Company registration number 14551628 (England and Wales)
SOCITM ADVISORY HOLDCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
SOCITM ADVISORY HOLDCO LIMITED
COMPANY INFORMATION
Directors
Mr DA Bryant
(Appointed 20 December 2022)
Mr A Summers
(Appointed 20 December 2022)
Mrs R Barker
(Appointed 8 February 2023)
Mr P Heywood
(Appointed 8 February 2023)
Mrs N Hussain
(Appointed 8 February 2023)
Mr M Nunny
(Appointed 8 February 2023)
Ms JC Gurney
(Appointed 3 July 2023)
Mr J Henderson
(Appointed 2 October 2023)
Company number
14551628
Registered office
8a Basset Court
Grange Park
Northampton
Northamptonshire
NN4 5EZ
Auditor
Cottons Accountants LLP
1 Billing Road
Northampton
United Kingdom
NN1 5AL
SOCITM ADVISORY HOLDCO LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Company statement of cash flows
16
Notes to the financial statements
17 - 34
SOCITM ADVISORY HOLDCO LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 1 -

The directors present the strategic report for the period ended 30 November 2023.

Principal activities

The principal activity of the company is that of a holding company. The principal activity of the group is that of IT consultancy.

Review of the business

The company was incorporated on 20 December 2022 with the purpose of acquiring the trading entity Socitm Advisory Limited. The acquisition of 100% of the share capital of the trading entity was completed on 8 February 2023. Further information in respect of the acquisition is included in the Notes to the Financial Statements.

 

The directors are satisfied with the performance of the company and group during the period and do not expect any significant changes to occur within the next 12 months.

 

Socitm Advisory HoldCo Limited is a parent company primarily focused on managing and supporting its subsidiary. Despite having no direct revenues, the company holds goodwill of £11.9m and long-term liabilities £10.4m plus short term loans of £0.875m. The primary mission is to leverage its assets to create value and achieve long-term financial stability.

Principal risks and uncertainties

The trading company Socitm Advisory Limited operates in a highly competitive market where other consultancy firms offer similar services. The risk lies in losing market share to competitors who may offer better pricing, more innovative solutions, or have a stronger market presence.

 

The directors are focused on ensuring that the services offered are of a high-quality while remain competitive.

 

Delays or cost overruns in project delivery can harm client relationships and erode trust. Effective project management practices are in place with dedicated project management teams, including risk identification and mitigation which, are essential to minimise the likelihood of such occurrences.

Strategy and business model

Socitm Advisory Limited stands as a prominent player in the realm of technology advisory services, and has more than 100 customers across local and central government, housing, health and social care, blue light services, the third sector, utilities and more. We have a proven track record of delivering transformation and modernisation programmes that improve public services for the benefit of not only the organisation, but the communities they serve.

Development and performance

The gross margins: can include once the financial statements are finalised with comparatives of last year.

 

Customer retention is a crucial Key Performance Indicator (KPI) for Socitm Advisory, reflecting the organisation's commitment to fostering long-term relationships with its clients. Maintaining a high level of customer retention not only ensures stability in revenue streams but also signifies satisfaction and loyalty among clients.

 

Customer retention and new clients 2022: 83%

Customer retention and new clients 2023: 73%

Important events occurring since the year end

There have been no significant events or developments since the balance sheet date.

SOCITM ADVISORY HOLDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 2 -

On behalf of the board

Mr A Summers
Director
1 August 2024
SOCITM ADVISORY HOLDCO LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 3 -

The directors present their annual report and financial statements for the period ended 30 November 2023.

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

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

Mr DA Bryant
(Appointed 20 December 2022)
Mr A Summers
(Appointed 20 December 2022)
Mrs R Barker
(Appointed 8 February 2023)
Mr P Heywood
(Appointed 8 February 2023)
Mrs N Hussain
(Appointed 8 February 2023)
Mr M Nunny
(Appointed 8 February 2023)
Mr M Gascoigne
(Appointed 8 February 2023 and resigned 7 July 2023)
Mr JD Threapleton
(Appointed 8 February 2023 and resigned 31 March 2023)
Ms JC Gurney
(Appointed 3 July 2023)
Mr J Henderson
(Appointed 2 October 2023)
Directors' insurance

The company maintains insurance policies on behalf of all the directors against liability arising from negligence, breach of duty and breach of trust in relation to the company.

Energy and carbon report

As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
Mr A Summers
Director
1 August 2024
SOCITM ADVISORY HOLDCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 4 -

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SOCITM ADVISORY HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOCITM ADVISORY HOLDCO LIMITED
- 5 -
Opinion

We have audited the financial statements of Socitm Advisory Holdco Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30 November 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information 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:

SOCITM ADVISORY HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOCITM ADVISORY HOLDCO LIMITED
- 6 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

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

SOCITM ADVISORY HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOCITM ADVISORY HOLDCO LIMITED
- 7 -
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.

 

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

- 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 computer component manufacturing and supply sector;

 

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006 and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; 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;

 

- 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;

 

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

 

- investigated the rationale behind significant or unusual transactions;

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

- agreeing financial statement disclosures to underlying supporting documentation;

 

- reading the minutes of meetings of those charged with governance;

 

- enquiring of management as to actual and potential litigation and claims;

 

- reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.

SOCITM ADVISORY HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOCITM ADVISORY HOLDCO LIMITED
- 8 -

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

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

David Ingram FCCA (Senior Statutory Auditor)
For and on behalf of Cottons Accountants LLP
14 August 2024
Chartered Accountants
Statutory Auditor
1 Billing Road
Northampton
United Kingdom
NN1 5AL
SOCITM ADVISORY HOLDCO LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 9 -
Period
ended
30 November
2023
Notes
£
Turnover
3
8,642,418
Cost of sales
(7,504,022)
Gross profit
1,138,396
Administrative expenses
(2,533,216)
Operating loss
4
(1,394,820)
Interest payable and similar expenses
8
(249,827)
Loss before taxation
(1,644,647)
Tax on loss
9
87,504
Loss for the financial period
22
(1,557,143)
(Loss)/profit for the financial period is all attributable to the owners of the parent company.
SOCITM ADVISORY HOLDCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 10 -
Period
ended
30 November
2023
£
Loss for the period
(1,557,143)
Other comprehensive income
-
Total comprehensive income for the period
(1,557,143)
Total comprehensive income for the period is all attributable to the owners of the parent company.
SOCITM ADVISORY HOLDCO LIMITED
GROUP BALANCE SHEET
AS AT
30 NOVEMBER 2023
30 November 2023
- 11 -
2023
Notes
£
£
Fixed assets
Goodwill
10
9,784,985
Other intangible assets
10
83,501
Total intangible assets
9,868,486
Tangible assets
11
142,550
10,011,036
Current assets
Debtors
14
2,314,642
Cash at bank and in hand
601,346
2,915,988
Creditors: amounts falling due within one year
15
(2,467,057)
Net current assets
448,931
Total assets less current liabilities
10,459,967
Creditors: amounts falling due after more than one year
16
(10,470,608)
Provisions for liabilities
Deferred tax liability
18
35,637
(35,637)
Net liabilities
(46,278)
Capital and reserves
Called up share capital
21
783
Other reserves
22
1,510,082
Profit and loss reserves
22
(1,557,143)
Total equity
(46,278)
The financial statements were approved by the board of directors and authorised for issue on 1 August 2024 and are signed on its behalf by:
01 August 2024
Mr A Summers
Director
Company registration number 14551628 (England and Wales)
SOCITM ADVISORY HOLDCO LIMITED
COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 12 -
2023
Notes
£
£
Fixed assets
Investments
12
11,947,365
Current assets
Debtors
14
691,349
Cash at bank and in hand
466
691,815
Creditors: amounts falling due within one year
15
(917,184)
Net current liabilities
(225,369)
Total assets less current liabilities
11,721,996
Creditors: amounts falling due after more than one year
16
(10,470,608)
Net assets
1,251,388
Capital and reserves
Called up share capital
21
783
Other reserves
22
1,510,082
Profit and loss reserves
22
(259,477)
Total equity
1,251,388

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £259,477.

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 1 August 2024 and are signed on its behalf by:
01 August 2024
Mr A Summers
Director
Company registration number 14551628 (England and Wales)
SOCITM ADVISORY HOLDCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 13 -
Share capital
Capital contribution
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 20 December 2022
-
-
-
-
Period ended 30 November 2023:
Loss and total comprehensive income
-
-
(1,557,143)
(1,557,143)
Issue of share capital
21
783
-
-
783
Transfers
-
1,510,082
-
1,510,082
Balance at 30 November 2023
783
1,510,082
(1,557,143)
(46,278)
SOCITM ADVISORY HOLDCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 14 -
Share capital
Capital contribution
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 20 December 2022
-
-
-
-
Period ended 30 November 2023:
Profit and total comprehensive income
-
-
(259,477)
(259,477)
Issue of share capital
21
783
-
-
783
Transfers
-
1,510,082
-
1,510,082
Balance at 30 November 2023
783
1,510,082
(259,477)
1,251,388
SOCITM ADVISORY HOLDCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 15 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
26
1,037,783
Interest paid
(249,827)
Income taxes paid
(1,197,248)
Net cash outflow from operating activities
(409,292)
Investing activities
Purchase of business
(4,558,616)
Purchase of tangible fixed assets
(6,219)
Net cash used in investing activities
(4,564,835)
Financing activities
Proceeds from issue of shares
783
Proceeds from borrowings
5,574,690
Net cash generated from/(used in) financing activities
5,575,473
Net increase in cash and cash equivalents
601,346
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
601,346
SOCITM ADVISORY HOLDCO LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 16 -
2023
Notes
£
£
Cash flows from operating activities
Cash absorbed by operations
27
(658,815)
Interest paid
(249,827)
Net cash outflow from operating activities
(908,642)
Investing activities
Purchase of subsidiaries
(4,666,365)
Net cash used in investing activities
(4,666,365)
Financing activities
Proceeds from issue of shares
783
Proceeds from borrowings
5,574,690
Net cash generated from/(used in) financing activities
5,575,473
Net increase in cash and cash equivalents
466
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
466
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 17 -
1
Accounting policies
Company information

Socitm Advisory Holdco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 8a Basset Court, Grange Park, Northampton, Northamptonshire, NN4 5EZ.

 

The group consists of Socitm Advisory Holdco Limited and all of its subsidiaries.

1.1
Reporting period

The company was incorporated on 20 December 2022. These first financial statements therefore cover the shortened period from incorporation to 30 November 2023.

1.2
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.

1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Socitm Advisory Holdco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 November 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.5
Going concern

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

1.6
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.7
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.

1.8
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.9
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Development costs
Straight line over 5 years
1.10
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:

Leasehold improvements
Straight line over 5 years
Computers
Straight line over 5 years
Software
Straight line over 5 years

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 recognised in the profit and loss account.

1.11
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 20 -

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.12
Impairment of fixed assets

At each reporting period end date, the group 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.13
Cash and cash equivalents

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

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.14
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

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 group 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 group after deducting all of its liabilities.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 22 -
Basic financial liabilities

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

 

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

 

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

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 group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group 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 group.

1.16
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 23 -
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 if, and only if, there is 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.

1.17
Employee benefits

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

 

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

 

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

1.18
Retirement benefits

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

1.19
Leases

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

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 24 -
2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

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

Amortisation of goodwill

In assessing the period that the goodwill is amortised over management have considered the future plans for the group. Estimated uncertainty relates to future challenges in the industry.

Loan note redemption

Uncertainty arises around the redemption date of loan notes. An estimate of the redemption date has been made based on current expectations and will be reviewed regularly.

3
Turnover
2023
£
Turnover analysed by class of business
IT consultancy
8,642,418
2023
£
Turnover analysed by geographical market
United Kingdom
8,642,418
4
Operating loss
2023
£
Operating loss for the period is stated after charging:
Depreciation of owned tangible fixed assets
51,315
Amortisation of intangible assets
1,106,384
Operating lease charges
55,108
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 25 -
5
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
5,750
Audit of the financial statements of the company's subsidiaries
15,750
21,500
For other services
All other non-audit services
5,740
6
Employees

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

Group
Company
2023
2023
Number
Number
Consultancy
70
-
Admin
36
6
Total
106
6

Their aggregate remuneration comprised:

Group
Company
2023
2023
£
£
Wages and salaries
4,519,223
-
0
Social security costs
820,358
-
Pension costs
394,175
-
0
5,733,756
-
0
7
Directors' remuneration
2023
£
Remuneration for qualifying services
250,500
Company pension contributions to defined contribution schemes
6,063
256,563
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
7
Directors' remuneration
(Continued)
- 26 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
£
Remuneration for qualifying services
120,000
8
Interest payable and similar expenses
2023
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
249,827
9
Taxation
2023
£
Current tax
Adjustments in respect of prior periods
(54,193)
Deferred tax
Origination and reversal of timing differences
(33,311)
Total tax credit
(87,504)

The actual (credit)/charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:

2023
£
Loss before taxation
(1,644,647)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00%
(411,162)
Tax effect of expenses that are not deductible in determining taxable profit
18,477
Unutilised tax losses carried forward
64,869
Effect of change in corporation tax rate
(4,506)
Permanent capital allowances in excess of depreciation
(60)
Amortisation on assets not qualifying for tax allowances
278,193
Under/(over) provided in prior years
(5,501)
Corporation tax on preacquisition profits
(27,814)
Taxation credit
(87,504)
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 27 -
10
Intangible fixed assets
Group
Goodwill
Development costs
Total
£
£
£
Cost
At 20 December 2022
-
0
-
0
-
0
Additions
10,872,205
-
0
10,872,205
Additions - business combinations
-
0
102,665
102,665
At 30 November 2023
10,872,205
102,665
10,974,870
Amortisation and impairment
At 20 December 2022
-
0
-
0
-
0
Amortisation charged for the period
1,087,220
19,164
1,106,384
At 30 November 2023
1,087,220
19,164
1,106,384
Carrying amount
At 30 November 2023
9,784,985
83,501
9,868,486
The company had no intangible fixed assets at 30 November 2023.
11
Tangible fixed assets
Group
Leasehold improvements
Computers
Software
Total
£
£
£
£
Cost
At 20 December 2022
-
0
-
0
-
0
-
0
Additions
164
2,354
3,701
6,219
Business combinations
6,677
74,988
105,981
187,646
At 30 November 2023
6,841
77,342
109,682
193,865
Depreciation and impairment
At 20 December 2022
-
0
-
0
-
0
-
0
Depreciation charged in the period
1,173
19,233
30,909
51,315
At 30 November 2023
1,173
19,233
30,909
51,315
Carrying amount
At 30 November 2023
5,668
58,109
78,773
142,550
The company had no tangible fixed assets at 30 November 2023.
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 28 -
12
Fixed asset investments
Group
Company
2023
2023
Notes
£
£
Investments in subsidiaries
13
-
0
11,947,365
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 20 December 2022
-
Additions
11,947,365
At 30 November 2023
11,947,365
Carrying amount
At 30 November 2023
11,947,365
13
Subsidiaries

Details of the company's subsidiaries at 30 November 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Socitm Advisory Ltd
8a Bassett Court, Grange Park, Northampton, England, NN4 5EZ
Ordinary
100.00
14
Debtors
Group
Company
2023
2023
Amounts falling due within one year:
£
£
Trade debtors
1,404,356
-
0
Corporation tax recoverable
54,193
-
0
Prepayments and accrued income
856,093
-
0
2,314,642
-
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
691,349
Total debtors
2,314,642
691,349
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 29 -
15
Creditors: amounts falling due within one year
Group
Company
2023
2023
Notes
£
£
Other borrowings
17
875,000
875,000
Trade creditors
421,999
-
0
Other taxation and social security
604,503
-
Deferred income
19
26,705
-
0
Other creditors
77,239
32,534
Accruals and deferred income
461,611
9,650
2,467,057
917,184
16
Creditors: amounts falling due after more than one year
Group
Company
2023
2023
Notes
£
£
Other borrowings
17
10,470,608
10,470,608
Amounts included above which fall due after five years are as follows:
Payable by instalments
1,268,673
1,268,673
17
Loans and overdrafts
Group
Company
2023
2023
£
£
Other loans
11,345,608
11,345,608
Payable within one year
875,000
875,000
Payable after one year
10,470,608
10,470,608

£500,000 attracts interest at 5% and is repayable on 31/08/2024.

£5,074,900 attracts interest at 5%. These are redeemable in 4 equal tranches - 3 of these are due between 2-5 years and 1 is due after 5 years.

£6,906,000 is interest free and is redeemable upon an exit.

£375,000 is interest free and redeemable on 29/02/2024.

 

 

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 30 -
18
Deferred taxation

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

Liabilities
2023
Group
£
Accelerated capital allowances
35,637
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the period:
£
£
Asset at 20 December 2022
-
-
Credit to profit or loss
(33,311)
-
Other
68,948
-
Liability at 30 November 2023
35,637
-

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

19
Deferred income
Group
Company
2023
2023
£
£
Other deferred income
26,705
-
20
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
394,175

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 31 -
21
Share capital
Group and company
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
466
466
A Ordinary shares of £1 each
310
310
B Ordinary shares of £1 each
7
7
783
783

Ordinary shares

 

Each share entitles the holder to receive notice, attend, speak and to one vote at any general meetings, and shall be entitled to receive and vote on any written resolutions. (B) each share is entitled to participate in receipt of the annual dividend or any other distribution excluding the long term dividend. (C) each share is entitled to participate pari passu with the B ordinary shares in any distribution arising from a return of capital, liquidation, capital reduction or winding up of the company (after payment of any amount due in respect of the A Ordinary shares). (D) the shares do not confer any rights of redemption.

 

Ordinary A shares

 

Each share entitles the holder to receive notice, attend, speak and to one vote at any general meetings, and shall be entitled to receive and vote on any written resolutions. (B) each share is entitled to participate in receipt of the long-term dividend and any other distribution excluding the annual dividend. (C) each share is entitled to participate in receipt of its proportion of the A ordinary threshold in any distribution arising from a return of capital, liquidation, capital reduction or winding up of the company (such payments to be made in advance of any payments on the Ordinary and the B Ordinary shares. (D) the shares do not confer any rights of redemption.

 

Ordinary B shares

 

The shares do not entitle the holder to receive notice, attend, speak or vote at any general meetings, and do not entitle the holder to receive or vote on any written resolutions. (B) the shares do not entitle the holder to participate in dividend payments or any other distribution. (C) Each share is entitled to participate pari passu with the ordinary shares in any distribution arising from a return of capital, liquidation, capital reduction or winding up of the company (after payment of any amount due in respect of the A Ordinary shares). (D) the shares do not confer any rights of redemption.

During the period shares the following share allotments were made:

 

Ordinary £1 shares - 466 shares issued and fully paid at par

Ordinary A £1 shares - 310 shares issued and fully paid at par

Ordinary B £1 shares - 7 shares issued and fully paid at par

 

22
Reserves

Capital contribution reserve

The capital contribution reserve represents a capital contribution received from shareholders arising in the form of a loans received at below market rate.

 

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
22
Reserves
(Continued)
- 32 -
Profit and loss reserves

The retained earnings account represents the accumulated profits and losses, net of dividends and other adjustments.

23
Acquisition of a business

On 8 February 2023 the group acquired 100 percent of the issued capital of Soctim Advisory Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Intangible assets
102,665
-
102,665
Property, plant and equipment
187,646
-
187,646
Trade and other receivables
3,036,440
-
3,036,440
Cash and cash equivalents
107,749
-
107,749
Trade and other payables
(1,093,144)
-
(1,093,144)
Tax liabilities
(1,197,248)
-
(1,197,248)
Deferred tax
(68,948)
-
(68,948)
Total identifiable net assets
1,075,160
-
1,075,160
Goodwill
10,872,205
Total consideration
11,947,365
The consideration was satisfied by:
£
Cash
4,666,365
Issue of loan note instruments
7,281,000
11,947,365
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
8,642,418
Loss after tax
(1,289,172)

The goodwill arising on the acquisition of the business is attributable to the anticipated future profitability of the Company.

SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 33 -
24
Operating lease commitments
Lessee

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

Group
Company
2023
2023
£
£
Within one year
73,947
-
Between two and five years
42,236
-
116,183
-
25
Related party transactions

Included in short term creditors is a short term loan of £500,000 from Socitm which has a a Director in common with the Company.

Included in long term creditors are outstanding loan notes; of which some are from related parties and do not incur any interest.

At the period end loan notes of £1,506,200 were owed to Advisory Associates Limited which has a Director in common with the Company.

At the period end loan notes of £1,506,200 were owed to Acuity 2020 Limited which has a Director in common with the Company.

At the period end loan notes of £3,337,400 were owed to Socitm which has a Director in common with the Company.

At the period end loan notes of £102,833 were owed to one of the Directors.

26
Cash generated from/(absorbed by) group operations
2023
£
Loss for the period after tax
(1,557,143)
Adjustments for:
Taxation credited
(87,504)
Finance costs
249,827
Amortisation and impairment of intangible assets
1,106,384
Depreciation and impairment of tangible fixed assets
51,315
Movements in working capital:
Decrease in debtors
775,991
Increase in creditors
472,208
Increase in deferred income
26,705
Cash generated from/(absorbed by) operations
1,037,783
SOCITM ADVISORY HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023
- 34 -
27
Cash absorbed by operations - company
2023
£
Loss for the period after tax
(259,477)
Adjustments for:
Finance costs
249,827
Movements in working capital:
Increase in debtors
(691,349)
Increase in creditors
42,184
Cash absorbed by operations
(658,815)
28
Analysis of changes in net debt - group
20 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
-
601,346
601,346
Borrowings excluding overdrafts
-
(11,345,608)
(11,345,608)
-
(10,744,262)
(10,744,262)
29
Analysis of changes in net debt - company
20 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
-
466
466
Borrowings excluding overdrafts
-
(11,345,608)
(11,345,608)
-
(11,345,142)
(11,345,142)
30
Auditor's liability limitation agreement

Upon appointment of Cottons Accountants LLP as auditors, the company entered into a limitation liability agreement with the auditors and this was approved by resolution on 8 March 2024. Liability is limited to £195,000. In accordance with section 537 of CA06, the effect of the liability limitation agreement is to limit the auditor's liability to less than such amount as is fair and reasonable, as determined by that section, the agreement shall have effect as if it limited the liability to such amount as is fair and reasonable, as so determined.

 

The agreement limits the liability owed to the company by the auditors in respect of any negligence, default or breach of duty, or breach of trust, occurring in the course of the audit of the accounts for the year ending 30 November 2023.

 

The agreement does not limit liability for any instance of fraud or dishonesty on behalf of the auditor or any other liability that cannot be excluded or restricted by applicable laws or regulations.

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