Change of Ownership
On April 13th, the Company along with all connected companies Methods Analytics Limited and CoreAzure Limited, were purchased by Alten Group, a French listed company. Alten has a growing IT Services division, and the acquisition of Methods and its sister companies is part of a strategic goal to accelerate Alten’s growth in the IT Services market in the UK.
Our mission
Methods is the UK’s leading independent transformation partner for public services. Our mission is to deploy modern technology to deliver improved business and social outcomes that are people-centred, safe, and flexible for the future. We do this by combining innovative people, proven delivery methods, market-driven technology solutions, UK-based talent with security clearance, regional offices for supporting local clients, Government approved secure facilities, and effective partnerships with market leading specialist product and technology suppliers.
Our people
As specialists in technology-enabled public service modernisation, Methods colleagues share an enviably strong sense of mission. Our recruitment efforts focus on finding the best talent from all areas and communities across the country and we are involved in a various independent projects to nurture young talent and apprentices. Upon joining, all colleagues take part in our focussed induction programme and are then ‘buddied’ with a more experienced colleague for their first few months. This process, coupled with our wide ranging and ongoing investment in learning and development, has contributed to increased colleague retention during the year, underpinning positive growth in colleague numbers.
The Board holds collective responsibility for ensuring best practice and delivery in relation to gender and pay equality, as well as diversity and inclusion, formally reviewing these key commitments on a quarterly basis. This oversight underpins our focus as an equal opportunities employer, dedicated to the recruitment, nurturing and growth of talent from all backgrounds and ethnicities.
In designing and delivering organisational transformation, colleagues are highly motivated by the opportunities presented by modern Cloud-based utilities and services to transform public services, safeguarding them for the digital era. Whether they are cloud engineers, technology and service architects, service management specialists, developers, data scientists, or experts in creating user-centric digital experience, Methods’ people are recognised for their shared commitment and approach to modernisation by deploying a common set of professional values. Our shared values: our commitment to the use of government design standards; Cloud-first architecture and services; open standards as appropriate; security by design underpinned by adoption of Agile lifecycles and techniques have been honed over 20 years.
Our financial performance
The Company operates through two divisions: Professional Services who provide IT Contractor services mainly to the UK Public Sector, and IT Services who provide outcome-based IT related services. Company revenue grew from £82.7m in 2021 to £89.2m in 2022, with 41% growth in IT Services from £50m to £70.6m, and 43% decline in Professional Services from £32.7m in 2021 to £18.6m in 2022. This saw a marked acceleration in the trends of the last three years with Professional Services impacted by the implementation of new IR35 rules in the Public Sector in 2017, and IT Services benefitting from increased spend in our key market.
Operating profit before share-based payments and sale related costs has declined from £3.8m (4.6%) in 2021 to £3.3m (3.7%). This decline arises from reduced margins in the public sector due to higher levels of competition and continued investment in sales and marketing and new offerings. These investments are now delivering improved margins in 2023. In addition results have been impacted by £0.7m due to bad debt provisions on two contracts that are in dispute, and still in the process of being resolved at the time of signing the accounts.
Included in the profit for the year are two exceptional costs
1. An accelerated share option charge for the full remaining cost of granting share options due to the sale of the company because the disposal of the company was earlier than assumed in the amortisation of the share options costs at 30 April 2021.
2. Costs due to the disposal of the company relating to completing the sale and sale related incentives designed to help improve the performance of the company. These costs were indirectly funded by the sellers from the gross disposal proceeds of the Group.
Our order book increased over the year from £44.0m to £46.0m.
The company had negative cash flow in year with cash flowing out of operations of £0.8m, with an overall decrease in cash at bank from £14.1m to £10.2m. This decrease in cash was mainly driven by difficulties in billing a number of large contracts due to issues with customer back office processes which lead to an increase of DSO from 59 days to 60 days. Since year end, these have been resolved and we have now seen a recovery in cash balances and positive cash flow.
The future
In working extensively with public services, we strive to deliver efficiently, to deliver value early and to facilitate clients' own capabilities. We continue to offer new ideas and working through practical ways of enhancing our services to deliver higher quality and better value outcomes, quicker than our competitors.
Additionally, we are continuing to invest in developing our own complex delivery services for clients to adopt where it would be either not cost effective or too difficult for clients to do it for themselves. Whilst the overall outsourcing trend has slowed, there are still a range of specialist services in - as examples - managed cloud services, multi-vendor management, service integration, cloud automation and orchestration, security operations, building applications rapidly, adoption of new technologies to deliver new business capabilities where we are very well placed to offer new and enhanced capabilities for our customers.
Our primary markets are: central government, education, justice, defence, healthcare, borders, environment and food, transport and local and place based services. Future government spending plans include continued investment in digital and cloud services together with an on-going push to reduce the reliance on legacy technology and related services. Many large public sector organisations still retain a significant legacy technology base. This migration and transition capability is a core competence.
Whilst we maintain a position of being technology agnostic, we also have expertise in market leading products such as Microsoft enterprise technologies, AWS services, ServiceNow as examples. We believe that they will continue to be the technologies of choice for many government organisations working at scale.
We are optimistic that a responsive UK based expert supplier of specialist market-leading competencies to enable better use of new and emerging technology has a solid future for profitable growth and to prosper .
There are many actual and potential risks which could have a material impact on Methods operations, its financial results, reputation with clients and colleagues and the value of its assets. These could cause future results to miss forecast and have other material adverse consequences. Every year the board carries out an assessment of the principal risks facing the company including those that could impact its business model, future performance and solvency. The table below identifies the principal risks but is not intended to be exhaustive
- staff recruitment and retention
- lack of new business development
- customer churn
- financial weakness
- systems collapse
The Board reviews and agrees policies for managing risk and keeps a register which is effective at anticipating and planning for high probability low impact events such as management or client loss. In the light of recent events stemming from the Covid-19 pandemic the board has decided to look at risk in a different and more strategic way. The greater the risk, the less likely it seems, and the less risky it becomes. Countering the cognitive biases that influence decision making by a board about strategic risk and existential threat requires processes that are explicitly designed and implemented to avoid the worst anticipation failures. The pandemic has made the “standard” risk assessment of probability times impact to be seen as wholly inappropriate. Time, not probability, is the critical factor. Two estimates of time are relevant: how long will it be before calamity strikes and the time required to implement mitigation options. If the former is genuinely greater than the latter, then there exists a positive Safety Margin. This concept of the Safety Margin is critical. However thoroughly analysed, assessments of probability done once a year are of limited value before an existential threat materialises and of no value whatsoever if the threat materialises in fact. The Safety Margin on the other hand, if properly analysed and appropriately used, can be of great value before and after a threat materialises and throughout mitigation activity.
The focus of the board in assessing Strategic Risk, is on monitoring high-value, leading warning indicators of a potential threat becoming an actual threat. These indicators are reflected in our choice of KPIs and discussed at every board meeting. Successful adaptation in the face of a material risk relies on resilience: how fast can Methods respond to a negative event. Resilience is a function of several interacting factors, including maintenance of staff and cash reserves, organisational problem detection and problem solving capabilities. Investing in adaptation in the face of Strategic Risk could be seen as a cost or diverting resources from investment but the Board believes that it creates real value.
As Covid-19 has demonstrated there are many risks which are currently unknown and outside the company ’s control. Where possible Methods takes steps to mitigate risks but realises that it cannot safeguard against all of them. Therefore the approach of the board has been to monitor risks and focus on the time to respond to an arising risk rather than cope with all potential risks; this is done regularly at board meetings by assessing the company' s performance. There has been no material change to Methods risk profile from previous years and the board considers its risk assessment processes to be reasonable robust and comprehensive for a company of its size.
The Directors continue to have regard to the interests of key stakeholders of the c ompany and those of its related undertakings, including the impact of its activities on the community, environment and the c ompany’s reputation, when making decisions. The Directors, acting fairly between shareholders, and acting in good faith, consider what is most likely to promote the success of the c ompany for its shareholders in the long term. The Directors receive monthly updates from management on matters affecting the c ompany’s stakeholders which assists the Directors in their decision-making process.
The Company made Operating Profit before share-based payments and sale related costs of £3.3m (2021: £3.8m) for the year on a turnover of £89.2m (2021: £82.7m).
At 30 April 2022 the Company had net assets of £14.6m (2021: £12.6m).
Cash in bank and in hand at year end decreased from £14.1m to £10.2m.
The Board monitors at each of its monthly board meetings the following key performance indicators as these are the strongest indicators of the ongoing financial health of the Company in terms of profit and cash flow.
Turnover: £89.2m (2021: £82.7m)
Profitability 1: 3.7% (2021: 4.6%)
EBITDA 2: £3.5m (2021: £4.0m)
Cash generated from operations: -£0.8m (2021: £2.5m)
Order Book: £46.0m (2021: £44.0m)
Staff Attrition 3: 36.0% (2021: 27.9%)
Contractor Ratio 4: 65.6% (2021: 60.1%)
1 = Operating profit before share-based payments / Turnover
2 = Earnings before interest, tax, depreciation, amortisation, share-based payments, exceptional items and amounts written off investments.
3 = Staff Leavers / The average of Staff Heads at start of year and staff heads at the end of the year
4 = Contractor FTE’s delivering services to clients / Total of Staff and Contractor FTEs delivering services to clients
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2022.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 14.
Interim dividends were paid amounting to £Nil (2021: £1,100,000). The Directors do not recommend payment of a final dividend (2021: Nil).
The Directors have determined that the c ompany and related undertakings’ key stakeholders are the shareholders of Methods Holdings Limited (the company’s parent company); staff; associates and contractors; customers; technology partners.
How the Directors engage with these stakeholders is summarised below:
Shareholders
The shareholders of the parent company are also the Directors of the parent company . The key areas of interest for the shareholders of the parent company is the current and future financial performance of the c ompany along with updates on HR and operational matters. Shareholders are provided with a quarterly report on the following topics: financial performance; sales performance; marketing; HR; operations; risks. The shareholders, as Directors of the parent company , also determine the overall strategic direction of the company taking into consideration the needs of all our stakeholders.
Our staff
The company’s long-term success is predicated on the commitment of our colleagues to our purpose and its demonstration of our values every day. We engage with our workforce to ensure that we are fostering an environment that they are happy to work in and supports their well-being. We are making significant investments in our workforce as we believe that maintaining low turnover rates across the entire workforce is a key source of efficiency and productivity. We engage through one-to-one meetings with managers, update calls and our intranet. The company is also accredited under the Investors In People scheme and we have also recently achieved the Social Value Quality Mark level 1. A colleague forum, which is representative of the various disciplines working in the company, meets every 6 weeks to discuss issues of importance to colleagues and the company, the results of which are discussed by the Directors and considered when making decisions.
Our associates and contractors
Our associates and contractors provide key niche skills and flexible capacity which enables us to deliver services to our customers. They are integrated into our project teams and are essential to the success of our projects. Regular communication between management and contractors occurs and the issues facing our contractors are fed back to the Board. The company is in the process of creating an intranet accessible by all our contractors to provide a more structured method of communication. The Board also regularly reviews the appropriate skill mix of our contractors compared to permanent colleagues which can lead to selected key contractors becoming permanently employed.
Our customers
We are in regular communication with our customers both during the delivery of services to ensure we are delivering high quality services, meeting their needs, and through events and ad hoc meetings to establish their longer terms needs and priorities. These discussions are an essential part of decisions both in the way we deliver and interact with our customers and to define current and future service offerings the company invests in.
Our technology partners
The company establishes partnerships with key technology providers whose products and offerings are core to our service offerings. Then ongoing relationship with our partners is led by a member of the Board and regular meetings and updates are held with partners by the Director and our staff. The Board also reviews whether the company needs to establish relationships with new partners where new products can enhance services to our clients.
The c ompany's financial instruments comprise cash and liquid resources, and various items such as trade debtors and trade creditors that arise directly from its operations. The main financial risks arising from these financial instruments are liquidity and credit risk.
Liquidity risk arises in relation to the c ompany's management of working capital and the risk that the c ompany will encounter difficulties in meeting financial obligations as and when they fall due. To minimise this risk, the liquidity position and ongoing working capital requirements are regularly reviewed by the Directors.
Trade debtors and trade creditors give risk to credit risk for the c ompany.
Trade debtors are, where appropriate, subject to a credit check, and regular reviews are undertaken of exposures to key customers and those where known risks have arisen or still persist. Unpaid balances are rigorously followed up on an ongoing basis. Any indications of impairment to the recoverability of trade debtor balances are provided for in the profit and loss account.
The risk arising from the possible non-advance of credit by the c ompany's trade creditors either by exceeding the credit limit or not paying within the specified terms is managed by prompt payment and monthly monitoring of the trade balance and credit limit terms for all suppliers.
The financial risk regarding amounts owed by connected companies is considered low risk as they are under the common control of the ultimate shareholders.
The company is not obligated to report on Streamlined Energy Carbon Reporting as this disclosure will be made under the immediate and also ultimate parent c ompany, Methods Holdings Limited.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit :
the information given in the Strategic Report and the Directors' R eport 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.
As explained more fully in the Directors' R esponsibilities S tatement, 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.
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 .
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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 objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no items of other comprehensive income for either the year or the prior year, accordingly no statement of other comprehensive income has been presented.
Methods Business and Digital Technology Limited is a private company limited by shares incorporated in England and Wales . The registered office is Saffron House, 6-10 Kirby Street, London, EC1N 8TS.
The financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements , including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group . T he company has therefore taken advantage of e xemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares ;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income ;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements ;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel .
The financial statements of the company are consolidated in the financial statements of Methods Holdings Limited . These consolidated financial statements are available from its registered office, Saffron House, 6-10 Kirby Street, London, England, EC1N 8TS .
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 credited or charged to profit or loss .
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss , except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors , loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. A m ounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgement (apart from those involving estimates) ha s had the most significant effect on amounts recognised in the financial statements.
Where a contract is loss making the company provides for the full loss of the contract once the loss has been identified and validated by management.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Revenue is recognised based on the value of services delivered in a period. For time and materials engagements this is based on the billable value of time worked. For fixed price projects the Company recognises revenue based on the percentage completion of the contract. Percentage completion is calculated by dividing the total cost to date on the contract by the total estimated cost for the whole contract. Total estimated costs are based on management judgement and detailed project plans. The accounting policy for revenue is disclosed in note 1.3 of the financial statements and the turnover for the year is disclosed in note 3 of the financial statements.
Where the recoverability of Work in Progress and Trade Debtors is unlikely, a provision is made for the unrecoverable amount. Where it is almost certain the amounts will not be recovered the amounts are written off permanently.
Accruals are based on the best estimate of costs that are expected to be invoiced after the year end. These are based on management's knowledge of costs relating to the Company that have not yet been billed and invoices relating to the financial year that are received after the year end.
The cost of granting share options is recognised rateably through the profit and loss account from the date of grant up to the likely date of exercise of the options, having first assumed a reasonable attrition rate through to the likely date of exercise. Attrition rates and based on historic rates of employee turnover and likely exercise dates are based on the assumed intentions of the shareholders at the year end.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
Additional employee remuneration relating to the sale of the company is included within note 4.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2021: 5).
The number of directors who exercised share options during the year was 4 (2021 - 0).
The remuneration for the year includes one-off amounts relating to the completion of the sale of the company.
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit and the standard rate of tax as follows:
The unlisted investments represent minority interest s in two Limited Liability Partnerships. As at 30 April 202 2 , the Directors do not believe that the investments are recoverable and therefore the full provision against the investments made in the previous years have remained.
Amounts due to connected companies are unsecured, interest bearing at Bank of England base rate plus 1.25% and repayable on demand. Amounts due to group undertakings are not interest bearing and repayable on demand.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
In a prior period the parent c ompany entered into an equity-settled share-based payment arrangement in respect of employees of this c ompany. All options were exercised during the year as part of the sale of the parent company. The c ompany had a share-based payment charge in the year o f £474,940 (2021: £1,394,753)
During the year, the company recognised total expenses of £474,940 (2021 - £1,394,753) which related to cash settled share based payment transactions.
Under the terms of the scheme the options c ould only be exercised on a change of control, transfer of business or a listing.
On exercise, the shareholders sold their existing shares to the option holders under contracts between the shareholders and the option holders. The c ompany was not party to these contracts and did not issue new shares for the option holders to purchase. The obligation to sell shares to the option holders therefore s at directly with the shareholders, not the c ompany.
The Black Scholes option pricing model was used to calculate the fair value of the options granted in the period. The key inputs to the model were calculated using equivalent quoted companies as a reference point. In calculating the total value of the options to be expensed, an expected attrition rate was applied to the options outstanding through to the likely exercise date of the options. The total value of the options was amortised on a straight line basis from grant date through to the exercise date.
The c ompany and connected companies (through common ownership) are party to a banking arrangement with Coutts & c ompany, whereby an unlimited cross guarantee is given for all liabilities to the bank of any kind whether incurred alone or jointly with another. At the year end, the overall liability of the c ompany and connected companies to the bank was £ n il (20 21 : £ n il).
The c ompany, and connected companies (through common ownership) are party to an invoice discounting facility with RBS Invoice Finance Limited, whereby an unlimited multi-party guarantee is given for all liabilities to RBS Invoice Finance Limited. At the year end, the overall liability of the c ompany, its parent company and connected companies to RBS Invoice Finance Limited was £ n il (20 21 : £ n il).
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the company entered into the following transactions with related parties:
During the year the company rendered and purchased services of £528,832 (2021: £1,132,997) and £659,618 (2021: £322,867) respectively with companies under common control.
During the year the company charged management fees and other recharges of £1,099,934 (2021: £544,950) to companies under common control.
During the year the company recharged costs related to the sale of the company amounting to £102,175 (2021: £Nil) to companies under common control.
At the year end the company owed £nil (2021: £3,132,953) to companies under common control. These amounts are unsecured, interest bearing at Bank of England base rate plus 1.25% and repayable on demand. The company also owed other amounts of £ 499,238 (2021: £22,065) to companies under common control.
At the year end the company was owed £250,228 (2021: £Nil) by companies under common control .
A Director of the company also serves as a Director of Amersham & Chalfont Hockey Community Sports Club Limited, a Community Amateur Sports Club, and also as a director of Amersham AGP Limited, which is a subsidiary of Amersham & Chalfont Hockey Community Sports Club Limited. In November 2016, an interest free loan of £100,000 was advanced to Amersham AGP Limited which is included in other debtors. The loan is to be repaid over a period of up to six years. In return for the preferential terms of the loan, Methods acts as principal sponsor, has the pitch named after the company, has the majority of advertising space at the facility and benefits from preferential rates for use of the club’s facilities. As at 30 April 2022, £nil (2021: £45,000) remained outstanding.
Methods Holdings Limited is the c ompany’s immediate parent c ompany. The ultimate parent company is Alten S.A., a company incorporated in France, the address of Alten S.A. is 40 Avenue Andre Morizet, 92100, Boulogne Billancourt, France.
Methods Holdings Limited is the parent undertaking smallest group for which group financial statements are drawn up, and of which the c ompany is a member. The registered office address o f Methods Holdings Limited, from which group financial statements are publicly available, is Saffron House, 6-10 Kirby Street, London, EC1N 8TS.