Registration number:
Architech Software Limited
for the Year Ended 31 December 2024
Architech Software Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Statement of Comprehensive Income |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Statement of Cash Flows |
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Notes to the Financial Statements |
Architech Software Limited
Company Information
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Directors |
Mr Andrew Robin Leal Mr Ross Fretten Mr Michael John Thorpe Mr Henri Mitchell Dowling |
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Registered office |
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Auditors |
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Architech Software Limited
Strategic Report for the Year Ended 31 December 2024
The Directors present their strategic report for the year ended 31 December 2024.
Principal activity
The principal activity of the Group is software licensing.
Fair review of the business
The results for the financial year which are set out in the Income Statement show a loss for the year of £3,214,004 (2023 - £2,363,702).
The increase in the loss is largely attributable to the increase in interest costs. Such costs have increased due to further advancements of loans from Correlation in the year. The loans provide essential working capital to support the Company and its subsidiaries while they are focused on scaling the business.
The Group's key financial and other performance indicators during the year were as follows:
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Financial KPIs |
Unit |
2024 |
2023 |
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Turnover |
£ |
563,678 |
353,224 |
|
Operating loss |
£ |
(1,422,447) |
(1,175,993) |
|
Loss for the year |
£ |
(3,214,004) |
(2,363,702) |
|
Net Liability position |
£ |
(8,633,357) |
(5,419,353) |
The increase in the loss and net liability position are largely attributable to the increase in interest costs.
Principal risks and uncertainties
All Turnover in 2024 was from one customer which is the wholly owned subsidiary Waggel Limited and as such the performance of the business is directly correlated with the performance of this customer.
The principal activity of Waggel Limited is to market and administer pet insurance and as such the company is exposed to the wider risks of the pet insurance market.
Approved and authorised by the
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Architech Software Limited
Directors' Report for the Year Ended 31 December 2024
The Directors present their report and the for the year ended 31 December 2024.
Directors of the Group
The Directors who held office during the year were as follows:
Principal activity
The principal activity of the Group is to market and administer pet insurance.
Going concern
The Directors have reviewed the Company's ability to meet its obligations for the foreseeable future, being twelve months from the signing of this report. The Company will continue to receive financial support from its shareholders to meet its obligations and therefore the Directors consider that the going concern basis is appropriate.
Disclosure of information to the auditor
Each Director has taken steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. The Directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Reappointment of auditors
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Bright Grahame Murray as auditors of the company is to be proposed at the forthcoming Annual General Meeting.
Approved and authorised by the
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Architech Software Limited
Statement of Directors' Responsibilities
The Directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. |
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Architech Software Limited
Independent Auditor's Report to the Members of Architech Software Limited
Opinion
We have audited the financial statements of Architech Software Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the consolidated profit and loss account, the consolidated statement of comprehensive income, the consolidated balance sheet, the company balance sheet, the consolidated statement of changes in equity, the company statement of changes in equity, the consolidated statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's loss for the period 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. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and 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.
Architech Software Limited
Independent Auditor's Report to the Members of Architech Software Limited
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and |
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the 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
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, 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. |
Responsibilities of Directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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 parent company or to cease operations, or have no realistic alternative but to do so.
Architech Software Limited
Independent Auditor's Report to the Members of Architech Software Limited
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
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We obtained an understanding of laws and regulations that affect the company, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and regulations that we identified included the UK Companies Act, tax and employment legislation. |
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We enquired of the director, reviewed correspondence with HMRC and reviewed director meeting minutes for evidence of non-compliance with relevant laws and regulations. We also reviewed controls the director has in place to ensure compliance. |
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We gained an understanding of the controls that the director has in place to prevent and detect fraud. We enquired of the director about any incidences of fraud that had taken place during the accounting period. |
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The risk of fraud and non-compliance with laws and regulations and fraud was discussed within the audit team and tests were planned and performed to address these risks. We identified the potential for fraud in the following areas: revenue recognition, related parties outside normal course of business and management override. |
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We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above. |
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We enquired of the directors about actual and potential litigation and claims. |
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We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud. |
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In addressing the risk of fraud due to management override of internal controls, we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias. |
Architech Software Limited
Independent Auditor's Report to the Members of Architech Software Limited
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
Chartered Accountants
Statutory Auditor
Emperor's Gate
114a Cromwell Road
London
SW7 4AG
Architech Software Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2024
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Note |
2024 |
2023 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
|
|
|
|
Administrative expenses |
( |
( |
|
|
Operating loss |
( |
( |
|
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Interest payable and similar expenses |
( |
( |
|
|
Loss before tax |
( |
( |
|
|
Loss for the financial year |
( |
( |
|
|
Profit/(loss) attributable to: |
|||
|
Owners of the Company |
( |
( |
The Group has no recognised gains or losses for the year other than the results above.
Architech Software Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2024
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2024 |
2023 |
|
|
Loss for the year |
( |
( |
|
Total comprehensive income for the year |
( |
( |
|
Total comprehensive income attributable to: |
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Owners of the Company |
( |
( |
Architech Software Limited
(Registration number: 10940789)
Consolidated Balance Sheet as at 31 December 2024
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Note |
2024 |
2023 |
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Fixed assets |
|||
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Tangible assets |
|
|
|
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Debtors |
|
|
|
|
|
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Current assets |
|||
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Debtors |
|
|
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Cash at bank and in hand |
|
|
|
|
|
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||
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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Total assets less current liabilities |
( |
( |
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
|
Provisions for liabilities |
( |
( |
|
|
Net liabilities |
( |
( |
|
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Capital and reserves |
|||
|
Called up share capital |
192 |
192 |
|
|
Share premium reserve |
19,809 |
19,809 |
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Other reserves |
809,888 |
942,631 |
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Retained earnings |
(19,293,178) |
(14,521,592) |
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Equity attributable to owners of the company |
(18,463,289) |
(13,558,960) |
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Shareholders' deficit |
(18,463,289) |
(13,558,960) |
Approved and authorised by the
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Architech Software Limited
(Registration number: 10940789)
Company Balance Sheet as at 31 December 2024
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Note |
2024 |
2023 |
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Fixed assets |
|||
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Tangible assets |
|
|
|
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Investments |
|
|
|
|
|
|
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Current assets |
|||
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Debtors |
|
|
|
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Cash at bank and in hand |
|
|
|
|
|
|
||
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Creditors: Amounts falling due within one year |
( |
( |
|
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Net current 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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Net liabilities |
( |
( |
|
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Capital and reserves |
|||
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Called up share capital |
192 |
192 |
|
|
Other reserves |
809,888 |
942,631 |
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Retained earnings |
(9,443,437) |
(6,362,176) |
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Shareholders' deficit |
(8,633,357) |
(5,419,353) |
The company made a loss after tax for the financial year of £3,214,004 (2023 - loss of £2,363,702).
Approved and authorised by the
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Architech Software Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2024
Equity attributable to the parent company
|
Share capital |
Share premium |
Other reserves |
Retained earnings |
Total |
Total equity |
|
|
At 1 January 2023 |
|
|
|
( |
( |
( |
|
Loss for the year |
- |
- |
- |
( |
( |
( |
|
Transfer into profit or loss |
- |
- |
(122,006) |
122,006 |
- |
- |
|
At 31 December 2023 |
192 |
19,809 |
942,631 |
(14,521,592) |
(13,558,960) |
(13,558,960) |
|
Share capital |
Share premium |
Other reserves |
Retained earnings |
Total |
Total equity |
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|
At 1 January 2024 |
|
|
|
( |
( |
( |
|
Loss for the year |
- |
- |
- |
( |
( |
( |
|
Transfer into profit or loss |
- |
- |
(132,743) |
132,743 |
- |
- |
|
At 31 December 2024 |
|
|
|
( |
( |
( |
Architech Software Limited
Company Statement of Changes in Equity for the Year Ended 31 December 2024
|
Share capital |
Other reserves |
Retained earnings |
Total |
|
|
At 1 January 2023 |
|
|
( |
( |
|
Loss for the year |
- |
- |
( |
( |
|
Transfer into profit or loss |
- |
(122,006) |
122,006 |
- |
|
At 31 December 2023 |
192 |
942,631 |
(6,362,176) |
(5,419,353) |
|
Share capital |
Other reserves |
Retained earnings |
Total |
|
|
At 1 January 2024 |
|
|
( |
( |
|
Loss for the year |
- |
- |
( |
( |
|
Transfer into profit or loss |
- |
(132,743) |
132,743 |
- |
|
At 31 December 2024 |
|
|
( |
( |
Architech Software Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2024
|
Note |
2024 |
2023 |
|
|
Cash flows from operating activities |
|||
|
Loss for the year |
(4,904,329) |
(4,494,695) |
|
|
Adjustments to cash flows from non-cash items |
|||
|
Depreciation and amortisation |
33,942 |
26,541 |
|
|
Loss/(profit) on disposal of tangible assets |
1,805 |
(300) |
|
|
Finance costs |
1,791,557 |
1,187,709 |
|
|
Share based payment expense |
190,307 |
37,369 |
|
|
(2,886,718) |
(3,243,376) |
||
|
Working capital adjustments |
|||
|
Increase in debtors |
(142,431) |
(120,356) |
|
|
Increase in creditors (excluding loans and borrowings) |
812,698 |
51,046 |
|
|
Increase in provisions |
90,950 |
114,716 |
|
|
Net cash flow from operating activities |
(2,125,501) |
(3,197,970) |
|
|
Cash flows from investing activities |
|||
|
Acquisitions of tangible assets |
(59,926) |
(38,083) |
|
|
Proceeds from sale of tangible assets |
517 |
300 |
|
|
Net cash flows from investing activities |
(59,409) |
(37,783) |
|
|
Cash flows from financing activities |
|||
|
Proceeds from borrowing |
3,000,000 |
3,461,032 |
|
|
Net increase in cash and cash equivalents |
815,090 |
225,279 |
|
|
Cash and cash equivalents at 1 January |
1,195,231 |
969,952 |
|
|
Cash and cash equivalents at 31 December |
2,010,321 |
1,195,231 |
|
Architech Software Limited
Company Statement of Cash Flows for the Year Ended 31 December 2024
|
Note |
2024 |
2023 |
|
|
Cash flows from operating activities |
|||
|
Loss for the year |
(3,214,004) |
(2,363,702) |
|
|
Adjustments to cash flows from non-cash items |
|||
|
Depreciation and amortisation |
33,942 |
26,541 |
|
|
Loss/(profit) on disposal of tangible assets |
1,805 |
(300) |
|
|
Finance costs |
1,791,557 |
1,187,709 |
|
|
Share based payment expense |
66,638 |
13,108 |
|
|
(1,320,062) |
(1,136,644) |
||
|
Working capital adjustments |
|||
|
Increase in debtors |
(1,703,100) |
(2,506,648) |
|
|
(Decrease)/increase in creditors |
(8,980) |
41,325 |
|
|
Net cash flow from operating activities |
(3,032,142) |
(3,601,967) |
|
|
Cash flows from investing activities |
|||
|
Acquisitions of tangible assets |
(59,926) |
(38,083) |
|
|
Proceeds from sale of tangible assets |
517 |
300 |
|
|
Net cash flows from investing activities |
(59,409) |
(37,783) |
|
|
Cash flows from financing activities |
|||
|
Proceeds from borrowing |
3,000,000 |
3,461,032 |
|
|
Net decrease in cash and cash equivalents |
(91,551) |
(178,718) |
|
|
Cash and cash equivalents at 1 January |
168,044 |
346,762 |
|
|
Cash and cash equivalents at 31 December |
76,493 |
168,044 |
|
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
General information |
The Company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
The Company, being the immediate parent company, heads a medium group and has taken advantage of section 400 of the Companies Act 2006 and is not filing the consolidated financial statements presented. These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
The Company has taken advantage of section 408 of the Companies Act 2006 and has not presented its individual Statement of Profit or Loss Account.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value. The financial statements have been prepared and presented in UK Pound Sterling (£) which is the functional currency of the Company. These financial statements have been rounded to the nearest whole £.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2024.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the Group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
The Directors have reviewed the Group's ability to meet its obligations for the foreseeable future, being twelve months from the signing of this report. The Group will continue to receive financial support from its shareholders to meet its obligations and therefore the Directors consider that the going concern basis is appropriate.
Judgements
No significant judgements have been made by management in preparing the financial statements other than those disclosed in Creditors and Borrowings notes which concern loans payable by the Company. Loans that are interest free are discounted at a market rate of interest, which in the judgement of the Directors is 8.5%. |
Revenue recognition
Turnover represents license fees received from the sale of software that the company has developed.
Income is recognised in line with the customer contracts.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Finance income and costs policy
Interest income is recognised in profit or loss using the effective interest method. Interest payable is also charged to the profit or loss at a constant rate on the carrying amount. Interest costs arising on discounted loans are transferred to the profit or loss reserve from the capital contribution reserve to unwind the discount gain calculated using a market rate of interest on the inception of the loan.
Tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same authority.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
|
Asset class |
Depreciation method and rate |
|
Office equipment |
Straight line over 4 years |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the Group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Investments
Investments in subsidiaries are measured at cost less impairment.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for licensing and services performed in the ordinary course of business.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the Group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Insurance debtors and creditors
The Group acts as an agent of insurance companies in broking and administering insurance products and is liable as a principal for premiums due to those underwriters. The Group has followed generally accepted accounting practice for insurance brokers by showing debtors, creditors and cash balances relating to insurance business as assets and liabilities of the Group itself. Revenue is recognised on such agency arrangements as set out in the turnover accounting policy.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing. Interest-free borrowings are discounted using a market rate of interest and are unwound to the profit or loss over the period of the loan. The equity element is recognised in the capital contribution reserve. The Directors have elected to make an annual transfer from the capital contribution reserve to retained earnings equal to the interest expense on the loan under the amortised cost method.
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a
past event, it is probable that the company will be required to settle that obligation and a reliable estimate can
be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the
obligation is recognised at present value. When a provision is measured at present value, the unwinding of
the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Clawback provision
At each year end, a provision is made in respect of active policies that may be cancelled before the end of their term, resulting in the payment of refunds. Assumptions regarding drop-out rates are made by the Directors when computing the provision.
Policy management provision
At each year end, the Group makes a provision in respect of income deferred at that date to match against future costs, such as claims and customer resolutions. The provision is calculated using an estimated costs based on historical averages. The provision is presented in current liabilities as deferred income.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the Group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Share based payments
The Company has entered into a cash-settled phantom share option scheme. Waggel Limited, a subsidiary company, recognises a share of the expense and liability of the scheme over the vesting period.
The Company measures the scheme at the reporting date. The Group's liability is measured using the fair value of the share options at the reporting date. The scheme has 550,894 phantom units in issue as at 31 December 2024 (2023 - 358,045) of which 60% of the units will vest on the 'cliff date' being the 3rd anniversary of each employee's joining date to the scheme. A further 20% of phantom units will vest on the 4th anniversary and the remaining 20% will vest at the end of the 5-year vesting period.
The liability is presented in liabilities, split for current and non-current amounts. Movements in the scheme liability is recognised in the profit or loss.
Management has made judgements to whether non-market based vesting are met, these are reviewed at each reporting date. Vesting conditions are met if employees remain in employment within the Group. If an employee leaves the Group before the cliff date, that employee will lose their rights to any phantom units held. Furthermore, if an employee remains employed at each vesting date, those shares due to vest at the given date will vest immediately.
Should management determine that non-market based vesting conditions will not be met, the liability will be reversed in full.
There are no market based vesting conditions.
The scheme is held by the Company and an element of the scheme liability and expense are recharged to the subsidiary company at each reporting date. The recharge is based on the Group's full-time equivalents and their apportionment of time and services provided to each member company of the Group.
The liability for the Group is recognised in the consolidated financial statements which represents the scheme's total liability.
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Financial instruments
Classification
Recognition and measurement
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 liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Basic financial liabilities including creditors and loans from fellow group companies 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.
Capital contribution reserves recognised on the equity element of interest free loans that are discounted at a market rate of interest is recognised in the reserve and reduced by any impairment recognised to the parent company's corresponding investment in order to mitigate the risk of an accounting mismatch. The Directors have elected to make an annual transfer to retained earnings from the capital contribution reserve equal to the interest cost recognised on the financial liability held at amortised cost.
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.
Current versus non-current classification
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Turnover |
The analysis of the Group's turnover for the year from continuing operations is as follows:
|
2024 |
2023 |
|
|
Insurance commission |
11,420,120 |
7,064,491 |
|
Provisions for commission clawbacks |
(90,950) |
(114,716) |
|
Provision for policy management |
(284,954) |
(195,088) |
|
|
|
The analysis of the Group's turnover for the year by market is as follows:
|
2024 |
2023 |
|
|
UK |
|
|
|
Operating loss |
Arrived at after charging/(crediting)
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Operating lease expense - property |
|
|
|
Loss/(profit) on disposal of property, plant and equipment |
|
( |
|
Interest payable and similar expenses |
|
2024 |
2023 |
|
|
Interest payable on loans from group undertakings and related parties |
1,791,557 |
1,187,709 |
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Staff costs |
The aggregate payroll costs (including Directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
Redundancy costs |
|
- |
|
Share based payments |
|
|
|
Staff benefits |
|
|
|
Staff training |
|
|
|
|
|
The average number of persons employed by the Group (including Directors) during the year, analysed by category was as follows:
|
2024 |
2023 |
|
|
Administrative |
14 |
12 |
|
Development and operations |
15 |
11 |
|
Claims |
33 |
22 |
|
Customer support |
8 |
3 |
|
Directors |
2 |
3 |
|
|
|
|
Directors' remuneration |
The Directors' remuneration for the year was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
281,320 |
392,642 |
The Directors are deemed to be the key management personnel.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of these financial statements |
23,000 |
20,572 |
|
Taxation |
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2023 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024
|
2023
|
|
|
Loss before tax |
(4,904,329) |
(4,494,695) |
|
Corporation tax at standard rate |
(1,226,082) |
(1,056,253) |
|
Tax increase (decrease) from effect of capital allowances and depreciation |
(5,915) |
(2,829) |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
18,320 |
14,331 |
|
Unrelieved qualifying charitable donations paid |
7,180 |
2,938 |
|
Tax increase (decrease) from other short-term timing differences |
1,442 |
1,379 |
|
Increase (decrease) from tax losses for which no deferred tax asset was recognised |
1,205,055 |
1,040,434 |
|
Total tax charge/(credit) |
- |
- |
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Tangible assets |
Group
|
Furniture, fittings and equipment |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2024 |
|
|
|
Additions |
|
|
|
Disposals |
( |
( |
|
At 31 December 2024 |
|
|
|
Depreciation |
||
|
At 1 January 2024 |
|
|
|
Charge for the year |
|
|
|
Eliminated on disposal |
( |
( |
|
At 31 December 2024 |
|
|
|
Carrying amount |
||
|
At 31 December 2024 |
|
|
|
At 31 December 2023 |
|
|
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Company
|
Furniture, fittings and equipment |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2024 |
|
|
|
Additions |
|
|
|
Disposals |
( |
( |
|
At 31 December 2024 |
|
|
|
Depreciation |
||
|
At 1 January 2024 |
|
|
|
Charge for the year |
|
|
|
Eliminated on disposal |
( |
( |
|
At 31 December 2024 |
|
|
|
Carrying amount |
||
|
At 31 December 2024 |
|
|
|
At 31 December 2023 |
|
|
|
Investments |
Company
|
2024 |
2023 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 January 2024 and 31 December 2024 |
|
|
Provision |
|
|
At 1 January 2024 and 31 December 2024 |
|
|
Carrying amount |
|
|
At 31 December 2024 |
|
|
At 31 December 2023 |
|
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the Company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2024 |
2023 |
|||
|
Subsidiary undertakings |
||||
|
|
3rd Floor, 114a Cromwell Road, London, England, SW7 4AG |
|
|
|
|
|
3rd Floor, 114a Cromwell Road, London, United Kingdom, SW7 4AG |
|
|
|
|
|
3rd Floor, 114a Cromwell Road, London, United Kingdom, SW7 4AG |
|
|
|
|
Debtors |
|
Group |
Company |
||||
|
Current |
Note |
2024 |
2023 |
2024 |
2023 |
|
Amounts owed by related parties |
- |
- |
|
|
|
|
Other debtors |
|
|
|
|
|
|
Prepayments |
|
|
|
|
|
|
|
|
|
|
||
|
Group |
Company |
|||
|
Non-current |
2024 |
2023 |
2024 |
2023 |
|
Other debtors |
|
|
- |
- |
|
|
|
- |
- |
|
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Company
The Company has pledged all of its assets plus assets of the 2 subsidiaries, as security over a loan provided from Correlation One Investments (Europe) Limited.
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Cash at bank |
|
|
|
|
Included in the above cash at bank is £1,241,330 (2023 - £938,471) which is being held on behalf of insurers.
|
Creditors |
|
Group |
Company |
||||
|
Note |
2024 |
2023 |
2024 |
2023 |
|
|
Due within one year |
|||||
|
Trade creditors |
|
|
|
|
|
|
Social security and other taxes |
|
|
|
|
|
|
Other payables |
|
|
|
|
|
|
Accruals and deferred income |
|
|
|
|
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Loans and borrowings |
|
|
|
|
|
|
Other payables |
|
|
|
|
|
|
|
|
|
|
||
|
Group |
Company |
|||
|
Due after more than five years |
2024
|
2023
|
2024 |
2023 |
|
After more than five years not by instalments |
- |
6,885,289 |
- |
|
|
- |
6,885,289 |
- |
6,885,289 |
|
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Loans and borrowings |
Non-current loans and borrowings
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Other borrowings |
|
|
|
|
The loan is secured by way of a fixed charge over the following assets:
(a) all present and future estates or interest in, or over, any freehold, leasehold or commonhold property;
(b) the benefit of all other contract, guarantees, appointments and warranties relating to each charged property and other documents which have the benefit relating to any letting, development, sale , purchase , use or operation of any charged property or otherwise relating to any charged property;
(c) all licences, consents, and authorisations (statutory or otherwise) held or required in connection with its business or the use of any secured asset, and all rights in connection with them;
(d) all its present and future goodwill;
(e) all its unpaid capital;
(f) all the Intellectual Property;
(g) all the Book Debts;
(h) all the Investments; and
(i) all its rights of each Insurance Policy, including all claims, the proceeds of all claims and all returns of premiums in connection with each Insurance Policy.
In addition, there is a floating charge over all assets not included in the fixed charge above, and identical fixed and floating charges over the assets of the Parent Company's two subsidiaries.
Other borrowings
The carrying amount of other borrowings at year end is £17,242,045 (2023 - £12,450,488).
The Company has five outstanding loans with its now majority shareholder, Correlation One Investments (Europe) Limited (Correlation). The first loan from the shareholder is an interest free loan and therefore discounted at market rate of interest judged by the Directors to be 8.5%. The carrying value of this loan is £1,690,112 (2023 - £1,557,368) and will be repaid in full on the date of maturity, 22 October 2029. The loan has been split in accordance with FRS 102 Section 11, into a liability component and an equity component. The equity component is recognised as a capital contribution from the shareholder on the inception of loan being
the difference between the cash advanced and the present value of the loan.
The second loan from Correlation is an interest bearing loan of 8% plus the Bank of England base rate % with a total loan facility of £1,500,000. Interest is compounding with a deferred interest payment and a final repayment of capital due on the date of maturity, 31 December 2026. The loan's carrying value is £2,124,028 (2023 - £1,866,061), repayable between 2-5 years. At the balance sheet date, interest of £629,015 is due for repayment.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
The third loan from Correlation is a convertible loan with a loan facility of £3,000,000. Interest is compounded and repaid along with the loan capital on the date of maturity, 31 December 2026. Interest is charged at 8%
plus the Bank of England base rate. The carrying value of the loan is £4,210,513 (2023 - £3,699,140) and is repayable in 2-5 years. As the convertible loan demands the same interest rate as the interest charged on the interest bearing loans from Correlation, the whole convertible loan is judged by the Directors to be a full debt instrument under FRS 102 Section 11 with no requirement to recognise an equity element to the loan.
The fourth loan advanced from Correlation is a convertible loan with a loan facility of £4,000,000. Interest is compounded and repaid along with the loan capital on the date of maturity, 31 December 2028. Interest is charged at 8% plus the Bank of England base rate. The carrying value of the loan is £4,974,244 (2023 - £4,370,115) and is repayable in 2-5 years.
The fifth loan advanced from Correlation is a convertible loan with a loan facility of £5,000,000. Interest is compounded and repaid along with the loan capital on the date of maturity, 31 December 2028. Interest is charged at 8% plus the Bank of England base rate. The carrying value of the loan is £3,766,659 (2023 - £507,079) repayable in 2-5 years.
Loans due to Directors and other related parties are also included in other borrowings which have a carrying value of £476,489 (2023- £450,725) and are repayable on 22 October 2029 which is the date of maturity.
|
Share based payments |
Group
Other non-current liabilities of £227,676 (2023 - £37,369) relate to the Group's cash-settled share based payment scheme. During the year, an expense of £190,307 (2023 - £37,369) was recognised in relation to the scheme.
Company
Other non-current liabilities of £79,746 (2023 - £13,108) relate to the Company's share of the cash-settled share based payment scheme. During the year, an expense of £66,639 (2023 - £13,108) was recognised in relation to the scheme.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Pension and other schemes |
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the Group to the scheme and amounted to £
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
191.99 |
|
191.99 |
|
Capital contribution reserve |
The capital contribution reserve represents a capital contribution arising on a loan received from the parent company at a below-market rate of interest.
|
2024 |
2023 |
|
|
At 1 January |
942,631 |
1,064,637 |
|
Transfer into profit or loss |
(132,743) |
(122,006) |
|
At 31 December |
809,888 |
942,631 |
|
Commitments |
At the balance sheet date, the Company has a non-cancellable operating lease expiring April 2025 for the rental of office premises. The monthly charge of the lease is £6,000 with total future cash flow commitments contracted to the Company of £24,000.
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Related party transactions |
Company
Loans to related parties
|
2024 |
Subsidiary |
Total |
|
At start of period |
|
|
|
Advanced |
|
|
|
Repaid |
( |
( |
|
At end of period |
|
|
|
|
||
|
2023 |
Subsidiary |
Total |
|
At start of period |
|
|
|
Advanced |
|
|
|
Repaid |
( |
( |
|
At end of period |
|
|
|
|
||
Terms of loans to related parties
At the year end the Company was owed £50,000 (2023 - £Nil) by Ross Fretten, a director of the Company. The loan was interest free and repaid in full on 20 January 2025.
Loans from related parties
|
2024 |
Entities with joint control or significant influence |
Key management |
Other related parties |
Total |
|
At start of period |
|
|
|
|
|
Advanced |
|
- |
- |
|
|
Interest transactions |
|
- |
|
|
|
At end of period |
|
|
|
|
|
|
||||
Architech Software Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
2023 |
Entities with joint control or significant influence |
Key management |
Other related parties |
Total |
|
At start of period |
|
|
|
|
|
Advanced |
|
- |
- |
|
|
Interest transactions |
|
- |
|
|
|
At end of period |
|
|
|
|
|
|
||||
Terms of loans from related parties
|
Parent and ultimate parent undertaking |
The ultimate parent company is Correlation One Investments (Europe) Limited, a company registered in England and Wales. The ultimate parent company is the smallest and largest group for which consolidated financial statements are prepared and are made publicly available at 3rd Floor 114a Cromwell Road, London, United Kingdom, SW7 4AG.
The Directors do not consider there to be a single controlling party.