The director presents the strategic report for the year ended 31 December 2023.
The Strategic Report contains an overview of the subsidiary company, Adjaye Associates Limited, being the whole trade and operations of the group.
Business Overview
Adjaye Associates works in the belief that architecture should represent and uplift the communities it serves. Meeting this ambition means building a coalition of designers, thinkers, and researchers that wholly represent those communities. As such, our practice is made up of a diverse team that consistently delivers architecture which champions representation at all levels.
The studio has built a robust reputation for both its built portfolio and intellectual and cross-cultural endeavors. Our built projects range in scale from private houses, exhibition designs, product designs, and temporary pavilions to major arts centres, landscape design, civic buildings, residential schemes, and large-scale masterplans. We are renowned in the architectural industry for research-driven solutions, an aesthetic built on eclectic material and colour palettes, as well as a capacity to offer rich civic experiences. Overall, our goal is to explore how architecture can act as a platform for storytelling, activating its power to build authentic narratives of place and people. The result is a practice portfolio of buildings that function not only as bold cultural symbols, but as significant social catalysts.
Our studio’s work reflects our team’s composition. Adjaye Associates cultivates an open office culture, where an approach of knowledge-sharing is universally encouraged and where everybody learns from each other. We pride ourselves on having a gender-balanced, ethnically diverse, international team where all knowledge systems are valued and used.
Projects and Pipeline
2023 was a commercially challenging year for the construction industry at large and this is reflected in our financial reporting for the period. Our position as one of the most diverse practices in the world, recognised for the representation we bring to architecture and for the quality and social impact of our work, together with our ability to be agile with our resourcing, is a resilient basis from which to recover from a temporary downturn.
An economic slowdown across many global economies led to delays on a number of significant projects in these markets. Our portfolio of work on the African continent has expanded, in line with GlobalData reporting on growth trends in emerging markets.
Progress continued on many international commissions and local contracts of varying scale and scope. Notable projects the practice completed in 2023 were the King Salman Park Visitor Centre in Riyadh, the George Street Plaza & Community Building in Sydney, Australia; 130 William, a residential skyscraper in New York City, USA; Sycamore & Oak, a community hub in the Congress Heights area of Washington DC, USA; and a commercial building in central London, UK. Our work receives positive recognition in the press and industry awards cycle.
The practice continued work on a number of major projects in the UK, Americas, the Middle East and African continent. A major new commission for The Kiran Nadar Museum of Art & Cultural Center, which will be the largest private art museum in India, was revealed at the 2023 Venice Biennale. The 100,000 sqm project is progressing on site. The practice won competitions for a major arts project in Saudia Arabia and a large scale residential project in France.
Adjaye Associates’ industry successes and recognitions in 2023 were a reflection of the strength and resilience of the studio’s global reputation as a practice that prioritises representation in the built environment. In April, David Adjaye’s innovative use of materiality was celebrated in ‘Alchemy’, a monograph published by Phaidon. The studio contributed to the 2023 Venice Biennale, curated by Lesley Lokko, with the installation of a black timber pyramid structure, Kwae, and a series of specially commissioned films about the studio’s work.
The company has retained its offer of a hybrid working pattern for our teams enabling flexible working. We have developed a model of working that meets the demands of our business as a world-leading design studio whilst responding to the work/life balance desired by a diverse international team. Our policies help us attract and retain the best possible candidates for the practice so we can continue to deliver exceptional projects.
Adjaye Associates’ management prides itself on supporting a skilled, professional, and flexible workforce. Team members are encouraged to develop their talents and skills with a view to increasing individual capabilities and opportunities. Practically, this translates into regular appraisals and reviews; RIBA and ARB accredited continuing professional development; further education and specific training programs; RIBA Part 3 support; and dedicated skills training and promotion for senior staff.
We encourage requests for training and development at all levels, provide regular REVIT/BIM Training and run a robust program of CPD (Continuous Professional Development), including mandatory sessions on CDM, Health & Safety and Regulatory issues. Our team is also supported through specific skills training. We fund training courses in part or fully as a wider ambition to enhance our staff’s wider career development, including soft-skills training around management, leadership, and presentation skills.
Adjaye Associates has intentionally composed a diverse team of architects, interior architects, researchers, and project managers. The practice’s commitment to diversity is far-reaching and is the founding principle on which the studio is built. We advocate, and are committed to, consistently ensuring that an inclusive and diverse team is supported. As such, we support and engage with groups including the Paradigm Network to ensure opportunities reach the widest possible pool of typically underrepresented candidates.
Adjaye Associates is composed of a diverse, gender-balanced team with 21 different nationalities represented in our studio . This diversity is represented at all levels of seniority, from entry level designers through to Part 3 architects, project leaders and senior management. We understand that achieving this level of representation does not happen without the appropriate training, mentorship, and progression programs – both formal and informal. The company encourages this culture of progression, enabling all members of staff the opportunities to access higher level positions.
In 2023, the company maintained strong performance with a turnover of £17m, driven by ongoing international projects. Gross margin percentage remained steady year-on-year, in line with the change in turnover. However, the overall profit before tax margin excluding exceptional items fell to 4% (from 12% in 2022) due to global economic challenges. Despite these difficulties, this was a commendable result in a commercially challenging year.
The average headcount decreased to 85 staff members (down from 96 in 2022), while turnover per employee remained stable at £202k (compared to £213k in 2022), which is above the industry average. Despite the economic uncertainty, strong reserves were maintained through steady cost management, accurate forecasting, and effective working capital management.
Project Pipeline
Having sufficient projects to ensure long term financial sustainability is managed by proactively seeking new business opportunities, exploring new and emerging markets and implementing cost control and cash flow forecasting.
Recruitment Shortages
Thanks to Adjaye Associates’ longstanding and visible track record on diversity in recruitment, our practice continued to enjoy high levels of candidate interest across all staff levels and will continue to build on our recruitment achievements through our practice’s messaging and by shaping an environment that attracts and retains talent.
Financial Risk
Credit risk is mitigated through constant monitoring of debtors and regular project reviews, to ensure that corrective action is taken before debt becomes overdue. Liquidity risk is managed through detailed cash flow projections, which enable the company to maintain appropriate levels of working capital to meet its financial obligations as they fall due and protect itself against short-term adverse fluctuations in market risk.
Currency risk arises from the revenue that the company earns from contracts denominated in non-Sterling currencies. The company manages this exposure by matching revenues and costs in the same currencies, and then converting excess cash balances in foreign currencies into Sterling as soon as is practicable.
Future Developments
We are committed to creating a nurturing environment where everyone is supported and has the freedom to be individuals. We are proud to have built a global practice that actively recruits from underrepresented and diverse groups. We are continually looking at how our studio can serve as an incubator for diverse talent and future leaders in the UK, USA and Africa, by giving opportunities to work on extraordinary projects of all scales in many different geographies and contexts. We are especially proud of our working collaboration with our studio in Accra, Ghana, where we are leveraging valuable global project experience for many young architects and supporting teams in this thriving and expanding creative economy.
Despite an unsettled period, we are optimistic about the resilience of the practice, as we continue to deliver projects around the world. This, together with our ongoing operational soundness, will allow the practice to focus exclusively on quality of output, the health and wellbeing of our staff, and seeking out ways to continue to deliver sustainable, representative architecture.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2023.
The director who held office during the year and up to the date of signature:
Ordinary dividends were paid amounting to £1,888,733. The director does not recommend payment of a further dividend.
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements 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 and company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of Adjaye Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Group Profit And Loss Account, the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
As explained more fully in the Director's Responsibilities Statement, the director is 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 director determines 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 director is responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or parent company or to cease operations, or has no realistic alternative but to do so.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,888,613 (2022 - £1,943,885 profit).
Adjaye Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Edison House, 223-231 Old Marylebone Road, London, NW1 5QT.
The group consists of Adjaye Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Adjaye Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Management have modelled the company's cash flows using different scenarios, considering the timing of ongoing projects, outgoings to subcontractors and variability on other costs. The director has provided a letter of support, confirming their personal financial support should the company require it. Therefore the director is confident that the business can meet its liabilities as they fall due for at least 12 months from the date of signing of these financial statements.
On the basis of the above, the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Services provided but which had not been billed at the balance sheet date have been recognised as revenue. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the firm and the revenue can be reliably measured. Revenue recognition in this manner is based on an assessment of the fair value of the services provided at the balance sheet date where there exists an agreed right to receive consideration for work undertaken.
Revenue from a contract to provide services is recognised in the period in which the services are provided using the percentage of completion method over the life of the project. This is based on the direct labour cost to date as a percentage of the total expected direct labour cost.
Accrued income is included in the financial statements as a current asset. Payments received on account of unbilled work are set off against accrued income in the balance sheet.
Income which is billed for work to be carried out at a future date or in advance of providing other services where a liability exists at the balance sheet date to fulfil specific future obligations, is treated as deferred income and included in current liabilities.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Revenue from contracts to provide services is assessed on an individual basis with revenue earned being ascertained based on the stage of completion of the contract which is estimated using a combination of the milestones in the contract and the time spent to date compared to the total time expected to be required to undertake the contract. Estimates of the total time required to undertake the contracts are made on a regular basis and subject to management review. These estimates may differ from the actual results due to a variety of factors such as efficiency of working, accuracy of assessment of progress to date and client decision making.
The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. See note 10 for the carrying amount of the intangible assets and note 1.4 for the useful economic lives for each class of asset.
All turnover is from rendering of services.
During the year, the group reviewed the position of claims for withholding taxes from foreign jurisdictions and has provided against those claims where there is either a limited or no chance of further recovery of these amounts.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
No remuneration was paid to the director.
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2023 are as follows:
Within deferred income, the group has a performance bond in favour of one of its clients in Saudi Arabia. This bond, of SAR905,114, is contingent on Adjaye Associates being able to produce the deliverables agreed as per the contract.
The group's bank borrowings are secured by a debenture comprising fixed and floating charges over all the group's assets.
The financing facility relates to a £250,000 Fixed rate loan agreement as part of the Coronavirus Business Interruption Loan Scheme. Interest is charged at the Base Rate plus 2.96% on the drawn-down amount. The fixed rate period is 60 months, with the final repayment date being 72 months after the Loan is drawn. This will be paid in monthly instalments of £4,167.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The group had unpaid pension contributions of £nil (2022: £27,963) at year end.
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:
The remuneration of key management personnel is as follows.
At the end of the year £137,622 (2022: £456,607) included in other debtors was owed from companies under common control.
During the year, the company made sales of £1,063,812 (2022: £311,615) to companies under common control and purchases of £348,290 (2022: £413,048) from companies under common control.
The group has taken advantage of the exemption available in accordance with FRS 102 section 33 'Related Party Disclosures' not to disclose transactions entered into between two or more members of a group, as the company has a wholly owned subsidiary undertaking of the company which it is party to the transactions.