Company registration number 07753604 (England and Wales)
ESMS GLOBAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ESMS GLOBAL LIMITED
COMPANY INFORMATION
Directors
R Sood
S Webster
S Sood
J Webster
Secretary
Aldbury Secretaries Limited
Company number
07753604
Registered office
2nd Floor Godfree Court
Apex Yard
29 Long Lane
London
SE1 4PL
Auditor
Gravita Audit II Limited
Aldgate Tower
2 Leman Street
London
E1 8FA
Bankers
NatWest Bank Plc
10 Southwark Street
London
SE1 1TJ
ESMS GLOBAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 29
ESMS GLOBAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Principal activities

The principal activity of the Company in the year under review was that of the provision of services to the research and development team of global pharmaceutical companies. In addition the company provides a unique information service across the veterinary industry.

Review of the business

Turnover for 2023 was £7,909,166 compared to the 2022 figure of £7,590,597, an increase of 4% . Profit after tax for 2023 was £2,536,279 compared to £2,528,770 in 2022, representing a stable level. The profit from 2023 was transferred to reserves and made available for the payment of dividends. At the year end the company had net assets of £6,498,332 compared to 2022 figure of £3,962,053 representing an increase of 64%. The increase in net assets was mainly due to the profit made by the company in 2023.

 

Principal risks and uncertainties

The Company's primary function is to support its clients in the pharmaceutical and biotechnology industry and their efforts for the successful development of drug therapies. The Company is at risk of changes in the regulatory environment for drug research.

The Company has a high penetration among the largest pharmaceutical companies for its services. Future growth in sales is dependent upon a continuing pipeline of development from these organisations and the introduction of services into new pharmaceutical companies.

 

The company has a substantial penetration within the UK Veterinary market, further growth is predicated on growth within the consumer sector and international growth.

Currency risk

The Company conducts the majority of its transactions in Sterling with the remaining transactions in US Dollars and Euros. As a result, the Company is exposed to some exchange risk.

Liquidity risk
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Primarily this is achieved through treasury account facilities.

Price risk
All commercial transactions undertaken by the Company are subject to negotiation, and as such the Company is exposed to some price risk.

Cash flow risk
The Company holds significant cash reserves and whilst the Company continues to operate profitably the cash flow risk remains relatively low.

 

ESMS GLOBAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators

Management review Turnover and Earnings Before Interest, Taxes, Depreciation and Amortisation ("EBITDA") as key indicators of the Company's performance.

 

EBITDA for the years presented was:

2023                 2022
£                 £

Profit after tax                 2,536,279             2,528,770
Interest expense                (24,000)                 (24,000)
Interest income                209,973                 0
Tax                    (800,390)              (453,243)
Depreciation                 (31,413)                  (4,152)
Amortisation                (20,900)                 7,401
EBITDA                     3,202,909 3,002,764

On behalf of the board

R Sood
Director
19 February 2025
ESMS GLOBAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Results and dividends

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

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

Directors

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

R Sood
S Webster
S Sood
J Webster
Auditor

In accordance with the company's articles, a resolution proposing that Gravita Audit II Limited be reappointed as auditor of the company will be put at a General Meeting.

Statement of disclosure to auditor

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

Medium-sized companies exemption

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

On behalf of the board
R Sood
S Webster
Director
Director
S Sood
J Webster
Director
Director
19 February 2025
ESMS GLOBAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

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

ESMS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ESMS GLOBAL LIMITED
- 5 -
Opinion

We have audited the financial statements of ESMS Global Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Emphasis of matter

We draw attention to note 22 of the accounts. The company is subject to legal proceedings which have been discussed in note 22.

Our opinion is not modified in respect to this matter.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

ESMS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ESMS GLOBAL LIMITED (CONTINUED)
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

ESMS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ESMS GLOBAL LIMITED (CONTINUED)
- 7 -

We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations. The laws and regulations applicable to the company were identified through discussions with directors and other management, and from our commercial knowledge and experience of the medical industry.

Of these laws and regulations, we focused on those that we considered may have a direct material effect on the financial statements or the operations of the company, including Companies Act 2006, taxation legislation, data protection, anti-bribery, anti-money-laundering, employment, environmental and health and safety legislation. The extent of compliance with these laws and regulations identified above was assessed through making enquiries of management and inspecting legal correspondence. The identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: 

To address the risk of fraud through management bias and override of controls, we: 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

ESMS GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ESMS GLOBAL LIMITED (CONTINUED)
- 8 -
Daniel Rose (Senior Statutory Auditor)
For and on behalf of Gravita Audit II Limited, Statutory Auditor
Chartered Accountants
Aldgate Tower
2 Leman Street
London
E1 8FA
19 February 2025
ESMS GLOBAL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
7,909,165
7,590,595
Cost of sales
(342,146)
(270,648)
Gross profit
7,567,019
7,319,947
Administrative expenses
(3,787,774)
(3,825,377)
Exceptional item
4
(628,549)
(488,557)
Operating profit
5
3,150,696
3,006,013
Interest receivable and similar income
8
209,973
-
0
Interest payable and similar expenses
9
(24,000)
(24,000)
Profit before taxation
3,336,669
2,982,013
Tax on profit
10
(800,390)
(453,243)
Profit for the financial year
2,536,279
2,528,770

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ESMS GLOBAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
2,536,279
2,528,770
Other comprehensive income
-
-
Total comprehensive income for the year
2,536,279
2,528,770
ESMS GLOBAL LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
69,013
49,763
Tangible assets
12
58,602
85,249
127,615
135,012
Current assets
Debtors
13
2,344,227
2,771,411
Cash at bank and in hand
8,468,057
5,357,196
10,812,284
8,128,607
Creditors: amounts falling due within one year
14
(2,668,512)
(2,522,226)
Net current assets
8,143,772
5,606,381
Total assets less current liabilities
8,271,387
5,741,393
Provisions for liabilities
Provisions
15
1,770,703
1,770,703
Deferred tax liability
16
2,352
8,637
(1,773,055)
(1,779,340)
Net assets
6,498,332
3,962,053
Capital and reserves
Called up share capital
20
880
880
Other reserves
44,037
44,037
Profit and loss reserves
6,453,415
3,917,136
Total equity
6,498,332
3,962,053

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 19 February 2025 and are signed on its behalf by:
R Sood
S Webster
Director
Director
S Sood
J Webster
Director
Director
Company registration number 07753604 (England and Wales)
ESMS GLOBAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share based payment reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
880
44,037
1,388,366
1,433,283
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
2,528,770
2,528,770
Balance at 31 December 2022
880
44,037
3,917,136
3,962,053
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
2,536,279
2,536,279
Balance at 31 December 2023
880
44,037
6,453,415
6,498,332
ESMS GLOBAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
3,681,703
2,852,615
Interest paid
(24,000)
(24,000)
Income taxes paid
(711,999)
(657,840)
Net cash inflow from operating activities
2,945,704
2,170,775
Investing activities
Purchase of intangible assets
(40,050)
(26,493)
Purchase of tangible fixed assets
(4,766)
(45,667)
Interest received
209,973
-
0
Net cash generated from/(used in) investing activities
165,157
(72,160)
Net increase in cash and cash equivalents
3,110,861
2,098,615
Cash and cash equivalents at beginning of year
5,357,196
3,258,581
Cash and cash equivalents at end of year
8,468,057
5,357,196
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

ESMS Global Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2nd Floor Godfree Court, Apex Yard, 29 Long Lane, London, SE1 4PL.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

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

1.3
Turnover

Turnover is recognised for providing a 24 hour poison information hotline, support for clinical trials and for product safety. Turnover is recognised once the company has provided the required service. Any contracted or prepaid services are deferred as necessary around the year end to ensure that only services provided to customers during the period are reflected in the financial statements as turnover.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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

Computer Software
25% straight line
1.5
Tangible fixed assets

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

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

Leasehold land and buildings
Over the term of the lease
Plant and equipment
25% straight line
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

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

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Other financial liabilities

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

 

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

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities

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

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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 when the company has 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.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.12
Employee benefits

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

 

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

 

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

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits

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

1.14
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. 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.

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.15
Leases

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

1.16
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

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

Contingent liabilities

As discussed in note 22, the company have various legal proceeding ongoing. Judgement has been applied to determine if it is probable that the entity will be required to to transfer economic benefits in settlement and if the amount of the obligation can be estimated reliably to determine whether a provision or a contingent liability should be recognised.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful economic life (depreciation and amortisation)

Depreciation and amortisation are provided at rates calculated to write off the cost of assets less the estimated residual value of each asset over its expected useful life, using industry standards.

Provision for legal costs

As discussed in note 22 the company has legal proceedings ongoing. The provision for legal costs has been determined based on a cost estimate provided by the relevant law firms.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Rendering of Services
7,909,165
7,590,595
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 20 -
2023
2022
£
£
Turnover analysed by geographical market
UK
2,798,184
3,346,011
Europe
2,887,373
2,663,615
Overseas
2,223,608
1,580,969
7,909,165
7,590,595
2023
2022
£
£
Other revenue
Interest income
209,973
-
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional Costs
628,549
488,557

Exceptional costs are in relation to legal fees paid relating to the matters discussed in note 22.

5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(117,218)
(87,923)
Fees payable to the company's auditor for the audit of the company's financial statements
65,458
69,019
Depreciation of owned tangible fixed assets
31,413
4,152
Amortisation of intangible assets
20,800
(7,401)
Operating lease charges
273,789
241,342
6
Employees

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

2023
2022
Number
Number
64
64
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 21 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,752,549
2,751,366
Social security costs
1,746
1,545
Pension costs
86,779
90,221
2,841,074
2,843,132
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
310,750
290,050
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
166,390
149,172
Company pension contributions to defined contribution schemes
-
567
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
209,973
-
0
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
209,973
-
0
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
24,000
24,000
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
806,675
445,101
Deferred tax
Origination and reversal of timing differences
(6,285)
8,142
Total tax charge
800,390
453,243

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:

2023
2022
£
£
Profit before taxation
3,336,669
2,982,013
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
784,803
566,582
Tax effect of expenses that are not deductible in determining taxable profit
23,355
92,986
Tax effect of income not taxable in determining taxable profit
(49,387)
-
0
Under/(over) provided in prior years
-
0
(198,357)
Tax relief in respect of gift aid
(8)
-
0
Capital allowances
(1,475)
(16,110)
Deferred tax movement
(6,285)
8,142
Non-trade loan relationship
49,387
-
0
Taxation charge for the year
800,390
453,243

The increase of the main rate of corporation tax from19% to 25% from 1 April 2023 was substantively enacted on 24th May 2021. The 23.52% rate used above reflects 9 months of the new rate and 3 months of the previous rate of 19%.

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
11
Intangible fixed assets
Negative goodwill
Computer Software
Total
£
£
£
Cost
At 1 January 2023
(1,422,333)
114,828
(1,307,505)
Additions
-
0
40,050
40,050
At 31 December 2023
(1,422,333)
154,878
(1,267,455)
Amortisation and impairment
At 1 January 2023
(1,422,333)
65,065
(1,357,268)
Amortisation charged for the year
-
0
20,800
20,800
At 31 December 2023
(1,422,333)
85,865
(1,336,468)
Carrying amount
At 31 December 2023
-
0
69,013
69,013
At 31 December 2022
-
0
49,763
49,763
12
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023
15,153
578,560
593,713
Additions
-
0
4,766
4,766
At 31 December 2023
15,153
583,326
598,479
Depreciation and impairment
At 1 January 2023
126
508,338
508,464
Depreciation charged in the year
-
0
31,413
31,413
At 31 December 2023
126
539,751
539,877
Carrying amount
At 31 December 2023
15,027
43,575
58,602
At 31 December 2022
15,027
70,222
85,249
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,000,423
1,902,698
Other debtors
466,824
279,550
Prepayments and accrued income
876,980
589,163
2,344,227
2,771,411
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Trade creditors
639,546
357,248
Corporation tax
799,210
704,534
Other taxation and social security
51,227
225,298
Deferred income
17
486,378
411,705
Other creditors
340,906
341,892
Accruals and deferred income
351,245
481,549
2,668,512
2,522,226

A loan of £200,000 have been received from a company under common control included in other creditors due within one year. This loan is secured by a fixed charge on the future acquired real property and intellectual property and floating charge on the company.

15
Provisions for liabilities
2023
2022
£
£
1,770,703
1,770,703

The provision includes an estimate of the legal costs in respect of one of the cases mentioned in Note 22 of the financial statements. At the year end, the case was ongoing and the provision represents a best estimate of the legal costs at that point. The directors do not wish to disclose any further information relating to the case as it would be prejudicial to such matters. The provision also includes the settlement amount which was known at the date of signing the financial statements for a different legal matter.

 

In the prior year accounts, the provision has been included within creditors however as this amount is the best estimate of the legal fees the comparatives have been restated to move the amount from creditors to provisions. This has no impact on retained earnings.

Movements on provisions:
£
At 1 January 2023 and 31 December 2023
1,770,703
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
16
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Share based payments
495
495
Other timing differences
1,857
8,142
2,352
8,637
2023
Movements in the year:
£
Liability at 1 January 2023
8,637
Credit to profit or loss
(6,285)
Liability at 31 December 2023
2,352
17
Deferred income
2023
2022
£
£
Other deferred income
486,378
411,705
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
86,779
90,221

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

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
19
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
1,141,797
1,141,797
1.25
1.25
Forfeited
(7,873)
-
0
-
0
-
0
Outstanding at 31 December 2023
1,133,924
1,141,797
1.24
1.25
Exercisable at 31 December 2023
-
0
-
0
-
0
-
0

The company has an EMI share option scheme for eligible employees.

 

At the end of the period a total of 648,938 (2022: 648,938) options over ordinary A shares at exercise price of £nil per ordinary A share and 484,986 (2022: 492,859) options over ordinary A or B shares at an exercise price of £2.90 per ordinary A or B share, were outstanding.

 

The options for all eligible employees are exercisable should the company be acquired, taken over or floated. The expiry date is ten years after the date the options were granted or at an earlier date should the employee cease to be an eligible employee.

 

The market price of the shares at 31 December 2023 is not considered to be materially different to the exercise price.

 

During the year, the company recognised total share-based payment expenses of £0 (2022 - £0) which related to equity settled share based payment transactions.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary class A of 1p each
800,000
800,000
80
80
Ordinary class B of 0.4p each
8,000,000
8,000,000
320
320
Ordinary class C of 0.6p each
8,000,000
8,000,000
480
480
16,800,000
16,800,000
880
880
21
Called up share capital

The ordinary A and B shares have full voting, dividend and capital distribution (including on winding up) rights. The ordinary C shares have dividend rights and holders are not entitled to vote at any General Meeting of the company.

 

The company has an EMI share option scheme. Under the scheme 800,000 options are held over ordinary A shares of 0.01p each which are already in issue. These options are held by Trident Trust Company (Guernsey) Limited as a trustee of the ESMS Employee Benefit Trust Limited. 719,698 options have an exercise price of £nil and can be exercised at any time between 13 May 2015 and 13 May 2025. 80,302 options have an exercise price of £2.90 and can be exercised at any time between 30 November 2018 and 30 November 2028.

ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
22
Financial commitments, guarantees and contingent liabilities

The company has in a previous period received a claim in relation to obligations relating to an agreement it entered into relating to the purchase of a business. The potential settlement of the claim has not been determined as legal proceedings are ongoing and no estimation has been given. The directions have obtained legal advice which suggests there is a basis to defend the claim. No provision has been made in the financial statements at the period end other than for legal costs to defend the claim. These costs are provided for in the financial statements as per cost estimates provided by the company’s legal advisors at the period end.

The company has received an employment related claim from a director. The potential losses are yet to be determined and legal advice has been obtained and as such at the period end no provision could be made in the financial statements relating to this matter.

The company is party to a legal matter occurring in the Bailiwick of Guernsey. The matter is primarily between a shareholder of the company and certain employees.  The company is only party to the matter in relation to the legal costs application limb that may arise as a result of the proceedings. There may also be potential tax liabilities because of the actions taken by certain employees, a director of the company and the Trustee of the shareholder. At the period end these matters had yet to start legal proceedings. These were commenced post year end. The company has determined the existing potential tax risks relating to the offshore status of the employment benefit trust, direction to the Trust and ear marking with the additional further incident after the year end have increased the likelihood of potential tax liabilities for the company. A director has estimated the potential income tax liability because of these actions at £3.8m. 

The actions after the year end in conjunction with the prior year activities have increased the estimated liability, as prepared by a director, in respect of capital gains tax to £2.4m. This increase from prior year estimates is based on three factors

The company is currently considering a possible GDPR breach. If there is a breach it may require a number of authorities to be informed, however only one has been informed at this stage by one director. At this stage the directors cannot determine the likelihood of costs or adverse findings on the company hence no provision could be made in the financial statements relating to this matter.

23
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
168,500
168,500
Between two and five years
674,000
674,000
In over five years
99,715
268,215
942,215
1,110,715
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
24
Related party transactions
Transactions with related parties

The company offered a guarantee to National Westminster Bank PLC to the value of £1,233,210 (2022: £1,233,210) to cover the bank loan to MTIS Prop Co Ltd. No other guarantees have been given or received.

 

During the period, management fees of £262,030 (2022: £251,055) were paid to companies under common control.

 

During the period, director fees of £nil (2022: £4,000) were charged by directors of the company.

 

During the period, rent and service charges of £195,269 (2022: £195,354) were charged by a company under common control.

 

Loans of £200,000 have been issued by companies under common control. This loan is interest bearing at 12% and interest of £24,000 was paid during the year. At the year end, £200,000 (2022: £200,000) was still outstanding and included within creditors falling due within one year. The loan is secured by a fixed and floating charge over the company's assets.

At the year end, an amount of £455,985 (2022: £443,490) was owed to companies under common control. This balance is due within 1 year and no interest is accruing on the balance.

 

At the year end, an amount of £3,563 (2022:£nil) was owed by companies under common control. This balance is due within 1 year and no interest is accruing on the balance.

At the year end, an amount of £290,957 (2022: £189,547) was due from the trustee of the employment benefit trust. This balance is due within 1 year and no interest is being charged.

25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,536,279
2,528,770
Adjustments for:
Taxation charged
800,390
453,243
Finance costs
24,000
24,000
Investment income
(209,973)
-
0
Amortisation and impairment of intangible assets
20,800
(7,402)
Depreciation and impairment of tangible fixed assets
31,413
4,152
Increase in provisions
-
0
1,770,703
Movements in working capital:
Decrease/(increase) in debtors
427,184
(531,549)
Decrease in creditors
(23,063)
(1,310,679)
Increase/(decrease) in deferred income
74,673
(78,624)
Cash generated from operations
3,681,703
2,852,614
ESMS GLOBAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
5,357,196
3,110,861
8,468,057
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