The directors present the strategic report for the period ended 31 December 2023.
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:
Meet budget and key performance indicators for the year.
Distribute products at lowest possible cost.
Develop IT product ranges and services offered to customers to increase diversity.
Maintain quality and continue to offer excellent level of customer service.
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:
Vendor Relationship Strategy will involve partnering largely with Tier 2 vendors in the UK IT distribution channel in order to deliver significant growth in the UK Market. Intec Microsystems Ltd in particular will leverage new products and services to enhance and build our Group's customer base. Product and technical specialists will work closely with vendors and sales to help lead initiatives.
E Commerce Strategy will involve partnering with a leading supplier of IT distribution ecommerce/webstores to launch a new offering at the back end of 2024/early 2025. The onboarding of new Tier 2 vendor products will go hand in hand with the ecommerce launch as the ecommerce platform will provide customers with a rounded, modern all in one ordering and customer service experience.
IT Roadmap will continue to develop key projects that will improve our business tools to improve our operational efficiency, CRM management, stock management across all functions. Furthermore, we aim to achieve Cyber Essentials Certification and file server data will be migrated to SharePoint to improve collaboration across the Intec and Kuiper businesses.
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.
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.
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
The directors present their annual report and financial statements for the period ended 31 December 2023.
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.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
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.
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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
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:
the nature of the industry and sector, control environment and business performance including the design of the group's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team regarding how and where fraud might occur in the Financial Statements and any potential indicators of fraud.
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.
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:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the Financial Statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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.
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.
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.
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.
The reporting period is from the incorporation date of 15 April 2023 to 31 December 2023.
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:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 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.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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.
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, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
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.
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.
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.
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.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
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:
Details of the company's subsidiaries at 31 December 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
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.
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.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
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.
The profit and loss account includes all current retained profits and losses, net of dividends paid.
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.
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.
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: