Company Registration No. 02251162 (England and Wales)
EUROBASE SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
EUROBASE SYSTEMS LIMITED
COMPANY INFORMATION
Directors
J Wilson
JG Moon
JP Locke
M Wilson
Secretary
JG Moon
Company number
02251162
Registered office
Essex House
2 County Place
Chelmsford
Essex
CM2 0RE
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
EUROBASE SYSTEMS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
EUROBASE SYSTEMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present their strategic report for the year ended 31 March 2024.
Review of the business
Review of the business of the company’s principal activities during the year continued to be the provision of software solutions including development and consultancy services, to Insurance companies, Banks and other Financial Institutions, and staff recruitment services mainly in the IT sector.
The key financial and other performance indicators during the year were as follows for the group:
| | Y/E March 2023 (as restated) |
| | |
| | |
Profit / (Loss) after tax | | |
| | |
Our continued investment into our insurance software is starting to pay back with another 3 new clients selecting Synergy2 during the year, one of which being a global captive manager who have selected Synergy2 as their global platform. Along with our investment in Synergy2 we continue to develop and invest in Siena, our banking solution, and existing insurance and banking customers had either commenced or committed to upgrades during the year. Our recruitment division had a strong second half of the year during which we placed numerous candidates in the UK, Germany, Switzerland and Nordics.
We have continued to maintain a strong cash position and still have no debt on our balance sheet.
Eurobase has continued to recognise the impact to the environment and is developing working practices to support our evolving ESG policy. Eurobase continues to be a carbon neutral company and with us committing to Science Based Initiatives (SBI) we will continue to focus on the impact we have and how we can improve.
Outlook
With the new client wins, prospective opportunities and existing customer projects commenced during 2024 the insurance business is looking very positive. Across both our banking and insurance businesses we have continued our roadmap investment, including Cloud Hosting, which should place us in a strong position going forward. Our recruitment business continues to build on their success in the second half of 2023/24 and are continuing to work towards winning further long-term innovative recruitment partnerships within the existing client base and new customers too.
Investment will continue to be made in staffing to enable the continued growth and development of the company.
Our lease on our London office expires in 2024 and we have taken the opportunity to evaluate our working requirements going forward and we have agreed terms on a brand new office facility in London which will enhance our working environment.
We have a strong healthy balance sheet and with a good cash balance, therefore the directors are confident that we have the resources and means to grow in 2024 and beyond.
*Turnover consists of a number of revenue streams across the group: - Banking and Insurance includes recurring revenues for annual support and licences fees, one-off revenue for development, implementation and consultancy. Recruitment revenue includes one off placement fees and monthly revenue for placing contractors on short to medium term contracts.
EUROBASE SYSTEMS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Principal risks and uncertainties
The principal risks to the group are as follows:
Liquidity risk
The group operates a treasury function within its finance department which is responsible for managing the liquidity, available funds and all other financial risks associated with its activities. The group has sufficient cash resources to meet its needs and is not dependent on external borrowing. It does not use derivative financial instruments and does not engage in forward speculation for either overseas transactions or investing those cash resources not required for immediate day to day trading. Such resources are invested through one United Kingdom high street bank
Foreign exchange transactional currency exposure
The group is limited to currency exchange rate risk as most of its receivables are in Sterling with only a few contracts in Euro or US$. Any foreign currency held is regularly converted into Sterling. As a result, no active management of this risk is undertaken.
Customer credit exposure
All clients of the group are initially subjected to credit verification procedures and credit control procedures are in place to monitor trade debts to ensure timely action is taken as necessary to safeguard the group’s position.
I would like to thank our customers, suppliers, business partners and staff for combining to produce the success story that Eurobase continues to be, especially in these difficult times.
J Wilson
Group Chairman and CEO
27 August 2024
EUROBASE SYSTEMS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of software development and consultancy services.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £12,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J Wilson
JG Moon
JP Locke
M Wilson
Research and development
The company undertakes significant research and development each year which is capitalised as intangible fixed assets. Costs associated with the maintenance of systems and research expenditure is charged to the profit and loss account as these costs are incurred. This is required due to the nature of the business and the development of bespoke systems created for clients. Such expenditure is considered likely to continue for the foreseeable future.
Auditor
In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
EUROBASE SYSTEMS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
By order of the board
JG Moon
Secretary
27 August 2024
EUROBASE SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EUROBASE SYSTEMS LIMITED
- 5 -
Opinion
We have audited the financial statements of Eurobase Systems Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year 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.
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 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 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.
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.
EUROBASE SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EUROBASE SYSTEMS LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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 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 company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
Capability of the audit in detecting irregularity, including fraud
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.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
EUROBASE SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EUROBASE SYSTEMS LIMITED (CONTINUED)
- 7 -
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; data protection legislation; anti-bribery and anti-corruption legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations to the procedures, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance which laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates in particular: depreciation and amortisation rates and property valuation;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting cash or any revenue account and large and unusual entries;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis;
Discussions with management; and
Reviewing board minutes where available
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
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.
EUROBASE SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EUROBASE SYSTEMS LIMITED (CONTINUED)
- 8 -
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.
Paul Forster
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
30 August 2024
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
EUROBASE SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
as restated
Notes
£
£
Turnover
3
13,188,178
12,686,280
Cost of sales
(9,400,936)
(9,685,424)
Gross profit
3,787,242
3,000,856
Administrative expenses
(4,324,218)
(4,561,967)
Other operating income
14,300
12,000
Operating loss
4
(522,676)
(1,549,111)
Interest receivable and similar income
9
401,919
156,213
Loss before taxation
(120,757)
(1,392,898)
Tax on loss
10
14,000
398,952
Loss for the financial year
(106,757)
(993,946)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EUROBASE SYSTEMS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
12
4,958,531
4,989,007
Tangible assets
13
1,952,268
2,012,614
Investment property
14
299,472
299,472
7,210,271
7,301,093
Current assets
Debtors
15
3,040,746
3,432,678
Cash at bank and in hand
8,878,449
8,059,737
11,919,195
11,492,415
Creditors: amounts falling due within one year
16
(10,905,624)
(10,436,909)
Net current assets
1,013,571
1,055,506
Total assets less current liabilities
8,223,842
8,356,599
Provisions for liabilities
Deferred tax liability
17
448,000
462,000
(448,000)
(462,000)
Net assets
7,775,842
7,894,599
Capital and reserves
Called up share capital
18
50,000
50,000
Revaluation reserve
133,019
133,019
Profit and loss reserves
19
7,592,823
7,711,580
Total equity
7,775,842
7,894,599
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 27 August 2024 and are signed on its behalf by:
J Wilson
Director
Company registration number 02251162 (England and Wales)
EUROBASE SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 March 2023:
Balance at 1 April 2022
50,000
133,019
9,546,186
9,729,205
Effect of change in accounting policy
-
(840,660)
(840,660)
As restated
50,000
133,019
8,705,526
8,888,545
Year ended 31 March 2023:
Loss and total comprehensive income
-
-
(993,946)
(993,946)
Balance at 31 March 2023
50,000
133,019
7,711,580
7,894,599
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
(106,757)
(106,757)
Dividends
11
-
-
(12,000)
(12,000)
Balance at 31 March 2024
50,000
133,019
7,592,823
7,775,842
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
1
Accounting policies
Company information
Eurobase Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is Essex House, 2 County Place, Chelmsford, Essex, CM2 0RE.
1.1
Accounting convention
These financial statements have been prepared in accordance with the applicable United Kingdom accounting standards, including Financial Reporting standard FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention except for certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Eurobase International Limited. These consolidated financial statements are available from its registered office, Essex House, 2 County Place, Chelmsford, Essex, CM2 0RE.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover consists of invoiced value (excluding VAT) for goods and services supplied to third parties. On long-term contracts, revenue is recognised in accordance with FRS102 and the percentage completion method. Licence and support revenues are normally recognised over the period to which they relate. Any costs directly incurred on long term contracts in the period between initial delivery and client acceptance which are not otherwise recoverable from the client are matched against the related licence fee in the year the cost is incurred.
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets other than goodwill
Costs associated with maintaining our software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of unique software controlled by the company are recognised as intangible assets.
Directly attributable costs that are capitalised as part of the software include the software development employee costs. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Development costs are only capitalised if there is an ability to use or sell the software and that it can be demonstrated how the software will generate probably future economic benefits.
Development costs that are recognised as intangible assets are amortised over the useful life, once the development has been completed. The useful life has been adjudged to be 5 years and are amortised on a straight line basis.
1.5
Tangible fixed assets
Tangible fixed assets are capitalised at their purchase cost plus the associated costs of purchase and/or delivery.
Depreciation is provided on all tangible fixed assets at rates calculated to write down the cost of assets, less the amount attributable to land, to their estimated residual values at the end of their anticipated useful lives using the straight line method. The rates applicable are:
Freehold property
60 years straight line
Office equipment
3 years straight line
Computer equipment
3 years straight line
Motor vehicles
5 years straight line
Bloodstock
3-4 years straight line
1.6
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.7
Impairment of fixed assets
At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of the affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carry amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.8
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 trade and other 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the company's accounts. Deferred tax is provided in full on timing differences which result in a material obligation to pay more (or less) tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws.
1.10
Employee benefits
Short-term employee benefits and contributions to defined contribution plans are recognised as an expense in the period in which they are incurred.
1.11
Pension costs
The company operates a grouped personal pension scheme for all employees. This is a defined contribution scheme. Contributions in respect of this scheme are charged to the profit and loss account in the year in which they fall due.
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.12
Leased assets
Assets held under finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their expected useful lives as at 1.5 above. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the profit and loss account over the period of the lease.
All other leases are regarded as operating leases and the total payments made under them are charged to the profit and loss account on a straight line basis over the lease term.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
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.
Key sources of estimation uncertainty
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.
Property valuation
The fair value of the freehold property was professionally valued in 2022. The directors review the valuation on a yearly basis and refer to a professional valuation when required.
Amortisation of intangible assets
Amortisation is provided for on intangible fixed assets. Amortisation rates used are the management's best estimates of the useful economic life of these assets.
3
Turnover
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Rendering of services
13,188,178
12,686,280
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Turnover
(Continued)
- 16 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
6,139,131
6,169,220
Rest of the World
7,049,047
6,517,060
13,188,178
12,686,280
4
Operating loss
2024
2023
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
24,038
(2,648)
Depreciation of owned tangible fixed assets
104,174
173,006
Amortisation of intangible assets
1,405,705
1,324,312
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Sales and Marketing
9
8
Administration
7
8
Production
79
83
Total
95
99
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
5,316,344
5,545,077
Social security costs
832,696
870,420
Pension costs
780,523
405,945
6,929,563
6,821,442
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
522,566
629,705
Company pension contributions to defined contribution schemes
64,114
60,423
586,680
690,128
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
195,204
195,454
7
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
780,523
405,945
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
8
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
24,125
25,850
9
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
401,919
156,213
10
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
24,048
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
10
Taxation
2024
2023
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
(14,000)
(423,000)
Total tax credit
(14,000)
(398,952)
On the 1st of April 2023 the rate of corporation tax in the UK increased to 25% (2022: 19%).
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(120,757)
(1,392,898)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(30,189)
(264,651)
Tax effect of expenses that are not deductible in determining taxable profit
1,615
12,434
Change in unrecognised deferred tax assets
179
(175,970)
Adjustments in respect of prior years
14,464
24,048
Permanent capital allowances in excess of depreciation
(4,798)
Depreciation on assets not qualifying for tax allowances
(69)
9,985
Taxation credit for the year
(14,000)
(398,952)
11
Dividends
2024
2023
£
£
Final paid
12,000
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
12
Intangible fixed assets
Development costs
£
Cost
At 1 April 2023
9,677,662
Additions - internally developed
1,375,229
At 31 March 2024
11,052,891
Amortisation and impairment
At 1 April 2023
4,688,655
Amortisation charged for the year
1,405,705
At 31 March 2024
6,094,360
Carrying amount
At 31 March 2024
4,958,531
At 31 March 2023
4,989,007
13
Tangible fixed assets
Freehold property
Office equipment
Computer equipment
Motor vehicles
Bloodstock
Total
£
£
£
£
£
£
Cost or valuation
At 1 April 2023
1,850,000
317,741
566,674
303,126
41,094
3,078,635
Additions
358
43,470
43,828
Disposals
(108,228)
(361,322)
(469,550)
At 31 March 2024
1,850,000
209,871
248,822
303,126
41,094
2,652,913
Depreciation and impairment
At 1 April 2023
44,241
225,395
518,623
236,669
41,093
1,066,021
Depreciation charged in the year
(1,741)
46,488
33,315
26,111
1
104,174
Eliminated in respect of disposals
(108,228)
(361,322)
(469,550)
At 31 March 2024
42,500
163,655
190,616
262,780
41,094
700,645
Carrying amount
At 31 March 2024
1,807,500
46,216
58,206
40,346
1,952,268
At 31 March 2023
1,805,759
92,346
48,051
66,457
1
2,012,614
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Tangible fixed assets
(Continued)
- 20 -
The freehold property is Essex House, the company's headquarters office in Chelmsford.
Land and buildings were revalued at 29 March 2022 by Kemsley LLP, independent valuers not connected with the company, on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately:
2024
2023
£
£
Cost
1,350,688
1,350,688
Accumulated depreciation
(134,435)
(742,878)
Carrying value
1,216,253
607,810
During the year the useful economic life of the freehold property and its residual value were reviewed and changed to 60 years and £1m respectively.
14
Investment property
2024
£
Fair value
At 1 April 2023 and 31 March 2024
299,472
Investment property comprises of a flat in London held for capital appreciation. The fair value of the investment property has been arrived at on the basis of a valuation carried out by the directors who have deemed that the fair value of the property has not moved since it's acquisition in 2020. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,112,231
2,284,068
Corporation tax recoverable
321,014
Other debtors
33,250
29,533
Prepayments and accrued income
895,265
798,063
3,040,746
3,432,678
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Trade creditors
81,624
205,374
Amounts owed to group undertakings
4,322,333
4,322,333
Taxation and social security
427,023
495,467
Deferred income
5,656,372
4,933,885
Other creditors
276,260
345,629
Accruals
142,012
134,221
10,905,624
10,436,909
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
1,144,558
1,245,360
Tax losses
(686,547)
(775,052)
Retirement benefit obligations
(10,011)
(8,308)
448,000
462,000
2024
Movements in the year:
£
Liability at 1 April 2023
462,000
Credit to profit or loss
(14,000)
Liability at 31 March 2024
448,000
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
ordinary shares of £1 each
50,000
50,000
50,000
50,000
19
Reserves
Reserves comprise of the revaluation reserve of £133,019 (2023 : £133,019) which is a non-distributable reserve and the profit and loss reserve of £7,592,823 (2023 : £7,711,580), of which £2,634,292 (2023 : £2,722,573) is distributable.
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
20
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
117,600
201,600
Between two and five years
117,600
117,600
319,200
21
Events after the reporting date
Shortly after the reporting date the company agreed to a new two year lease on a London office. The lease will cost £434,200 over the two years.
22
Related party transactions
Included within creditors is an amount of £5,933 due to J Wilson (2023: £22,873). With regard to transactions with other group members, all of whom are also wholly owned by Eurobase International Limited, advantage has been taken of the exemption in FRS 102 not to disclose such transactions as being between related parties.
23
Ultimate controlling party
The Company is a wholly owned subsidiary of Eurobase International Limited. The Directors consider Eurobase International Limited a company registered in England to be this Company's ultimate holding company.
Group accounts can be obtained at the following address:
Eurobase Group
Essex House
2 County Place
Chelmsford
Essex
CM2 0RE
For both the current and prior year, the company was controlled by J Wilson by virtue of him owning the majority of the issued share capital of Eurobase International Limited
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
24
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Mar 2023
£
£
£
Fixed assets
Tangible assets
2,312,086
(299,472)
2,012,614
Investment properties
-
299,472
299,472
Provisions for liabilities
Deferred tax
(44,340)
(417,660)
(462,000)
Net assets
8,312,259
(417,660)
7,894,599
Capital and reserves
Profit and loss reserves
8,129,240
(417,660)
7,711,580
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 March 2023
£
£
£
Taxation
(24,048)
423,000
398,952
Loss for the financial period
(1,416,946)
423,000
(993,946)
Reconciliation of changes in equity
1 April
31 March
2022
2023
£
£
Adjustments to prior year
Deferred tax
(840,660)
(417,660)
Equity as previously reported
9,729,205
8,312,259
Equity as adjusted
8,888,545
7,894,599
Analysis of the effect upon equity
Profit and loss reserves
(840,660)
(417,660)
Reconciliation of changes in loss for the previous financial period
2023
£
Adjustments to prior year
Deferred tax
423,000
Loss as previously reported
(1,416,946)
Loss as adjusted
(993,946)
EUROBASE SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
24
Prior period adjustment
(Continued)
- 24 -
Notes to reconciliation
Deferred tax
A deferred taxation liability was not previously provided for within the prior years financial statements in respect of intangible assets. A prior year adjustment has been made to recognise this liability of £840,600 as at 31 March 2022, and the subsequent decrease of the deferred tax of £423,000 as at 31 March 2023.
Investment properties
An investment property with a value of £299,472 had been previously classified as a tangible fixed asset and so a prior year adjustment has been made to reflect this at 31 March 2023. This adjustment had no impact on net assets or the profit and loss account.
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