CODE Northcoders Group Plc

 

1.7    Intangible assets other than goodwill

The Group's other intangible assets are stated at cost less accumulated amortisation and impairment losses. Where assets are acquired through business combinations, the Group uses an appropriate fair value technique in order to determine cost. Intangible assets are tested annually for impairment or otherwise when circumstances change.

Amortisation begins when an asset is acquired or becomes available for use and is calculated on a straight- line basis to allocate the cost of assets over their estimated useful lives as follows:

 

Licence	4 years straight line
Technology	5 years straight line
Development costs	10 years straight line
Brand	6 years straight line
Customer relationships	6 years straight line
Customer contracts	6 years straight line

 

 

1.8    Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

 

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

 

Leasehold improvements	Over the term of the lease
Fixtures and fittings	25% straight line
Computers	33% straight line
Right of use assets	Over the term of the lease

 

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 income statement.

 

1.9    Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

 

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

 

1.10  Impairment of tangible and intangible assets

At each reporting 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 group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impair

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.

 

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.

 

1.11  Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

 

1.12  Financial assets

Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

 

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

 

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

 

Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the group's business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

 

Impairment of financial assets

Financial assets, other than those measured at fair value through profit or 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 of the investment have been affected.

 

The Group recognises lifetime expected credit losses (ECL) for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Group's historical credit loss experience, adjusted for facts that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast director of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

 

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

 

1.13  Financial liabilities

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

 

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

 

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the group's obligations are discharged, cancelled, or they expire.

 

1.14  Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

Share capital represents the nominal value of shares that have been issued.

 

Share premium represents the excess of the subscription price over the par value of shares issued.

 

Share option reserve relates to amounts recognised for the fair value of share options and warrants granted in accordance with IFRS 2.

 

Other reserve represents the nominal value of the share for share exchange.

 

Merger reserve represents the carrying value of the investment in the subsidiary undertaking at the point of the share for share exchange.

 

Retained earning include all current and prior period retained earnings.

 

1.15  Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

 

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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 group 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 tax authority.

 

1.16  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 inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

 

1.17  Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

 

1.18  Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

 

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

 

1.19  Leases

At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

 

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

 

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the group's estimate of the amount expected to be payable under a residual value guarantee; or the group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

 

The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

 

1.20  Grants

Grants for revenue expenditure are credited in the income statement as other operating income in the period in which the expenditure for which they are intended to contribute towards has been incurred.

 

1.21  Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

 

1.22  Non-recurring items

Items which are material either because of their size or nature, and which are non-recurring, are presented within their relevant consolidated income statement category, but highlighted through separate disclosure. The separate reporting of non-recurring items helps provide a better picture of the group and company's underlying performance. Items which are included within the non-recurring category include (but are not limited to):

·    Costs incurred in relation to the integration of significant acquisitions and other major restructuring programmes;

·    Significant goodwill or other asset impairments relating to specific market events;

·    Revenue clawback due to the inability to claim for job outcomes after the period. The reason for this being the shift in outcomes rate due to the post covid tech economy crash; and

·    Other particularly significant or unusual items.

 

 

2     Adoption of new and revised standards and changes in accounting policies

 

In the current year, the following new and revised standards and interpretations have been adopted by the group and have an effect on the current period or a prior period or may have an effect on future periods:

 

·    IFRS 17 'Insurance contracts' and subsequent withdrawal of IFRS 4 'Insurance Contracts' and amendments to IFRS 17

·    Deferred tax related to Assets and Liabilities arising from a single transaction (Amendments to IAS 12 Income Taxes)

·    International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)

·    Disclosure of Accounting Policies (Amendments to IAS 1 amnd IFRS Practive Statement 2)

·    Definition of an Accounting Estimate (Amendments to IAS 8)

 

Standards which are in issue but not yet effective

 

At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the UK):

 

Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)

Effective date - period beginning on or after 1 January 2024*

 

 

Non-current Liabilities with Covenants (Amendments to IAS 1) and Classification of Liabilities as Current or Non-current (Amendments to IAS 1)	1 January 2024*
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)	1 January 2024*
Lack of Exchangeability (Amendments to IAS 1)	1 January 2025*

 

 

* These standards, amendments and interpretations have not yet been endorsed by the UK and the dates shown are the expected dates.

The adoption of all above standards is not expected to have any impact on the Group's financial statements.

 

3      Critical accounting estimates and judgements

 

In the application of the company'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, if the revision affects only that period, or in the period of the revision and future periods if 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 outlined below.

 

Critical judgements

Capitalisation of development costs

The Group recognises as intangible fixed assets development costs that are considered to meet the relevant capitalisation criteria. The measurement of such costs and assessment of their eligibility in line with the appropriate capitalisation criteria requires judgement and estimation around the time spent by eligible staff on development, expectations around the ability to generate future economic benefit in excess of cost and the point at which technical feasibility is established.

 

Useful lives and impairment of non-current assets (including right of use assets)

Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives as set out in the Group's accounting policy. The selection of these estimated lives requires the exercise of management judgement. Useful lives are regularly reviewed and should management's assessment of useful lives shorten/increase then depreciation charges in the financial statements would increase/decrease and carrying amounts of tangible assets would change accordingly.

 

The Group is required to consider, on an annual basis, whether indications of impairment relating to such assets exist and if so, perform an impairment test. The recoverable amount is determined based on the higher of value in use calculations or fair value less costs to sell. The use of value in use method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. The Directors are satisfied that all recorded assets will be fully recovered from expected future cash flows.

 

Deferred tax

The Group makes provision for anticipated tax consequences based on the likelihood of whether additional taxes may arise. The Group recognises deferred tax assets to the extent to which it expects to be able to utilise the balances against future taxable profits.

 

Key sources of estimation uncertainty

Incremental borrowing rates applied to calculate lease liabilities

The Group has used the incremental borrowing rate to calculate the value of the lease liabilities relating to its property lease liabilities recognised under IFRS 16. The discount rate used reflects the estimated risks associated with borrowing against similar assets by the Group, incorporating assumptions for similar terms, security and funds at that time.

 

Share based payments

The determination of the fair values of EMI options and warrants has been made by reference to the Black- Scholes model. The input with the greatest amount of estimation being the volatility of the company's share price which has been derived via benchmarking against similar companies in the industry.

Expected credit losses

The amount recognised as a provision is the best estimate of the expected credit loss that the Group is projected to incur on receivables. Each year end the Directors assess the risks and uncertainties surrounding receivable balances and use expected loss rates based on the historical credit losses experienced by the Group.

 

Revenue provision

An estimate of variable consideration is recognised against DFE income due to the performance based nature of the contract. The measurement of the consideration requires judgment and estimation around the expectation of what percentage of students who finish the DFE course go into a relevant job within the timescales of the contract. In 2023 this adjustment reduces revenue by £364,021 and reduces current assets. Job outcomes are regularly reviewed by management and the consideration is flexed as necessary. This is a change in estimate of the variable consideration to the previous year. In the previous year, management presumed all revenue would be received, outcome rates were high enough to justify not needing an adjustment. Due to an in inflation of jobs due to the pandemic, this estimate was incorrect and the rectification of this has been included in non-recurring items, see note 5.

 

4      Revenue

 

IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports of the Group that are regularly reviewed by the Group's chief operating decision maker. The chief operating decision maker of the Group is considered to be the Board of Directors.

 

The Group previously reported under the following operating segments:

 

4.1    Consumer bootcamps and apprenticeships - Individuals go through a selection process and a 13- week coding bootcamp programme to the point where they are in-demand, career ready Junior Software Engineers. Existing employees of businesses can undertake a 13-month 'On the Job' apprenticeship programme for junior software engineers. This is delivered with an on-programme assessment to one or more apprentices utilising government-backed funding from the Education and Skills Funding Agency ("ESFA"). All training income is deferred or accrued as appropriate in order to recognise this on a percentage of completion basis, which is typically on a straight line period over the delivery of the course.

4.2    Corporate solutions - On completion of a course, the Group may seek to place an individual with an employer and such placement fees are included in this segment. No such fees have been recognised in the current year, and in the prior year such fees were invoiced directly to the employer. The Group has decided to not charge these fee's going forwards. This segment further includes practical developments created on behalf of other companies who engage the Group and also bespoke training programmes delivered to large groups from selected organisations.

4.3    Central - Where revenues or costs cannot be meaningfully allocated to either primary operating segment, these are allocated to the Central segment.

 

Following the acquisition of Tech Returners Limited during the year, the way that financial information is reviewed has changed. The Group's chief operating decision maker now considers cash flows from a consolidated group perspective and thus the Board of Directors consider it reasonable and appropriate to treat the whole business as one single operating segment. All strategic decisions are made on the basis of the consolidated operating results.

 

All assets, liabilities and revenues are located in, or derived in, the United Kingdom.

 

The results of the Group are allocated to the single operating segment consistent with the requirements of IFRS 8:

 

 

	2023 £	2022 £
Revenue	7,102,319	5,598,863
Cost of sales	(2,658,650)	(1,656,938)
Gross profit	4,443,669	3,941,925
Operating costs	(4,957,649)	(3,506,587)
Other operating income	-	12,000
Non-recurring costs	(562,603)	-
Operating profit	(1,076,583)	447,338
Net finance costs	(149,090)	(100,909)
Profit/(loss) before taxation	(1,225,673)	346,429

 

 

 

	2023	2022
	£	£
Revenue analysed by geographical market
United Kingdom	7,102,319	5,598,863
	2023	2022
	£	£
Other significant revenue
Grants received	-	12,000

 

Revenue includes undiscounted EdAid sales of £7,542 (2022: £5,208) of which some of these contain a financing element. EdAid sales are governed by a formal credit agreement facilitated by a third party. An adjustment of £nil (2022: £nil) has been recognised in finance income to reflect the discounted element based on expected repayment profiles inherent in the agreement at date of invoice.

 

Also included within revenue is undiscounted StepEx sales of £29,924 (2022: nil). StepEx sales are governed by a formal credit agreement facilitated by a third party. An adjustment of £nil (2022: nil) has been recognised in finance income to reflect the discounted element based on expected repayment profiles inherent in the agreement at date of invoice.

 

Grants received comprises the following:

 

4.4    Education and Skills Funding Agency grant of £nil (2022: £12,000) received for the hire of apprentices.

 

Revenue from customers who individually accounted for more than 10% of total Group revenue amounted to £5,778,001 (2022: £4,845,368) from one customer (2022: one customer).

 

Assets and liabilities related to contract with customers:

 

The Group has recognised the following assets and liabilities related to contracts with customers:

 

Contract assets	2023 £	2022 £
At 1 January	1,947,922	801,119
Transfers in the year from contract assets to trade receivables	(1,595,005)	(801,119)
Non-recurring item - irrecoverable amounts written off	(352,917)	-
Excess of revenue recognised over cash (or rights to cash) being recognised during the year	1,398,018	1,947,922
At 31 December	1,398,018	1,947,922
Contract liabilities	2023	2022
	£	£
At 1 January	5,239	21,813
Amounts recognised as revenue during the year	(5,239)	(21,813)
Amounts received in advance of performance and not recognised as revenue during the year	206,500	5,239
At 31 December	206,500	5,239

 

Contract assets and contract liabilities are both shown on the face of the statement of financial position. They arise from the Group's contracts because cumulative payments received from customers at each balance sheet date do not necessarily equal the amount of revenue recognised on the contracts.

 

 

5      Non-recurring items

 

	2023 £		2022 £
Expenditure
Irrecoverable amounts	485,770		-
Acqusition costs	57,269		-
Business restructuring costs	19,564		-
	562,603		-

 

Irrecoverable amounts

Having reviewed the recoverability of contract assets, management have assessed that a portion of income accrued during 2022, amounting to £458,770, is irrecoverable and has therefore been written off as an non- recurring item.

 

The Group recognises revenue in accordance with IFRS 15 and the specific provisions relating to variable consideration. At the time of recognising the contract asset, the Group had every expectation that the amounts would be recoverable. The contracts are performance-based and external factors and conditions arising during 2023, which could not be foreseen, have had a detrimental impact to the recoverability of these contract assets. In particular, following the Covid-19 pandemic, the number of job opportunities for course participants has diminished, resulting in reduced performance-based revenue. Such factors and conditions have been taken into account in recognising revenue as at 31 December 2023.

 

Acquisition costs

Acquisition costs pertain to legal and professional fees incurred as part of the acquisition of Tech Returners Limited during the year. Such costs are non-recurring and hence deemed non-recurring.

 

Business restructuring costs

Non-recurring restructuring costs in the form of redundancy and severance payments were incurred by the Group as part of its retreat from the apprenticeship market.

 

6     Adjusted EBITDA

 

The Directors have used an Alternative Performance Measure ("APM") in the preparation of these financial statements. The Consolidated Income Statement has presented Adjusted EBITDA, where EBITDA represents Earnings Before Interest, Tax, Depreciation and Amortisation. The adjusted element removes non recurring items which are not relevant to the underlying performance and cash generation of the business. Non- recurring items for the current year are disclosed in note 5. There are no non-recurring costs for the prior year.

 

The Directors have presented this APM because they feel it most suitably represents the underlying performance and cash generation of the business, and allows comparability between the current and comparative period in light of the rapid changes in the business (most notably its admission to AIM and associated costs), and will allow an ongoing trend analysis of this performance based on current plans for the business.

 

 

7      Operating loss

 

		2023 £		2022 £
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses		896		-
Government grants		-		(12,000)
Fees payable to the company's auditor for the audit of the group and company's financial statements		115,000		75,000
Depreciation of property, plant and equipment		172,582		171,521
Profit on disposal of property, plant and equipment		(83)		-
Amortisation of intangible assets (included within administrative expenses)		208,751		85,167
Impairment of intangible assets (included within administrative expenses)		25,474		-
Share-based payments		186,542
		203,607

 

                                

                                

8         Auditor's remuneration	2023		2022
Fees payable to the company's auditor and associates:	£		£
For audit services Audit of the financial statements of the group and company	75,000		-
Audit of the Group and subsidiary undertakings	40,000		75,000
	115,000		75,000
9         Employees
The average monthly number of persons (including directors) employed by the group during the year was:
	2023 Number		2022 Number
Executive Directors	3		3
Non-Executive Directors	2		2
Administration and operations	44		32
Client service delivery	75		50
Total	124		87
Their aggregate remuneration comprised:	2023		2022
	£		£
Wages and salaries	4,294,730		3,095,713
Social security costs	441,671		315,711
Pension costs	446,996		191,136
	5,183,397		3,602,560

 

In addition to the above, further employee costs have been incurred as part of the development costs. The total employment costs which have been capitalised as development are:

 

	2023 £		2022 £
Wages and salaries	621,977		358,439
Social security costs	58,668		44,805
Pension costs	34,531		16,130
	715,176		419,374

 

10	Directors' remuneration	2023	2022
		£	£
	Remuneration for qualifying services	555,322	504,722
	Amounts receivable under long term incentive schemes	43,383	28,918
	Company pension contributions to defined contribution schemes	38,489	7,706
		637,194	541,346

 

The number of directors for whom retirement benefits are accruing

under defined contribution

schemes

amounted to 4 (2022: 4). No pension contributions have been recognised for Mr A N Parker.

Remuneration disclosed above includes the following amounts paid to the highest paid director:

	2023 £	2022 £
Remuneration for qualifying services	170,842	161,939
Company pension contributions to defined contribution schemes	13,625	1,468

 

 

During the year to 31 December 2023 the directors received remuneration as follows:

 

Director	Salary   £		Share options £	Benefits in kind £	Pension   £		Total   £
Mr A Batra	142,361		-	1,615	11,389		155,365
Mr C D Hill	170,312		-	530	13,625		184,467
Ms C Prior	150,833		43,383	359	12,100		206,675
Mr A N Parker	35,000		-	-	-		35,000
Mrs A M Williams	54,312		-	-	1,375		55,687
	552,818		43,383	2,504	38,489		637,194

 

 

 

	During the year to 31 December 2022 the directors received remuneration as follows:
Director			Salary	Share options		Benefits in            Pension kind				Total
			£	£		£			£	£
Mr A Batra			127,250	-		1,370			1,468	130,088
Mr C D Hill			153,812	-		781			1,468	156,061
Ms C Prior			132,714	28,918		307			1,468	163,407
Mrs S Lindsay (resigned  4 January 2022)			357	-		-			-	357
Mr A N Parker			35,000	-		-			-	35,000
Mrs A M Williams (appointed 5 January 2022)
53,131					-		-		3,302		56,433
502,264					28,918		2,458		7,706		541,346

 

The directors of the Company control 30.66% (2022: 36.76%) per cent of the voting shares of the Company and hold 175,000 (2022: 75,000) EMI share options. No Directors exercised share options during the year.