Registration number:
Architech Software Limited
for the Year Ended 31 December 2023
Architech Software Limited
Contents
Company Information |
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Balance Sheet |
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Notes to the Financial Statements |
Architech Software Limited
Company Information
Directors |
Mr Andrew Robin Leal Mr Ross Fretten Mr Michael John Thorpe Mr Henri Mitchell Dowling |
Registered office |
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Auditors |
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Architech Software Limited
(Registration number: 10940789)
Balance Sheet as at 31 December 2023
Note |
2023 |
2022 |
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Fixed assets |
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Tangible assets |
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Investments |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Net liabilities |
( |
( |
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Capital and reserves |
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Called up share capital |
192 |
192 |
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Other reserves |
942,631 |
1,064,637 |
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Retained earnings |
(6,362,176) |
(4,120,480) |
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Shareholders' deficit |
(5,419,353) |
(3,055,651) |
These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the Directors have not delivered to the registrar a copy of the Profit and Loss Account.
Approved and authorised by the
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Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
General information |
The Company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value. The financial statements have been prepared and presented in UK Pound Sterling (£) which is the functional currency of the Company. These financial statements have been rounded to the nearest whole £.
Group accounts not prepared
The ultimate parent company of the Company is Correlation One Investments (Europe) Limited which is a registered company in England and Wales. The ultimate parent company is the smallest and largest group for which consolidated financial statements are made available.
The Company is the immediate parent company of a small sized group.
Going concern
The Directors have reviewed the Group's ability to meet its obligations for the foreseeable future, being twelve months from the signing of this report. The Group will continue to receive financial support from its shareholders to meet its obligations and therefore the Directors consider that the going concern basis is appropriate.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Audit report
Judgements
No significant judgements have been made by management in preparing the financial statements other than those disclosed in Creditors and Borrowings notes which concern loans payable by the Company. Loans that are interest free are discounted at a market rate of interest, which in the judgement of the Directors is 8.5%. |
Revenue recognition
Turnover represents commissions received from the sale of insurance policies. Commissions are recognised at the inception of the policy, as the insurance is arranged and placed, and are adjusted for commissions refundable in the event of policy cancellation. Provisions are maintained to meet potential subsequent commission clawbacks for policies that could cancel in the future.
Finance income and costs policy
Interest income is recognised in profit or loss using the effective interest method. Interest payable is also charged to the profit or loss at a constant rate on the carrying amount. Interest costs arising on discounted loans are transferred to the profit or loss reserve from the capital contribution reserve to unwind the discount gain calculated using a market rate of interest on the inception of the loan.
Tax
The tax expense for the period comprises tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates taxable income.
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 authority.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Office equipment |
Straight line over 4 years |
Investments
Investments in subsidiaries are measured at cost less impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for licensing and services performed in the ordinary course of business.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing. Interest-free borrowings are discounted using a market rate of interest and are unwound to the profit or loss over the period of the loan. The equity element is recognised in the capital contribution reserve. The Directors have elected to make an annual transfer from the capital contribution reserve to retained earnings equal to the interest expense on the loan under the amortised cost method.
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a
past event, it is probable that the company will be required to settle that obligation and a reliable estimate can
be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the
obligation is recognised at present value. When a provision is measured at present value, the unwinding of
the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Capital contribution reserve
The capital contribution reserve represents a capital contribution arising on a loan received from the parent company at a below-market rate of interest.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the Company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Share based payments
The Company has entered into a cash-settled phantom share option scheme. Waggel Limited, a subsidiary company, recognises a share of the expense and liability of the scheme over the vesting period.
The Company measures the scheme at the reporting date. The Group's liability is measured using the fair value of the share options at the reporting date. The scheme has 358,045 phantom units in issue as at 31 December 2023 of which 60% of the units will vest on the 'cliff date' being the 3rd anniversary of each employee's joining date to the scheme. A further 20% of phantom units will vest on the 4th anniversary and the remaining 20% will vest at the end of the 5-year vesting period.
The liability is presented in liabilities, split for current and non-current amounts. Movements in the scheme liability is recognised in the profit or loss.
Management has made judgements to whether non-market based vesting are met, these are reviewed at each reporting date. Vesting conditions are met if employees remain in employment within the Group. If an employee leaves the Group before the cliff date, that employee will lose their rights to any phantom units held. Furthermore, if an employee remains employed at each vesting date, those shares due to vest at the given date will vest immediately.
Should management determine that non-market based vesting conditions will not be met, the liability will be reversed in full.
There are no market based vesting conditions.
The scheme is held by the Company and an element of the scheme liability and expense are recharged to the subsidiary company at each reporting date. The recharge is based on the Group's full-time equivalents and their apportionment of time and services provided to each member company of the Group.
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.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Financial instruments
Classification
Recognition and measurement
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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Basic financial liabilities including creditors and loans from fellow group companies 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.
Capital contribution reserves recognised on the equity element of interest free loans that are discounted at a market rate of interest is recognised in the reserve and reduced by any impairment recognised to the parent company's corresponding investment in order to mitigate the risk of an accounting mismatch. The Directors have elected to make an annual transfer to retained earnings from the capital contribution reserve equal to the interest cost recognised on the financial liability held at amortised cost.
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.
Current versus non-current classification
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Staff numbers |
The average number of persons employed by the Company (including Directors) during the year, was
Auditors' remuneration |
2023 |
2022 |
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Audit of the financial statements |
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Tangible assets |
Furniture, fittings and equipment |
Total |
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Cost or valuation |
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At 1 January 2023 |
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Additions |
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At 31 December 2023 |
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Depreciation |
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At 1 January 2023 |
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Charge for the year |
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At 31 December 2023 |
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Carrying amount |
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At 31 December 2023 |
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At 31 December 2022 |
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Investments |
2023 |
2022 |
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Investments in subsidiaries |
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Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Subsidiaries |
£ |
Cost or valuation |
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At 1 January 2023 and at 31 December 2022 |
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Provision |
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At 1 January 2023 and at 31 December 2022 |
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Carrying amount |
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At 31 December 2023 |
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At 31 December 2022 |
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Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Debtors |
Note |
2023 |
2022 |
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Amounts owed by related parties |
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Other debtors |
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Prepayments |
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Loans due from related parties
The Company has a loan due from its subsidiary company Waggel Limited, the loan is due for repayment when the Company gives no less than 1 year's notice.
Creditors |
Creditors: amounts falling due within one year
Note |
2023 |
2022 |
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Due within one year |
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Loans and borrowings |
- |
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Trade creditors |
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Social security and other taxes |
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Other payables |
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Accruals |
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Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Creditors: amounts falling due after more than one year
Note |
2023 |
2022 |
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Due after one year |
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Loans and borrowings |
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Other payables |
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- |
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2023 |
2022 |
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Due after more than five years |
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After more than five years not by instalments |
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- |
- |
The loan is denominated in sterling with a nominal interest rate of 0%. The final instalment is due on 22 October 2029.
The loan is secured by way of a fixed charge over the following assets:
(a) all present and future estates or interest in, or over, any freehold, leasehold or commonhold property;
(b) the benefit of all other contract, guarantees, appointments and warranties relating to each charged property and other documents which have the benefit relating to any letting, development, sale , purchase , use or operation of any charged property or otherwise relating to any charged property;
(c) all licences, consents, and authorisations (statutory or otherwise) held or required in connection with its business or the use of any secured asset, and all rights in connection with them;
(d) all its present and future goodwill;
(e) all its unpaid capital;
(f) all the Intellectual Property;
(g) all the Book Debts;
(h) all the Investments; and
(i) all its rights of each Insurance Policy, including all claims, the proceeds of all claims and all returns of premiums in connection with each Insurance Policy.
In addition, there is a floating charge over all assets not included in the fixed charge above, and identical fixed and floating charges over the assets of the Company's two subsidiaries.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Loans and borrowings |
Current loans and borrowings
2023 |
2022 |
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Other borrowings |
- |
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Non-current loans and borrowings
2023 |
2022 |
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Other borrowings |
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Other borrowings
The carrying amount of Other borrowings at year end is £12,450,488 (2022 - £7,801,747). The Company has six loans with its now majority shareholder, Correlation One Investments (Europe) Limited (Correlation). The first loan from the shareholder is an interest free loan and therefore discounted at market rate of interest judged by the Directors to be 8.5%. The carrying value of this loan is £1,557,368 (2022 - £1,435,363) and will be repaid in full on the date of maturity, 22 October 2029. The loan has been split in accordance with FRS 102 Section 11, into a liability component and an equity component. The equity component is recognised as a capital contribution from the shareholder on the inception of loan being the difference between the cash advanced and the present value of the loan.
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Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
The fourth loan advanced from Correlation, was a short-term bridging loan that was due for repayment one year after its issue. The repayment date was 22 October 2023. The full loan facility of £1,000,000 was advanced on 22 October 2022 and interest was charged at the Bank of England base rate % + 8%. As at the balance sheet date, £Nil (2022 - £1,021,798) was due for repayment.
The fifth loan advanced from Correlation is a convertible loan with a loan facility of £4,500,000. Interest is compounded and repaid along with the loan capital on the date of maturity, 31 December 2028. Interest is charged at 8% plus the Bank of England base rate. The carrying value of the loan is £4,370,115 (2022 - £Nil) and is repayable in 2-5 years.
The sixth loan advanced from Correlation is a convertible loan with a loan facility of £5,000,000. Interest is compounded and repaid along with the loan capital on the date of maturity, 31 December 2028. Interest is charged at 8% plus the Bank of England base rate. The carrying value of the loan is £507,079 (2022 - £Nil) and is repayable in 2-5 years.
Details of the security of the loans from Correlation can be found in note 9.
Loans due to Directors and other related parties are also included in other borrowings which have a carrying value of £450,725 (2022 - £427,047) and are repayable on 29 October 2029 which is the date of maturity. The total carrying value of these loans is repayable in more than 5 years. Loans from the Director, Andrew Leal, who is also a shareholder, are carried at historic cost in accordance with FRS 102, paragraph 11.13A as Andrew Leal is a director of a qualifying small company. Loans from other related parties are from the Director's father and brother and therefore do not meet the requirements of close members of the family of the Director, and are discounted at a market rate of interest of 8.5%.
Share based payments |
Other non-current liabilities of £13,108 (2022 - £Nil) relate to the Company's share of the cash-settled share based payment scheme. During the year, an expense of £13,108 (2022 - £Nil) was recognised in relation to the scheme.
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
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No. |
£ |
No. |
£ |
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191.99 |
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191.99 |
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Capital contribution reserve |
The capital contribution reserve represents a capital contribution arising on a loan received from the parent company at a below-market rate of interest.
|
2023 |
2022 |
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At 1 January |
1,064,637 |
1,194,295 |
Transfer into profit or loss |
(122,006) |
(129,658) |
At 31 December |
942,631 |
1,064,637 |
Financial commitments, guarantees and contingencies |
At the balance sheet date, the Company has a non-cancellable operating lease expiring on 5 April 2024 for the rental of office premises. The monthly charge of the lease is £5,184 with total future cash flow commitments contracted to the Company of £21,600.
Related party transactions |
Directors' remuneration
The Directors' remuneration for the year was as follows:
2023 |
2022 |
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Remuneration |
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Contributions paid to money purchase schemes |
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392,642 |
452,642 |
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Loans to related parties
2023 |
Subsidiary |
Total |
At start of period |
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Advanced |
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Repaid |
( |
( |
At end of period |
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2022 |
Subsidiary |
Total |
At start of period |
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Advanced |
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Repaid |
( |
( |
At end of period |
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Terms of loans to related parties
Loans from related parties
Loans payable to the Company's majority shareholder, Correlation, are disclosed in notes 9 and 10.
As at the balance sheet date, the Company owed the Director, Andrew Leal £148,468 (2022 - £148,468) and £302,257 (2022 - £278,579) was due to other related parties connected to the Director.
Relationship between entity and parents |
The ultimate parent company is Correlation One Investments (Europe) Limited, a company incorporated in England and Wales. The ultimate parent company is the smallest and largest group for which consolidated financial statements are made available.
The Directors do not consider there to be a single controlling party.