Registered number: 05659614
EVOLVE B G LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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EVOLVE B G LIMITED
COMPANY INFORMATION
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Chartered accountants & statutory auditor
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EVOLVE B G LIMITED
CONTENTS
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Independent auditors' report
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Consolidated statement of comprehensive income
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Consolidated statement of financial position
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Company statement of financial position
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Consolidated analysis of net debt
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Notes to the financial statements
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EVOLVE B G LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The Evolve BG Group offers proactive and human-centric digital solutions to keep businesses running smoothly 24 hours a day, 365 days a year. Employing four primary services; Business Connectivity (EvolveISP), Guest Wi-Fi (EvolveODM), SD-WAN (EvolveWAN) and IT support (EvolveIT), the Group provides a one-stop solution for all telecom needs. Their patented SD-WAN technology allows Evolve Business Group to deliver top-spec hardware with software-defined WAN paths that offer layers of redundancy, ensuring high availability and cloud-based control. Evolve's core ethos for its greater than 100 employees is acting with pace, curiosity and dedication to ensure they uphold their vision: "We envisage all multi-site brands seeing connectivity as a gain, not a pain".
The Group performed strongly with revenues increasing to £16.43m up from £12.98m in FY23 (26.6% increase). The Group has good visibility of its monthly revenues with 87% coming from recurring sources in the period up
to 31st January 2024 (37% increase from FY23 recurring revenue). The Group made a loss before tax of £0.019m in the year (profit of £1.57m in 2023) due to investment in future growth and non-recurring costs incurred in a fundraising process.
The financial statements have been prepared for the 12-month period from the 1st February 2023 to the 31st January 2024.
The Group is accredited to the ISO 9001:2015 Quality Management, ISO 27001:2013 Information Security Management, PCI-DSS and Cyber Essentials Principals.
Principal risks and uncertainties
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The directors consider the principal risks the Group faces to be:
Increased Competition
The telecommunications and managed network services markets could become more competitive resulting increased competition for the Group. As a Group, we embrace this by continuously striving for customer service excellence and maintaining a relentless focus on improving customer site uptime and service levels across the board. Our commitment to unparalleled service ensures that we not only thrive amidst the intensifying competition but also emerge as industry leaders, setting new standards for customer satisfaction and overall performance.
Key Resources
The Group is managed by key personnel, including executive directors and senior management who have significant experience within the Group and may be difficult to replace. Additionally, the Group depends on being able to recruit and retain skilled employees to provide exceptional levels of customer service to new and existing clients. The Group is mitigating this risk by investing in additional highly skilled senior management and succession planning. This strategic approach not only safeguards the continuity of our operations but also reinforces our commitment to consistently deliver top-notch service to our valued clients.
As a leading managed network and IT services provider, the Group remains firmly committed to realising ambitious growth targets in the coming financial year FY25. This dedication stems from our continued investments into critical areas, namely systems/automation and workforce expansion.
We have laid the foundations for seamless scalability, enabling us to accommodate the evolving needs of our ever-growing customer base and meet the surging demand for our developing services.
Page 1
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EVOLVE B G LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
Key performance indicators
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Turnover: £16.43m (2023: £12.98m)
Gross Profit: £6.40m (2023: £4.30m)
Profit/(loss) before tax: £(0.019)m (2023: £1.57m)
Recurring revenue: £14.29m (2023: £10.42m)
Number of employees: 99 (2023: 81)
This report was approved by the board on 30 October 2024 and signed on its behalf.
R. Stephenson-Brown
Director
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EVOLVE B G LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The directors present their report and the financial statements for the year ended 31 January 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £43,303 (2023 - profit £1,228,095).
Particulars of recommended dividends are detailed in note 12 to the financial statements.
The directors who served during the year and up to the date of this report were:
Matters covered in the Group Strategic Report
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The Company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
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EVOLVE B G LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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Details of post balance sheet events are included in note 27 to the accounts.
Under section 487(2) of the Companies Act 2006, Sagars Accountants Ltd will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board on 30 October 2024 and signed on its behalf.
R. Stephenson-Brown
Director
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EVOLVE B G LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EVOLVE B G LIMITED
We have audited the financial statements of Evolve B G Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 January 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 January 2024 and of the Group's loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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EVOLVE B G LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EVOLVE B G LIMITED (CONTINUED)
The other information comprises the information included in the annual report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the annual 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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EVOLVE B G LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EVOLVE B G LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of contract income and posting of unusual journals along with complex transactions. We discussed these risks with client management, designed audit procedures to test the timing and recognition of contract income, tested a sample of journals, selected on a risk basis, to confirm they were appropriate and reviewed areas of judgement and estimation for indicators of management bias to address these risks.
The organisation is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified GDPR and employment law as the areas most likely to have such an effect. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Group and Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Group and Company to cease to continue as a going concern.
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EVOLVE B G LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EVOLVE B G LIMITED (CONTINUED)
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Group and 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 Group and Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group and Company and the Group and Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Ross Preston CA (Senior statutory auditor)
for and on behalf of
Sagars Accountants Ltd
Chartered accountants & statutory auditor
Gresham House
5-7 St Pauls Street
Leeds
LS1 2JG
30 October 2024
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EVOLVE B G LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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(Loss)/profit before taxation
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(Loss)/profit for the financial year
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Foreign currency retranslation
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Total comprehensive income for the year
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(Loss)/profit for the year attributable to:
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Owners of the parent Company
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Total comprehensive income for the year attributable to:
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Owners of the parent Company
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There were no recognised gains and losses for 2024 or 2023 other than those included in the consolidated statement of comprehensive income.
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The notes on pages 17 to 38 form part of these financial statements.
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All the activities of the group are from continuing operations.
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Page 9
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EVOLVE B G LIMITED
REGISTERED NUMBER: 05659614
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 October 2024.
The notes on pages 17 to 38 form part of these financial statements.
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EVOLVE B G LIMITED
REGISTERED NUMBER: 05659614
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Profit and loss account brought forward
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(Loss)/profit for the year
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Other changes in the profit and loss account
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 October 2024.
The notes on pages 17 to 38 form part of these financial statements.
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EVOLVE B G LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
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Comprehensive income for the year
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Foreign currency retranslation
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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Comprehensive income for the year
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Foreign currency retranslation
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 17 to 38 form part of these financial statements.
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Page 12
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EVOLVE B G LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 17 to 38 form part of these financial statements.
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Page 13
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EVOLVE B G LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
Cash flows from operating activities
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(Loss)/profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Profit on disposal of tangible assets
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Decrease/(increase) in stocks
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Net cash (used in)/generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Purchase of investment properties
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Purchase of fixed asset investments
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Net cash used in investing activities
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Cash flows from financing activities
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Foreign currency translation reserve movement
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Page 14
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EVOLVE B G LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 17 to 38 form part of these financial statements.
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Page 15
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EVOLVE B G LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 JANUARY 2024
The notes on pages 17 to 38 form part of these financial statements.
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Page 16
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
The principal activity of the group is other information technology activies.
Evolve B G Limited (the "Company") is a private company limited by shares, incorporated and registered in England & Wales in the UK. The registered number is 05659614 and the registered address is EvolveODM, 1 Smithy Court, Smithy Brook Road, Wigan, Lancashire, WN3 6PS.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Parent company disclosure exemptions
In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:
- No Statement of cash flows has been presented for the parent company;
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The financial statements have been prepared on the basis that the Group can continue to operate as a going concern.
The directors are of the opinion, based on forecasts prepared, that the Group has adequate working capital to execute its operations over at least the next 12 months, from the date of approval of the accounts, and comply with the terms and conditions of its bank facilities.
Having regard to the above, the Directors believe it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
Page 17
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Group and Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Page 18
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.
Page 19
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Page 20
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investment property is carried at fair value determined by the directors in conjunction with external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Work in progress is reflected in the accounts on a contract by contract basis by recording revenue and related costs as contract activity progresses.
Page 21
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Page 22
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
|
Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the date of the statement of financial position and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. Details of these judgements are set out in the accounting policies.
Key sources of estimation uncertainty
The estimates and assumptions which have a heightened risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:
Valuation of investments in subsidiary undertakings
Investments in subsidiary companies are held at cost which is considered to be the fair value on the date of acquisition. The directors review the financial statements of each subsidiary to assess the performance and profitability. A full impairment review is carried out where there is an indication of impairment, eg. if the subsidiary is loss making.
Valuation of investment property
The directors estimate the value of investment property in the current year based on purchase price due to close proximity of the purchase to the year end. When assessing the valuation of property the directors consider current market conditions and any significant changes since the date of the last professional valuation when making these judgements.
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An analysis of turnover by class of business is as follows:
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Analysis of turnover by country of destination:
Page 23
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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The operating profit is stated after charging/(crediting):
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Amortisation of intangible assets
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Depreciation of tangible assets
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(Profit)/loss on disposal of tangible assets
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Impairment of trade debtors
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Other operating lease rentals
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During the year, the Group obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
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Fees payable to the Company's auditors in respect of:
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Page 24
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Remuneration of key management personnel during the year totalled £206,385 (2023 - £108,789).
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Group contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 4 directors (2023 - 4) in respect of defined contribution pension schemes.
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The total directors remuneration shown above includes benefits in kind of £24,357 (2023 - £nil).
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Interest receivable and similar income
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Other interest receivable
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Page 25
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
|
Interest payable and similar expenses
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Other loan interest payable
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Page 26
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 24% (2023 - 19%). The differences are explained below:
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(Loss)/profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 24% (2023 - 19%)
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Non-tax deductible amortisation of goodwill
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Lower rate taxes on overseas earnings
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Adjustments to tax charge in respect of prior periods
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Adjustment in research and development tax credit leading to a decrease in the tax charge
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Unrelieved tax losses carried forward
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Corporation tax on pre-acquisition profits
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Other differences leading to a increase in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
|
There were no factors that may affect future tax charges.
|
Dividends paid on ordinary A shares
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Dividends paid on ordinary B shares
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Page 27
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Charge for the year on owned assets
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During the year, the trade and assets of Urban Origin Limited, GB3 Limited and 4G Voice and Data Limited were hived up to Evolve B G Limited. The group reconstruction has been accounted for using acquisition accounting and the resulting goodwill was capitalised and will be written off over 10 years. The reason for selecting this period is that the acquisitions have contributed to a new revenue stream, thus increasing group turnover and profitability.
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Page 28
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
13.Intangible assets (continued)
|
During the year, the trade and assets of Urban Origin Limited, GB3 Limited and 4G Voice and Data Limited were hived up to Evolve B G Limited. The group reconstruction has been accounted for using acquisition accounting and the resulting goodwill was capitalised and will be written off over 10 years. The reason for selecting this period is that the acquisitions have contributed to a new revenue stream, thus increasing group turnover and profitability.
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Page 29
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Transfers between classes
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Charge for the year on owned assets
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Transfers between classes
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Page 30
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
14.Tangible fixed assets (continued)
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Short-term leasehold property
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Charge for the year on owned assets
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Page 31
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
|
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Investments in subsidiary companies
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Page 32
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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The following were subsidiary undertakings of the Company:
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GB3 Limited (indirect holding)
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4G Voice and Data Limited
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5G Voice and Data Limited
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The registered office of all UK subsidiary companies is 1 Smithy Court, Smithy Brook Road, Wigan,
England, WN3 6PS.
The registered office of Evolve B G Inc is 6 Liberty Square 6203, Boston MA, 02109.
The registered office of Evolve B G GmBH is Koenigstrasse 27, 70173 Stuttgart.
All subsidiary companies operate in the telecommunications industry, with the exception of Urban Origin Limited which is a holding company.
During the year, the trade and assets of 4G Voice and Data Limited, Urban Origin Limited and GB3 Limited were transferred into Evolve B G Limited and as such, the investment value has been written down to £nil with a transfer to goodwill as this has contributed to a new revenue stream, thus increasing group turnover and profitability.
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Page 33
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
|
|
Freehold investment property
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Cost or Valuation and Net Book Value
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The investment property was purchased on 14th November 2023 for £484,493.
The Directors have reviewed the valuation of the investment property at the year end and have concluded that the valuation still reflects the current market value due to the close proximity of the purchase to the year end.
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If the Investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:
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Finished goods and goods for resale
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The difference between purchase price or production cost of stocks and their replacement cost is not material.
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Page 34
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Amounts owed by group undertakings
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Amounts owed by joint ventures and associated undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Amounts owed to associates
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Other taxation and social security
|
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Accruals and deferred income
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BGF Nominees Limited hold fixed and floating charges over all assets and property of the Group.
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Creditors: Amounts falling due after more than one year
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BGF Nominees Limited hold fixed and floating charges over all assets and property of the Group.
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Page 35
|
EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Charged to profit or loss
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Arising on business combinations
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Page 36
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Allotted, called up and fully paid
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50 (2023 - 50) Ordinary A shares shares of £1.00 each
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50 (2023 - 50) Ordinary B shares shares of £1.00 each
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The holders of the ordinary shares are entitled to receive dividends from time to time and are entitled to one vote per share at meetings of the company. The holders of the ordinary A shares are entitled to 60% of the total dividend amount and the holders of the ordinary B shares are entitled to 40% of the total dividend amount, which is divided by the holders equally.
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Foreign exchange reserve
This reserve records foreign currency movements arising on consolidation.
Profit and loss account
This reserve records retained earnings and accumulated profits and losses.
The Group operates a defined contributions pension scheme. The amount recognised in profit or loss as an expense in relation to defined contribution plans was £223,558 (2023: £156,246). The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions totalling £ 26,893 (2023: £26,347) were payable to the fund at the reporting date and are included within other creditors.
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Commitments under operating leases
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At 31 January 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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EVOLVE B G LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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Related party transactions
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Advantage has been taken of the exemption under Financial Reporting Standard 102 not to disclose transactions with wholly owned group members.
During the year, the group received an amount of £18,327 (2023 - £15,229 payable) on behalf of an associated company. The net balance payable to the associated company at the period-end was £3,097 (2023 - £15,229 receivable).
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Post balance sheet events
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Following the year end, on 31 July 2024, Evolve B G Holdings Limited purchased the 50 Ordinary B shares of Evolve B G Limited. On this date Evolve B G Holdings Limited also purchased the entire share capital of OneCore Group Limited and as such, is now the ultimate parent company of Evolve B G Limited (50% direct and 50% indirect ownership).
The directors believe that there is no individual controlling party of Evolve B G Holdings Limited and as such, no individual controlling party of Evolve B G Limited.
The directors believe that there was no individual controlling party during the year to 31 January 2024. For further details on changes to ownership subsequent to the year end, please refer to note 27 of the financial statements.
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