ACCOUNTS - Final Accounts preparation

An analysis of turnover by class of business is as follows:

Caseware UK (AP4) 2020.0.247 2020.0.247 2020-12-312021-05-052020-12-31false2020-01-01falseprovision of interim management, consultancy and recruitment services focusing on business and technology change, HR transformation and operational subject matter experts.4553false 05048716 2020-01-01 2020-12-31 05048716 2019-01-01 2019-12-31 05048716 2020-12-31 05048716 2019-12-31 05048716 2019-01-01 05048716 1 2020-01-01 2020-12-31 05048716 1 2019-01-01 2019-12-31 05048716 4 2020-01-01 2020-12-31 05048716 4 2019-01-01 2019-12-31 05048716 5 2020-01-01 2020-12-31 05048716 5 2019-01-01 2019-12-31 05048716 d:CompanySecretary1 2020-01-01 2020-12-31 05048716 d:Director1 2020-01-01 2020-12-31 05048716 d:Director2 2020-01-01 2020-12-31 05048716 d:Director3 2020-01-01 2020-12-31 05048716 d:Director4 2020-01-01 2020-12-31 05048716 d:Director5 2020-01-01 2020-12-31 05048716 d:Director6 2020-01-01 2020-12-31 05048716 d:Director6 2020-12-31 05048716 d:RegisteredOffice 2020-01-01 2020-12-31 05048716 e:FurnitureFittings 2020-01-01 2020-12-31 05048716 e:OfficeEquipment 2020-01-01 2020-12-31 05048716 e:OfficeEquipment 2020-12-31 05048716 e:OfficeEquipment 2019-12-31 05048716 e:OfficeEquipment e:OwnedOrFreeholdAssets 2020-01-01 2020-12-31 05048716 e:CurrentFinancialInstruments 2020-12-31 05048716 e:CurrentFinancialInstruments 2019-12-31 05048716 e:CurrentFinancialInstruments e:WithinOneYear 2020-12-31 05048716 e:CurrentFinancialInstruments e:WithinOneYear 2019-12-31 05048716 e:ReportableOperatingSegment1 2020-01-01 2020-12-31 05048716 e:ReportableOperatingSegment1 2019-01-01 2019-12-31 05048716 f:UnitedKingdom 2020-01-01 2020-12-31 05048716 f:UnitedKingdom 2019-01-01 2019-12-31 05048716 e:UKTax 2020-01-01 2020-12-31 05048716 e:UKTax 2019-01-01 2019-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2020-01-01 2020-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2020-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2019-01-01 2019-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2019-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2019-01-01 05048716 d:OrdinaryShareClass1 2020-01-01 2020-12-31 05048716 d:OrdinaryShareClass1 2020-12-31 05048716 d:OrdinaryShareClass1 2019-12-31 05048716 d:FRS102 2020-01-01 2020-12-31 05048716 d:Audited 2020-01-01 2020-12-31 05048716 d:FullAccounts 2020-01-01 2020-12-31 05048716 d:PrivateLimitedCompanyLtd 2020-01-01 2020-12-31 05048716 e:WithinOneYear 2020-12-31 05048716 e:WithinOneYear 2019-12-31 05048716 e:BetweenOneFiveYears 2020-12-31 05048716 e:BetweenOneFiveYears 2019-12-31 05048716 2 2020-01-01 2020-12-31 05048716 e:AcceleratedTaxDepreciationDeferredTax 2020-12-31 05048716 e:AcceleratedTaxDepreciationDeferredTax 2019-12-31 05048716 e:TaxLossesCarry-forwardsDeferredTax 2020-12-31 05048716 e:TaxLossesCarry-forwardsDeferredTax 2019-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 05048716

PRACTICUS LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

PRACTICUS LIMITED

COMPANY INFORMATION

Directors	B A Kershaw
	J W L Luckhurst
	D A Tolhurst
	P Wandless
	B Culora
	J Roop (appointed 21 January 2020)


Company secretary	R G Hunte


Registered number	05048716


Registered office	Riverside Barns
	Remenham Church Lane
	Remenham
	Henley-On-Thames
	Oxfordshire
	RG9 3DB


Independent auditor	James Cowper Kreston
	Chartered Accountants and Statutory Auditor
	Reading Bridge House
	George Street
	Reading
	Berkshire
	RG1 8LS

PRACTICUS LIMITED

CONTENTS

	Page
Strategic report	1 - 3
Directors' report	4 - 5
Independent auditor's report	6 - 9
Statement of comprehensive income	10
Balance sheet	11
Statement of changes in equity	12
Statement of cash flows	13
Notes to the financial statements	14 - 25

PRACTICUS LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

The Directors are pleased to present their strategic report together with the audited financial statements for the period ended 31 December 2020.
Review of the Business
Our strategic purpose is helping people navigate change through the provision of Interim Management, Consultancy and Recruitment Services. Our principle markets include Strategic Change, Operational Efficiency, Cultural and Behavioural Engagement, Digital and Technology Change. The Company provides services across a broad portfolio of industries in both the public and private sector.
We are delighted to have achieved 1st place, Platinum Tier winner in the rankings produced by the Institute of Interim Management, together with three of our consultants recognised in the top fifteen consultants. This privileged position has been earned from feedback provided by our clients and candidates as Practicus has improved its market position year on year for the last seven years in the provider rankings.
2020 has been an unprecedented year with the challenge of the Coronavirus (Covid-19). The Directors are very proud of our staff and interims that have helped our clients navigate this challenge, particularly in supporting our NHS clients during this difficult year. Naturally, Covid-19 has resulted in many organisations placing new change programmes on hold during 2020, which has had some impact on our results. Despite this, we are pleased to report the company’s net assets have been restored to a positive position and we are experiencing a high degree of new business opportunities and activity in early 2021. Key performance indicators (KPIs) used by the company to monitor progress are set out below:
£000’s 2020 2019
Turnover 23,655 33,558
Gross profit 5,361 7,189
EBITDA 849 1,139
Further investment has been made in building the infrastructure that sits behind our Community Model following the initial success of this reported last year. As part of developing this concept wider, the company has undergone a Target Operating Model process during 2020 providing some realignment and broadening of our service offerings. This process has provided positive engagement throughout the business against which the fruits of our labour are gaining momentum. There is excitement throughout the organisation for the new business opportunities this process has opened up. The focus for 2021 is that of growth from the foundations that have been laid. As we begin to come out of the Covid-19 pandemic together with our embedded Target Operating Model, we are experiencing an upturn in business and the Directors are committed to investing further in scaling up to grasp the opportunities that lay ahead. This includes producing remote onboarding and training content to ensure all staff are supported and developed as optimally as possible.
Furthermore, the Board are acutely conscious of the Deemed Employment (IR35) legislation changes being extended to the Private Sector from April 2021. Practicus had first-hand experience of managing this situation when the reforms took place for the Public Sector in April 2017. We are therefore well placed to support our Clients and Interim Community with these changes. Unlike the roll out of IR35 with the Public sector, we are experiencing much more publicity and dialogue for the changes coming into place this time around. In addition, we have taken steps with early interaction and education with our clients and interims as well as maintaining our own IR35 panel to manage potential risk.
Principal Risks and Uncertainties
The Directors continue to make risk management a priority and devote their effort and attention to ensuring that risks are identified and mitigated such that the business has a robust, stable and sustainable platform for growth. A summary of the risks and actions taken to mitigate them is set out below:

Page 1

PRACTICUS LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Going Concern
There are no material uncertainties that may cast significant doubt on the ability of the Company to continue as a going concern that have been identified by the Directors.
The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in this Strategic Report.
Employee Involvement
Details of the number of employees and related costs can be found in note 7 to the financial statements.
The Company’s business is dependent upon its employees. As such, the Company continues to focus on ensuring it has the necessary skills, resources and work environment required for a high-performing business.
The Company continually seeks to develop its employees and invest in training to nurture talent in our business. There are a number of ways we ensure our employees are involved in the business and issues relating to its performance, including regular employee briefings via the monthly “Talking Heads” video, monthly employee feedback via “Listen to the Business”, bi-annual workshop led conferences and regular lunch and learns. To encourage employees to have a stake in the business there is also a share option scheme. The Company has previously been included in the Sunday Times 100 Best Small Companies to Work For.
The Company has a formal approach towards succession planning, internal recruitment and promotion with decisions based on an individual’s ability to perform the role via a competency framework.
The Company gives full consideration to applications for employment from disabled applicants where a disabled person can adequately fulfil the requirements of the job. Should an employee become disabled whilst working for the Company, every effort is made to accommodate them or to find a suitable alternative role and to assist with any re-training.
Bribery and Corruption
Bribery and corruption is unfortunately a feature of corporate and public life in many countries. Practicus therefore has a policy in place so that all staff are aware of acceptable practices and behaviours. This is in accordance with The Bribery Act 2010 which came into force on 1 July 2011.

Page 2

PRACTICUS LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Corporate Social Responsibility Statement
Practicus Limited is a socially responsible company. We make every effort to consider the impact of our business practices on society and strive to ensure that what we do, and how we do it, is beneficial to our clients, candidates, employees, communities and the environment. We believe in giving back and supporting the invaluable work performed by our chosen charities, by either getting involved and supporting their various activities or by making regular donations.

This report was approved by the board and signed on its behalf.

................................................

D A Tolhurst

CEO

Date: 27 April 2021

Page 3

PRACTICUS LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2020

The directors present their report and the financial statements for the year ended 31 December 2020.

Results and dividends

The profit for the year, after taxation, amounted to £645,000 (2019 - £799,000).

Directors

The directors who served during the year were:

B A Kershaw

J W L Luckhurst

D A Tolhurst

P Wandless

B Culora

J Roop (appointed 21 January 2020)

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the directors are required to:

∙select suitable accounting policies for the Company's financial statements and then apply them consistently;

∙make judgments and accounting estimates that are reasonable and prudent;

∙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 Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Page 4

PRACTICUS LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

Auditor

The auditor, James Cowper Kreston, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.

................................................

D A Tolhurst

CEO

Date: 27 April 2021

Page 5

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF PRACTICUS LIMITED

Opinion

We have audited the financial statements of Practicus Limited (the 'Company') for the year ended 31 December 2020, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Company's affairs as at 31 December 2020 and of its profit for the year 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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 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.

Page 6

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF PRACTICUS LIMITED (CONTINUED)

Other information

The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the 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 Company and its 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 in relation to which 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 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 set out on page 4, 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 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 Company or to cease operations, or have no realistic alternative but to do so.

Page 7

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF PRACTICUS LIMITED (CONTINUED)

Auditor's 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.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
• Enquiry of management, those charged with governance around actual and potential litigation and claims;
• Enquiry of management and those charged with governance to identify any material instances of non-compliance with laws and regulations;
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
• Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's report.

Page 8

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS, AS A BODY, OF PRACTICUS LIMITED (CONTINUED)

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.

Darren O'Connor BSc (Hons) FCCA ACA (Senior Statutory Auditor)

for and on behalf of

James Cowper Kreston

Chartered Accountants and Statutory Auditor

Reading Bridge House

George Street

Reading

Berkshire

RG1 8LS

5 May 2021

Page 9

PRACTICUS LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

	2020	2019
Note	£	£000


Turnover	4	23,665	33,558
Cost of sales		(18,304)	(26,369)
Gross profit		5,361	7,189
Administrative expenses		(4,709)	(6,122)
Other operating income	5	161	-
Operating profit	6	813	1,067
Interest receivable and similar income		3	4
Interest payable and expenses	9	(10)	(76)
Profit before taxation		806	995
Tax on profit	10	(161)	(196)
Profit for the financial year		645	799

There were no recognised gains and losses for 2020 or 2019 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2020 (2019:£NIL).

The notes on pages 14 to 25 form part of these financial statements.

Page 10

PRACTICUS LIMITED

REGISTERED NUMBER: 05048716

BALANCE SHEET

AS AT 31 DECEMBER 2020

		2020		2019
Note		£000		£000

Fixed assets
Tangible assets	11		51		77
			51		77
Current assets
Debtors: amounts falling due within one year	12	2,694		4,050
Cash at bank and in hand	13	357		500
		3,051		4,550
Creditors: amounts falling due within one year	14	(2,863)		(5,033)
Net current assets/(liabilities)			188		(483)
Total assets less current liabilities			239		(406)

Net assets/(liabilities)			239		(406)

Capital and reserves
Profit and loss account	17	239	(406)
		239	(406)

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

................................................

D A Tolhurst

CEO

Date: 27 April 2021

The notes on pages 14 to 25 form part of these financial statements.

Page 11

PRACTICUS LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

	Profit and loss account	Total equity
	£000	£000
At 1 January 2020	(406)	(406)
Comprehensive income for the year
Profit for the year	645	645
Total comprehensive income for the year	645	645
At 31 December 2020	239	239

The notes on pages 14 to 25 form part of these financial statements.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

	Profit and loss account	Total equity
	£000	£000
At 1 January 2019	(1,205)	(1,205)
Comprehensive income for the year
Profit for the year	799	799
Total comprehensive income for the year	799	799
At 31 December 2019	(406)	(406)

The notes on pages 14 to 25 form part of these financial statements.

Page 12

PRACTICUS LIMITED

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

			2020	2019
			£000	£000

Cash flows from operating activities
Profit for the financial year	645	799
Adjustments for:
Depreciation of tangible assets	35	72
Loss on disposal of tangible assets	-	16
Interest paid	10	76
Interest received	(3)	(4)
Taxation charge	161	196
Decrease in debtors	1,234	1,114
Decrease in amounts owed by related parties	225	246
(Decrease) in creditors	(981)	(834)
Corporation tax (paid)/received	(167)	-
Net cash generated from operating activities	1,159	1,681

Cash flows from investing activities
Purchase of tangible fixed assets	(10)	(84)
Interest received	3	4
Net cash from investing activities	(7)	(80)
Cash flows from financing activities
Repayment of other loans	-	(536)
Invoice discounting	(1,285)	(1,271)
Interest paid	(10)	(76)
Net cash used in financing activities	(1,295)	(1,883)
Net (decrease) in cash and cash equivalents	(143)	(282)
Cash and cash equivalents at beginning of year	500	782
Cash and cash equivalents at the end of year	357	500

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	357	500
	357	500

The notes on pages 14 to 25 form part of these financial statements.

Page 13

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1.	General information

Practicus Limited is a limited liability company incorporated in England and Wales. The address of its registered office is Riverside Barns, Remenham Church Lane, Remenham, Henley-On-Thames, Oxfordshire, RG9 3DB.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Going concern

The Company's business activities, together with factors likely to affect its future development, performance and position are set out in the Strategic report and Directors report. The Directors have a high degree of confidence that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Practicus’ financial position has strengthened during 2020 with the company’s balance sheet returning to positive net assets during the coronavirus pandemic year. This, together with a healthy level of financing facility in place, leads the directors to conclude that the financial statements have been prepared appropriately on the going concern basis.

2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 14

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.4

Turnover

Turnover is recognised on delivery of the service provided. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.

2.6

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 15

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, straight line or reducing balance method.

Depreciation is provided on the following basis:

				Fixtures and fittings	-	25% - 33% reduced balance and 20% - 33% straight line
				Office equipment	-	25% - 33% reduced balance and 25% - 33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

2.12

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 16

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

2.14

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.15

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

Page 17

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2.Accounting policies (continued)

2.16

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amount of reported assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgments and estimates have had the most significant effects on amounts recognised in the financial statements.
Provisions
In recognising provisions, the company evaluates the extent to which it is probable that it has incurred a legal or constructive obligation in respect of past events and the probability that there will be an outflow of benefits as a result. The judgments used to recognise provisions are based on currently known factors which may vary over time, resulting in changes in the measurement of recorded amount as compared to initial estimates.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual value, where appropriate. The actual lives of the assets and residual values may vary depending on a number of factors.

	Revenue from contracts with customers	23,665	33,558

Analysis of turnover by country of destination:

					2020	2019
					£000	£000

United Kingdom	23,665	33,558
	23,665	33,558

Page 18

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

5.	Other operating income
		2020	2019
		£000	£000

Other operating income	161	-
	161	-

The other operating income relates to the Coronavirus Job Retention Scheme.

Depreciation of tangible fixed assets	35	72
Fees payable to the group's auditor and its associates for the audit of the company's annual financial statements	14	13
Fees payable to the group's auditor and its associates for other services: Tax compliance services	2	3
Other operating lease rentals	221	287
Loss on disposal of fixed assets	-	15

Wages and salaries	3,367	4,158
Social security costs	406	500
Cost of defined contribution scheme	103	149
	3,876	4,807

The average monthly number of employees, including the directors, during the year was as follows:

	2020	2019
	No.	No.

Employee Numbers	45	53

Page 19

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

8.	Directors' remuneration
		2020	2019
		£000	£000


Directors' remuneration	1,160	1,171
Company contributions to defined contribution pension schemes	84	19
	1,244	1,190

The aggregate of remuneration and amounts receivable under long term incentive schemes of the highest paid director was £237k (2019: £265k), and company pension contributions of £nil (2019:nil) were made to a defined contribution pension scheme.
During the year retirement benefits were accruing to 3 directors (2019: 2) in respect of defined contribution pension schemes.
The total amount of employee benefits received by key management personnel for the year amounted to £1,244k (2019: £1,322k).

9.	Interest payable and similar expenses
		2020	2019
		£000	£000

Bank interest payable

Corporation tax
Current tax on profits for the year	163	167
	163	167

Total current tax	163	167

Deferred tax
Origination and reversal of timing differences	(2)	29
Total deferred tax	(2)	29


	Taxation on profit on ordinary activities	161	196

Page 20

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

10.Taxation (continued)

Profit on ordinary activities before tax

806

995

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)	153	189
Effects of:
Non-tax deductible amortisation of goodwill and impairment	8	11
Adjustments to tax charge in respect of prior periods	-	(4)
Total tax charge for the year	161	196

Factors that may affect future tax charges

There were no factors that affected the tax charge for the year which has been calculated on the profits on ordinary activities before tax at the standard rate of corporation tax in the UK of 19% (2019 - 19%).

Page 21

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

11.	Tangible fixed assets

		Fixtures, Fittings and Office equipment
		£000
	Cost or valuation
	At 1 January 2020	699
	Additions	10
	Disposals	(228)
	At 31 December 2020	481
	Depreciation
	At 1 January 2020	622
	Charge for the year	35
	Disposals	(227)
	At 31 December 2020	430
	Net book value
	At 31 December 2020	51
	At 31 December 2019	77

Page 22

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

12.

Debtors

					2020	2019
					£000	£000


Trade debtors	1,841	2,910
Amounts owed by related parties	-	225
Other debtors	161	73
Prepayments and accrued income	685	837
Deferred taxation	7	5
	2,694	4,050

13.	Cash and cash equivalents
		2020	2019
		£000	£000

Cash at bank and in hand	357	500
	357	500

14.	Creditors: Amounts falling due within one year
		2020	2019
		£000	£000

Invoice discounting facility	-	1,184
Trade creditors	1,303	1,972
Corporation tax	162	167
Other taxation and social security	786	576
Other creditors	15	36
Accruals and deferred income	597	1,098
	2,863	5,033

The invoice discounting facility is secured against the invoices in which it relates to.

Page 23

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

15.	Deferred taxation

		2020
		£000

	At beginning of year	5
	Charged to profit or loss	2
	At end of year	7

The deferred tax asset is made up as follows:
	2020	2019
	£000	£000

Fixed asset timing differences	5	3
Short term timing differences	2	2
	7	5

16.	Share capital
		2020	2019
		£	£

Authorised

100,000,000 (2019 - 100,000,000) Ordinary shares of £0.00001 each	1,000	1,000

Allotted, called up and fully paid

27,000,000 (2019 - 27,000,000) Ordinary shares of £0.00001 each	270	270

17.

Reserves

Profit and loss account

Includes all current and prior period retained profits and losses.

18.	Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge
represents contributions payable by the Company to the fund and amounted to £101,594 (2019: £149,403). Contributions totalling £9,523 (2019: £15,920) were payable to the fund at the balance sheet date and are included in creditors.

Page 24

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Not later than 1 year	135	258
Later than 1 year and not later than 5 years	186	276
	321	534

20.

Related party transactions

During the year, Practicus Limited paid £1,489 (2019: £4,705) for goods purchased on behalf of Meglio Limited, a company partly owned by the directors of Practicus Limited. The balance outstanding from Meglio Limited at the year end was £Nil (2019: £346).
United Outcomes Limited, a previously owned subsidiary in Hong Kong, had a loan balance due to Practicus Limited of £Nil (2019: £224,676). United Outcomes is owned by some of the Directors of Practicus Limited. During the year, there were recharges of £Nil (2019: £15,854) relating to expenses and £172 (2019: £5,850) in relation to support.
During the year the Company paid £34,978 (2019: £34,773) to Suffolk Life Pensions Limited for rent and rates for the property owned by the Directors' Pension Scheme. The balance outstanding from Practicus Limited at the year end was £Nil (2019: £1,157).

Page 25