principal credit risk, is in the recovery of amounts owed by trade debtors. In order to manage credit risk the Directors assess customers based on a combination of payment history and other information. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history.
Liquidity risk
The Company regularly forecasts cash flow and maintains an appropriate balance of cash to ensure that sufficient funds are available to cover future expenses and capital expenditure.
Mr S Adjepong
Director
15 July 2024
TALOS360 LIMITED
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 in the year under review was that of the provision of talent software solutions and related recruitment activities.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Rundell
Mr S Adjepong
Mrs J Martin
Research and development
During the period the company incurred £1,309,240 (2022: £1,012,520) of Research and Development expenditure.
Future developments
The company is continually investing in product development to ensure its software products are at the forefront of the talent sector.
Auditor
The auditor, Barlow Andrews LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the fair review of the business and principal risks and uncertainties.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr S Adjepong
Director
15 July 2024
TALOS360 LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
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:
select suitable accounting policies and then apply them consistently;
make judgements 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 company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
TALOS360 LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALOS360 LIMITED
- 6 -
Opinion
We have audited the financial statements of Talos360 Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
TALOS360 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TALOS360 LIMITED
- 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the recruitment and IT sector;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
TALOS360 LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TALOS360 LIMITED
- 8 -
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.
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.
Adam Woodward (Senior Statutory Auditor)
For and on behalf of Barlow Andrews LLP
15 July 2024
Chartered Accountants
Statutory Auditor
Carlyle House
78 Chorley New Road
Bolton
TALOS360 LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
11,568,541
10,492,421
Cost of sales
(3,512,573)
(3,076,601)
Gross profit
8,055,968
7,415,820
Administrative expenses
(7,712,132)
(8,981,327)
Operating profit/(loss) before depreciation and amortisation
5
343,836
(1,565,507)
Depreciation and amortisation
(780,777)
(573,527)
Operating loss
(436,941)
(2,139,034)
Interest receivable and similar income
9
10,559
84,000
Interest payable and similar expenses
10
(20,943)
(32,316)
Amounts written off investments
11
-
(69)
Group reconstruction costs
4
(2,370,862)
Loss before taxation
(447,325)
(4,458,281)
Tax on loss
12
209,192
444,501
Loss for the financial year
(238,133)
(4,013,780)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There is no other comprehensive income for the year. The total comprehensive income is the profit for the financial year shown above.
TALOS360 LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
13
754,230
612,853
Tangible assets
14
305,820
415,873
1,060,050
1,028,726
Current assets
Debtors
15
4,129,873
3,865,756
Cash at bank and in hand
1,084,101
1,377,939
5,213,974
5,243,695
Creditors: amounts falling due within one year
16
(6,598,341)
(6,291,104)
Net current liabilities
(1,384,367)
(1,047,409)
Total assets less current liabilities
(324,317)
(18,683)
Creditors: amounts falling due after more than one year
17
(3,475,220)
(3,542,721)
Net liabilities
(3,799,537)
(3,561,404)
Capital and reserves
Called up share capital
20
100
100
Share premium account
19,995
19,995
Capital redemption reserve
5
5
Profit and loss reserves
(3,819,637)
(3,581,504)
Total equity
(3,799,537)
(3,561,404)
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 15 July 2024 and are signed on its behalf by:
Mr S Adjepong
Director
Company registration number 06824959 (England and Wales)
TALOS360 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2022
105
19,995
432,276
452,376
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(4,013,780)
(4,013,780)
Redemption of shares
(5)
5
Balance at 31 December 2022
100
19,995
5
(3,581,504)
(3,561,404)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
(238,133)
(238,133)
Balance at 31 December 2023
100
19,995
5
(3,819,637)
(3,799,537)
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Talos360 Limited is a private company limited by shares incorporated in England and Wales. The registered office is 4 Webster Court, Carina Park, Westbrook, Warrington.
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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Eiger Bidco Limited. These consolidated financial statements are available from its registered office, 4 Webster Court, Carina Park, Westbrook, Warrington.
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.
The expectation is based on cash flow forecasts prepared by the directors and management team, which show that the company has the necessary liquidity to continue trading for the foreseeable future.
In addition to these forecasts, the company has ongoing support from its' parent company, who will not seek to recover any monies owed on inter-group loans until such time repayments are financially feasible.
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.
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
The company recognises both software and advertising revenue and costs to the extent that the software and/or advertising has been used by the customer, thereby matching the revenue recognised and costs by accruing and deferring as appropriate.
For fulfilment services, the company recognises revenue from placement of candidates when candidates commence employment with a customer.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Intangible assets are software development costs, recognised initially at cost and subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Software development costs
50% straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
10-50% straight line
IT equipment
33-50% 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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ 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 trade debtors and cash and bank balances, are initially measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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.
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including trade creditors and loans from fellow group companies, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
1.12
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 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
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.
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Software revenue
5,070,445
3,276,032
Advertising credit revenue
5,644,602
6,183,078
Fulfilment revenue
853,494
1,033,311
11,568,541
10,492,421
2023
2022
£
£
Other revenue
Interest income
10,559
-
Dividends received
-
84,000
4
Exceptional item
In the prior year, legal and professional costs of £2,370,862 were incurred relating to the group reconstruction. These costs were disclosed separately as exceptional items. No exceptional items have been noted in the current financial year.
5
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Research and development costs
506,832
331,430
Depreciation of owned tangible fixed assets
76,737
105,555
Depreciation of tangible fixed assets held under finance leases
42,928
53,978
Loss on disposal of tangible fixed assets
-
1,591
Amortisation of intangible assets
661,112
413,994
Operating lease charges
192,699
195,585
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
17,895
15,000
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Operations
39
39
Sales
31
37
Technology development
22
19
Administration & other
12
14
Management
7
9
Total
111
118
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,697,091
6,142,070
Social security costs
631,211
847,225
Pension costs
243,006
87,778
5,571,308
7,077,073
Ex-gratia payments recognised in the year and included above amounted to £13,179 (2022: £nil).
Redundancy payments recognised in the year and included above amounted to £70,626 (2022: £577).
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
607,003
1,138,277
Company pension contributions to defined contribution schemes
79,020
3,038
686,023
1,141,315
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3)
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
335,855
901,667
Company pension contributions to defined contribution schemes
2,238
330
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
10,559
Income from fixed asset investments
Income from shares in group undertakings
84,000
Total income
10,559
84,000
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
10,172
Interest on finance leases and hire purchase contracts
20,943
22,144
20,943
32,316
11
Amounts written off investments
2023
2022
£
£
Gain/(loss) on disposal of fixed asset investments
(69)
12
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(209,192)
(337,676)
Deferred tax
Origination and reversal of timing differences
(106,825)
Total tax credit
(209,192)
(444,501)
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Taxation
(Continued)
- 20 -
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(447,325)
(4,458,281)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(105,211)
(847,073)
Tax effect of expenses that are not deductible in determining taxable profit
(3,239)
(111,266)
Unutilised tax losses carried forward
807,446
Permanent capital allowances in excess of depreciation
181,254
87,921
Research and development tax credit
(209,192)
(337,675)
Deferred tax
(106,825)
R&D expenditure restricted in respect of tax credit
(72,804)
62,971
Taxation credit for the year
(209,192)
(444,501)
At the year end, tax losses carried forward amounted to £4,250,307 (2022: £4,250,307).
13
Intangible fixed assets
Software development costs
£
Cost
At 1 January 2023
1,986,416
Additions - internally developed
802,489
At 31 December 2023
2,788,905
Amortisation and impairment
At 1 January 2023
1,373,563
Amortisation charged for the year
661,112
At 31 December 2023
2,034,675
Carrying amount
At 31 December 2023
754,230
At 31 December 2022
612,853
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Tangible fixed assets
Fixtures, fittings & equipment
IT equipment
Total
£
£
£
Cost
At 1 January 2023
727,842
245,355
973,197
Additions
9,612
9,612
Disposals
(105,439)
(149,046)
(254,485)
At 31 December 2023
632,015
96,309
728,324
Depreciation and impairment
At 1 January 2023
347,082
210,242
557,324
Depreciation charged in the year
92,740
26,925
119,665
Eliminated in respect of disposals
(105,439)
(149,046)
(254,485)
At 31 December 2023
334,383
88,121
422,504
Carrying amount
At 31 December 2023
297,632
8,188
305,820
At 31 December 2022
380,760
35,113
415,873
Within tangible fixed assets are assets held under hire purchase, with a net book value at the year end of £213,094 (2022: £254,388).
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,827,842
1,728,393
Corporation tax recoverable
209,192
337,676
Other debtors
4,323
5,441
Prepayments and accrued income
2,088,516
1,794,246
4,129,873
3,865,756
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
83,692
106,337
Trade creditors
679,796
574,069
Taxation and social security
416,397
454,478
Other creditors
46,570
31,110
Accruals and deferred income
5,371,886
5,125,110
6,598,341
6,291,104
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Creditors: amounts falling due within one year
(Continued)
- 22 -
Bank facilities and other borrowings are secured by fixed and floating charges over all assets and undertakings of the company.
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
211
77,634
Amounts owed to group undertakings
3,475,009
3,465,087
3,475,220
3,542,721
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
83,692
106,337
In two to five years
211
77,634
83,903
183,971
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Those assets held under finance leases are secured against the assets to which they relate.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
243,006
87,778
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.
Contributions totalling £29,952 (2022: £7,965) were payable to the scheme at the end of the year and are included in creditors.
TALOS360 LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
10,000 Ordinary shares of 1p each
100
100
The shares have attached to them full voting, dividend and capital distribution rights.
21
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
183,188
182,136
Between two and five years
313,391
465,425
496,579
647,561
22
Related party transactions
At the prior year end, there were net amounts outstanding to companies which are no longer related parties totalling £20,021.
23
Ultimate controlling party
The company is a subsidiary of Project Eiger 3 Limited, a company incorporated in England and Wales. Its registered office is 4 Webster Court, Carina Park, Warrington. The ultimate controlling party is Eiger Bidco Limited.
Eiger Bidco Limited prepares group financial statements and copies can be obtained from Companies House, Crown Way, Maindy, Cardiff.
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100Mr S RundellMr S AdjepongMrs J MartinA G Secretarial Limitedfalsefalse068249592023-01-012023-12-3106824959bus:Director12023-01-012023-12-3106824959bus:Director22023-01-012023-12-3106824959bus:Director32023-01-012023-12-3106824959bus:CompanySecretary12023-01-012023-12-3106824959bus:RegisteredOffice2023-01-012023-12-31068249592023-12-31068249592022-01-012022-12-3106824959core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3106824959core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3106824959core:OtherResidualIntangibleAssets2023-12-3106824959core:OtherResidualIntangibleAssets2022-12-3106824959core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-12-3106824959core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-12-31068249592022-12-3106824959core:FurnitureFittings2023-12-3106824959core:ComputerEquipment2023-12-3106824959core:FurnitureFittings2022-12-3106824959core:ComputerEquipment2022-12-3106824959core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3106824959core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3106824959core:Non-currentFinancialInstrumentscore:AfterOneYear2023-12-3106824959core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3106824959core:CurrentFinancialInstruments2023-12-3106824959core:CurrentFinancialInstruments2022-12-3106824959core:Non-currentFinancialInstruments2023-12-3106824959core:Non-currentFinancialInstruments2022-12-3106824959core:ShareCapital2023-12-3106824959core:ShareCapital2022-12-3106824959core:SharePremium2023-12-3106824959core:SharePremium2022-12-3106824959core:CapitalRedemptionReserve2023-12-3106824959core:CapitalRedemptionReserve2022-12-3106824959core:RetainedEarningsAccumulatedLosses2023-12-3106824959core:RetainedEarningsAccumulatedLosses2022-12-3106824959core:ShareCapital2021-12-3106824959core:SharePremium2021-12-3106824959core:CapitalRedemptionReserve2021-12-3106824959core:RetainedEarningsAccumulatedLosses2021-12-31068249592021-12-3106824959core:ShareCapital2022-01-012022-12-3106824959core:SharePremium2022-01-012022-12-3106824959core:IntangibleAssetsOtherThanGoodwill2023-01-012023-12-3106824959core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-01-012023-12-3106824959core:FurnitureFittings2023-01-012023-12-3106824959core:ComputerEquipment2023-01-012023-12-3106824959core:OwnedAssets2023-01-012023-12-3106824959core:OwnedAssets2022-01-012022-12-3106824959core:LeasedAssets2023-01-012023-12-3106824959core:LeasedAssets2022-01-012022-12-3106824959core:UKTax2023-01-012023-12-3106824959core:UKTax2022-01-012022-12-310682495912023-01-012023-12-310682495912022-01-012022-12-310682495922023-01-012023-12-310682495922022-01-012022-12-3106824959core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-12-3106824959core:DevelopmentCostsCapitalisedDevelopmentExpenditurecore:InternallyGeneratedIntangibleAssets2023-01-012023-12-3106824959core:FurnitureFittings2022-12-3106824959core:ComputerEquipment2022-12-31068249592022-12-3106824959core:Non-currentFinancialInstruments12023-12-3106824959core:Non-currentFinancialInstruments12022-12-3106824959core:WithinOneYear2023-12-3106824959core:WithinOneYear2022-12-3106824959core:BetweenTwoFiveYears2023-12-3106824959core:BetweenTwoFiveYears2022-12-3106824959bus:PrivateLimitedCompanyLtd2023-01-012023-12-3106824959bus:FRS1022023-01-012023-12-3106824959bus:Audited2023-01-012023-12-3106824959bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP