Company Registration No. 04929079 (England and Wales)
Drax Executive Limited
Annual report and financial statements
for the period ended 31 March 2024
Drax Executive Limited
Company information
Directors
Graham Roadnight
Marco Anatriello
(Appointed 7 December 2023)
Samuel Robberts
(Appointed 7 December 2023)
Mohammed Tahir
(Appointed 7 December 2023)
Catherine Saunderson
(Appointed 4 June 2024)
Company number
04929079
Registered office
71 Queen Victoria Street
London
EC4V 4BE
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Drax Executive Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
Drax Executive Limited
Strategic report
For the period ended 31 March 2024
1

The directors present the strategic report for Drax Executive Limited (Drax) for the fifteen month period ended 31 March 2024.

 

The LCap Group comprises of:

  1. Drax Executive Limited (Drax) – the “platform company”, is a strategic leadership advisory specialist and executive search provider for high-growth companies across the UK and European market. Supporting investors, founders and leadership teams throughout the value creation life cycle by providing specialist services both pre and post investment.

  2. Rowan Recruitment Limited – the UK specialist Leadership Advisory and Executive Search firm for privately owned companies and growth capital investors across the North West. Rowan was LCap’s first strategic investment, deepening LCap’s reach within the North West, the second largest market within the UK for Private Capital investments in high growth businesses.

  3. Altus Partners Limited - In June 2023 the LCap Group made their second strategic investment in Altus Partners, who provide executive search services to Private Equity Funds for their own investment professional hiring as well as M&A Directors to the fund’s portfolio investee companies across Europe.

In December 2023 the LCap Group took external investment from Three Hills Capital Partners to allow the Group to continue its growth strategy to further develop itself as a Leadership Consulting Group, underpinned by its proprietary digital analytics platform and point solutions, Leadership Dynamics and PACE.

Strategic review of business

The directors consider the metrics disclosed in the Group Income Statement and Balance Sheet to be the key performance metrics that they review and track, this including revenue, profit before taxation and cash at bank.

Revenue: for the period ended 31 March 2024 was £19,382,611 (FY22: £16,290,493), a growth of £3,092,118 or 19%.

Future Prospects and Outlook

The directors are confident Drax will continue to drive strong performance in our business and enhance our offerings to our clients. We are satisfied with the trading results of the period to 31 March 2024 and with the financial position of the Company at the period end.

We believe the outlook for the business is positive, due to the acceleration of Leadership Search, Insights software and Consultancy practices. The current market conditions are now prime for our strategic growth strategy with the support of our investment partner and Leadership team

The directors are not aware, at the date of this report, of any likely major changes in the Group’s activities in the next year.

Drax Executive Limited
Strategic report (continued)
For the period ended 31 March 2024
2
Principal Risks and Uncertainties

The Group’s principal risks and uncertainties comprise of

Liquidity risk. This is managed by ensuring an effective credit control process, careful consideration of working capital requirements and future financial forecasts.

Business environment – The leadership advisory, digital point solutions, Executive search and private equity markets are sensitive to changes in the macro-economic climate however, have a natural resilience based on the private equity deal cycle. The group believes it is well placed in its chosen market to manage such risk by supporting clients in a wide variety of sectors and geographic markets.

Loss of key staff – The success of the group is driven by its key asset being the employees and leadership team. The group manages this risk by ensuring there are appropriate policies for long term staff retention and recruitment.

Loss of key clients - Key client risks are managed by maintaining a diverse and global client base across multiple industries which are both high-growth companies and private equity-backed businesses, as well as supporting private credit and equity houses directly. There is no significant customer concentration and churn rates are low, due to exceptional client service and values, which result in long standing client relationships, therefore loss of key clients is not considered a material risk to the group.

On behalf of the board

Catherine Saunderson
Director
27 November 2024
Drax Executive Limited
Directors' report
For the period ended 31 March 2024
3

The directors present their annual report and financial statements for the fifteen month period ended 31 March 2024.

Principal activities

The principal activity of the company continued to be that of an executive search and recruitment company.

Results and dividends

The results for the period are set out on page 9.

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

Directors

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

Graham Roadnight
David Bushell
(Resigned 7 December 2023)
Ruby Sheera
(Resigned 7 December 2023)
Lee Colliss
(Resigned 22 July 2024)
Marco Anatriello
(Appointed 7 December 2023)
Thomas Cassidy
(Appointed 7 December 2023 and resigned 22 July 2024)
Samuel Robberts
(Appointed 7 December 2023)
Mohammed Tahir
(Appointed 7 December 2023)
Catherine Saunderson
(Appointed 4 June 2024)
Auditor

Saffery LLP have expressed their willingness to continue in office.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

Drax Executive Limited
Directors' report (continued)
For the period ended 31 March 2024
4
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Catherine Saunderson
Director
27 November 2024
Drax Executive Limited
Independent auditor's report
To the members of Drax Executive Limited
5
Opinion

We have audited the financial statements of Drax Executive Limited (the 'company') for the period ended 31 March 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

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.

Drax Executive Limited
Independent auditor's report (continued)
To the members of Drax Executive Limited
6

Opinions on other matters prescribed by the Companies Act 2006

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

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Drax Executive Limited
Independent auditor's report (continued)
To the members of Drax Executive Limited
7

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Drax Executive Limited
Independent auditor's report (continued)
To the members of Drax Executive Limited
8
Roger Weston
Senior Statutory Auditor
For and on behalf of Saffery LLP
27 November 2024
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Drax Executive Limited
Statement of comprehensive income
For the period ended 31 March 2024
9
Period
Year
ended
ended
31 March
31 December
2024
2022
Notes
£
£
Turnover
6
19,382,611
16,290,493
Cost of sales
(464,188)
(399,153)
Gross profit
18,918,423
15,891,340
Administrative expenses
(15,829,175)
(13,498,013)
Other operating income
280,800
464,735
Operating profit
8
3,370,048
2,858,062
Interest receivable and similar income
5
84,701
35,600
Interest payable and similar expenses
7
(208,772)
(152,635)
Profit before taxation
3,245,977
2,741,027
Tax on profit
9
395,048
(353,664)
Profit for the financial period
3,641,025
2,387,363

The income statement has been prepared on the basis that all operations are continuing operations.

Drax Executive Limited
Statement of financial position
As at 31 March 2024
10
2024
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
2,769,987
2,809,641
Tangible assets
11
127,813
148,035
2,897,800
2,957,676
Current assets
Debtors
12
11,350,194
7,582,549
Cash at bank and in hand
2,556,657
5,283,236
13,906,851
12,865,785
Creditors: amounts falling due within one year
14
(4,175,607)
(4,752,702)
Net current assets
9,731,244
8,113,083
Total assets less current liabilities
12,629,044
11,070,759
Creditors: amounts falling due after more than one year
15
-
0
(2,200,000)
Provisions for liabilities
16
(647,396)
(703,955)
Net assets
11,981,648
8,166,804
Capital and reserves
Called up share capital
19
5
5
Other reserves
20
887,001
713,182
Profit and loss reserves
11,094,642
7,453,617
Total equity
11,981,648
8,166,804
The financial statements were approved by the board of directors and authorised for issue on 27 November 2024 and are signed on its behalf by:
Catherine Saunderson
Director
Company Registration No. 04929079
Drax Executive Limited
Statement of changes in equity
For the period ended 31 March 2024
11
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
5
265,732
5,266,254
5,531,991
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,387,363
2,387,363
Dividends
13
-
-
(200,000)
(200,000)
Share based payment
-
447,450
-
0
447,450
Balance at 31 December 2022
5
713,182
7,453,617
8,166,804
Period ended 31 March 2024:
Profit and total comprehensive income for the period
-
-
3,641,025
3,641,025
Share based payment
20
-
173,819
-
0
173,819
Balance at 31 March 2024
5
887,001
11,094,642
11,981,648
Drax Executive Limited
Statement of cash flows
For the period ended 31 March 2024
12
2024
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
1,210,487
3,665,427
Interest paid
(208,772)
(152,635)
Income taxes refunded
342,782
167,016
Net cash inflow from operating activities
1,344,497
3,679,808
Investing activities
Purchase of intangible assets
(1,085,336)
(1,293,939)
Purchase of tangible fixed assets
(70,526)
(108,068)
Proceeds on disposal of tangible fixed assets
85
-
0
Interest received
84,701
35,600
Net cash used in investing activities
(1,071,076)
(1,366,407)
Financing activities
(Repayment)/receipt of bank loans
(3,000,000)
(800,000)
Dividends paid
-
0
(200,000)
Net cash used in financing activities
(3,000,000)
(1,000,000)
Net (decrease)/increase in cash and cash equivalents
(2,726,579)
1,313,401
Cash and cash equivalents at beginning of period
5,283,236
3,969,835
Cash and cash equivalents at end of period
2,556,657
5,283,236
Drax Executive Limited
Notes to the financial statements
For the period ended 31 March 2024
13
1
Accounting policies
Company information

Drax Executive Limited is a private company limited by shares incorporated in England and Wales. The registered office is 71 Queen Victoria Street, London, EC4V 4BE.

1.1
Reporting period

The comparative financial period was for the year to 31 December 2022 and is not directly comparable to the current fifteen month period ended 31 March 2024. The period end changed due to a group restructure.

1.2
Accounting convention

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

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.3
Going concern

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

1.4
Turnover

Turnover represents amounts receivable for services provided, net of value added tax. Turnover is recognised on completion of defined stages of work in accordance with specific terms of business agreed with the company's clients and includes revenue from executive search services and interim placement services.

 

Turnover for executive search services is recognised on confirmation dates of work completed, typically recognised across three stages. Turnover for interim placement services is recognised when the service has been provided.

1.5
Intangible fixed assets other than goodwill

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated. Capitalised development costs relate to the improvement to it’s data-analytics platform implemented by a mixture of employees and contracted staff which are key to ensuring the company maintains it’s position as a market leader.

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

Development costs
Straight line over 5 years
1.6
Tangible fixed assets

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

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
14

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

Fixtures, fittings & equipment
Straight line over 4 years
Computer equipment
Straight line over 4 years

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 credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

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

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
15
Basic financial assets

Basic financial assets, which include debtors, 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
16
Basic financial liabilities

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

 

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

 

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

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company 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 company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
17
1.12
Employee benefits

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

 

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

 

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

1.13
Retirement benefits

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

1.14
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Monte Carlo model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity and recorded in Other reserves.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.15
Leases

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

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
18
2
Critical accounting judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

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

Share based payments

EMI share options were granted to employees in the financial year. The options were valued by management using the Monte Carlo model. The use of the Monte Carlo model required management to make several significant assumptions and estimations, including the volatility of shares and the expected life of the options.

3
Employees

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

2024
2022
Number
Number
90
86

Their aggregate remuneration comprised:

2024
2022
£
£
Wages and salaries
10,612,650
8,247,577
Social security costs
1,433,082
1,098,878
Pension costs
218,670
158,603
12,264,402
9,505,058
4
Directors' remuneration
2024
2022
£
£
Remuneration for qualifying services
919,775
941,197
Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
4
Directors' remuneration (continued)
19
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2022
£
£
Remuneration for qualifying services
330,395
267,243

The company consider no other key management personnel, outside of the directors' remuneration

5
Interest receivable and similar income
2024
2022
£
£
Interest income
Interest on bank deposits
74,126
617
Other interest income
10,575
34,983
Total income
84,701
35,600
2024
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
74,126
617
6
Turnover and other revenue

An analysis of the company's turnover is as follows:

2024
2022
£
£
Turnover analysed by class of business
Executive search
18,804,563
15,838,855
Interim
578,048
451,638
19,382,611
16,290,493
2024
2022
£
£
Other significant revenue
Interest income
84,701
35,600
Management charge receivable from group companies
280,800
350,000
Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
20
7
Interest payable and similar expenses
2024
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
208,772
152,635
8
Operating profit
2024
2022
Operating profit for the period is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
6,212
16,017
Fees payable to the company's auditor for the audit of the company's financial statements
32,750
28,750
Depreciation of owned tangible fixed assets
90,663
57,318
Loss on disposal of tangible fixed assets
-
1,123
Amortisation of intangible assets
1,124,990
673,889
Share-based payments
173,819
447,450
Operating lease charges
378,901
287,014
9
Taxation
2024
2022
£
£
Current tax
UK corporation tax on profits for the current period
(334,978)
133,293
Adjustments in respect of prior periods
(3,511)
35,567
Total current tax
(338,489)
168,860
Deferred tax
Origination and reversal of timing differences
(56,559)
184,804
Total tax (credit)/charge
(395,048)
353,664
Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
9
Taxation (continued)
21

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

2024
2022
£
£
Profit before taxation
3,245,977
2,741,027
Expected tax charge based on the standard rate of corporation tax in the UK of 23.82% (2022: 19.00%)
773,192
520,795
Tax effect of expenses that are not deductible in determining taxable profit
2,351
177,291
Adjustments in respect of prior years
(3,511)
35,567
Permanent capital allowances in excess of depreciation
1,066
(15,802)
Amortisation on assets not qualifying for tax allowances
267,748
128,039
Other non-reversing timing differences
(213,868)
(1,260)
Share based payment charge
49,017
85,016
Other tax allowances
(1,214,484)
(760,786)
Deferred tax adjustment
(56,559)
184,804
Taxation (credit)/charge for the period
(395,048)
353,664
10
Intangible fixed assets
Development costs
£
Cost
At 1 January 2023
4,009,565
Additions
1,085,336
At 31 March 2024
5,094,901
Amortisation and impairment
At 1 January 2023
1,199,924
Amortisation charged for the period
1,124,990
At 31 March 2024
2,324,914
Carrying amount
At 31 March 2024
2,769,987
At 31 December 2022
2,809,641
Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
22
11
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2023
98,067
340,890
438,957
Additions
9,959
60,567
70,526
Disposals
(11,309)
(16,015)
(27,324)
At 31 March 2024
96,717
385,442
482,159
Depreciation and impairment
At 1 January 2023
95,859
195,063
290,922
Depreciation charged in the period
4,744
85,919
90,663
Eliminated in respect of disposals
(11,309)
(15,930)
(27,239)
At 31 March 2024
89,294
265,052
354,346
Carrying amount
At 31 March 2024
7,423
120,390
127,813
At 31 December 2022
2,208
145,827
148,035
12
Debtors
2024
2022
Amounts falling due within one year:
£
£
Trade debtors
2,483,973
2,974,796
Corporation tax recoverable
338,889
343,182
Amounts owed by group undertakings
6,758,432
3,538,829
Other debtors
598,448
446,491
Prepayments and accrued income
1,170,452
279,251
11,350,194
7,582,549
13
Dividends
2024
2022
£
£
Ordinary shares
Final paid
-
0
200,000
Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
23
14
Creditors: amounts falling due within one year
2024
2022
Notes
£
£
Bank loans
18
-
0
800,000
Trade creditors
387,435
441,880
Amounts owed to group undertakings
1,382,127
-
0
Taxation and social security
748,856
920,644
Other creditors
269,021
216,855
Accruals and deferred income
1,388,168
2,373,323
4,175,607
4,752,702
15
Creditors: amounts falling due after more than one year
2024
2022
Notes
£
£
Bank loans
18
-
0
2,200,000
16
Deferred taxation

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

Liabilities
Liabilities
2024
2022
Balances:
£
£
Accelerated capital allowances
647,396
703,955
2024
Movements in the period:
£
Liability at 1 January 2023
703,955
Credit to profit or loss
(56,559)
Liability at 31 March 2024
647,396

The deferred tax liability set out above relates to accelerated capital allowances that are expected to mature in the foreseeable future.

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
24
17
Retirement benefit schemes
2024
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
218,670
158,603

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Loans and overdrafts
2024
2022
£
£
Bank loans
-
0
3,000,000
Payable within one year
-
0
800,000
Payable after one year
-
0
2,200,000

The bank loan was repaid in the period ended 31 March 2024.

 

19
Share capital
2024
2022
2024
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
5
5
5
5
20
Share-based payment transactions

During the period end 31 March 2024, EMI share options were issued by a director and shareholder over shares of the parent company LCap Group Limited to 17 employees (2022: 12 employees). During the period ended 31 March 2024, all share options were exercised. No share options remained outstanding at the period end.

 

Share options allocated are subject to non-market vesting conditions and only become exercisable subject to the conditions set out in the option scheme rules. The options may not be exercised later than the 10th anniversary of the option agreement.

 

 

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
20
Share-based payment transactions (continued)
25
Number of share options
2024
2022
Number
Number
Outstanding at 1 January 2023
81,125,800
66,750,550
Granted
187,143,984
20,375,250
Forfeited
-
0
(6,000,000)
Exercised
(187,144,484)
-
0
Expired
(81,125,300)
-
0
Outstanding at 31 March 2024
-
0
81,125,800
Exercisable at 31 March 2024
-
0
-
0

The directors value share options at the date of grant and consider the relevant inputs to determine any charge. At the date of the option date, the company considered a valuation model with a vesting period.

 

During the period, the company recognised total share-based payment expenses of £173,819 (2022: £447,450) which related to equity settled share based payment transactions. The equity settled share based payments are recognised in other reserves.

 

21
Operating lease commitments
Lessee

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

2024
2022
£
£
Within one year
289,461
312,234
Between two and five years
687,321
1,062,863
976,782
1,375,097
22
Related party transactions

During the period, the company paid interim dividends of £nil (2022: £200,000).

During the period, management charges of £280,800 (2022: £464,735) were charged to a fellow group company.

Drax Executive Limited
Notes to the financial statements (continued)
For the period ended 31 March 2024
26
23
Cash generated from operations
2024
2022
£
£
Profit for the period after tax
3,641,025
2,387,363
Adjustments for:
Taxation (credited)/charged
(395,048)
353,664
Finance costs
208,772
152,635
Investment income
(84,701)
(35,600)
(Gain)/loss on disposal of tangible fixed assets
-
1,123
Amortisation and impairment of intangible assets
1,124,990
673,889
Depreciation and impairment of tangible fixed assets
90,663
57,318
Equity settled share based payment expense
173,819
447,450
Movements in working capital:
Increase in debtors
(3,771,938)
(1,378,287)
Increase in creditors
222,905
1,005,872
Cash generated from operations
1,210,487
3,665,427
24
Control

The immediate parent company is LCap Group Limited. The ultimate parent company is LCap Topco Limited. The company is controlled by the directors who hold a majority shareholding in the company. The directors consider there to be no one ultimate controlling party.

25
Analysis of changes in net funds
1 January 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
5,283,236
(2,726,579)
2,556,657
Borrowings
(3,000,000)
3,000,000
-
2,283,236
273,421
2,556,657
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