The financial statements reflect the correction of the following prior period errors, each effected by restatement of the comparative figures:
(a) Interest on the convertible loan agreement entered into on 23 March 2021 accrues at 8 per cent per annum (simple, actual/365) from the date of the agreement but had not previously been recognised. Interest accrued to 31 August 2024 of £367,127 has been recognised within creditors, with £260,231 charged against reserves brought forward at 1 September 2023 and £106,896 recognised in the restated profit and loss account for the year ended 31 August 2024. The charge for the current year is £106,604.
(b) The principal of the same loan was recorded at £1,325,352; the executed agreement confirms £1,332,552. The £7,200 understatement has been corrected.
(c) A balance of £139,953 within amounts owed by group undertakings represented accumulated expenditure on an opportunity explored by the group which failed in the second half of 2022 and had no counterparty within the group. The balance has been written off with effect from 31 August 2022: amounts owed by group undertakings at 31 August 2024 reduced by £139,953 and reserves brought forward at 1 September 2023 reduced by £139,953. There is no effect on the profit and loss account for either year presented.
(d) Contract costs equal to the income recognised in each period have been recognised, with a corresponding amount owed to a subsidiary undertaking, so that the contract result in each period is nil.
(e) A balance of £63,622 described in the amounts owed by group undertakings which is not a subsidiary undertaking — related to payroll costs borne in 2019 and was irrecoverable. Of this, £61,650 has been written off with effect from 31 August 2022 on the same basis: amounts owed by group undertakings at 31 August 2024 reduced by £61,650 and reserves brought forward at 1 September 2023 reduced by £61,650. The rest of the balance has been written off in the current year.