ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
COMPANY INFORMATION
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ETHOS GROUP HOLDINGS LIMITED
CONTENTS
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ETHOS GROUP HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2022
The Group is one of the largest independent and privately owned specialist providers of managed print, document, integrated solutions, and IT services in the UK.
Headquartered in the City of London with five regional offices in England & Wales and operates across 40 countries, partnering with leading document and software solution providers.
The results for Ethos Group Holdings Limited and its subsidiaries are set out on page 9.
The years results of £30.6m turnover, £14.7m gross profit and £3.7m EBITDA are at a similar level to prior year figures. The disposal of the Group's telecommunications subsidiary Ethos Voice and Data on 1st March 2022 means that associated revenues and profits discontinued in the final quarter of the financial year. When taking this into account there has been an improvement in profitability vs 2021 on a like for like basis. The directors are pleased with these results considering the challenges faced throughout much of the year from COVID-19 restrictions still being in place. The small bottom line loss for the period is largely driven from some exceptional restructuring costs as a consequence of the disposal of Ethos Voice and Data Holdings. Ethos Group will continue to innovate and transform into an IT-centric organisation with managed print services at its core. Digitalisation, software, and IT services represent not only an extension of the Group's core activities but meets the growing needs of a lot of organisations to not only centralise information and make it available to a disparate work force, but to improve business and process efficiencies. Ethos is supporting their existing and prospective clients to develop and execute their digital transformation strategies and providing a clear path forward for those businesses who recognise the need for change.
Financial risk management objectives and policies
The directors are aware of the risks associated with a growing business and have implemented business process and management review policies to ensure that there is full visibility and managerial responsibility for the effect of gross margin and overheads on the business. Liquidity risk Management closely monitors available bank and other credit facilities in comparison to the Group's outstanding commitments on a regular basis to ensure that the Group has sufficient funds to meet its obligations as they fall due. The Board receives regular debt management and cash forecasts which estimate the cash inflows and outflows over the next eighteen months, so that management can ensure that sufficient financing can be arranged as it is required. In addition, management monitors cash outflows on interest payments closely to ensure that the Group minimises its exposure to fluctuating interest rates. Credit risk Trade debtors are managed in respect of credit risk by policies relating to the credit offered to customers and the regular monitoring of amounts owed.
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ETHOS GROUP HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2022
The directors review and monitor all aspects of the business but consider that turnover, gross profit, EBITDA and EBITDA margins are the key performance indicators for the business. There are a number of operational KPIs that support these main ones particularly around service and performance.
The table below summarises the key performance indicators: 2022 2021 Turnover (£'000s) 30,582 31,757 Gross profit (£'000s) 14,700 14,586 Gross profit margin 48.1% 46.0% EBITDA (£'000s) 3,740 3,876 EBITDA margin 12.2% 12.2% The directors are happy that the Group continue to achieve healthy margins and are confident that it will at least continue to maintain these margins.
This report was approved by the board on 15 August 2023 and signed on its behalf.
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ETHOS GROUP HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2022
The directors present their report and the financial statements for the year ended 31 May 2022.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £316,552 (2021 - loss £2,608,329).
Final dividend payment was made of £686,240 (2021 - £331,820).
The directors who served during the year were:
The Group plans to continue to grow across all business activities, capitalising on opportunities as deemed appropriate.
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ETHOS GROUP HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2022
The Group carries out certain research and development activities in the normal course of its business.
The Group keeps employees informed of matters affecting them as employees and the financial and economic factors affecting the performance of the Group by the method of ad-hoc internal communications.
Purchase of Objective Technologies Limited
On 15th July 2022, the Group purchased Objective Technologies Limited, an IT services Company based in Hampshire for consideration of £250k for its 100% share capital. Issue of shares On 27 September 2022, 17,395 £0.05 Ordinary B shares, 17,395 £0.05 Ordinary D shares and 17,395 £0.05 Ordinary F shares were issued for a total consideration of £396,104. Refinancing of bank loan On 22 December 2022, the Company restructured its banking facilities following a decision to repay £3.5m of its banking loans in 2022. The repayment was funded by the proceeds from the sale of Ethos Voice and Data Holdings Limited which afforded the Company sufficient liquidity to do so. Working with the bank, revised covenant levels have been agreed and the repayment date for loans totalling £11,837,171 has been extended to December 2025 with the Company having an extension option if required.
This report was approved by the board on
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ETHOS GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ETHOS GROUP HOLDINGS LIMITED
We have audited the financial statements of Ethos Group Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 May 2022, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.
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 or the 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.
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ETHOS GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ETHOS GROUP HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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ETHOS GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ETHOS GROUP HOLDINGS LIMITED (CONTINUED)
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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector, including Companies Act 2006;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙laws and regulations identified were communicated with the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙reviewed the financial statement disclosures and tested to supporting documentation to assess compliance with provisions of relevant laws and regulations;
∙performed analytical procedures and tested journal entries to identify any unusual or unexpected relationships or transactions.
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ETHOS GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ETHOS GROUP HOLDINGS LIMITED (CONTINUED)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
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.
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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Leytonstone House
London
E11 1GA
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ETHOS GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 04623246
CONSOLIDATED BALANCE SHEET
AS AT 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 04623246
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 15 August 2023.
The notes on pages 19 to 48 form part of these financial statements.
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ETHOS GROUP HOLDINGS LIMITED
REGISTERED NUMBER: 04623246
COMPANY BALANCE SHEET
AS AT 31 MAY 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 19 to 48 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2022
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2022
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Ethos Group Holdings Limited ("the Company") and its subsidiaries (together "the Group") had the following principal activities during the year.
The principal activity of Ethos Group Holdings Limited continued to be that of a holding company and provision of services to group companies. The principal activities of the subsidiary companies continued to be the provision of equipment, solutions, services, consumables, digital document print, copy and management systems. The Company is a private company limited by shares incorporated in England and Wales. Its registered address is 72 Leadenhall Market, London, EC3V 1LT.
2.Accounting policies
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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
The Group's business activities, together with the factors likely to affect its future development, its financial position, financial risk management objectives, details of its financial instruments and derivative activities, and its exposures to price, credit, liquidity and cash flow risks are described in the Strategic Report on pages 1 to 2.
The directors have considered the going concern basis of preparation of the financial statements, noting the result for the year, forecasts and plans going forward. The directors consider that the Company and Group have sufficient working capital and cash reserves to enable the company to continue trading for the forseeable future and, on the basis of cash flow information prepared, will be sufficient for the company's needs. The companies development, its financial position, financial risk management objectives, details of its business activities, together with the factors likely to affect its future financial instruments and derivative activities, and its exposures to price, credit, liquidity and cash flow risk. The Company has considerable financial resources together with long-term contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The group have restructured its banking facilities following a decision to repay £3.5m of its banking loans in 2022, the repayment was funded by the proceeds from the sale of Ethos Voice and Data Holdings which afforded the Group sufficient liquidity to do so. The repayment has significantly reduced the Group’s debt service commitments, its Gross Leverage and total debt. Working with the bank revised covenant levels have been agreed and the forecasts show they will be met. The forecasts have been independently reviewed. After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. On this basis, the directors consider it appropriate to prepare the financial statements on the going concern basis.
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
1) Installed during the period, or; 2) Would have been installed during the period but for a delay in delivery to meet the commercial objectives of the customer, or; 3) If relating to meterage, is recognised in the period in which it relates. All maintenance, service income, terminations and commissions are credited to the statement of income and retained earnings in the period to which the income relates.
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only. Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life. Customer contracts Customer contracts are valued at fair value using the Multi Period Excess Earnings method. Subsequent to initial recognition they are measured at cost less accumulated amortisation and accumulated impairment losses. Customer contracts are amortised on a straight line basis to the consolidated statement of comprehensive income over their useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed thirteen years. The estimated useful lives range as follows: Customer contracts - 7 years Goodwill - 10-13 years Customer database - 7 years
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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.
The majority of stock relates to consumable parts that are held at customer premises. This stock is expensed to the profit and loss account as it is used by the customer. At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Page 25
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group 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.
The Group 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.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Page 26
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
2.Accounting policies (continued)
Critical judgements - Acquisition accounting judgements Judgements are made with respect to the fair value of the net assets acquired and the purchase of consideration, by way of the due dilligence procedure carried out prior to the acquisition. The valuation of intangibles arising have been prepared by external valuation specialists using the valuation methodology for the specific asset. Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumption that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below: i) Useful economic lives of tangible 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 reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 18 for the carrying amount of tangible assets and note 2.16 for the useful economic lives for each class of assets. ii) Impairment of debtors The Group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 21 for the net carrying amount of the debtors. iii) Stock Consumable stocks held at customer premises are expensed to the profit and loss account as they are used. The Group makes and estimate of the estimated useful life/usage of the consumable stock. See note 20 for the carrying value of stock.
Page 27
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
The whole of the turnover is attributable to the principal activity of the Group.
Analysis of turnover by country of destination:
Included within the Statement of Income and Retained Earnings were costs charged to cost of sales and administrative expenses in respect of research and development expenditure.
Page 28
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 29
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 30
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 31
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
13.Taxation (continued)
At the Budget 2021 on 3 March 2021, the Government announced that the corporation tax rate will increase to 25% for companies with profits above £250,000 with effect from 1 April 2023. These changes were substantively enacted at the balance sheet date and hence have been reflected in the measurement of deferred tax balances at the period end.
Page 32
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The profit after tax of the parent Company for the year was £
Page 33
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 34
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 35
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
18.Tangible fixed assets (continued)
Page 36
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 37
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Subsidiary undertakings (continued)
Page 38
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 39
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Obligations under finance lease and hire purchase contracts of £138,973 (2021 - £8,583) are secured on the assets to which they relate.
The bank loan of £10,496,943 (2021 - £11,760,942) is secured by a debenture. Security has also been provided by fellow subsidiary companies included within the Group.
Page 40
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 41
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 42
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 43
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Share premium account
Capital redemption reserve
Merger Reserve
Profit and loss account
Page 44
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
Page 45
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
During the year, the Group identified errors in the valuation of stock impacting on both the opening and closing stock values.
An adjustment has therefore been made to the 2021 figures to reduce the opening stock and brought forward retained earnings by £4,676,402. An adjustment of £4,489,797 was also made to reduce the closing stock figure. The above adjustments therefore reduced purchases by £186,605 with gross profit, operating profit, profit before tax and profit after tax increasing by the same amount as a result of the adjustment. In addition, an other creditor was incorrectly classified as a bank overdraft. An adjustment has therefore been made to correct the figures to reduce the bank overdraft balance by £1,083,524 and increase the other creditor balance by the same amount.
Ethos Group Holdings Limited, Ethos Communications Solutions Limited and Ethos Document Solutions Limited are part of a group VAT registration and as a result, each company is jointly and severally liable for the VAT liabilities of the other members of the VAT group.
The Group operates a defined contributions pension scheme. The assets of the scheme are held seperately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £161,878 (2021 - £185,583). Contributions totalling £25,659 (2021 - £24,861) were payable to the fund at the balance sheet date and are included in creditors.
Page 46
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
During the year, the following transactions occurred with the directors:
Page 47
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ETHOS GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2022
On 15th July 2022, the Group purchased Objective Technologies Limited, an IT services Company based in Hampshire for consideration of £250k for its 100% share capital. Issue of shares On 27 September 2022, 17,395 £0.05 Ordinary B shares, 17,395 £0.05 Ordinary D shares and 17,395 £0.05 Ordinary F shares were issued for a total consideration of £396,104. Refinancing of bank loan On 22 December 2022, the Company restructured its banking facilities following a decision to repay £3.5m of its banking loans in 2022. The repayment was funded by the proceeds from the sale of Ethos Voice and Data Holdings Limited which afforded the Company sufficient liquidity to do so. Working with the bank, revised covenant levels have been agreed and the repayment date for loans totalling £11,837,171 has been extended to December 2025 with the Company having an extension option if required.
The ultimate controlling party is Michelle Norris.
Page 48
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