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Registered number: 13758031









AAREON ACCELERATE LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2022

 
AAREON ACCELERATE LIMITED
 
 
COMPANY INFORMATION


Directors
A L Berkley (appointed 23 January 2023)
S P Cobby (appointed 27 January 2023, resigned 28 November 2023)
R K Nayyar (appointed 18 January 2022)
D R Synott (appointed 28 November 2023)
Dr I Y Abel (appointed 22 November 2021, resigned 31 January 2022)
M D Careless (appointed 18 January 2022, resigned 28 October 2022)
P M I Caulfield (appointed 18 January 2022, resigned 11 May 2023)
Dr A Rasquin (appointed 22 November 2021, resigned 18 January 2022)




Registered number
13758031



Registered office
International House,
36-38 Cornhill

London

EC3V 3NG




Independent auditors
BKL Audit LLP
Chartered Accountants & Statutory Auditor

35 Ballards Lane

London

N3 1XW





 
AAREON ACCELERATE LIMITED
 

CONTENTS



Page
Group strategic report
 
 
1 - 2
Directors' report
 
 
3 - 4
Independent auditors' report
 
 
5 - 8
Consolidated statement of comprehensive income
 
 
9
Consolidated statement of financial position
 
 
10
Company statement of financial position
 
 
11
Consolidated statement of changes in equity
 
 
12
Company statement of changes in equity
 
 
13
Consolidated statement of cash flows
 
 
14 - 15
Notes to the financial statements
 
 
16 - 35


 
AAREON ACCELERATE LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022

Executive Summary

The Executive Summary provides a concise overview of Aareon Accelerate Limited’s strategic position, key financial highlights, and primary objectives. This section aims to summarize the most critical information for stakeholders.

Introduction
 
Aareon Accelerate Limited is dedicated to providing innovative software solutions to enhance property management and optimize operations for our clients. Our mission is to lead the market with cutting-edge technology and exceptional customer service.

Business review
 
Company History:
Founded in 2021 to house Aareon AG SMB acquisitions, Aareon Accelerate Limited has consistently grown to become a leader in the property management software industry. Our evolution has been marked by innovation, and a commitment to excellence.
Products and Services:
 
Property Management Software: Comprehensive tools for property management, tenant communications,and maintenance tracking.
 
Consulting Services: Tailored solutions to maximize software utilization and efficiency.

Competitive Landscape:
Aareon Accelerate Limited operates in a competitive market with key competitors including Alto, Plentific, and Landlord Vision. Our competitive advantage lies in our innovative products, exceptional customer service, and depth of industry knowledge.
Cost Management:
Operational Efficiency: We grew costs slower than revenue as we approach cash flow positivity.
R&D Investment: Allocated 27% of revenue towards R&D to fuel innovation and future growth.
Balance Sheet Strength:
Assets: Increased total assets through investments in software and business growth.
Liabilities: Managed liabilities effectively, with no external debt, and long term parent investment via loans and direct capital increases in subsidiaries.
Key Achievements:
Product Launches: Successfully launched Contractor Marketplace, enhancing our product portfolio. Built integrations between our portfolio products increasing the opportunity for cross sell of products.
Client Acquisition: Secured over 500 new clients, expanding our market presence.

Page 1

 
AAREON ACCELERATE LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022

Principal risks and uncertainties
 
Market Risks:
 
Economic Downturns: Mitigation through diversified product offerings and markets, and the introduction of term contracts.
 
Regulatory Changes: Proactive compliance strategies and regular legal consultations ensuring our business and our products stay ahead of any changes.
 
Operational Risks:
 
Cybersecurity Threats: Enhanced security protocols and regular staff training.
 
Product Downtime: Invest in suitable infrastructure and recovery processes to minimise the risk and impact of product downtime.

Financial key performance indicators
 
Revenue Growth: Achieved a revenue increase in the subsidiary companies of 34% in the fiscal year, driven by new client acquisitions,  and product upgrades.
Profit Margins: Improved EBITDA as we concentrated on long term R&D development whilst growing sales.

Other key performance indicators
 
Our strategic objectives are centred around growth, innovation, and customer satisfaction:
Market Expansion: Increase market share in existing regions and explore new industry verticals within our established geographies markets.
Product Innovation: Continuously enhance our software capabilities to meet evolving customer needs.
Customer Engagement: Strengthen relationships with clients through superior service and support.

Directors' statement of compliance with duty to promote the success of the Group
 
Aareon Accelerate Limited has demonstrated resilience and strategic acumen in navigating a dynamic market landscape. We are committed to maintaining our leadership position through innovation, operational excellence, and unwavering customer focus.


This report was approved by the board and signed on its behalf.



A L Berkley
Director

Date: 4 September 2024

Page 2

 
AAREON ACCELERATE LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the period ended 31 December 2022.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the period, after taxation, amounted to £6,045,956.

The principal activity of the company is that of holding company.

Directors

The directors who served during the period were:

S P Cobby (appointed 27 January 2023, resigned 28 November 2023)
R K Nayyar (appointed 18 January 2022)
Dr I Y Abel (appointed 22 November 2021, resigned 31 January 2022)
M D Careless (appointed 18 January 2022, resigned 28 October 2022)
P M I Caulfield (appointed 18 January 2022, resigned 11 May 2023)
Dr A Rasquin (appointed 22 November 2021, resigned 18 January 2022)

Page 3

 
AAREON ACCELERATE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022

Future developments

Aareon Accelerate Limited is well-positioned for continued growth and success. Our focus will remain on innovation, market expansion, and enhancing customer satisfaction. Key initiatives for the coming year include:
Expanding of Marketplace to complement our core product offering.
Using new technology to allow our customers to reach all of their customers.
Introduce payments to provide best in class services to more of our customer experiences.
Strengthening partnerships with key industry players to foster collaborative growth.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

Since the year, the Group disposed of its investment in Curo Software Ltd. Additionally, following the year end, the Group's Thai subsidiary has entered into voluntary liquidation in accordance with local rules and regulations. 

Auditors

This is the first year that the company has required an audit. BKL Audit LLP were appointed to fill a casual vacancy arising during the year. Under section 487(2) of the Companies Act 2006BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





A L Berkley
Director

Date: 4 September 2024

Page 4

 
AAREON ACCELERATE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED
 

Opinion


We have audited the financial statements of Aareon Accelerate Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 December 2022, which comprise the Consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 or the 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 Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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
Page 5

 
AAREON ACCELERATE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED (CONTINUED)


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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, 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 Group's and 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
AAREON ACCELERATE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED (CONTINUED)


Auditors' 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 Auditors' 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 Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
Enquiring of management around actual and potential litigation and claims:
Reviewing minutes of meetings of those charged with governance;
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 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 bias.


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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:


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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.


Page 7

 
AAREON ACCELERATE LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED (CONTINUED)


Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statementsWe are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


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 2006Our 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 Auditors' 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.





Nick Bishop FCA (Senior statutory auditor)
  
for and on behalf of
BKL Audit LLP
 
Chartered Accountants
Statutory Auditor
  
London

5 September 2024
Page 8

 
AAREON ACCELERATE LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022

Period ended
31 December
2022
Note
£

  

Turnover
 4 
3,839,271

Cost of sales
  
(1,042,548)

Gross profit
  
2,796,723

Administrative expenses
  
(8,572,281)

Operating (loss)/profit
 5 
(5,775,558)

Interest receivable and similar income
  
1,090

Interest payable and similar expenses
 9 
(239,655)

(Loss)/profit before tax
  
(6,014,123)

Tax on (loss)/profit
 10 
(31,833)

(Loss)/profit for the financial period
  
(6,045,956)

Other comprehensive income for the period
  

Currency translation differences
  
6,932

Other comprehensive income for the period
  
6,932

Total comprehensive income for the period
  
(6,039,024)

Loss for the year attributable to:
  

Owners of the parent company
  
6,045,956

  
6,045,956

Total comprehensive income attributable to:
  

The notes on pages 16 to 35 form part of these financial statements.

Page 9

 
AAREON ACCELERATE LIMITED
REGISTERED NUMBER: 13758031

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
Note
£

Fixed assets
  

Intangible assets
 11 
55,191,512

Tangible assets
 12 
265,981

  
55,457,493

Current assets
  

Debtors: amounts falling due after more than one year
 14 
86,098

Debtors: amounts falling due within one year
 14 
1,525,764

Cash at bank and in hand
 15 
554,961

  
2,166,823

Creditors: amounts falling due within one year
 16 
(23,610,129)

Net current (liabilities)/assets
  
 
 
(21,443,306)

Total assets less current liabilities
  
34,014,187

Provisions for liabilities
  

Deferred tax
 17 
(43,211)

  
 
 
(43,211)

Net assets
  
33,970,976


Capital and reserves
  

Called up share capital 
 18 
40,010,000

Foreign exchange reserve
 19 
6,932

Profit and loss account
 19 
(6,045,956)

  
33,970,976


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




A L Berkley
Director

Date: 4 September 2024

The notes on pages 16 to 35 form part of these financial statements.

Page 10

 
AAREON ACCELERATE LIMITED
REGISTERED NUMBER: 13758031

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
Note
£

Fixed assets
  

Investments
 13 
51,321,239

  
51,321,239

Current assets
  

Debtors: amounts falling due within one year
 14 
482,016

Cash at bank and in hand
 15 
9,952

  
491,968

Creditors: amounts falling due within one year
 16 
(20,228,610)

Net current (liabilities)/assets
  
 
 
(19,736,642)

Total assets less current liabilities
  
31,584,597

  

  

Net assets
  
31,584,597


Capital and reserves
  

Called up share capital 
 18 
40,010,000

Loss/(profit) for the period
  
(8,425,403)

Profit and loss account carried forward
  
(8,425,403)

  
31,584,597


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


A L Berkley
Director

Date: 4 September 2024

The notes on pages 16 to 35 form part of these financial statements.

Page 11

 

 
AAREON ACCELERATE LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022



Called up share capital
Foreign exchange reserve
Profit and loss account
Equity attributable to owners of parent Company
Total equity


£
£
£
£
£



Comprehensive income for the period


Loss for the period

-
-
(6,045,956)
(6,045,956)
(6,045,956)


Foreign exchange movement
-
6,932
-
6,932
6,932



Other comprehensive income for the period
-
6,932
-
6,932
6,932



Total comprehensive income for the period
-
6,932
(6,045,956)
(6,039,024)
(6,039,024)



Contributions by and distributions to owners


Shares issued during the period
40,010,000
-
-
40,010,000
40,010,000



Total transactions with owners
40,010,000
-
-
40,010,000
40,010,000



At 31 December 2022
40,010,000
6,932
(6,045,956)
33,970,976
33,970,976

The notes on pages 16 to 35 form part of these financial statements.

Page 12

 
AAREON ACCELERATE LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£


Comprehensive income for the period

Loss for the period
-
(8,425,403)
(8,425,403)
Total comprehensive income for the period
-
(8,425,403)
(8,425,403)


Contributions by and distributions to owners

Shares issued during the period
40,010,000
-
40,010,000


Total transactions with owners
40,010,000
-
40,010,000


At 31 December 2022
40,010,000
(8,425,403)
31,584,597

The notes on pages 16 to 35 form part of these financial statements.

Page 13

 
AAREON ACCELERATE LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2022
£

Cash flows from operating activities

(Loss)/profit for the financial period
(6,045,956)

Adjustments for:

Amortisation of intangible assets
2,989,920

Depreciation of tangible assets
40,149

Interest paid
239,655

Interest received
(1,090)

Taxation charge
31,833

(Increase)/decrease in debtors
(979,846)

(Increase)/decrease in amounts owed by groups
(632,016)

Increase in creditors
2,453,333

Increase in amounts owed to groups
21,073,346

Corporation tax received
101,691

Goodwill impairment
2,692,233

Net cash generated from operating activities

21,963,252


Cash flows from investing activities

Purchase of intangible fixed assets
(4,906,945)

Purchase of tangible fixed assets
(306,130)

Interest received
1,090

Acquisition of subsidiaries
(55,966,720)

Net cash from investing activities

(61,178,705)
Page 14

 
AAREON ACCELERATE LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022


2022

£



Cash flows from financing activities

Issue of ordinary shares
40,010,000

Interest paid
(239,655)

Net cash used in financing activities
39,770,345

Net increase in cash and cash equivalents
554,892

Cash and cash equivalents at the end of period
554,892


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
554,961

Bank overdrafts
(69)

554,892


The notes on pages 16 to 35 form part of these financial statements.

Page 15

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

1.


General information

Aareon Accelerate Limited is a private company limited by shares incorporated in England and Wales. The address of the registered office is International House, 36-38 Cornhill, London, England, EC3V 3NG.
The principal activity of the Company is that of a holding company. The principal activity of the Group is that of support services to property management companies.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Going concern

The Group financial statements show a loss for the period before tax of £6,014,123 and net assets of £33,970,976.
The directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Page 16

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.5

Revenue

The Group derives its revenue primarily through fees from subscription agreements with customers that are mostly monthly in term, payable in advance. Subscription revenues are recognised ratably over the contract terms beginning on the commencement date of each contract. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 17

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.11

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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 and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 18

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

 The estimated useful lives range as follows:

Development expenditure
-
5
years
Goodwill
-
10
years



 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Page 19

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Over life of lease
Fixtures and fittings
-
33%
Office equipment
-
20%
Computer equipment
-
33%
Other fixed assets
-
20%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.17

Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties.
 
Page 20

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.17
Financial instruments (continued)

(i) Financial assets
Basic financial assets, including trade & other debtors, are initially recognised at transaction price, 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. 
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors, bank loans and loans from other third parties, 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 receipts discounted at a market rate of interest. 
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. Creditors 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 liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Fair value models assume that the effective rate of interest to be used for valuing fair value is that rate at which the company can obtain external finance.

Page 21

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the Group's accounting policies, the Directors are required to make judgments, estimates and assumptions. 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
1. The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below: 
2. Management make judgements and estimates regarding the development phase of research and development costs. Management also estimate a reasonable ratio for capitalised development costs.
3. Management establish a reliable estimate of the useful life of goodwill and intangible assets based on factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, and legal, regulatory or contractual provisions that can limit the useful life and assumptions that market participants would consider in respect of similar business. 


4.


Turnover

An analysis of turnover by class of business is as follows:


Period ended
31 December
2022
£

Subscription income
3,839,271


All turnover arose within the United Kingdom.

Page 22

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

Period ended
31 December
2022
£

Research & development charged as an expense
199,182

Exchange differences
2,623

Other operating lease rentals
229,936

Impairment of goodwill
2,692,233


6.


Auditors' remuneration

During the period, the Group obtained the following services from the Company's auditors:


Period ended
31 December
2022
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
21,750

Fees payable to the Company's auditors in respect of:

The auditing of accounts of subsidiaries of the Company
47,500

Taxation compliance services
5,750


7.


Employees

Staff costs, including directors' remuneration, were as follows:

Group
2022
£
Wages and salaries

1,994,066

Social security and other taxes

330,467

Pension contributions

88,759

2,413,292


The average monthly number of employees, including the directors, during the period was as follows:

Page 23

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
Group
Company
2022
2022
£
£


Employees
148
-

Directors
11
3

159
3


8.


Directors' remuneration

Period ended
31 December
2022
£

Directors' emoluments
122,156

Group contributions to defined contribution pension schemes
7,710

129,866


During the period retirement benefits were accruing to 3 directors in respect of defined contribution pension schemes.


9.


Interest payable and similar expenses

Period ended
31 December
2022
£


Loans from group undertakings
239,655

Page 24

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

10.


Taxation


Period ended
31 December
2022
£

Corporation tax


Current tax on profits for the year
18,278


Total current tax
18,278

Deferred tax


Origination and reversal of timing differences
13,555

Total deferred tax
13,555


Tax on (loss)/profit
31,833

Factors affecting tax charge for the period

The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 19%. The differences are explained below:

Period ended
31 December
2022
£


(Loss)/profit on ordinary activities before tax
(6,014,123)


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19%
(1,142,683)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
954,341

Non-taxable foreign income
12,417

Unrelieved tax losses carried forward
194,203

Other differences leading to an increase (decrease) in the tax charge
13,555

Total tax charge for the period
31,833

Page 25

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
 
10.Taxation (continued)


Factors that may affect future tax charges

The group has losses of approximately £1,975,000 to carry forward and use against future profits. No deferred tax asset has been recognised on these losses due to the uncertain nature of when the group will be profitable and begin to utilise them.


11.


Intangible assets

Group




Development expenditure
Goodwill
Total

£
£
£



Cost


Additions
-
55,966,720
55,966,720


Additions - internal
4,906,945
-
4,906,945



At 31 December 2022

4,906,945
55,966,720
60,873,665



Amortisation


Charge for the period on owned assets
487,448
2,502,472
2,989,920


Impairment charge
-
2,692,233
2,692,233



At 31 December 2022

487,448
5,194,705
5,682,153



Net book value



At 31 December 2022
4,419,497
50,772,015
55,191,512



None of the Group's intangible fixed assets are held in the Parent Company.

Page 26

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

12.


Tangible fixed assets

Group






Long-term leasehold property
Fixtures and fittings
Office equipment
Computer equipment
Other fixed assets
Total

£
£
£
£
£
£



Cost


Additions
26,201
56,494
66,793
148,448
8,194
306,130



At 31 December 2022

26,201
56,494
66,793
148,448
8,194
306,130



Depreciation


Charge for the period on owned assets
2,744
11,929
4,718
20,463
295
40,149



At 31 December 2022

2,744
11,929
4,718
20,463
295
40,149



Net book value



At 31 December 2022
23,457
44,565
62,075
127,985
7,899
265,981

Page 27

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost


Additions
59,517,984



At 31 December 2022
59,517,984



Impairment


Charge for the period
8,196,745



At 31 December 2022

8,196,745


Direct subsidiary undertakings


The following were direct subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Arthur Online Limited
International House, 36-38 Cornhill, London, England, EC3V 3NG
Ordinary
100%
Tactile Limited
International House, 36-38 Cornhill, London, England, EC3V 3NG
Ordinary
100%

Page 28

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

Indirect subsidiary undertakings


The following were indirect subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Curo Software Ltd
8 Osborne Promenade, Warrenpoint, Newry, County Down, BT34 3NQ
Ordinary
100%
Rentpro Ltd
8 Osborne Promenade, Warrenpoint, Newry, County Down, BT34 3NQ
Ordinary
100%
Arthur Southeast Asia Co. Ltd.
FMA Building, 7th Floor 8/4, Convent Road, Silom, Bang Rak, Bangkok, Thailand
Ordinary
99.99%

Page 29

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

14.


Debtors

Group
Company
2022
2022
£
£

Due after more than one year

Other debtors
86,098
-


Group
Company
2022
2022
£
£

Due within one year

Trade debtors
698,818
-

Amounts owed by group undertakings
632,016
482,016

Other debtors
22,515
-

Prepayments and accrued income
172,415
-

1,525,764
482,016



15.


Cash and cash equivalents

Group
Company
2022
2022
£
£

Cash at bank and in hand
554,961
9,952

Less: bank overdrafts
(69)
-

554,892
9,952


Page 30

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

16.


Creditors: Amounts falling due within one year

Group
Company
2022
2022
£
£

Bank overdrafts
69
-

Trade creditors
317,900
-

Amounts owed to group undertakings
21,073,346
20,228,610

Corporation tax
52,832
-

Other taxation and social security
694,231
-

Other creditors
361,098
-

Accruals and deferred income
1,110,653
-

23,610,129
20,228,610



17.


Deferred taxation


Group



2022


£






Charged to profit or loss
(43,211)



At end of year
(43,211)

Group
2022
£

Accelerated capital allowances
(43,211)


18.


Share capital

2022
£
Allotted, called up and fully paid


4,001,000 Share Capital shares of £10.00 each
40,010,000


During the period, 4,001,000 £10 ordinary shares were issued for a total consideration of £40,010,000.

Page 31

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

19.


Reserves

Foreign exchange reserve

Foreign exchange reserve includes all foreign exchange variances incurred when retranslating the Statement of Financial Position of overseas subsidiaries into the Group reporting currency at the reporting date.

Profit and loss account

Profit and loss account includes all current year retained earnings.


20.
 

Business combinations

During the period, the Group acquired 100% of the ordinary share capital of Tactile Limited and Arthur Online Limited.

Acquisition of Tactile Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value
£
£

Fixed Assets

Tangible
181,739
181,739

Intangible
1,051,105
1,051,105

1,232,844
1,232,844

Current Assets

Debtors
660,025
660,025

Cash at bank and in hand
781,934
781,934

Total Assets
2,674,803
2,674,803

Creditors

Due within one year
(1,352,990)
(1,352,990)

Deferred taxation
(29,656)
(29,656)

Total Identifiable net assets
1,292,157
1,292,157


Goodwill
34,896,348

Total purchase consideration
36,188,505

Page 32

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

20.Business combinations (continued)

Consideration

£


Cash
36,188,505

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
36,188,505

36,188,505

Less: Cash and cash equivalents acquired
(781,934)

Net cash outflow on acquisition
35,406,571

The goodwill arising on acquisition is attributable to reputation, customer lists and future return potential.

The results of Tactile Limited since acquisition are as follows:

Current period since acquisition
£

Turnover
2,451,995

Loss for the period since acquisition
143,505

Page 33

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

20.Business combinations (continued)

Acquisition of Arthur Online Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value
£
£

Fixed Assets

Tangible
66,529
66,529

Intangible
4,466,328
4,466,328

4,532,857
4,532,857

Current Assets

Debtors
240,042
240,042

Cash at bank and in hand
722,135
722,135

Total Assets
5,495,034
5,495,034

Creditors

Due within one year
(876,114)
(876,114)

Deferred taxation
80,335
80,335

Total Identifiable net assets
4,699,255
4,699,255


Goodwill
18,630,224

Total purchase consideration
23,329,479

Consideration

£


Cash
23,329,479

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
23,329,479

23,329,479

Less: Cash and cash equivalents acquired
(722,135)

Net cash outflow on acquisition
22,607,344

Page 34

 
AAREON ACCELERATE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022

20.Business combinations (continued)

The goodwill arising on acquisition is attributable to reputation and customers list and future return potential.

The results of Arthur Online Limited since acquisition are as follows:

Current period since acquisition
£

Turnover
1,977,880

Loss for the period since acquisition
912,501


21.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group  in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £88,759. Contributions totalling £79,047 were payable to the fund at the reporting date and are included in creditors.


22.


Post balance sheet events

Since the year, the Group disposed of its investment in Curo Software Ltd. Additionally, following the year end, the Group's Thai subsidiary has entered into voluntary liquidation in accordance with local rules and regulations. 


23.


Controlling party

The immediate parent undertaking is Aareon Holding GmbH, a company incorporated in Germany.
 The ultimate parent undertaking is Aareal Bank AG, a company incorporated in Germany.

 
Page 35