Company Registration Number 04396808 (England and Wales)
SOCITM
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SOCITM
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
SOCITM
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
104,902
80,740
Tangible assets
5
7,577
1,604
Investments
6
3,731,234
230,436
3,843,713
312,780
Current assets
Debtors
11
746,275
273,225
Investments
10
176,896
Cash at bank and in hand
219,214
881,132
1,142,385
1,154,357
Creditors: amounts falling due within one year
12
(757,637)
(788,650)
Net current assets
384,748
365,707
Net assets
4,228,461
678,487
Reserves
Income and expenditure account
4,228,461
678,487
Members' funds
4,228,461
678,487
The directors of the company have elected not to include a copy of the income and expenditure account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 May 2024 and are signed on its behalf by:
Mr M Lumley
Director
Company registration number 04396808 (England and Wales)
SOCITM
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Socitm is a private company limited by guarantee incorporated in England and Wales. The registered office is 8a Basset Court, Grange Park, Northampton, Northamptonshire, NN4 5EZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Income and expenditure
Income and expenses are included in the financial statements as they become receivable or due.
Expenses include VAT where applicable as the company cannot reclaim it.
1.3
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.
1.4
Intangible fixed assets - goodwill
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Goodwill arose on the acquisition of a business in 2011. At the date of transition to FRS 102 the remaining useful life of the goodwill was estimated at 5 years. The residual value is being amortised evenly over this period.
1.5
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
Over its useful life of 4 years
No amortisation is being charged on the intangible asset until it is bought into use.
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
12.5%-25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to surplus or deficit.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in surplus or deficit.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
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 surplus or deficit, 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 surplus or deficit, 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.
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.9
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.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include 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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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.
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current or deferred taxation assets and liabilities are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Foreign exchange
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.
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.
Loan notes
The Company holds loan notes that are not traded in an active market with a nominal value amounting to £3,212,400. The Company has valued these loan notes at the amortised cost using the effective interest method. In doing so, the Company has made judgements about expected future cash flows and estimated the effective interest rate at 6% per annum.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
21
16
4
Intangible fixed assets
Goodwill
Other
Total
£
£
£
Cost
At 1 January 2023
247,284
80,740
328,024
Additions
45,143
45,143
At 31 December 2023
247,284
125,883
373,167
Amortisation and impairment
At 1 January 2023
247,284
247,284
Amortisation charged for the year
20,981
20,981
At 31 December 2023
247,284
20,981
268,265
Carrying amount
At 31 December 2023
104,902
104,902
At 31 December 2022
80,740
80,740
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
5
Tangible fixed assets
Computers
£
Cost
At 1 January 2023
16,204
Additions
7,472
At 31 December 2023
23,676
Depreciation and impairment
At 1 January 2023
14,600
Depreciation charged in the year
1,499
At 31 December 2023
16,099
Carrying amount
At 31 December 2023
7,577
At 31 December 2022
1,604
6
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
350
90
Other investments other than loans
1,073,145
230,346
Loans
2,657,739
3,731,234
230,436
Movements in fixed asset investments
Shares in subsidiaries and associates
Other investments
Loans
Total
£
£
£
£
Cost or valuation
At 1 January 2023
90
230,346
-
230,436
Additions
300
800,000
2,525,492
3,325,792
Valuation changes
-
42,799
132,247
175,046
Disposals
(40)
-
-
(40)
At 31 December 2023
350
1,073,145
2,657,739
3,731,234
Carrying amount
At 31 December 2023
350
1,073,145
2,657,739
3,731,234
At 31 December 2022
90
230,346
230,436
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
7
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
SOCITM Commercial Ltd
8a Bassett Court, Grange Park, Northampton, United Kingdom, NN4 5EZ
Ordinary
100.00
8
Associates
Details of the company's associates at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Protocol Policy Systems Limited
C/O GPC Financial Management, 423 Linen Hall, 162-168 Regent Street, London, United Kingdom, W1B 5TE
Ordinary
50.00
Socitm Advisory Holdco Ltd
8a Bassett Court, Grange Park, Northampton, United Kingdom, NN4 5EZ
Ordinary
25.00
9
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through surplus or deficit
176,896
-
10
Current asset investments
2023
2022
£
£
Other investments
176,896
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
200,687
224,619
Amounts owed by group undertakings
516,609
16,809
Prepayments and accrued income
28,979
31,797
746,275
273,225
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
58,365
45,460
Taxation and social security
121,854
113,990
Other creditors
29,308
22,759
Accruals and deferred income
548,110
606,441
757,637
788,650
13
Members' liability
The company is limited by guarantee, not having a share capital and consequently the liability of members is limited, subject to an undertaking by each member to contribute to the net assets or liabilities of the company on winding up such amounts as may be required not exceeding £5.
14
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
David Ingram FCCA
Statutory Auditor:
Cottons Accountants LLP
Date of audit report:
3 July 2024
15
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
Within one year
2,499
15,912
Between two and five years
625
3,124
3,124
19,036
16
Events after the reporting date
During the year ended 31st December 2023 the Company made an application to become a registered charity. Prior to the date of approval of these financial statements the Company has received a decision from the Charity Commission - the Charity was registered on 19 February 2024.
SOCITM
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
17
Related party transactions
Socitm owns 50% of the share capital in Protocol Policy Systems Limited
At the period end Protocol Policy Systems Limited owed the company £16,809 (2022: £16,809). No interest was charged during the year.
Socitm owns 25% of Socitm Advisory Holdco Limited. During the period Holdco issued a loan note for £125,000 to Socitm . This is interest free and held at cost.
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