The directors present the strategic report for the year ended 31 December 2023.
The Group continue to make good progress developing the business during the financial year. The growth of subsidiaries has progressed further in line with expectations. During the period the business has focused on its people, products and service to ensure Ikonic Technology Limited continue to lead the industry when supplying IT Hardware and peripheral IT products.
The sourcing of a wide range of quality IT products from different brands at the best price continues to be a focus while managing currency risk is important. The developing internal infrastructure is benefiting the business and delivering efficiencies and continued profitability in what is a competitive service led market.
The accounts have been prepared for the year ended 31 December 2023. The Group's total turnover for the year ended 31 December 2023 was £132,052,522 (2022: £103,532,265), reflecting the continued growth of the Group's existing business. The group looks to build its competitive position through innovation and its service offering.
EBITDA (earnings before interest, tax, depreciation and amortisation) was £2,528,326 (2022: £5,767,215) at the year end date. Whilst the Group maintained control over administrative expenses, and recent investment in infrastructure has supported the turnover growth experienced across the Group. Profit before taxation of £2,289,986 (2022: £5,597,005) reflects the Group development delivered in year. The Group's net asset position at year end is £9,759,795 (2022: £11,372,224). Operating cash inflow was £4,937,784 (2022: outflow of £1,035,796).
During the year Ikonic Technology Ltd became employee owned. Ikonic Technology Employee Ownership Trust Limited became a majority shareholder following a share for share exchange between Ikonic Technology Holdings Limited and Ikonic Technology Limited. The reorganisation reinforces the continued focus on long term growth for the benefit for the business and its employees.
Continuing the business commitment to being more sustainable Ikonic Technology Limited has been independently certified as carbon neutral for the last three years including the reported financial year 2023. The directors recognise the importance of the business to be more sustainable and has actioned a long term plan to continue to reduce its carbon footprint.
The trading outlook remains positive given the Group's entities are well positioned in their respective markets and the trend that technology is continuing to be at the centre of business and end users environments is expected to continue. European based entities created in previous years have continued to facilitate better growth opportunities especially for Europe based customers. This includes diversification of the sales mix during the year with growth opportunities identified across various market areas. Growth in gross profit is expected going forward while margin percentage is expected to reduce in future years. The investment in people and systems has continued to help the business adapt to meet customer requirements and enhance service capabilities.
The directors consider the key performance indications of the Group to be turnover, EBITDA, operating cash flows and shreholders' funds, which are documented below. The KPI targets which were based on revenue, EBITDA and Operating cash flows. These were acceptable given the market conditions and wider group activities.
2023 2022
£ £
Turnover 132,052,522 103,532,265
EBITDA 2,528,326 5,770,215
Operating cash flows 4,937,784 (1,035,796)
Shareholders' funds 9,759,795 11,372,224
Section 172 Statement
Promoting long term success
The Ikonic Group’s strategy for improved long-term success is based on continuing to be a value-adding Group. This will be achieved by focusing on areas where Ikonic’s products and services have a strategic advantage and then establishing growth opportunities in high-growth and developing markets and geographies. Descriptions of the Group’s approach apply equally to all subsidiary companies.
The directors of the company are always mindful of the Ikonic Group’s strategic priorities and values when setting the strategic direction of the company, as well as when undertaking the day to day management activities. The Group also has a series of detailed policies and procedures that are applied.
Regular self-assessment is undertaken to ensure that the activities of the company comply with the Group’s policies and also ensure compliance with the Group’s detailed risk and control framework. The directors meet regularly to discuss latest trading performance and to approve significant transactions such as capital expenditure proposals. Ad-hoc meetings are also held as required for specific purposes, such as the approval of annual accounts, or the approval of a dividend payment.
The Ikonic Group’s directors ensure that the directors appropriately discharge their statutory responsibilities, and that all material decision s are accurately reflected in minutes.
The directors aim to promote the long-term success of the company, and consider certain stakeholder Groups as noted below, as being fundamental to this objective.
Employees
In line with the wider Ikonic Group, the company believes that people are its most important asset and, as part of the Group’s ongoing development as a value-added company, is committed to investment and development of talent. The company acknowledges inclusion and diversity as one of its priorities. Having an inclusive culture provides an equal opportunity for everyone to contribute to their full potential, while having a diverse workforce brings a valued range of perspectives. The directors encourange the company’s employees to share best practices around the group.
Customers
The company liaises with customers to ensure that all products meet both their specifications and needs. The Ikonic Group’s value-added strategy is focused on identifying products that drive profitability and growth, whilst working with customers to help promote and improve such products for mutual benefit. Development of products and services within the Group is aimed to be optimised with a customer viewpoint, considering customer’s future directions as well as likely wider market growth trends.
Suppliers
The company aims to build strong relationships with its suppliers and to mitigate supply risk. The Ikonic Group’s supplier assessment program is designed to ensure that suppliers meet the Group’s expectations in terms of behaviours, processes and procedures, as well as meeting legal requirements.
Environment
The Ikonic Group’s value-added strategy underlines the contribution that the Group’s products and services make to society and the environment. IT products and services that enhance lives while limiting their impact on the wider environment is essential. The products of the company and its subsidiaries play a key role in its overall environmental strategy. Reducing both the Groups direct and indirect carbon footprint is a core aspiration of the coming years. A focus on the life cycle of IT products is a highlighted area where the Group can enhance its positive impact on the wider environment.
Good progress to being more sustainable has been achieved. Ikonic Technology Limited has been independently certified as carbon neutral for the last three years including the reported financial year 2023
Community
Being involved and supporting the local community continues to be part of the Ikonic Group’s culture. Giving time, IT products and financial support to local and national charities has contributed to benefiting numerous people and communities from a diverse range of backgrounds.
Principal risks and uncertainties
Currency risk
A significant proportion of the Group’s cost of sales is denominated in Sterling and Euro currencies however the Group’s revenues are also denominated predominantly in the same currencies. The directors seek to mitigate this inherent currency risk by matching both cost and revenue steams with the objective to limit current exposure. Hedging certain currency flows has been developed to support the mitigation of currency fluctional risk.
Interest rate risk
A significant proportion of the Group’s debt instruments involve invoice discounting and overdraft facilities based on variable interest rates. The Group reviews these facilities regularly to ensure they are being managed and used effectively to limit debt and interest rate exposure.
Cash flow risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange and interest rates. The directors seek to mitigate the risk of adverse cash flows during day to day trading by cultivating a strong and open relationship with the Group’s banking partner to ensure that significant credit lines are available.
Cost base risk
The Group’s operating cost base continues to increase but the board are mindful that costs reflect the expected benefit and considered infrastructure and daily operating costs continue to be challenged.
Reputation risk
The directors seek to mitigate the risk to the reputation of the Group’s brands and by continuing to invest in quality control, supply chain management and the development of new products within strict brand criteria.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £3,225,390. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The Companies (Directors Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 implemented the government's policy on Streamline Energy and Carbon Reporting (SECR). The Regulations came into effect on 1 April 2019 and the group is required to report the emissions and energy consumption for this year to 31 December 2023 to coincide with the financial reporting period.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m turnover, the recommended ratio for the sector.
We continue to work with our customers and suppliers to reduce the group's carbon footprint.
The prior year comparative figures have been restated to allow for year-on-year comparability as a carbon emissions consultant has since been engaged in order to meet the group's objective to be a net cabon neutral business.
We have audited the financial statements of Ikonic Technology Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise 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 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).
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period; and
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
The notes on pages 16 to 31 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,316,800 (2022 - £600,455 profit).
Ikonic Technology Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Block P16, Heywood Distribuion Park, Pilsworth Road, Heywood, Lancashire, OL10 2TT.
The group consists of Ikonic Technology Holdings Limited and all of its subsidiaries.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Ikonic Technology Holdings 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 31 December 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.
The Group applied the principles of merger accounting in consolidating the results control of Ikonic Technology Limited and its subsidiaries. It was acquired by Ikonic Technology Holdings Limited via a share-for-share exchange on 31 May 2023. Merger accounting requires that the results of the Group are presented as if the Group has always been in its present form, and does not require a re-evaluation of fair values as at the point of acquisition. Accordingly, as a result of this merger accounting a merger reserve is recognised within equity
Merger reserve reflects the difference between the value of investments in Ikonic Technology Limited prior to
merger and the nominal value of its share capital. The group is eligible to adopt merger accounting rules on
the basis that ultimate shareholders remained unchanged after the share reorganisation. This was done by
issuing shares in Ikonic Technology Holdings to mirror the share capital within Ikonic Technology Limited.
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.
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.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
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.
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.
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, 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, 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.
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.
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.
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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
Merger reserve reflects the difference between the value of investments in Ikonic Technology Limited prior to merger and the nominal value of its share capital. The group is eligible to adopt merger accounting rules on the basis that ultimate shareholders remained unchanged after the share reorganisation. This was done by issuing shares in Ikonic Technology Holdings to mirror the share capital within Ikonic Technology Limited.
The tax expense represents the sum of the tax currently payable and deferred 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.
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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Judgement is required on the adequacy of stock valuation and provisioning. The assessment of estimated selling price can fluctuate as a result of market factors. Furthermore, estimation uncertainty exists from provision requirements for slow moving stock.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
On 31 May 2023, the entire share capital of Ikonic Technology Limited was acquired by Ikonic Technology Holdings Limited by way of a share-for-share exchange. The transaction qualifies for use of merger accounting when preparing the group consolidated financial statements, as permitted by FRS102 when the transfer of equity holdings in one or more subsidiaries of a group to a new entity that is not a group entity but whose equity holders are the same as those of the group’s parent, immediately after the transaction.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Cenoka Globla Trading FZCO was incorporated on the 1 January 2024, thus not a subsidiary at the year end.
Included within other debtors is £378,371 owed by the Directors (2022: £491,415). For further information, see note 22.
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.
During the year, a share subdivision was executed; Ordinary shares redesignated as 'A Ordinary'; and further alphabet shares were issued on 31 May 2023 as illustrated above. This was done as a part of the share-for-share exchange that occurred during the year.
All classes of share rank pari passu in all respects.
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:
As at 31 December 2023, an entity with common control owed the group £15,360 (2022: £397,300). A provision for doubtful debt of £Nil (2022: £397,300) is recognised against this balance. Sales of £49,239 (2022: £28,177) were made to this entity during the year.