Company registration number 14803703 (England and Wales)
ERIS TOPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
ERIS TOPCO LIMITED
COMPANY INFORMATION
Directors
A Russell
(Appointed 7 July 2023)
J Bennett
(Appointed 15 April 2023)
C Mcdonald
(Appointed 1 May 2024)
Secretary
A Russell
Company number
14803703
Registered office
C/O UHY Hacker Young
St James' Building
79 Oxford Street
Manchester
M1 6HT
Auditor
UHY Hacker Young Manchester LLP
St James Building
79 Oxford Street
Manchester
M1 6HT
ERIS TOPCO LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 33
ERIS TOPCO LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the period ended 31 December 2023.

Review of business

Eris Group has focused largely on Sales and Product Range diversification post acquisition. Similar to the last few years trade under prior management, a continued focus has been placed on working with a wide range of new and different vendors and manufacturers in order to broaden the portfolio of products that could be offered to customers. Developing stronger partnerships that allow us to enhance and modernise our offerings is an ongoing drive and real focus for the business. Eris Group continues its goal to be as wide-ranging an IT Distributor as possible offering the best products and customer service it can.

System development has continued across the business to maintain strong IT product analysis and to try and really streamline, to make the business as efficient as possible. During 2023 and progressing into 2024 has seen Intec focus its efforts on planning around the online and Ecommerce IT channel as the Company looks to adapt to the opportunities in the ecommerce market.

On 7 July 2023 100% of the issued share capital of Intec Microsystems Ltd and Kuiper Technology Limited was acquired by the Private Equity Firm Chiltern Capital Nominees Limited. The current management team have remained invested in the ongoing project and are as committed as ever to the Business.

The Group continued during the year to focus on the key Management's objectives which are to:

 

The Group’s Board has and will continue to evolve and review the strategic goals of the organisation with a vision Eris Group will do distribution differently in the UK with a differentiated focus on Tier 2 vendor growth, providing new product set and solution in to the Top 50 VAR’s and continuing to develop deep relationships with both current and developing MPS partners. Behind this vision there are a range of initiatives spanning technology, vendor growth with existing and new partners and ensuring the business has a talented and motivated workforce. Intec strives to offer real focus and support to Vendor Partners and customers to be able to enjoy a mutually beneficial growth journey.

Future Developments

In looking to the future, development plans include continued organic growth from IT distribution. Eris Group continues to explore more opportunities with established and newly up and coming vendors, who the group can partner with to share a journey of progression. Other plans for the business focus largely on the expansion of engineering, technical, warranty and support services which go hand in hand with the ever-widening product portfolio on offer. Ecommerce, automation and increased efficiency will also be huge areas for Intec as the business moves with the times to ensure they can offer a wide range of facilities in the ever-changing IT sector. Customers and our relationships we value, along with our reputation of exemplary customer service will always remain at the forefront of our thoughts.  

 

Key elements of our strategic roadmap are noted below:

 

ERIS TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 2 -

 

 

Principal risks and uncertainties

The Group’s board reviews the risks facing the Group on a weekly basis and work to mitigate risks. Processes are designed to identify, mitigate and manage the risk and the ultimate responsibility for risk management is owned by the Executive Board. The principal risks facing the business and the key controls in place to mitigate are as follows:

Business performance risk: Business performance risk is the risk that the Group may not perform as expected either due to internal factors or due to competitive pressures in the market in which they operate.  This risk is managed through several measures: ensuring the appropriate management team is in place; budget and business planning; monthly reporting and variance analysis; financial controls; key performance indicators; and regular forecasting; product and stock price management.

 

Retention of key functional and technical skills: The Group is committed to an investment programme in both onboarding and subsequent training and evaluation of all its employees and recognises the importance of this critical stakeholder relationship. Long term growth of the business depends on the Group’s ability to retain and attract personnel of high quality. This risk is managed through development and training plans which are regularly reviewed and updated. These are accompanied by specific policies in areas such as training, management development and performance management.

Business continuity risk: Business continuity risk planning is regarded with significant importance to the managers and director.  A business continuity plan has been drawn up (and subject to periodic review) to ensure supply can be met in the event of a significant negative impact on the business.

 

Health and safety risk: The Group is committed to ensuring a safe working environment.  The risks arising from inadequate management of health and safety matters are the exposure of employees and third parties to the risk of injury, potential liability and/or loss of reputation.  These risks are managed by the company through the strong promotion of a health and safety culture, and well-defined health and safety policies. Quality processes are managed via our ISO 9001 accreditation and framework.

 

Financial and business control: Strong financial and business controls are necessary to ensure the integrity and reliability of financial and other information on which the Group relies for day-to-day operations, external reporting and for longer term planning. The company exercises financial and business control through a combination of qualified and experienced financial teams; performance analysis; budgeting and cash flow forecasting; and clearly defined approval limits. The external auditors provide advice on specific accounting and tax issues as they arise.

 

Social, ethical and environmental risk: Due to the Group’s nature and size no significant social, ethical or environmental risks have been identified by the management.

 

 

ERIS TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 3 -

Data Protection and Cyber Security: The current IT strategy for the Group involves continuing the focus on cyber security by ensuring we have the best tools in place to protect against modern day threats. Our implementation of employee security awareness training and advanced impersonation protection via email during the first half of 2024 has improved our posture. Further improvements have been made around general network management and performance by the replacement of all network switches over 5 years old. Also new wireless access points have been installed across the site to improve employee and guest performance on the WiFi.

 

Regulatory Compliance: The Group is subject to a range of industry specific regulations which could expose the group to risks from a failure to comply with relevant codes of practice, law or regulation. Failure to comply could result in fines, cessation of some business activities and/or public reprimand. This risk is mitigated through close monitoring of regulatory compliance and ongoing training.

Promoting the success of the company

The board of Eris Topco Limited consider that they have acted in good faith and in a manner likely to promote the success of the group for the benefit of all its members (having regard to the stakeholders and matters set out in s172(1)(a)-(f) of the Companies Act 2006) in the decisions taken during the period ended 31 December 2023. Our primary considerations and decisions are designed to have a long-term beneficial impact on the group.

 

Fundamental to the ultimate success and delivery of the group’s service are our team members. The health, safety and well-being of our group’s team members is one of our primary considerations in the way we conduct business. We aim to be a responsible employer in our approach to the pay and benefits our group’s team members receive. We believe part of the key to our success is the way in which we engage with suppliers and our customers. We meet and have regular dialogue with our commercial partners throughout the year. We constantly review certain key areas to prevent involvement in modern slavery, corruption, bribery and breaches of competition law.

 

On a wider scale, we take into account the impact of the company’s operations on the community and environment as our social responsibilities – in particular how we comply with environmental legislation. At every opportunity we pursue waste-savings and react promptly to local community concerns.

 

The board is felt to behave responsibly and ensure that management operate in an equally responsible manner. The company operates within high standards of ethics, business conduct and sound governance expected for a business such as ours. In doing so we will contribute to the delivery of our plans to meet and exceed our expectations and nurture our excellent reputation.

 

It is the boards, intention to behave responsibly towards our shareholders, treating them both fairly and equally, so that they may benefit from the success of the business.

 

Business Ethos

An ongoing priority of the business will be to consolidate our position by providing a total customer experience from the initial sales process through to customer service, support and satisfaction. We will continue our comprehensive training and coaching programs in order to further support our aims in providing a great customer experience for all our customers.

 

Engagement with suppliers, customers

We will continue to maintain and strengthen relationships with our manufacturer, customers and suppliers through this trying and uncertain period. We will adapt to change where we have to and work to a “new normal” months ahead.

On behalf of the board

A Russell
Director
25 September 2024
ERIS TOPCO LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the period ended 31 December 2023.

Principal activities

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

Results and dividends

The results for the period are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

A Russell
(Appointed 7 July 2023)
H Reid
(Appointed 12 October 2023 and resigned 1 May 2024)
J Bennett
(Appointed 15 April 2023)
A Cantwell
(Appointed 7 July 2023 and resigned 23 January 2024)
C Mcdonald
(Appointed 1 May 2024)
Z Billimoria
(Appointed 15 April 2023 and resigned 12 October 2023)
Energy and carbon report

As the parent of the group has not consumed more than 40,000 kWh of energy in this reporting period it therefore qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

 

As mandated under the regulations the parent company has considered its group level energy and carbon reporting requirements. The only company within the group obliged to include information in its own financial statements is Intec Microsystems Ltd.

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

ERIS TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 5 -
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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
A Russell
Director
25 September 2024
ERIS TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ERIS TOPCO LIMITED
- 6 -
Opinion

We have audited the financial statements of Eris TopCo Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

ERIS TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ERIS TOPCO LIMITED
- 7 -
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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non- compliance with laws and regulations, we considered the following:

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

ERIS TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ERIS TOPCO LIMITED
- 8 -

We also obtained an understanding of the legal and regulatory frameworks that the group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the Financial Statements. The key laws and regulations we considered in this context included the UK Companies Act, pensions legislation and tax legislation in all relevant jurisdictions where the company operates.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the Financial Statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

In addition to the above, our procedures to respond to risks identified included the following:

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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 auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non- detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

ERIS TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ERIS TOPCO LIMITED
- 9 -

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Daly BEng FCA
For and on behalf of
25 September 2024
UHY Hacker Young Manchester LLP
Chartered Accountants
Statutory Auditor
St James Building
79 Oxford Street
Manchester
M1 6HT
ERIS TOPCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 10 -
Period
ended
31 December
2023
Notes
£
Turnover
3
38,083,540
Cost of sales
(35,100,767)
Gross profit
2,982,773
Administrative expenses
(1,234,850)
Other operating income
18,425
Restructure and development costs
4
397,122
Operating profit
5
2,163,470
Interest receivable and similar income
9
16,491
Interest payable and similar expenses
10
(459,186)
Profit before taxation
1,720,775
Tax on profit
11
437,926
Profit for the financial period
24
2,158,701
Profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
ERIS TOPCO LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
Notes
£
£
Fixed assets
Goodwill
12
195,200
Negative goodwill
12
(320,201)
Net goodwill
(125,001)
Tangible assets
13
598,144
473,143
Current assets
Stocks
16
6,751,980
Debtors
17
12,446,371
Cash at bank and in hand
1,921,777
21,120,128
Creditors: amounts falling due within one year
18
(15,994,269)
Net current assets
5,125,859
Total assets less current liabilities
5,599,002
Creditors: amounts falling due after more than one year
19
(3,435,971)
Provisions for liabilities
Deferred tax liability
21
3,330
(3,330)
Net assets
2,159,701
Capital and reserves
Called up share capital
23
1,000
Profit and loss reserves
24
2,158,701
Total equity
2,159,701
The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
25 September 2024
A Russell
Director
Company registration number 14803703 (England and Wales)
ERIS TOPCO LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 12 -
2023
Notes
£
£
Fixed assets
Investments
14
1
Current assets
Debtors
17
999
Net current assets
999
Net assets
1,000
Capital and reserves
Called up share capital
23
1,000

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0.

The financial statements were approved by the board of directors and authorised for issue on 25 September 2024 and are signed on its behalf by:
25 September 2024
A Russell
Director
Company registration number 14803703 (England and Wales)
ERIS TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 15 April 2023
-
-
-
Period ended 31 December 2023:
Profit and total comprehensive income
-
2,158,701
2,158,701
Issue of share capital
23
1,000
-
1,000
Balance at 31 December 2023
1,000
2,158,701
2,159,701
ERIS TOPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 14 -
Share capital
Notes
£
Balance at 15 April 2023
-
Period ended 31 December 2023:
Profit and total comprehensive income
-
Issue of share capital
23
1,000
Balance at 31 December 2023
1,000
ERIS TOPCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 15 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
4,721,743
Interest paid
(426,045)
Income taxes paid
(353,083)
Net cash inflow/(outflow) from operating activities
3,942,615
Investing activities
Purchase of subsidiaries (cash amount less cash acquired)
(2,677,520)
Purchase of tangible fixed assets
(13,639)
Interest received
16,491
Net cash used in investing activities
(2,674,668)
Financing activities
Proceeds from issue of shares
1,000
Loan stock issued
652,830
Net cash generated from/(used in) financing activities
653,830
Net increase in cash and cash equivalents
1,921,777
Cash and cash equivalents at beginning of period
-
Cash and cash equivalents at end of period
1,921,777
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
Company information

Eris TopCo Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O UHY Hacker Young St James' Building, 79 Oxford Street, Manchester, M1 6HT.

 

The group consists of Eris Topco Limited and all of its subsidiaries.

1.1
Reporting period

The reporting period is from the incorporation date of 15 April 2023 to 31 December 2023.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

 

1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Eris Topco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.5
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.6
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 12 months.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
50 years straight line
Leasehold improvements
8 years straight line
Plant and equipment
25% reducing balance
Fixtures and fittings
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.9
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.10
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.11
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.13
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.15
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 period. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.18
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.19
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 group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Provision for slow moving and obsolete stock

The group reviews its inventory to assess for potential loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in the profit or loss, the group makes judgments as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is anticipated to be less than the cost based on best estimates by the management. The provision for obsolescence of inventory is based on the aged profile of the stock. The provision for obsolete inventory in the current year is £520,026.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 22 -
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.

Estimating useful lives of property, plant and equipment and goodwill

The group estimates the useful lives of property, plant and equipment and goodwill based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment and goodwill are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets.

The director has not identified any critical judgements or key sources of estimation uncertainty which cause a significant risk of material adjustment to the carrying amount of assets and liabilities in the accounts.

3
Turnover and other revenue
2023
£
Turnover analysed by class of business
Sale of goods
38,083,540
2023
£
Turnover analysed by geographical market
United Kingdom
34,437,744
Europe
3,521,162
Rest of the World
124,634
38,083,540
2023
£
Other revenue
Interest income
16,491
4
Restructure and development costs
2023
£
Restructure and development costs
(397,122)
(397,122)

During the period certain costs were incurred post-acquisition that, whilst directly connected with the group's operations were not recurring in nature. It was therefore deemed necessary for the understanding of the financial statements to analyse these costs separately.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 23 -
5
Operating profit
2023
£
Operating profit for the period is stated after charging/(crediting):
Exchange losses
738
Depreciation of owned tangible fixed assets
29,903
Amortisation of intangible assets
195,201
Release of negative goodwill
(2,593,546)
Operating lease charges
76,853
6
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
8,500
Audit of the financial statements of the company's subsidiaries
39,000
47,500
7
Employees

The average monthly number of persons (including directors) employed by the group and company during the period was:

Group
Company
2023
2023
Number
Number
Administration
88
-
Directors
3
-
Total
91
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2023
£
£
Wages and salaries
2,206,854
-
0
Social security costs
264,949
-
Pension costs
42,539
-
0
2,514,342
-
0
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 24 -
8
Directors' remuneration
2023
£
Remuneration for qualifying services
71,704
9
Interest receivable and similar income
2023
£
Interest income
Interest on bank deposits
16,491
10
Interest payable and similar expenses
2023
£
Interest on bank overdrafts and loans
24,992
Interest on invoice finance arrangements
399,832
Other interest
34,362
Total finance costs
459,186
11
Taxation
2023
£
Current tax
UK corporation tax on profits for the current period
(410,843)
Deferred tax
Origination and reversal of timing differences
(27,083)
Total tax credit
(437,926)
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 25 -

The actual (credit)/charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:

2023
£
Profit before taxation
1,720,775
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00%
430,194
Tax effect of expenses that are not deductible in determining taxable profit
77,446
Tax effect of income not taxable in determining taxable profit
(648,387)
Unutilised tax losses carried forward
8,285
Marginal relief
(402)
Under provision for taxation
(1,770)
Other differences
3,875
Corporation tax recoverable
(307,167)
Taxation credit
(437,926)
12
Intangible fixed assets
Group
Goodwill
Negative goodwill
Total
£
£
£
Cost
At 15 April 2023
-
0
-
0
-
0
Additions
390,401
(2,913,747)
(2,523,346)
At 31 December 2023
390,401
(2,913,747)
(2,523,346)
Amortisation and impairment
At 15 April 2023
-
0
-
0
-
0
Amortisation charged for the period
195,201
(2,593,546)
(2,398,345)
At 31 December 2023
195,201
(2,593,546)
(2,398,345)
Carrying amount
At 31 December 2023
195,200
(320,201)
(125,001)
The company had no intangible fixed assets at 31 December 2023.
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 26 -
13
Tangible fixed assets
Group
Leasehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
£
Cost
At 15 April 2023
-
0
-
0
-
0
-
0
-
0
Additions
-
0
-
0
13,638
1
13,639
Business combinations
475,001
57,613
75,112
6,682
614,408
At 31 December 2023
475,001
57,613
88,750
6,683
628,047
Depreciation and impairment
At 15 April 2023
-
0
-
0
-
0
-
0
-
0
Depreciation charged in the period
5,423
11,683
11,842
955
29,903
At 31 December 2023
5,423
11,683
11,842
955
29,903
Carrying amount
At 31 December 2023
469,578
45,930
76,908
5,728
598,144
The company had no tangible fixed assets at 31 December 2023.
14
Fixed asset investments
Group
Company
2023
2023
Notes
£
£
Investments in subsidiaries
15
-
0
1
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 15 April 2023
-
Additions
1
At 31 December 2023
1
Carrying amount
At 31 December 2023
1
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
15
Subsidiaries
(Continued)
- 27 -
Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Intec Microsystems Ltd
*
Ordinary
-
100.00
Kuiper Technology Limited
*
Ordinary
-
100.00
Eris Bidco Limited
*
Ordinary
-
100.00
Eris Midco Limited
*
Ordinary
100.00
-

Registered office addresses (all UK unless otherwise indicated):

*
C/O UHY Hacker Young, St James Building, 79 Oxford Street, Manchester, M1 6HT
16
Stocks
Group
Company
2023
2023
£
£
Finished goods and goods for resale
6,751,980
-
0
17
Debtors
Group
Company
2023
2023
Amounts falling due within one year:
£
£
Trade debtors
9,100,459
-
0
Corporation tax recoverable
300,206
-
0
Amounts owed by group undertakings
-
959
Other debtors
2,500,701
40
Prepayments and accrued income
521,016
-
0
12,422,382
999
Amounts falling due after more than one year:
Deferred tax asset (note 21)
23,989
-
0
Total debtors
12,446,371
999
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 28 -
18
Creditors: amounts falling due within one year
Group
Company
2023
2023
£
£
Trade creditors
6,235,424
-
0
Corporation tax payable
22,344
-
0
Other taxation and social security
462,926
-
Other creditors
8,850,164
-
0
Accruals and deferred income
423,411
-
0
15,994,269
-
0
19
Creditors: amounts falling due after more than one year
Group
Company
2023
2023
Notes
£
£
Loan stock
20
685,971
-
0
Deferred consideration
2,750,000
-
0
3,435,971
-

Deferred consideration is payable based upon certain criteria, both conditional and un-conditional being met in the period up to and including 31 August 2026. These amounts totalling £2,750,000 as at 31 December 2023 are reasonably expected to be paid in relation to the acquisition.

20
Loans and overdrafts
Group
Company
2023
2023
£
£
Loan stock
685,971
-
0
Payable after one year
685,971
-
0

The loan notes are secured by fixed charges held over shares indirectly held within subsidiary companies.

On the 7 July 2023 Eris Midco Limited issued loan stock (secured loan stock 2028) totalling £652,830 comprising of A Loan Stock totalling £499,320 and B Loan Stock totalling £153,510. Both A and B loan stock rank pari passu in all respects and without discrimination or preference.

 

Both A and B loan stock bear interest at a rate of 12% per annum, and any interest not paid accrues into the principal amounts. Loan stock is scheduled for settlement on the 5th anniversary of issue and are secured by way of a fixed and floating charge over the assets of the Eris Group.

ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 29 -
21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Assets
2023
2023
Group
£
£
Accelerated capital allowances
3,330
-
Tax losses
-
23,989
3,330
23,989
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the period:
£
£
Asset at 15 April 2023
-
-
Credit to profit or loss
(20,659)
-
Asset at 31 December 2023
(20,659)
-
22
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
42,539

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

23
Share capital
Group and company
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
A1 Ordinary Shares of 0.1p each
680,000
680
A2 Ordinary Shares of 0.1p each
45,000
45
B Ordinary Shares of 0.1p each
160,000
160
B Ordinary Convertible Shares of 0.1p each
45,000
45
C Ordinary shares of 0.1p each
70,000
70
1,000,000
1,000
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
23
Share capital
(Continued)
- 30 -

The company was incorporated on the 15 April 2023 with the issue of one Ordinary Share with a nominal value of 0.1p.

 

On the 7 July 2023 the company issued further shares of varying classifications, with all shares issued fully paid.

 

679,999 A1 Ordinary Shares were issued with a nominal value per share of 0.1p. The existing Ordinary Share from issue was converted to an A1 Ordinary Share.

 

45,000 A2 Ordinary Shares were issued with a nominal value per share of 0.1p.

 

160,000 B Ordinary Shares were issued with a nominal value per share of 0.1p

 

45,000 B Ordinary Shares were issued with a nominal value per share of 0.1p

 

70,000 C Ordinary Shares were issued with a nominal value per share of 0.1p

 

Each share in issue at the 31 December 2023 has attached to it full rights with respect to voting and dividends on distributions of assets on a liquidation or return of capital. The surplus assets of the company remaining, after payment of its liabilities, shall be distributed to the holder of the respective share types according to Article 5 of the Articles of Association of the Company.

24
Profit and loss reserves

The profit and loss account includes all current retained profits and losses, net of dividends paid.

25
Acquisition of a business

On 7 July 2023 the group acquired 100% of the issued capital of Intec Microsystems Ltd. Intec Microsystems Ltd are a specialist distributor of IT equipment and services, based in the West Midlands.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
598,335
-
598,335
Inventories
9,887,793
(868,075)
9,019,718
Trade and other receivables
13,690,358
-
13,690,358
Cash and cash equivalents
2,834,709
-
2,834,709
Borrowings
(7,467,943)
-
(7,467,943)
Trade and other payables
(9,774,967)
-
(9,774,967)
Deferred tax
(3,094)
-
(3,094)
Total identifiable net assets
9,765,191
(868,075)
8,897,116
Goodwill
(2,913,747)
Total consideration
5,983,369
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
25
Acquisition of a business
(Continued)
- 31 -
The consideration was satisfied by:
£
Cash
906,500
Deferred consideration
2,682,015
Held back to settle group receivables
1,500,000
Loan notes issued
61,092
Deal related fees
833,762
5,983,369
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
35,055,076
Loss after tax
(2,134,260)

On 7 July 2023 the group acquired 100% of the issued capital of Kuiper Technologies Limited. Kuiper Technologies Limited are a specialist reseller of IT equipment and services, based in the West Midlands.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
16,073
-
16,073
Trade and other receivables
1,214,892
-
1,214,892
Cash and cash equivalents
932,075
-
932,075
Trade and other payables
(1,640,637)
-
(1,640,637)
Deferred tax
(3,330)
-
(3,330)
Total identifiable net assets
519,073
-
519,073
Goodwill
390,401
Total consideration
909,474
The consideration was satisfied by:
£
Cash
840,361
Deferred consideration
67,985
Loan notes issued
1,128
909,474
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
25
Acquisition of a business
(Continued)
- 32 -
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
5,254,545
Loss after tax
(5,881)
26
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2023
£
£
Within one year
317,088
-
Between two and five years
819,144
-
1,136,232
-
27
Cash generated from/(absorbed by) group operations
2023
£
Profit for the period after tax
2,158,701
Adjustments for:
Taxation credited
(437,926)
Finance costs
459,186
Investment income
(16,491)
Amortisation and impairment of intangible assets
(2,398,345)
Depreciation and impairment of tangible fixed assets
29,903
Increase in provisions
23,174
Movements in working capital:
Decrease in stocks
2,267,738
Decrease in debtors
5,061,535
Decrease in creditors
(2,425,732)
Cash generated from/(absorbed by) operations
4,721,743
ERIS TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 33 -
28
Analysis of changes in net funds - group
15 April 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
-
1,921,777
1,921,777
Borrowings excluding overdrafts
-
(685,971)
(685,971)
-
1,235,806
1,235,806
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