The directors present the strategic report for the year ended 31 May 2024.
The below figures produced by management reflect underlying client fees by agency rather than turnover per legal entity. Therefore, third party fees that are directly passed onto clients, that make up cost of sales, are not included.
AMICULUM continues to be a leading independent global health communications and consultancy business and has experienced revenue growth during 2023/24. We achieved increase in revenue of nearly 11% over the previous year achieving a fee income of £35.3 million. 78% of this growth was from clients that we worked with during the previous year. Due to investment in expanding and developing the team in previous years we were able to deliver this additional revenue with our existing team. We report a pre-tax profit of £3.9 million, up from £2.0 million the previous year. As at 31 May 2024, net assets for the group were £7.9m.
Expanding programmes with existing and new clients enhanced the revenue achieved by Mudskipper, Cence and 7.4 which increased by 18% from the previous year (£15.2 million vs £12.9 million in 2022/23). However, we expect a significant reduction in revenue in 7.4 due to decisions from two major clients to consolidate their suppliers away from AMICULUM towards larger agency networks. In order to prepare for this, we implemented a recruitment freeze towards the end of the financial year and began the process of reassigning team members from 7.4 to other areas of AMICULUM where additional resource was required.
For our pharmaceutical industry consulting team, Evida, which supports clients with complex assignments, there was growth in year-on-year revenue of 5%. Our market access team achieved £1.3 million in revenue in its third year up from £1.1 million in the previous year. Cogent, also in its third year, saw an increase in revenue from £1.7 million in its second year to £2.4 million, while fee income for Seques which provides services relating to cell and gene therapies, was £2.3 million. The combined revenues of Cogent and Seques showed a year-on-year increase of 39%. AMICULUM’s rare disease team, Comradis, had an increase of 27% in revenue versus the previous year (£3.6 million versus £2.8 million in 2022/23), with strong profits.
There was an increased volume of competitive pitches and we augmented our business development activities to enable the identification of opportunities with new clients and strengthen our pipeline. A total of seven new pharmaceutical industry clients were added to AMICULUM’s roster during the course of the year. In preparation for the expected revenue growth in response to this business development drive, we also continued to devote time to developing team and service area capabilities, and to optimising our global platform.
An area we continued to focus on within the business is our digital and technology-enabled services including deployment of AI. While there were increases in these services across the company as a whole, there was a reduction in combined fee revenue of 9% to £5.0 million (versus £5.5 million the previous year) for AMICULUM Digital and our specialised healthcare learning agency, Delta Kn. At the same time, however, there continues to be increasing revenue associated with digital and omnichannel activities recognised in the accounts of other AMICULUM teams reflecting the increasing trend for more closely integrated, multidisciplinary health communications programmes.
In Asia there was a decrease of £0.4 million in the annual fee income (to just under £2.0 million). AMICULUM decided in September 2023 to cease business operations in Shanghai. However, our knowledge of the China market and network contacts mean that we will be able to support selected projects in China without having a team based in Shanghai, and we are focusing on developing our Asia regional health communications through the Singapore and Hong Kong teams in 2024/25.
AMICULUM USA only had a modest (1%) increase in fee income. This reflected a significant account loss due to a client product failure, but also success in building on our strong reputation in many therapy areas to win new clients. We expect these achievements to be reflected in growth during 2024/25.
AMICULUM’s health communications team based in Auckland, NZ had a good year supporting accounts across our agencies.
The nature of our communications business in the Middle-East (primarily based on face-to-face activities) had made it particularly sensitive to the impact of Covid-19. During and immediately after the pandemic, spare capacity in the region was deployed to support other teams within the business. However, as demand for services in MENA region continued to be limited, we took the decision to close our office and business in the region at the end 2023/24.
AMICULUM’s global headcount fell to an average of 327 in the year ending 31 May 2024 from an average of 340 the previous year. Our talent outreach and recruitment agency, Ambit, which had developed from our internal recruitment team, ceased operating during the year as a distinct agency supporting external clients and has been re-focussed on driving AMICULUM recruitment.
As a supplier of services and consultancy to clients in the international pharmaceutical industry, a key risk to our business derives from the fundamental risks inherent in our clients’ operations, such as termination of development of a new drug or withdrawal of a marketed compound. Patent expiry is also a risk but this is well defined and can generally be mitigated well in advance.
AMICULUM has an established risk mitigation strategy and our agencies deliver services relating to a number of compounds at different stages of development for a range of client companies. In instances where drugs have been stopped in development we have, to date, been able to replace the revenue with other projects from our existing or new clients. AMICULUM’s agencies have established effective long-term relationships with their key clients and have historically grown primarily through repeat business and referral. However there is increasing competition and consolidation within the sector and we are therefore adapting our business development approach to attain future growth.
The ability to recruit and retain high calibre staff with the requisite qualifications for our industry has always been challenging. This risk is managed by provision of an excellent working environment and a carefully designed benefits package to encourage staff retention. AMICULUM has, as a consequence, a record of low staff turnover.
The group’s financial instruments comprise bank balances, credit card facilities, trade debtors and creditors. Although costs are predominantly in sterling, a significant proportion of revenue is denominated in US Dollars and Euros. The inevitable currency risk requires management through advanced budgeting for anticipated exchange rate movements and maintaining adequate cash reserves to absorb exchange rate fluctuations. AMICULUM manages its working capital by matching cash flows wherever possible through interim billings in the case of projects that are of more than one month’s duration. AMICULUM’s liquidity risk is managed as part of its overall financial control facilitated by regular management reporting to include monthly rolling profit and cashflow forecasts.
Having demonstrated the resilience and flexibility of our business again during 2023/24, we are looking forward with a high level of confidence and expect much greater growth in the future.
AMICULUM initiated plans in 2023/24 to consolidate its family of agencies under the AMICULUM brand, starting in 2024/25. This realignment will enhance the range of specialized services we offer, increase our agility in meeting client needs in a dynamic sector, and position us for continued success in the future.
The key financial indicators we focus on are client fee income, staff costs and operating margins.
Client fee income (gross profit per the group statement of comprehensive income) increased by 12% to £35,469,636 in the year to 31 May 2024, from £31,874,357 in the prior year.
AMICULUM staff costs, excluding directors of the parent company and subsidiary companies, increased by 4% to £23,360,810, from £22,551,819 in the prior year.
AMICULUM’s operating margin increased to 11% from 6% in the prior year.
This statement is in line with the section 172 statement requirements contained in section 414CZA of the Companies Act 2006. It focuses on how the directors have acted, in good faith, to promote the success of AMICULUM for the benefits of its members. This includes considering their duties under Section 172(1) (a) to (f) of the Companies Act 2006, amongst other matters.
The AMICULUM culture is based on five core values: individuals, fairness, integrity, enterprise, and collaboration. These values guide how AMICULUM conducts its business, emphasizing high standards of professional and ethical conduct in all its interactions with its employees, clients, suppliers, and other third parties. AMICULUM values diversity and recognises the strength that comes from it. Our goal is to create a culture where everyone feels a strong sense of belonging and is valued for their contributions.
A key priority for the AMICULUM board has been to ensure that we offer fair, generous and competitive rewards and benefits that provide financial stability for our employees and incentivize performance.
During 2023/24, we established a dedicated wellbeing programme, with 80% of our employees confirming their understanding and adherence to our health and safety best practices. In 2024/25, we aim to achieve 100% engagement. We also continue to support our employees in balancing working lives with their wider responsibilities through an operating model that allows location (office or home) and work pattern flexibility around core hours
Our management and leadership teams actively engage with employees through various company-wide activities and programmes, such as one-on-one and team meetings, annual events, regular surveys, and quarterly newsletters. We encourage employees to regularly provide open and constructive feedback. Additionally, we offer a wide range of learning, development, and career support through our internal learning platform, Curriculum. In 2023/24, we implemented more bespoke and advanced training, increasing awareness and upskilling our employees on important business ethics, data protection and security, and sustainability issues. In 2024/25 our aim is to continue our collaborative efforts to develop learning resources, promote the well-being of our members and to encourage employee interaction and knowledge-sharing, while promoting the consistent use of best practices.
We remain committed to upholding the highest standards of integrity and transparency, and to maintain our record of zero cases of allegations, investigations, or convictions (2023/24: zero, 2022/23: zero). All employees will continue to undergo comprehensive anti-corruption training to ensure a thorough understanding of our policies and the importance of ethical conduct.
More information on the directors’ engagement with the Company’s members is provided on pages 6 and 7 of our directors’ report.
We collaborate closely with our clients and the global medical community to meet their needs. By actively engaging with our clients and monitoring changes within the health sector, AMICULUM continues to refine its business and strategies to remain responsive and agile in addressing our clients’ changing requirements.
AMICULUM conducts thorough due diligence on its new suppliers to ensure that they have sustainable and environmentally friendly strategies that align with the sector where we operate. AMICULUM strives to work with suppliers and third parties who uphold good employment and ethical practices, and who aim to achieve the same high standards in their business operations as AMICULUM. Therefore, in 2023/24, AMICULUM finalised and released its supplier code of conduct, which outlines the expected behaviours from our suppliers and other third parties to foster a fair, trusting, collaborative, and constructive business relationship.
Our community and environment
We continue to acknowledge the importance for AMICULUM to develop strong relationships within the communities where we operate. AMICULUM donates to charitable causes it wishes to support and has also regularly matched employee donations to increase the total amount raised. During 2023/24, AMICULUM donated £19,765 (2022/23: £15,000). These donations related to local or global initiatives, including those in the healthcare field.
AMICULUM is actively involved in various academic outreach projects. For example, it has partnered with the University of Dundee to develop, launch and co-deliver a Masters’ course in Science and Health Communication, with the aim of raising awareness of the importance of scientific communications as a key component of healthcare and to provide career support and guidance to students who are interested in joining our field. We have also founded and continue to fund the Emily Travis Scholarship to support a student on this programme. AMICULUM also provides pro-bono support to other organisations aligned with the health communications sector.
During 2023/24, AMICULUM’s employees hosted a roundtable event at the annual meeting of the International Society for Medical Publication Professionals. This event involved congress organisers, client stakeholders, and ISMPP delegates who discussed the environmental issues facing the industry and pledged actions to make a difference.
Using our social media presence and influence, we encourage our clients to think about the downstream impact of printed items (for example congress materials), and work with them to suggest items that have longevity and impact. Our dedicated Viva Engage community provides a forum for sharing of ideas on sustainability issues at both global and local levels.
Limiting the impact that AMICULUM and its operations have on the environment is at the centre of our environmental strategy. We continue to work with our office landlords to provide appropriate recycling facilities and to introduce ‘green tariffs’ for our energy to help reduce AMICULUM’s GHG emissions. During 2024/25, we aim to continue to review our office space needs and expect to see a decrease in energy consumption and GHG emissions relating to our offices as a result.
As part of this commitment, AMICULUM continues to disclose its carbon emissions annually via Carbon Disclosure Project (CDP). Emissions of carbon dioxide equivalent and the aggregate kWh of energy consumed in 2023/24 for UK operations are set out below. The Greenhouse Gas Protocol Corporate Accounting and Reporting Standard has been used to calculate our emissions:
Aggregate energy consumption (kWh) |
| 2023/24 | 2022/23 |
|
|
|
|
Energy consumed in the UK used to calculate emissions from purchase of electricity |
| 106,772 | 84,622.08 |
Energy consumed in the UK used to calculate emissions from the consumption of fuel – car
|
| 23,491.71 | 43,314.09 |
Emissions of carbon dioxide | Scope | 2023/24 (CO2 tonnes) | 2022/23 (CO2 tonnes) |
Combustion of F gas | 1 | 5.92 | 5.92 |
|
|
|
|
Purchase of electricity for UK operations | 2 | 22.11 | 17.52 |
Consumption of fuel for the purpose of UK business travel - car | 3 | 5.67 | 10.50 |
|
|
|
|
Total |
| 33.7 | 33.94 |
Number of UK employees per year |
| 275 | 276 |
Intensity ratio (CO2e tonnes per employee) |
| 0.123 | 0.123
|
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 May 2024.
AMICULUM has maintained its overseas branch in New Zealand to support the subsidiaries of AMICULUM in the delivery of services to our international clients.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year, after taxation, amounted to £2,850,926 (2023: £1,472,756)
The interim dividends paid are in respect of the financial year ended 31 May 2024 are £4,670,474 (2023: £nil).
AMICULUM employs nearly 330 highly qualified individuals worldwide and ensuring an appropriate level of employee engagement in key aspects of our business has been critical to the successful growth of our company. The business is led by the Board and Management Team, supported by a wider Business Strategy Team and Leadership Team, the latter of which comprises the heads of all of our agencies, business units and support teams. The members of these teams relay information from colleagues within the business to those in leadership positions (ultimately the Board) and are also charged with helping to ensure that policy decisions made by the business leaders are clearly communicated to the wider company. The business structure adopted by AMICULUM means that there are very few ‘layers’ of management, which also aids communication. In addition to line-management communication channels, every employee is supported by a HR business partner working in our People Team and so has the ability to raise, in confidence, any issue or concern. Issues which cannot be easily resolved locally can be escalated to the Board – the leader of the People Team meets the Chair of the Board on a weekly basis to discuss any such issues.
The AMICULUM management team presents the Company’s plans and details of performance to all team members on a regular basis – we hold annual meetings of all staff in addition to more frequent team meetings. During the last year we introduced a quarterly business update newsletter which is distributed to all staff. We also make extensive use of an internal ‘social and professional networking platform’ which is used both for the collection and dissemination of information relating to our business, plus other topics of interest to our team. While some information is restricted on the basis of commercial confidentiality, all members of staff have access to key financial and other information relating to the operation of our business. The company also actively communicates with staff on matters about the business environment to create awareness of both internal and external factors which might impact our performance. We have a long-standing culture of fairness and collaboration and team members are actively encouraged to ask questions of our business leaders at any time. All employees who are not members of the AMICULUM Management Team are entitled to participate in a global profit-sharing scheme which makes payments on the basis of the overall success of the business in the previous year. We believe that this supports a high level of employee engagement.
AMICULUM has introduced a sophisticated tool designed to solicit and capture feedback from all team members relating to the performance of their peers and other colleagues. This information helps to inform individual performance appraisals and career development conversations which take place at least annually (more frequently for colleagues during their probationary period). Finally, in addition to the communications directed to employees and feedback solicited from them, all leavers are interviewed on a confidential basis by a member of our People Team and the results of such conversations are communicated appropriately to senior managers.
The success of AMICULUM’s efforts to engage positively with employees at all levels in the business is evidenced by our very low staff turnover, by the overwhelmingly positive feedback provided even by those leaving the company and our employee-based rating (www.glassdoor.com) where AMICULUM currently scores 4.5 out of a maximum of 5 with 90% of reviewers stating that they would recommend the Company to a friend.
A statement on how AMICULUM fosters business relationships with clients, suppliers and other third parties is provided in the strategic report.
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
AMICULUM has consumed more than 40,000 kWh of energy and is required to report on its aggregate carbon dioxide emissions and kWh of energy. This is included in the Strategic report.
We have audited the financial statements of AMICULUM Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 group's and 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 parent company or to cease operations, or have no realistic alternative but to do so.
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 purposes of expressing an opinion on the effectiveness of the 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's or the parent 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 auditor’s 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 auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
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.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,247,662 (2023: £2,021,380).
AMICULUM Limited (“the parent company”) is a private limited company guarenteed by shares, domiciled and incorporated in England and Wales. The registered office is The Boathouse, Clarence Mill, Clarence Road, Bollington, Chesire, SK10 5JZ. .
The group consists of AMICULUM Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to
retrospectively apply the standard to business combinations that occurred before the date of transition to
FRS 102, being 01 June 2014. Therefore, the Group continues to recognise a merger reserve which
arose on a past business combination that was accounted for as a merger in accordance with UK GAAP
as applied at that time.
The parent Company has taken the permitted exemptions of not presenting a statement of cash flow.
At the time of approving the financial statements, the directors have a reasonable expectation that the company and group have adequate resources to continue in operational existence for the foreseeable future.
The group recorded a profit for the year ended of £2,850,926 (2023: £1,472,756). The operating profit for the year was £3,777,712 (2023: £1,927,918) and the group is forecasting continued operating profit moving forward.
The group has a cash balance of £6,998,929 at the year end. These are cash resources available for the use and the group was cash generative in the year and post year end. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised to the extent that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover 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 to ensure that turnover is correctly recognised:
Rendering of services
Turnover 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 turnover 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.
Where a service is not completed and invoiced, revenue will be recognised based on the value agreed in advance with clients for any completed activities and the percentage completed based on timesheets for any uncompleted activities.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Investments in subsidiaries are measured at cost, less any impairment.
The Group only enters into basic financial instruments 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 non-puttable 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 financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
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 instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed.
Functional and presentation currency
The Company’s functional and presentational currency is GBP, rounded to the nearest pound.
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 the Consolidated Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses are presented in the Consolidated Statement of Comprehensive Income within ‘Other operation (expenses)/income’.
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.
Finance costs
Finance costs are charged to the Consolidated Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Dividends
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. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.
Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Statement of Financial Position date and carried forward to future periods measured at the undiscounted salary cost of the future holiday entitlement.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The main area of judgement is in revenue recognition where projects are not completed in a single financial year. Estimates of revenue are based on the percentage completion of a project with reference to any milestones on the project. Where a service is not completed and invoiced, revenue will be recognised based on the value agreed in advance with clients for any completed activities and the percentage completed based on timesheets for any uncompleted activities. Any material change to these estimates would affect revenue recognised in the Consolidated Statement of Comprehensive Income and the level of deferred or accrued revenue on the balance sheet.
The group makes an estimate of the recoverability of intercompany loans. When assessing recoverability of intercompany loans, management considers factors including their judgement of future expected revenue and profits of trading subsidiaries and their individual strategies for repayment. Management continue to monitor recoveries closely and will consider providing for debts should there be further uncertainties over recoveries. Any material change to these estimates would affect the Company Statement of Comprehensive Income and the Amounts due from group undertakings on the Company Balance Sheet.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year retirement benefits were accruing to 4 directors (2023: 4) in respect of defined contribution pension schemes.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 May 2024 are as follows:
1 - The Boathouse, Clarence Mill, Bollington, England, SK10 5JZ
2 - Unit 608, 6/F., Laford Centre, 838 Lai Chi Kok Road, Kowloon, Hong Kong
3 - 1 N. State Street, 15th Floor, Chicago, IL 60602
4 - 1 North Bridge Road, #19-09 High Street Centre, Singapore 179094
5 - Hirschgaesslein 11, P.O. Box 257, CH-4010 Basel, Switzerland
6 - Room B313, 3rd Floor, 1359 Zhonghua Road, Huangpu District, Shanghai
7 - Reef Tower, Jumeirah Lakes Towers, Dubai, United Arab Emirates
AMICULUM Digital Limited is exempt from audit by virtue of s479A of Companies Act 2006.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. At the balance sheet date, contributions totalling £205,900 (2023: £185,155) were payable to the fund.
The company has an Enterprise Management Incentive share options plan. Under the scheme, on 11 May 2018, 2,400,000 (1,200,000 each) options over the B shares of the Company were granted to two employees of the Group at an exercise price of 0.1p per share. The options can be exercised on 11 May 2028, or earlier if certain circumstances are met. The cost is calculated using the valuation of the options. The impact of the share option scheme on the Group’s financial statements is immaterial.
A composite guarantee has been given to the Company's bankers in respect of any debts or liabilities owing to the bank by any party to the guarantee. The other parties to the guarantee are the companies listed below:
AMICULUM Limited
AMICULUM Business Services Limited
Delta Kn Limited
Mudskipper Business Limited
7.4 Limited
At the balance sheet date, the Group's indebtedness to its bankers was £nil (2023: £nil).
Share premium account
The share premium reserve records the amount above the nominal value received for shares sold, less transaction costs.
Foreign exchange reserves
The foreign exchange reserve results from the exchange differences relating to the translation of the results and net assets of the Group's foreign operations from their functional currencies to the Group's presentation currency. These are recognised directly in other comprehensive income and accumulated in the foreign exchange reserve.
Other reserves
The other reserve results from the grant of share options by the Company and capital redemption reserve from the repurchase of the Company's own shares.
Merger reserve
The merger reserve results from the difference on consolidation resulting from the application of merger accounting.
Profit and loss account
This account represents the cumulative realised profits and losses.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
A decision was made in the year to close down the operations of AMICULUM MENA DMCC. The liquidation of AMICULUM MENA DMCC will result in the cessation of its operations and the winding-up of its affairs and the process is ongoing post year end.
The Company had related party transactions with wholly owned subsidiaries and as such has taken advantage of the exemption permitted under section 33.1A not to provide disclosures of transactions entered into with other wholly owned members of the group.
During the year, AMICULUM Business Services Limited incurred consultancy fees of £nil (2023: £11,288) payable to M Putin.