Registered number: 13758031
AAREON ACCELERATE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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AAREON ACCELERATE LIMITED
COMPANY INFORMATION
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A L Berkley (appointed 23 January 2023, resigned 31 October 2024)
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S P Cobby (appointed 27 January 2023, resigned 28 November 2023)
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R K Nayyar (resigned 12 September 2024)
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D R Synott (appointed 28 November 2023)
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R L Baig (appointed 12 September 2024)
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J S Hines (appointed 27 November 2024)
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P M I Caulfield (resigned 11 May 2023)
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E Marinelli (appointed 12 September 2024)
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Chartered Accountants & Statutory Auditor
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AAREON ACCELERATE LIMITED
CONTENTS
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Independent auditors' report
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Consolidated statement of comprehensive income
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Consolidated statement of financial position
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Company statement of financial position
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Notes to the financial statements
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AAREON ACCELERATE LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Executive Summary
The Executive Summary provides a concise overview of Aareon Accelerate Limited’s strategic position, key financial highlights, and primary objectives. This section aims to summarise the most critical information for stakeholders.
Aareon Accelerate Limited is dedicated to providing innovative software solutions to enhance property management and optimise operations for our clients. Our mission is to lead the market with cutting-edge technology and exceptional customer service.
Company History:
Founded in 2021 to house Aareon AG SMB acquisitions, Aareon Accelerate Limited has consistently grown to become a leader in the property management software industry. Our evolution has been marked by innovation, and a commitment to excellence.
Products and Services:
Property Management Software: Comprehensive tools for property management, tenant communications,and maintenance tracking.
Consulting Services: Tailored solutions to maximise software utilization and efficiency.
Competitive Landscape:
Aareon Accelerate Limited operates in a competitive market with key competitors including Alto, Plentific, and Landlord Vision. Our competitive advantage lies in our innovative products, exceptional customer service, and depth of industry knowledge.
Cost Management:
Operational Efficiency: We grew costs slower than revenue as we approach cash flow positivity.
R&D Investment: Allocated 27% of revenue towards R&D to fuel innovation and future growth.
Balance Sheet Strength:
Assets: Increased total assets through investments in software and business growth.
Liabilities: Managed liabilities effectively, with no external debt, and long term parent investment via loans and direct capital increases in subsidiaries.
Key Achievements:
Product Launches: Successfully launched Contractor Marketplace, enhancing our product portfolio. Built integrations between our portfolio products increasing the opportunity for cross sell of products.
Client Acquisition: Secured over 500 new clients, expanding our market presence.
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AAREON ACCELERATE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal risks and uncertainties
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Market Risks:
Economic Downturns: Mitigation through diversified product offerings and markets, and the introduction of term contracts.
Regulatory Changes: Proactive compliance strategies and regular legal consultations ensuring our business and our products stay ahead of any changes.
Operational Risks:
Cybersecurity Threats: Enhanced security protocols and regular staff training.
Product Downtime: Invest in suitable infrastructure and recovery processes to minimise the risk and impact of product downtime.
Financial key performance indicators
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Revenue Growth: Achieved a revenue increase in the subsidiary companies of 34% in the fiscal year, driven by new client acquisitions, and product upgrades.
Profit Margins: Improved EBITDA as we concentrated on long term R&D development whilst growing sales.
Other key performance indicators
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Our strategic objectives are centred around growth, innovation, and customer satisfaction:
Market Expansion: Increase market share in existing regions and explore new industry verticals within our established geographies markets.
Product Innovation: Continuously enhance our software capabilities to meet evolving customer needs.
Customer Engagement: Strengthen relationships with clients through superior service and support.
Directors' statement of compliance with duty to promote the success of the Group
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Aareon Accelerate Limited has demonstrated resilience and strategic acumen in navigating a dynamic market landscape. We are committed to maintaining our leadership position through innovation, operational excellence, and unwavering customer focus.
This report was approved by the board and signed on its behalf.
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AAREON ACCELERATE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £10,299,947 (2022 - £6,045,956).
No dividends were declared or paid in the year (2022: £Nil).
The principal activity of the company is that of holding company.
The directors who served during the year were:
A L Berkley (appointed 23 January 2023, resigned 31 October 2024)
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S P Cobby (appointed 27 January 2023, resigned 28 November 2023)
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R K Nayyar (resigned 12 September 2024)
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D R Synott (appointed 28 November 2023)
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P M I Caulfield (resigned 11 May 2023)
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AAREON ACCELERATE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Aareon Accelerate Limited is well-positioned for continued growth and success. Our focus will remain on innovation, market expansion, and enhancing customer satisfaction. Key initiatives for the coming year include:
Expanding of Marketplace to complement our core product offering.
Using new technology to allow our customers to reach all of their customers.
Introduce payments to provide best in class services to more of our customer experiences.
Strengthening partnerships with key industry players to foster collaborative growth.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Post balance sheet events
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Following the year end, the Group's Thai subsidiary has entered into voluntary liquidation in accordance with local rules and regulations.
Under section 487(2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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AAREON ACCELERATE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED
We have audited the financial statements of Aareon Accelerate Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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AAREON ACCELERATE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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AAREON ACCELERATE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED (CONTINUED)
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙Enquiring of management around actual and potential litigation and claims
∙Reviewing minutes of meetings of those charged with governance;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
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AAREON ACCELERATE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AAREON ACCELERATE LIMITED (CONTINUED)
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Nick Bishop FCA (Senior statutory auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
London
7 March 2025
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AAREON ACCELERATE LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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Other comprehensive income for the year
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Foreign exchange movement
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Other comprehensive income for the year
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Total comprehensive income for the year
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Profit for the year attributable to:
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Owners of the parent company
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The notes on pages 18 to 35 form part of these financial statements.
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AAREON ACCELERATE LIMITED
REGISTERED NUMBER: 13758031
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Equity attributable to owners of the parent Company
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AAREON ACCELERATE LIMITED
REGISTERED NUMBER: 13758031
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 18 to 35 form part of these financial statements.
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AAREON ACCELERATE LIMITED
REGISTERED NUMBER: 13758031
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Profit and loss account brought forward
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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AAREON ACCELERATE LIMITED
REGISTERED NUMBER: 13758031
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
The notes on pages 18 to 35 form part of these financial statements.
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AAREON ACCELERATE LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the period
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Foreign exchange movement
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Total comprehensive income for the period
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Contributions by and distributions to owners
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Shares issued during the period
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Comprehensive income for the year
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Foreign exchange movement
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Total comprehensive income for the year
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Contributions by and distributions to owners
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The notes on pages 18 to 35 form part of these financial statements.
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AAREON ACCELERATE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the period
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Total comprehensive income for the period
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Contributions by and distributions to owners
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Shares issued during the period
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Comprehensive income for the period
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Total comprehensive income for the year
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Contributions by and distributions to owners
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The notes on pages 18 to 35 form part of these financial statements.
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AAREON ACCELERATE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
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Loss for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Decrease/(increase) in amounts owed by groups
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Increase in amounts owed to groups
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Net fair value (gains)/losses recognised in P&L
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Corporation tax (paid)/received
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of intangible fixed assets
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Purchase of tangible fixed assets
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Sale of fixed asset investments
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Acquisition of subsidiaries
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Net cash from investing activities
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AAREON ACCELERATE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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Cash flows from financing activities
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 18 to 35 form part of these financial statements.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Aareon Accelerate Limited is a private company limited by shares incorporated in England and Wales. The address of the registered office is International House, 36-38 Cornhill, London, England, EC3V 3NG.
The principal activity of the Company is that of a holding company. The principal activity of the Group is that of support services to property management companies.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The Group financial statements show a loss for the period before tax of £10,004,052 (period ended 2022: £6,014,123) and net assets of £24,661,093 (period ended 2022: £33,970,976).
The group has net current liabilities at £26,034,326. Included in creditors are amounts of £25,125,218 due to group entities. The parent company has confirmed its intention to continue providing support to the group for a period of at least 12 months from the date at signing of these financial statements.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
The Group derives its revenue primarily through fees from subscription agreements with customers that are mostly monthly in term, payable in advance. Subscription revenues are recognised ratably over the contract terms beginning on the commencement date of each contract. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met.
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Operating leases: the Group as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Interest income is recognised in profit or loss using the effective interest method.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Long-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Impairment of fixed assets and goodwill
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Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Investments in subsidiaries are measured at cost less accumulated impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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(i) Financial assets
Basic financial assets, including trade & other debtors, are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors, bank loans and loans from other third parties, 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 receipts discounted at a market rate of interest.
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. Creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Fair value models assume that the effective rate of interest to be used for valuing fair value is that rate at which the company can obtain external finance.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the Group's accounting policies, the Directors are required to make judgments, estimates and assumptions. 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:
1.Management make judgements and estimates regarding the development phase of research and development costs. Management also estimate a reasonable ratio for capitalised development costs.
2. Management establish a reliable estimate of the useful life of goodwill and intangible assets based on factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, and legal, regulatory or contractual provisions that can limit the useful life and assumptions that market participants would consider in respect of similar business.
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An analysis of turnover by class of business is as follows:
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All turnover arose within the United Kingdom.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The operating loss is stated after charging:
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Research & development charged as an expense
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Other operating lease rentals
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During the year, the Group obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
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Fees payable to the Company's auditors in respect of:
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The auditing of accounts of subsidiaries of the Company
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Taxation compliance services
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Staff costs, including directors' remuneration, were as follows:
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Social security and other taxes
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The average monthly number of employees, including the directors, during the period was as follows:
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During the year retirement benefits were accruing to 3 directors (2022 - 3) in respect of defined contribution pension schemes.
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Interest payable and similar expenses
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Loans from group undertakings
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Current tax on profits for the year
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Origination and reversal of timing differences
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Taxation (continued)
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Factors affecting tax charge for the year/period
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The tax assessed for the year/period is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
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Non-tax deductible amortisation of goodwill and impairment
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Other pernament differences
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Remeasurement of deferred tax for changes in tax rates
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Other differences leading to an increase (decrease) in the tax charge
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Movement in deferred tax not recognised
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Total tax charge for the year/period
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Factors that may affect future tax charges
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The group has losses of approximately £6,715,831 to carry forward and use against future profits. No deferred tax asset has been recognised on these losses due to the uncertain nature of when the group will be profitable and begin to utilise them.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charge for the year on owned assets
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None of the Group's intangible fixed assets are held in the Parent Company.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Long-term leasehold property
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Charge for the year on owned assets
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Investments in subsidiary companies
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During the year, the Group disposed of its investment in Curo Software Ltd.
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Direct subsidiary undertakings
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The following were direct subsidiary undertakings of the Company:
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International House, 36-38 Cornhill, London, England, EC3V 3NG
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International House, 36-38 Cornhill, London, England, EC3V 3NG
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Indirect subsidiary undertakings
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The following were indirect subsidiary undertakings of the Company:
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8 Osborne Promenade, Warrenpoint, Newry, County Down, BT34 3NQ
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Arthur Southeast Asia Co. Ltd.
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FMA Building, 7th Floor 8/4, Convent Road, Silom, Bang Rak, Bangkok, Thailand
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Due after more than one year
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Amounts owed by group undertakings
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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The amounts due to group undertakings are unsecured, interest bearing at an annual rate of 3.5% plus SONIA and repayable in July 2029.
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Charged to profit or loss
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
19.Deferred taxation (continued)
|
Accelerated capital allowances
|
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Allotted, called up and fully paid
|
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4,001,000 (2022 - 4,001,000) Share Capital shares of £10.00 each
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Foreign exchange reserve
Foreign exchange reserve includes all foreign exchange variances incurred when retranslating the Statement of Financial Position of overseas subsidiaries into the Group reporting currency at the reporting date.
Other reserves
Other reserves include capital injections received from the parent company, to support its operations.
Profit and loss account
Profit and loss account includes all current year retained earnings.
An adjustment was made to the comparative information to reclassify a loan from current liabilities into non-current liabilities. This has no impact on the previously reported net assets and retained earnings.
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AAREON ACCELERATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £183,586 (2022: £88,759). Contributions totalling £36,869 (2022: £79,047) were payable to the fund at the reporting date and are included in creditors.
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Post balance sheet events
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Following the year end, the Group's Thai subsidiary has entered into voluntary liquidation in accordance with local rules and regulations.
The immediate parent undertaking is Aareon Holding GmbH, a company incorporated in Germany.
The ultimate parent undertaking is Aareal Bank AG, a company incorporated in Germany.
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