The directors present the strategic report for the period ended 31 March 2024. It should be noted that the period ended 31 March 2024 is the first and an extended financial period, of 14 months, for Chronos Topco Limited.
The group acquired the group headed by Bemafin Invest SAS (hereafter “Tennaxia group”) on 7 March 2023. Chronos Topco is therefore the new parent entity of the Tennaxia group. Tennaxia Group is a dynamic and innovative software-as-a-service (SaaS) business. Tennaxia, based in France, is a company specialising in sustainability, environmental, health, and safety (EHS) management software and consulting services. Operating within the complex and dynamic EHS and sustainability markets, Tennaxia has carved out a niche by providing tailored solutions that enable companies to manage compliance, sustainability reporting, and risk management more effectively. The company's business model revolves around a hybrid approach that combines cloud-based software solutions with expert consulting services, catering primarily to large and medium-sized enterprises across various industries, including manufacturing, energy, and retail.
The Company’s business complexity is evident in its dual focus on both technology and consulting, requiring a deep understanding of regulatory environments, client needs, and technological advancements. The company’s operational model emphasises close collaboration with clients to deliver customised solutions that align with their specific EHS and sustainability objectives. This approach has allowed Tennaxia to maintain a strong client base, with its services supporting businesses in navigating the increasingly stringent regulatory landscapes.
The directors are satisfied with the financial results of the period ended 31 March 2024. The directors of Tennaxia are committed to driving sustainable growth while continuously enhancing their service offerings. Their strategy focuses on expanding the company's software capabilities, increasing market penetration, and strengthening their consulting expertise. This is in line with the company’s performance over the past year, where Tennaxia reported stable revenue growth despite the challenging economic environment.
Looking forward, Tennaxia is well-positioned to capitalise on the increasing demand for EHS and sustainability solutions. While the business has shown resilience, the directors remain cautious of potential external pressures, including economic fluctuations and regulatory changes. Nonetheless, the strategic investments made during the year have strengthened the company’s foundation, with the year-end performance indicating a positive outlook for continued growth and expansion in the upcoming years.
The Company manages financial risks according to instructions provided by the Board of Directors. The Company has financial debt on its balance sheet and is therefore exposed to interest rate risk. The amount of debt is leveraged against its annual recurring revenues and the evolution of the interests is closely monitored for affordability. The company’s customer base partly consists of small and medium sized enterprises whose operations may not be as stable as those of larger corporations with a potentially better credit rating. The company’s business is, nevertheless, based on a large number of customers and, therefore, the impact of a single customer on the Group’s revenue is small. Nevertheless, the customer churn rates are closely monitored, the efficient customer success team contributing to keep these rates low.
The group primarily measures business success based on sales development, specifically recurring sales from subscription contracts.
The directors monitor the company's financial performance against strategic objectives using key performance indicators (KPI’s) on a regular basis. Annual Recurring Revenue (ARR) is the key performance indicator for the group. For the period ended 31 March 2024, this was €9.9m. The B2M2 Bidco's group results for the year are in line with the expectation of the directors and provide a solid base for future activities.
The revenue of the group reached €12,270,279 fuelled by a solid expansion of the existing client portfolio and high retention rate. The gross margin of the group is 65.4% for the period.
The group generated a loss before tax of €15,236,146. Total assets at the year-end totalled €120,610,568.
Following a recent founder transition to professional CEO and certain key c-level appointments i.e. CFO. The directors have no other plans for further reorganisation or change in the near future and remain cautious but optimistic in light of the group’s position and macro-economic factors. There are no additional post balance sheet events relevant to the reading of the financial statements except the ones disclosed in the note 36 "Events after the reporting date".
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 March 2024.
The results for the period are set out on pages 10 to 11.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Acquisition of Traace
On 24 May 2024, Bemafin Invest SAS and B2M2 Midco SAS acquired 100% of the company Traace, which is a software company that provides greentech solutions to measure carbon footprint, track reduction projects and design green IT strategies. The acquisition is in line with the strategy to offer a complete range of services in the CSR business.
B2M2 Bidco SAS used €6,000K out of the €10,000K Eurazeo Capex & Acquisition Facility to finance the acquisition.
The 3 co-founders of Traace subscribe for shares in B2M2 Midco SAS totalling 4.5% of the share capital.
Change in the share capital distribution
Marlin EP and BPI France have invested further in the capital of the B2M2 Midco SAS Group. Marlin EP holds a majority of voting rights in B2M2 Midco SAS Group.
The governance also evolved with co-founder as of 27 June 2024, Bernard Fort resigned from his CEO role and remains B2M2 Midco SAS Board chairman.
Grant Thornton UK LLP were appointed as auditor and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
We have audited the financial statements of Chronos Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the period from 7 March 2023 to 31 March 2024, which comprise the group statement of comprehensive income, the group statement of financial position, the group statement of cash flows, the group statement of changes in equity, the parent company statement of financial position, the parent company statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK-adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding 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 and 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 report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the group's and the parent company's business model including effects arising from macro-economic uncertainties such as the cost of living crisis, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the group's and the parent company's financial resources or ability to continue operations over the going concern period.
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 the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
We obtained an understanding of the legal and regulatory frameworks applicable to the group and parent company which it operates through our general commercial and sector experience, discussions with management and review of board minutes. We determined that the most significant laws and regulations are related to financial reporting legislation including the Companies Act 2006 and relevant tax compliance regulations in the UK and France. In addition, we concluded that there are certain laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements such as health and safety, anti-bribery, employment and social security legislation, environmental protection legislation, money laundering, foreign corrupt practices act and data protection act.
We enquired of management concerning the group and the parent company’s policies and procedures relating to:
the identification, evaluation and compliance with laws and regulations
the detection and response to the risks of fraud; and
the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations.
We enquired of management and those charged with governance, whether they were aware of any instances of non-compliance with laws and regulations or whether they had any knowledge of actual, suspected or alleged fraud.
We assessed the susceptibility of the Group and parent company’s financial statements to material misstatement, including how fraud might occur and the risk of management override of controls. Audit procedures performed by the engagement team included:
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
Challenge assumptions and judgements made by management in its significant accounting estimates;
Identifying and testing journal entries, in particular journal entries with unusual account combinations that increases revenues or that reduced costs in the statement of comprehensive income; and
Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.
In addition we completed audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements.
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
The engagement partner’s assessment of the appropriateness of the collective competence and capabilities of the engagement team including consideration of the engagement team including the consideration of the engagement team’s:
understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation; and
knowledge of the industry in which the client operates; and
understanding of the legal and regulatory requirements specific to the entity including the provisions of the applicable legislation and applicable statutory provision.
We communicated relevant laws and regulations and potential fraud risks to all engagement team members. We remained alert to any indicators of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
The notes on pages 17 to 52 form part of these group financial statements.
The notes on pages 17 to 52 form part of these group financial statements.
The notes on pages 17 to 52 form part of these group financial statements.
The notes on pages 17 to 52 form part of these group financial statements.
Other movements relate to interest accrued which remains unpaid.
Chronos Topco Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Marlin Equity Partners, 4th Floor, 1 Newman Street, London, W1T 1PB. The company's principal activities and nature of its operations are disclosed in the directors' report.
The group consists of Chronos Topco Limited and all of its subsidiaries.
The financial statements are prepared in euros, which is the functional currency of all of the entities in the group. Monetary amounts in these financial statements are rounded to the nearest €1.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
(a) the requirements of IFRS 7 'Financial Instruments: Disclosure';
(b) the requirements within IAS 1 relating to the presentation of certain comparative information;
(c) the requirements of IAS 7 'Statement of Cash Flows' to present a statement of cash flows;
(d) paragraphs 30 and 31 of IAS 8 'Accounting policies, changes in accounting estimates and errors' (requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued but it not yet effective); and
(e) the requirements of IAS 24 'Related Party Disclosures' to disclose related party transactions and balances between two or more members of a Group.
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the period was €nil.
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
The consolidated group financial statements consist of the financial statements of the parent company Chronos Topco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Non-controlling interests are measured initially at their proportionate share of the acquiree's identifiable net assets at the date of acquisition. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Revenues from the licence
The service by granting the licence is the promise to the right to access to the Group’s platform with varying additional modules and facilities. The related performance obligation is considered to be satisfied over-time on a linear basis, over the subscription’s period for access to the platform, which is usually 1 year renewable.
Revenues from other services
Other services are provided alongside the core platform subscription, for example a support service package. mainly rendered in relation with the license contracts. The revenues related to that services are recognised according to their own performance obligations, which are over time, over the periods that services are rendered, based on the stage of completion.
Other considerations
The Group does not consider the unconditional right to consideration until the point of raising the invoice, at which point the fee amount has been agreed and confirmed with the customer. Therefore, the billed amount are recognised in trade receivables, and the unbilled amounts are recognised as contract assets if material. Revenues billed in advance are recognised as deferred revenues.
The group has not identified separate performance obligation in the customer’s contracts, related to the warranty / maintenance costs. Consequently, costs incurred, if any, are recorded according to IAS 37.
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 income statement.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
IFRS 16 has been adopted and leased assets are presented as right of use assets above.
Payments in respect of short term and/or low value leases (where leases have a value of less than £5,000, or less than 12 months or no minimum contract term) continue to be charged to the income statement on a straight-line basis over the term of the lease.
The right of use assets are depreciated over the shorter of the asset’s useful life and the lease term, on a straight line basis. The leases are discounted at the Group’s incremental borrowing rate on the date of lease inception, which ranges between 2.8%-3.1%.
Further details on the Group's leases are given in note 25.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.
The tax expense represents the sum of the tax currently payable and deferred tax.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
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 simulation. 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.
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.
At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the group's estimate of the amount expected to be payable under a residual value guarantee; or the group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
Non-recurring operating incomes and expenses
Non-recurring operating incomes and expenses correspond to non-current income and expenses which are unusual, uncommon and of a significant amount.
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the UK):
* These standards, amendments and interpretations have not yet been endorsed by the UK and the dates shown are the expected effective dates for period beginning on or after these dates.
The adoption of all above standards is not expected to have any material impact on the Group’s financial statements.
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Depreciation and amortisation is provided so as to write down the assets to their residual values over their estimated useful lives as set out in the Group's accounting policy. The selection of these estimated lives requires the exercise of management judgement. Useful lives are regularly reviewed and should management's assessment of useful lives shorten/increase then depreciation charges in the financial statements would increase/decrease and carrying amounts of tangible assets would change accordingly.
The Group is required to consider, on an annual basis, whether indications of impairment relating to such assets exist and if so, perform an impairment test. The recoverable amount is determined based on the higher of value in use calculations or fair value less costs to sell. The use of value in use method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. The Directors are satisfied that all recorded assets will be fully recovered from expected future cash flows.
The Group makes provision for anticipated tax consequences based on the likelihood of whether additional taxes may arise. The Group recognises deferred tax assets to the extent to which it expects to be able to utilise the balances against future taxable profits.
The Group has used the incremental borrowing rate to calculate the value of the lease liabilities relating to its property lease liabilities recognised under IFRS 16. The discount rate used reflects the estimated risks associated with borrowing against similar assets by the Group, incorporating assumptions for similar terms, security and funds at that time.
The carrying amounts of such liabilities is disclosed within note 25.
The determination of the fair values of share options and warrants has been made by reference to the Monte Carlo model. The input with the greatest amount of estimation being the volatility of the company's share price which has been derived via benchmarking against similar companies in the industry. Other key inputs are set out in note 29.
In assessing the fair value of the intangible assets acquired in acquisitions, the management estimated the future cash inflows and cost savings associated with each class of intangible asset acquired. These are amortised over their estimated useful lives in accordance with IAS 38 – Intangible Assets.
The group has a defined benefit pension scheme. The management use external specialists to determine both the present value of the obligation under the scheme, and also the fair value of assets owned, to determine the overall deficit in the scheme that must be made good. Full disclosure of the assumptions used by the independent third party is provided in note 28.
No individual customer contributed in excess of 10% of total revenues.
For an extended description of the nature and timing of the satisfaction of performance obligations in contracts with customers including the group’s accounting policies and assessments regarding the timing of and method adopted for revenue recognition and significant judgments when applying IFRS 15, see accounting policy note 2.5.
Other non-recurring costs include costs relating to IT, finance, and human resources.
The average monthly number of persons (including directors) employed by the group during the period was:
Their aggregate remuneration comprised:
The directors' received no remuneration nor benefits during the period.
The financial liabilities held at fair value relate to interest rate caps. The caps contract has been recorded at the fair value at the inception date. As the contract does not meet the criteria for cash-flows hedging instruments as defined by IFRS 9, the change in fair value is recorded in the income statement.
The charge for the period can be reconciled to the loss per the income statement as follows:
In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:
The UK corporation tax rate was 19.00% until April 2023 when it increased to 25% for groups with taxable profits of over £250,000.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
More information on impairment movements in the period is given in note 14.
The goodwill arose when Chronos Topco Limited acquired the share capital of Bemafin Investment SAS on 7 March 2023. All of the goodwill is allocated to one CGU, being the Tennaxia operations.
The Group tests intangible assets for impairment annually. Assets are assessed for impairment by comparing the carrying values with the value-in-use calculation, which is determined by calculating the net present value ("NPV") of future cashflows arising from the intangible assets.
The NPV of future cash flows is based on forecasts for the next four years to 2028 and subsequent expectations of the business revenue growth and EBITDA margin through application of the ‘rule of 40’ in line with market expectation throughout 2029 and 2030 due to the business being in an early growth phase. Growth rates have been applied based on historic trends and taking into account the establishment of the senior leadership team. Revenue growth over the forecast period to 2030 averages 22% per annum. A long-term growth rate of 2% has been used to perpetuity based on market expectations and European Central Banks inflation targets. A discount rate of 11.6% for the CGU has been used based on the Group's estimated costs of capital and on the risk profile of the underlying assets.
The value of key assumptions used reflects historical data from both external and internal sources. Growth rates reflect the long-term growth rates anticipated for the product line and industry but the forecasts are sensitive to these forecasts given the start-up nature of the business.
The estimate of recoverable amount is particularly sensitive to the discount rate and reduction in revenues. If the discount rate used is increased by 0.5%, an impairment loss of €5.2m would have to be recognised which would be written off against goodwill. A 2% per cent decrease in forecasted revenue every year throughout the forecast period and in the terminal year would result in impairment loss of €5.1m. Management is not currently aware of any other reasonably possible changes to key assumptions that would cause the carrying amount to exceed its recoverable amount.
It is concluded that no impairment of intangible assets is required at the year end.
IFRS 16 has been adopted and leased assets are presented as right of use assets above.
Payments in respect of short term and/or low value leases (where leases have a value of less than £5,000, or less than 12 months or no minimum contract term) continue to be charged to the income statement on a straight-line basis over the term of the lease.
The right of use assets are depreciated over the shorter of the asset’s useful life and the lease term, on a straight line basis. The leases are discounted at the Group’s incremental borrowing rate on the date of lease inception, which ranges between 2.8%-3.1%.
Further details on the Group's leases are given in note 25.
The Company has no items of property, plant and equipment as at 31 March 2024.
Details of the company's subsidiaries at 31 March 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
On March 7, 2023, the group acquired 31.66% of B2M2 Midco SAS’s share capital. This represents a 51% stake in terms of voting rights.
On March 7, 2023, the group also acquired 48.00% and 47.78% of Tenn 2 SAS and Tenn 3 SAS share capital. This represents a 51% stake in both companies in terms of voting rights.
Contract assets and contract liabilities are both shown on the face of the statement of financial position. They arise from the Group's contracts because cumulative payments received from customers at each balance sheet date do not necessarily equal the amount of revenue recognised on the contracts.
Note that contract assets are yet to be invoiced, and therefore not due at the year end.
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
The Group considers that the credit risk is limited due to contracts being signed mainly with reputable customers, most of the contracts being prepaid at the start of the agreements and contracts being carefully monitored.
The Group has the following non-current borrowings at 31 December 2023:
Except as detailed below, the directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.
The group generates cash through its operations and aims to manage liquidity by ensuring it will always have sufficient financing facilities to meet its liabilities when due under both normal and stress conditions. Cash flow is carefully monitored on a daily basis to ensure any liquidity risk is minimised and cash balances are maintained at a level to meet both short and long term obligations. A revolving credit facility of EUR 10,000k is available to utilise which is subject to various financial covenants. At 31 March 2024 this facility was not drawn down.
The Groups interest rate risk is in relation to external borrowings. The interest rate on external borrowings is based upon two loans, details as explained in note 21. The first is a EURAZEO long term loan of €18,748,090 with an interest rate of 8% plus 3 month EURIBOR. The second loan is again a long term loan of €41,981,175 with a fixed interest rate of 8.75%. In managing interest rates, the group aims to reduce the impact of short term fluctuations on the Group's earnings through the avoidance of short term loans. The undiscounted contractual maturity analysis for Group financial instruments is shown in note 23. The maturity analysis reflects the contractual undiscounted cashflows, including future interest charges, which may differ from the carrying value of the liabilities as at the reporting date.
The Group has implemented hedging contracts (caps) to hedge the interest rate risks, relate to the financial loans implemented to finance the acquisition of Bemafin Invest. Whilst the company takes steps to minimise its exposure to cash flow interest rate risk, changes in interest rates will have an impact on profit. Loans on a variable rate, representing the 3 months EURIBOR base rate plus a margin. The effect of a 1% increase in the interest rate at the reporting date on the variable rate debt carried at that date would, all other variables being held constant, have resulted in an increase of the company's pre-tax profit for the year of €187,481. A 1% decrease in the interest rate would, on the same basis, have increased pre-tax profit by the same amount. However, the denomination of some bank loans in Euros means that, in practice, other variables would impact this sensitivity.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The Group's right of use asset additions and depreciation charge recognised on leases in the year is shown in note 16, and interest expense in note 11.
Included within accruals is €3,924,952 of interest relating the the Marlin Equity Partners loan, for further details see note 21.
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.
Deferred tax balances are carried at 25%.
The unrecognised tax losses carried forward amount to €126K resulting in an unrecongised deferred tax asset of €32K.
The amounts included in the statement of financial position arising from the group's obligations in respect of defined benefit plans are as follows:
Movements in the present value of defined benefit obligations
The defined benefit obligations arise from plans which are wholly unfunded.
Scheme obligations would have been affected by a variation of +0.5% of the actuarial rate this would have an impact of around 9% on the obligations.
Amounts recognised in the income statement
Of the total expenses for the period, €88,612 in administration expenses and €17,227 in finance costs.
Amounts recognised in other comprehensive income
The B1 shares of B2M2 Midco have a nominal value of €0.50, and an exercise price of €12.45 which is
reflective of fair value. The B1 shares are fully paid-up. The fact that the B1 shares are acquired for fair value means that no accounting entry is required to recognise a share based payment expense. Nevertheless, the shares still meet the definition of a share-based payment for disclosure purposes since the B1 shares have been issued to management and are expected to increase in value through to exit.
The B2 shares of B2M2 Midco have a nominal value of €0.50, payable at a future exit event. The value of the shares is expected to increase in value through to exit.
Both the B1 and B2 shares may be forfeited if the participant ceases to remain an employee of the Group before the scheme has fully vested. All B1 and B2 shares were granted at the same date and carry identical terms for each participant.
The inputs to the valuation are summarised below:
On incorporation, 1 ordinary share of £1 was issued at par.
Subsequently, the share capital was sub-divided into 10,000 ordinary shares of £0.0001 each then a further 76,000 ordinary shares of £0.0001 each were issued at par.
The 86,000 ordinary shares in issue were then consolidated into 1 ordinary share of £8.6 then sub-divided into 1,000 ordinary shares of £0.0086 each and redenominated to 1,000 ordinary shares of €0.01 each.
A futher 2,129,989 ordinary shares of €0.01 each were issued for consideration of €2,129,989 resulting in share premium of €2,108,689.
On 7 March 2023 B2M2 Bidco SAS acquired 100% percent of the issued capital of Bemafin Invest, being the parent company of a group of six companies, including Tennaxia SAS.
B2M2 Bidco SAS is owned 100% by B2M2 Midco SAS. The group owns 31.66% of the share capital of B2M2 Midco SAS, which represents a 51% stake in terms of voting rights, creating a non-controlling interest higher in the group, see note 33.
In accordance with IFRS 3 Business Combinations, goodwill of €72,182,124 arising from the acquisition and €27,807,202 of separable intangibles assets have been recognised.
The March 2024 results for The Bemafin Invest Group have been consolidated with those of the pre-existing Group members in these financial statements from the date of acquisition.
On 7 March 2023 B2M2 Bidco SAS acquired 100% percent of the issued capital of Bemafin Invest, being the parent company of a group of six companies, including Tennaxia SAS.
B2M2 Bidco SAS is owned 100% by B2M2 Midco SAS. The group owns 31.66% of the share capital of B2M2 Midco SAS, which represents a 51% stake in terms of voting rights, creating a non-controlling interest higher in the group.
Additionally the group acquired, 48.00% and 47.78% of Tenn 2 SAS and Tenn 3 SAS share capital. This represents a 51% stake in both companies in terms of voting rights.
On 7 March 2023, B2M2 Midco SAS, Tenn 2 SAS and Tenn 3 SAS issued shares to non-controlling interest for consideration totalling €41,372,826.
The following information summarises the information relating to the group's subsidiaries that have material non-controlling interest ('NCI'):
The objectives of the Group when managing capital are:
To ensure the Group's ability to continue as a going concern, and
To maximise returns to shareholders.
The Group is constantly monitoring the capital structure of the Group in order to reduce net debt and achieve an optimal capital structure to maximise returns to shareholders.
The Group is not subject to any externally imposed capital requirements.
The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
Marlin Equity Partners is a controlling party of the Group. The Group has supplier debt with Marlin Equity Partners as at 31 March 2024 of €171K. The fees invoiced by Marlin Marlin Equity Partners in period amount to €727.6K. Additionally, the Group has an outstanding loan note issued by Marlin Equity Partners of €41,981.2k along with €3,925k of interest relating to this loan note.
The Group has a Financial current account advance by Allinove (a related party by vitue of being a shareholder of B2M2 Midco) to Tennaxia SAS as at 31 March 2024 of €508.8K including interest of €8.8K.
The notes on page 55 form part of these parent financial statements.
The notes on page 55 form part of these parent financial statements.
The average monthly number of persons (including directors) employed by the company during the Period was:
Details of the company's principal operating subsidiaries are included in note 17.