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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
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ATRATO GROUP LIMITED
COMPANY INFORMATION
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ATRATO GROUP LIMITED
CONTENTS
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ATRATO GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The principal activity of the Group is to identify investment strategies to forge a sustainable future through offering best-in-class expertise in generating long-term asset backed inflation linked income. The Group provides corporate finance and investment advice to professional clients in relation to existing real estate property, new real estate developments and other real assets. Details of the Group’s subsidiary undertakings are detailed elsewhere in note 13 of the financial statements.
The period to 31 December 2024 represented a period of significant change and continued investment for the Group amidst a challenging macro environment with equity markets remaining closed to new issuance for most of the Investment Trust universe.
Supermarket Income REIT Plc (‘SUPR’), for which Atrato Capital Limited was the Investment Advisor to, had a resilient financial performance with an increase in annualised passing rent, continued 100% rent collection and a lower EPRA cost ratio. Fees of £7.5million were earned in relation to Atrato Capital’s investment advisory services. Post year end Investors voted to internalise the management of SUPR, this resulted in the termination of the Investment Advisory Agreement and the transfer of 14 members of staff. Atrato Capital Limited was paid a fee of £16.8 million upon termination. Atrato Partners Limited was engaged as the Investment Advisor to Atrato Onsite Energy Plc until 13 December 2024. A consortium of investors bid for and subsequently acquired all the assets of the fund, this resulted in the termination of the Investment Advisory mandate. , with investment advisory fees of £1.0million earned during the period. Atrato Partners Limited was paid a termination fee of £3.7 million. The Company was to be appointed as the Alternative Investment Fund Manager (AIFM) for Supermarket Income REIT plc however the shareholders voted to internalise the management of the fund and terminate the prospective AIFM appointment. The company was paid a termination fee of £0.3m in respect of this. The Company was also paid an amount of £1.48m in respect of Intellectual Property, policies, processes and systems upon the internalisation which took effect in March 2025. Atrato Partners Limited continues to pursue new revenue streams whilst growing existing ones. During the period this Company continued to pursue its investment strategy to address the structural under supply of supported housing in the UK. The Company was awarded the mandate to become the Investment Manager of Social Housing REIT plc (formerly Triplepoint Social Housing REIT plc) with effect from 1 January 2025, and a dedicated team transferred to the Company alongside the mandate. The Company was selected to become the Authorised Corporate Director of Home Long Income Fund and continues to work towards onboarding the mandate. Atrato Partners is proud to be a signatory of the UN Principles for Responsible Investment (“UN PRI”). As a PRI signatory, Atrato Partners has committed to adopting the six Principles for Responsible Investment and submitted its first report in accordance with the established PRI framework in September 2023. The results of this year’s reports will be made publicly available later this year. The Company also endorsers of the PRI's Spring stewardship initiative for nature. Atrato Capital was also a UN PRI signatory, however it was deregistered upon termination of the SUPR Investment Advisory Agreement. During the period we have continued to develop our governance framework and to enhance our policies and procedures. We maintain robust governance arrangements through a clear organisational structure with well defined lines of responsibility. The established arrangements and systems, processes and mechanisms are comprehensive and proportionate to the nature, scale and complexity of our current and proposed activities. The balance sheet of the Group remains strong with net assets of £11.3 million (2023: £9.3million) and cash of £4.7 million (2023: £2.4million).
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ATRATO GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The Group is exposed through its operations to the following financial and non-financial risks.
Personnel risk The Group recognises the need to develop, reward and retain key employees. Employee satisfaction is measured annually as part of a staff survey and changes to benefits have been made in response to this feedback. Regulation The Group is committed to regulatory compliance and has developed policies and procedures to stay abreast of regulatory developments. The Group balance sheet includes cash, debtors, creditors and accrued income that arise directly from its operations. These assets and liabilities expose the Group to a number of financial risks that could result in either a reduction in the Group’s net assets or a reduction in profits. These risks include, counterparty risk, credit risk and liquidity risk. Counterparty risk Counterparty risk is the risk that a client or counterparty fails to perform its contractual obligations and the Group suffers a loss as a result. The Group’s material counterparties were Supermarket Income REIT Plc and Atrato Onsite Energy Plc, the funds to which Atrato Capital and Atrato Partners, respectively, acted as investment advisor. These mandates have subsequently been terminated and therefore the Company is no longer exposed to the risk of reduced advisory fees from these funds. The Group was paid significant termination fees as a result of these events. Post year end Atrato Partners Limited was awarded a mandate to become the Investment Manager of Social Housing REIT plc and this will therefore become a material counterparty going forwards. Credit risk The Group’s exposure to credit risk arises principally from its cash deposits. This risk is managed by holding cash only at institutions with a credit rating of A or higher (S&P Long Term). Liquidity risk This is the risk that the Group will encounter difficulties in meeting financial liabilities or regulatory capital requirements. The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to maintain surplus cash balances. The Group’s policy throughout the reporting period has been to achieve this objective through management’s day to day involvement in business decisions, as well as cashflow monitoring and forecasting, and forecasting of the Group’s capital and reserves including sensitivity analysis. The Group is also exposed to operational risk. The Group operates a risk register which is focussed on identifying and assessing operational risk inherent in activities, processes and systems. Identified risks are mitigated by updating business processes, ongoing monitoring programmes and operational frameworks. Risk management is functionally separate from operations of the business and is overseen by the Head of Compliance.
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ATRATO GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The Key financial metrics reviewed by management are set out below:
Net Assets £11,267,080 (2023: £9,366,955) EBITDA £2,308,592 (2023: £(3,201,934)) Profit/(loss) after tax £1,900,125 (2023: £(2,824,633) Operating profit margin 21% (2023: -29%)
The Group has a talented and committed team who operate within a high-performance and dynamic culture. The health and safety of the team is a high priority and details of support systems and processes in place for staff are outlined below. These are reviewed regularly and amendments are made in response to the annual staff survey.
• Professional development includes peer training, online learning and Corporate Criminal Offence training; we have now implemented a structured graduate analyst programme and a communications training programme for senior leaders • A well-documented performance management process • Employee engagement includes quarterly strategy meetings, weekly team meetings, and employee surveys • Staff are offered health insurance • Staff remuneration policy has been benchmarked by external consultants • Staff have access to a grievance process • Diversity and inclusion is actively supported and 40% of the senior management team are women • Staff can volunteer during work time to support a chosen cause • Health and safety policy was updated: no injuries were reported to staff during the period • Staff are offered the opportunity to work remotely and IT equipment is made available for this
The Directors of the Group must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 and include a duty to promote the success of the Group, which is summarised below.
The executive Directors meet regularly, and at least quarterly, to discuss their duties and they can and do access professional advice on these. This advice can be either through the Group or where necessary through independent third-party advisers. The Directors fulfil their duties partly through a well-documented governance framework that delegates day to day decision making to employees of the Group. This delegation is not restricted to financial authorities but includes empowering staff to input into the strategic direction of the business and to have responsibility for the teams that they manage.
This report was approved by the board and signed on its behalf.
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ATRATO GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
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.
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 profit for the year, after taxation, amounted to £1,900,125 (2023 - loss £2,824,633).
The directors who served during the year were:
The Directors will look to grow the company's existing revenue streams whilst pursuing new ones.
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ATRATO GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Our people
We seek to create a working environment based on respect and inclusion, we encourage staff to operate in an open and honest manner and are committed to the highest ethical standards in all that we do. We strive to be the employer of choice for industry leaders and skilled professionals. Our clients We pride ourselves on being proactive and initiating new ideas that are in the best interests of our clients. We aim to be the adviser of choice for clients seeking exposure to alternative asset back investment income, often with inflation linkage. We look to develop and maintain strong client relationships. Sustainability The Group’s approach to sustainability includes commitments against all three fundamental ESG pillars: • Environment: Reducing our emissions and mitigating the environmental impact of our business (including with respect to the climate, water, waste, pollution and biodiversity) • Social: Acting in accordance with our purpose and values, respecting human rights and delivering broader value to all our stakeholders • Governance: Strengthening our ESG performance and upholding responsible business practices The Group’s sustainability strategy is aligned to the most material UN Sustainable Development Goals (SDGs) to the business, namely: • SDG 8: Decent work and economic growth • SDG 10: Reduced inequalities • SDG 11: Sustainable cities and communities • SDG 13: Climate action The Group creates opportunities for people to work in their local areas, delivering a positive socioeconomic impact within those communities. The Group itself will continue to support the wellbeing and development of its own employees, through training, upskilling and consistent engagement. As the employee base grows, the Group commits to further investment in human capital development. The Group is also committed to enhancing the environmental performance of the assets within the funds which it advises and to reducing the environmental impact of the Group itself. The Group has partnered with external ESG consultancy, Anthesis, to measure its Greenhouse Gas Emissions (“GHG”) and prepare a full GHG Inventory across Scope 1, 2 and 3 emissions. The Group’s carbon footprint for the period 1 April 2022 to 31 March 2023 was 260 tCO2e. The Group publicly supports the Task Force on Climate-Related Financial Disclosures (“TCFD”), and the Paris Agreement. The Group has supported the funds that it advises to report in line with the TCFD recommendations, within its Annual Reports, to improve and increase reporting of climate-related financial information. In addition, the Group is a signatory to the Net Zero Asset Managers Initiative (“NZAM”) and uses this as a framework to support investing aligned with net zero emissions by 2050 or sooner. During 2024, the Group published its first Responsible Investment Report on its website. This Report will provide further details of the activities which underpin the Group’s sustainability strategy and responsible investment commitments. The Group aims to provide active support to causes that facilitate the advancement of its sustainability objectives through charitable donations and the implementation of a volunteering policy, such that all staff can donate time
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ATRATO GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
to support charitable initiatives. The Group has also launched a formal Volunteer Policy allowing all employees to take a paid day off to volunteer in the community.
The Group is committed to supporting charities via donations to The Atrato Foundation. The amounts will be at least £50,000 per annum and has not been provided for in the financial statements, but will be paid post year end.
As set out in the strategic report the Investment Advisory Agreement with Supermarket Income REIT plc was terminated during March 2025. A total fee of £20.8 million was paid to the Group in consideration of this. The preference shares within Atrato Capital Limited were repurchased by Atrato Group Limited and will be cancelled during 2025. The Group was appointed as the Investment Manager to Social Housing REIT plc with effect from 1 January 2025.
The auditor, Hillier Hopkins LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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ATRATO GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ATRATO GROUP LIMITED
We have audited the financial statements of Atrato Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Company balance sheet, 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.
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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ATRATO GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ATRATO GROUP LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
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.
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ATRATO GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ATRATO GROUP LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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:
∙assess the nature of the industry and sector, control environment and business performance;
∙the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. We consider the results of our enquiries of management, about their own identification and assessment of the risks and irregularities;
∙any matters we identified having obtained and reviewed the Company's documentation of their policies an procdures relating to
°identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
°detecting and reporting to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
°the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations including those administered by the Financial Conduct Authority;
∙the matters discussed among the audit engagement team and involving relevant internal specialists, regarding how and where fraud might occure in the financial statements and any potential indicators of fraud.
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
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ATRATO GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ATRATO GROUP LIMITED (CONTINUED)
for and on behalf of
Chartered Accountants
Statutory Auditor
Radius House
51 Clarendon Road
Hertfordshire
WD17 1HP
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ATRATO GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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ATRATO GROUP LIMITED
REGISTERED NUMBER: 12333067
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 40 form part of these financial statements.
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ATRATO GROUP LIMITED
REGISTERED NUMBER: 12333067
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 40 form part of these financial statements.
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ATRATO GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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ATRATO GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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ATRATO GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ATRATO GROUP LIMITED
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ATRATO GROUP LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Atrato Group Limited is a company limited by shares, incorporated in England and Wales.
The principal activity of the company is that of head office activities and the principal activity of the group is investment advisory. The principal place of business is same as its registered office.
2.Accounting policies
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
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 Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102.
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Group’s main contributor to income was the Investment Advisory mandate with Supermarket Income REIT plc. This engagement was terminated during March 2025 when investors voted to internalise the management of the company. The dedicated team working on the SUPR engagement transferred upon termination and no longer work for the group.
The Investment Advisory mandate with Atrato Onsite Energy was also terminated during the year. The Group were paid significant termination fees for the cessation of both of these mandates. The Group were appointed as the Investment Manager to Social Housing REIT plc with effect from 1 January 2025. The Ultimate shareholders have committed to support the group until at least 31 May 2025. The Directors believe the Group is still well placed to manage it’s business risks and that it will remain viable, continuing to operate and meet its liabilities as they fall due. The Directors have performed an assessment of the ability of the group to continue as a going concern for the 12 month period ended 31 May 2026. The Directors have considered the expected obligations of the group during this period and are confident they will all be met. Having reviewed and considered the forecasts prepared, the Directors consider that the group has adequate resources in place and will be able to settle its liabilities for a period of at least 12 months from the date of signing these financial statements and have therefore adopted the going concern basis of accounting in preparing these financial statements.
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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 balance sheet 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 balance sheet 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 balance sheet date.
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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:
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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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
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, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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
Page 24
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Trade debtors: The recoverability of trade debtors has been assessed as at the year end and up until the date of signing these financial statements. Management have based the decision to provide for any amounts based on their judgment of all the available information, and their experience of the specific nature of trade debtor in question. Classification of preference shares between debt and equity: 100 preference shares of £0.01 each were issued by the company's subsidiary, Atrato Capital Limited ("ACL"), in 2017 for £1 and carry a fixed preference dividend based on fees payable to ACL. Since payment of the preference dividends is payable to the holder of the preference shares on a non-discretionary basis, the preference shares are considered to be, in substance, debt. The fair value of the liability component of the preference shares has not been included in the consolidated balance sheet as management consider that the fair value cannot be measured realiably and also may not be permitted under the Companies Act. Dividends payable to the preference shareholder are included in the consolidated statement of comprehensive income as interest payments. The preference shares do not carry voting rights except in the case of winding up of the company or varying any rights in respect of the preference shares or a reduction of the share capital. Fixed dividends equal to 10 per cent of the monthly manaement fees and semi-annual management fees less £37,500 per quarter are payable subject to the company having sufficient profits to lawfully pay dividends out of. The preference shares are irredeemable except on liquidation of the company when any dividends in arrears must be paid and 10% of any surplus assets as defined in the articles are payable to the preference shareholders. As stated, the cost of these preference shares has been recognised as debt. No adjustment has been made in respect of the liability element of the future fixed preference share dividends. During 2025 the preference shares were purchased by Atrato Group Limited and will be cancelled.
The whole of the turnover is attributable to the principal activity.
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 27
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 28
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 29
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 30
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
The group has £621,710 (2023: £825,609) of tax losses which can be offset against future profits.
Page 31
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 32
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
12.Tangible fixed assets (continued)
Page 33
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 34
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Subsidiary undertakings (continued)
Page 35
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 36
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 37
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
18.Provisions (continued)
Page 38
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Profit and loss account
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 £318,815 (2023: £234,769). Contributions totalling £Nil (2023: £Nil) were payable to the fund at the balance sheet date and are included in creditors.
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ATRATO GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
As set out in the strategic report the Investment Advisory Agreement with Supermarket Income REIT plc was terminated during March 2025. A total fee of £20.8 million was paid to the Group in consideration of this. The preference shares within Atrato Capital Limited were repurchased by Atrato Group Limited. And will be cancelled during 2025. The Group was appointed as the Investment Manager to Social Housing REIT plc with effect from 1 January 2025.
The directors do not consider there to be an ultimate controlling party.
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