The directors present the strategic report for the Period ended 31 December 2024.
Tech
The Group has seen growing competition with technological advancements from other service providers in the education sector with customers, particularly MATs requiring enhanced reporting and self-service functionality. To mitigate this risk the Group is part way through a strategic project to design and implement a new integrated HR and Payroll platform following investment from their former parent company Citation Holdings Ltd in 2023. The Directors are confident that the new leading-edge technology designed specifically for Education, along with their experienced team of specialists in the sector will drive growth and efficiencies making EPM a strong competitor in the current market. Transferring customers to any new system comes with risk however early indications show current customers are wanting to purchase additional modules on the new software and the current sales pipeline supports this.
Changes in legislation
Changes of government and in subsequent legislation have a significant impact on the Group through updates to client information and the requirement to ensure that all Group staff maintain their comprehensive knowledge of the regulations that could affect clients, and software can be updated in line with the latest legislative changes.
Liquidity risk
The Directors review the Group's liquidity risks both bi-annually, as part of the planning and budgeting process, and on a frequent basis to ensure the Group has sufficient cash resources to meet covenant and funding requirements and liabilities as they fall due. Within the management buyout agreement, short term funding is available from Citation Holdings Ltd should the need arise whilst the Group undergo a period of transformation with the new technology. Short-term and long-term cash flow forecasts are regularly performed and reported to the Directors. The Group's finance team monitor cash positions daily and this is reviewed by the CFO daily.
Credit risk
The Group is exposed to credit risk on financial assets to the extent that it is owed trade and other receivables from customers. Trade receivable exposures are managed in-house by a credit controller. At risk customers are reported to the Directors on an ad-hoc basis and action is taken swiftly to reduce risk. If debt is deemed irrecoverable overdue invoices and any related accrued income balance is written off against the relevant underlying provisions.
Cyber risk
The Group is at risk of a cyber-attack given that it delivers its service offering alongside technology-based platforms. Failure to prevent a cyber-attack or data breach could negatively impact the Group’s customer and employee data, financial reporting systems and stakeholder confidence and could ultimately result in fines levied by ICO. The business continues to proactively manage risks associated with data loss, GDPR non-compliance and data control weaknesses and have a team who ensure data security training programmes are carried out by all Group employees and a team who continually review the Group’s IT structure, systems and procedures to ensure they are fit for purpose. To mitigate this risk the Group now holds all data in the cloud, has regularly tested disaster recovery plans and uses multifactor authentication for all access. The Group is also undertaking a full ISO 27001 Gap analysis, addressing all technical and policy non-conformities and working towards accreditation in 2025.
Environmental matters
The Group is committed to minimising the environmental impact of its activities, products and services and has implemented several strategies within its direct operational management. These strategies have been carefully designed and implemented to ensure that the business is operating in an environmentally responsible manner. Directors regularly evaluate the Group’s policies to ensure compliance with relevant environmental legislation, regulations and other environmental requirements are maintained.
Environmental and energy efficiency initiatives undertaken in the year include:
• Introduction of an Electrical Vehicle (EV) scheme to reduce fuel consumption and minimise carbon emissions.
• Reduction in employee travel through remote selling to and servicing of clients and the use of a hybrid working from home model for employees.
• Implemented waste reduction and recycling programs such as proper segregation of waste, composting of organic materials and recycling initiatives to minimise the amount of waste sent to landfills.
• Prioritised working with suppliers who use sustainable materials, minimise their own carbon emissions and have their own environmental management systems in place.
• Implementing energy efficient technologies and practices, such as LED lighting and thermostatic temperature controls to significantly reduce our energy consumption.
• Adopted water saving technologies and practices to minimise water wastage within the Group premises including the use of water efficient fixtures.
• Explored alternative packaging options for marketing materials that are biodegradable or recyclable to minimise plastic waste and reduction of plastic pollution.
• Actively encourage the use of car share and raising awareness of the cycle to work scheme throughout the Group to reduce fuel consumption and minimise carbon emissions further.
Corporate social responsibility
The Group is committed to taking its corporate social responsibilities very seriously and includes social and environmental issues at the heart of all decision-making processes. Our charity work focuses on community, health and education. We prioritise initiatives which help those in need, and which support the development of young people. We support a range of UK-wide charities each year raising funds for those charities which are usually close to the heart of our team, they’ve included The Rainbow Trust, Children's Liver Disease Foundation, Cancer Research, Magic breakfast and the NSPCC, to name a few. We also support local schools and colleges with supporting and attending open days and providing work experience opportunities for their pupils.
Our employees are at the heart of what we do, and our wellbeing strategy focuses on 5 areas of wellbeing and fosters a culture of inclusivity, work-life balance and continuous development. It is an ongoing commitment to creating a workplace where employees feel valued, supported and empowered, the 5 areas are:
• Physical health and wealth - Offering health assessments, discounted gym memberships and providing healthy food options and snacks in the office as well as nutritional workshops.
• Mental and emotional wellbeing - Providing access to a range of confidential counselling services, various workshops on mindfulness and stress management, mental health first aid team and mental health days.
• Work life balance - Flexible work policies and arrangements, time management workshops and leave policies.
• Personal and professional development - Learning and development, career pathing and mentorship programmes.
• Financial wellbeing - various webinars and talks on financial planning including pensions, discount apps and Bupa cash plans.
On behalf of the board
The directors present their annual report and financial statements for the Period ended 31 December 2024.
The results for the Period are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the Period and up to the date of signature of the financial statements were as follows:
Going Concern
The Group’s business activities, and the factors likely to affect its future development, performance, and financial position, are described in the Strategic Report.
The Group is 18 months into the management buyout of EPM Limited, which was completed in December 2023. As part of the continuing operations under this structure, a funding facility of £1.7 million has been made available by Citation Holdings Ltd to EPM Holdings Ltd to support the Group’s transformation programme. This facility is subject to certain financial covenants.
The Group operates under a centralised treasury function, and actively monitors its liquidity position, covenant compliance, and headroom under available facilities throughout the year.
In forming their assessment of going concern, the Directors have prepared detailed cash flow and profit forecasts through to December 2026. These forecasts have been stress-tested using severe but plausible downside scenarios, including:
A 5% reduction in recurring revenue from the existing client base; and
A 12% decline in new business and upsells, despite continued investment in technology.
Even under these downside scenarios, the forecasts demonstrate that the Group retains sufficient cash reserves to meet its obligations, including interest payments, and remains compliant with its financial covenants.
Accordingly, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future and have adopted the going concern basis in preparing these financial statements.
During the year the Group had third party indemnity insurance for the Directors and Officers. This insurance remains in force as at the date of approving the Directors’ report.
The Group's main financial instruments are cash and receivables and payables carried at amortised cost. The Group does not use derivative financial instruments.
Within the bounds of commercial confidentiality, staff at all levels are kept fully informed of matters that affect the progress of the Group and are of interest to them as employees. This is carried out by the Directors who present a groupwide update over MS Teams monthly. A heavy emphasis is placed on providing an engaging and rewarding environment for our employees to thrive, develop their skills, and contribute meaningfully to the success of the organisation. The Group has development schemes in place to take all level of employees through professional qualifications. The Group measures employee engagement using the robust measure of the Gallup Q12 and places in the top quartile in the UK for employee engagement.
The Group is continuing with its strategy of developing and implementing its new leading-edge technology into the Education sector and adding additional products and services to its current suite available for its education customers. As part of its forward-thinking strategy, the Group is adopting the use of AI technologies to enhance operational performance and support its people through smarter, more efficient ways of working.
The auditor, , is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of EPM Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the Period ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, 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).
Basis for 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.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial Period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
Based on our understanding of the company and its industry, we identified the principal risks of non-compliance with laws and regulations related to company law applicable in England and Wales, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, tax legislation regarding payroll, VAT and corporation tax.
We evaluated the management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk to override controls), and performed the following audit procedures:
- Enquiry with senior management and those charged with governance about known or suspected instances of non-compliance with laws and regulations and fraud.
- Reviewing correspondence and minutes of relevant meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £969,279.
EPM Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Spencer House, Ermine Business Park, Huntingdon, Cambridgeshire, PE29 6EP.
The group consists of EPM Holdings Limited and Education Personnel Management Limited.
The company was incorporated on 4 December 2023, and its first reporting period covers the period from 4 December 2023 to 31 December 2024.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company EPM Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Revenue is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
The group offers a diverse range of products and services and applies various revenue recognition methods in accordance with the principles of FRS 102. For contractual revenue, income is recognised based on the delivery of services to customers over the duration of the contract, which typically spans 12 months but may extend up to 36 months depending on the nature of the product or service.
The costs associated with service delivery are allocated to the specific performance obligations outlined in the contract. Revenue is recognised in line with this cost allocation, as and when these performance obligations are satisfied throughout the contract term.
Non-contractual revenue is recognised at the point in time when control of the service is transferred to the customer.
Where invoices are issued on a schedule that does not align with the timing of revenue recognition based on service delivery, appropriate adjustments are made through accrued or deferred income. Deferred income commonly arises where customers pay in advance on an annual, termly, or quarterly basis.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The Group determines a reliable estimate of the useful life of intangible assets based on various factors, including the expected use of the asset, the anticipated useful life of the cash-generating units to which the asset is allocated, and any legal, regulatory, or contractual provisions that may limit its useful life. The estimate also considers assumptions that market participants would make regarding similar assets.
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended where necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
The Group recognises accrued income when it has earned revenue for services rendered but has not yet received payment by the end of the reporting period. This income is recorded based on the Group’s reliable estimate of the amount expected to be received, considering contractual terms, historical collection patterns, and the probability of receipt.
The Group recognises deferred income when payments are received in advance of rendering services. This income is initially recorded as a liability and subsequently recognised as revenue in the period in which the related services are delivered, in accordance with the terms of the underlying agreement and relevant FRS 102 revenue recognition principles.
The average monthly number of persons (including directors) employed by the group and company during the Period was:
Their aggregate remuneration comprised:
The actual (credit)/charge for the Period can be reconciled to the expected credit for the Period based on the profit or loss and the standard rate of tax as follows:
The other tax reliefs represent a claim for SME Research and Development repayable tax credit of £168,014.
Reversals of previous impairment losses have been recognised in profit or loss as follows:
An impairment charge of £690,000 was recognised in the financial year 2021 relating to capitalised development costs for Project Nextgen, which aimed to implement the Atlas HR platform within EPM. The project was subsequently discontinued in early financial year 2022. Following a detailed reconciliation and review, the correct impairment journal was identified and posted during the year. As a result, the original £690,000 impairment charge has been reversed during the year.
More information on impairment movements in the Period is given in note 11.
The opening balances of intangible assets relate to the balances acquired as part of the business combination with Education Personnel Management Limited on 14 December 2023. These were consolidated into the group accounts from 1 January 2024, as the period between acquisition and year-end was considered immaterial.
The opening balances of tangible assets relate to the balances acquired as part of the business combination with Education Personnel Management Limited on 14 December 2023. These were consolidated into the group accounts from 1 January 2024, as the period between acquisition and year-end was considered immaterial.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Financial assets that are debt instruments measured at amortised cost comprise trade debtors, other debtors, and amount owed from group undertakings.
Financial liabilities measured at amortised cost comprise trade creditors, amount owed to group undertakings, other creditors and accruals.
During the year, the Company entered into two borrowing arrangements with Citation Holdings Limited. The first, a Term Loan Facility Agreement dated 14 December 2023, provides funding of up to £2,240,000, repayable in instalments between December 2026 and December 2028. As at the year end, the outstanding loan balance under the facility was £1,740,000. The loan bears interest at a fixed rate of 12% per annum, payable quarterly, and is secured by a debenture over the Company’s assets.
The second arrangement, also dated 14 December 2023, involved the issuance of Fixed Rate Secured Loan Notes 2028 with a principal limit of £5,166,191. Interest accrues daily at a fixed rate of 12% per annum and is compounded quarterly, with the option to pay interest in cash or through the issue of additional loan notes (PIK Notes). The notes are repayable on or before 30 December 2028. The notes are secured pursuant to Security Documents over the Company's assets, ranking as first priority security.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A deferred tax liability of £324,500 has been recognised in the consolidated financial statements in respect of temporary differences arising from fair value adjustments made on the acquisition of Education Personnel Management Limited. The liability relates to the recognition of acquired intangible assets and has been calculated at a corporation tax rate of 25%.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: