Company registration number 05247486 (England and Wales)
INSTITUTIONAL PROTECTION SERVICES LIMITED
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
INSTITUTIONAL PROTECTION SERVICES LIMITED
COMPANY INFORMATION
Directors
R Leighton
C J Goodman
W D Eason
J S Naughton
Sir A C D Yarrow
Secretary
J S Naughton
Company number
05247486
Registered office
1-3 Staple Inn
London
WC1V 7QH
Auditor
CLA Evelyn Partners Limited
Onslow House
Onslow Street
Guildford
GU1 4TL
INSTITUTIONAL PROTECTION SERVICES LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 5
Profit and loss account
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 18
INSTITUTIONAL PROTECTION SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present their report and audited financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of services for major institutional investors including monitoring shareholder actions and financial antitrust cases around the world and providing recovery and advisory services to manage the risk of participation in investor actions.
Results and dividends
The company has made a net profit for the year after taxation of £103,496 (2021: loss £297,193). During the year, the company has not paid any dividends.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Leighton
C J Goodman
W D Eason
J S Naughton
Sir A C D Yarrow
Auditor
In accordance with the company's articles, a resolution proposing that CLA Evelyn Partners Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;
make judgements 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 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.
Statement of disclosure to auditor
So far as each of the directors at the date of approving this report is aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the directors individually have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information. The directors are not aware of any relevant audit information of which the auditors are unaware.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
INSTITUTIONAL PROTECTION SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
On behalf of the board
J S Naughton
Director
16 August 2023
INSTITUTIONAL PROTECTION SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INSTITUTIONAL PROTECTION SERVICES LIMITED
- 3 -
Opinion
We have audited the financial statements of Institutional Protection Services Limited ( the 'company') for the year ended 31 December 2022 which comprise the Profit and Loss Account, the Balance sheet, the Statement of Changes in Equity and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 2022 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.
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 UK, including the FRC’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 director's 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.
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 Directors' 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 the fact.
We have nothing to report in this regard.
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' Report has been prepared in accordance with applicable legal requirements.
INSTITUTIONAL PROTECTION SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INSTITUTIONAL PROTECTION SERVICES LIMITED
- 4 -
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 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; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 1, 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.
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.
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.
We obtained a general understanding of the company’s legal and regulatory framework through enquiry of management concerning: their understanding of relevant laws and regulations; the entity’s policies and procedures regarding compliance; and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the company’s industry and regulation.
We understand that the company complies with the framework through:
• Outsourcing accounts preparation, and tax compliance to external experts.
• Subscribing to relevant updates from external experts and making changes to internal procedures and controls as necessary.
INSTITUTIONAL PROTECTION SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INSTITUTIONAL PROTECTION SERVICES LIMITED
- 5 -
In the context of the audit, we considered those laws and regulations: which determine the form and content of the financial statements; which are central to the company’s ability to conduct its business; and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the company:
• The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations above:
• Making enquiries of management and those charged with governance as to the risks of non-compliance and any instance thereof;
• Obtained written management representations regarding disclosure of any non-compliance with laws and regulations; and
• Review of minutes of meeting of those charged with governance.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to the manipulation of the financial statements through manual journal entries and incorrect recognition of revenue.
The procedures we carried out to gain evidence in the above areas included:
• Testing the occurrence of revenue, specifically around the balance sheet date;
• Testing journal entries, selected based on specific risk assessments applied based on client processes and controls surrounding manual journals.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
Peter Key
Senior Statutory Auditor, for and on behalf of
Onslow House
CLA Evelyn Partners Limited
Onslow Street
Statutory Auditor
Guildford
Chartered Accountants
GU1 4TL
Date: 16 August 2023
2023-08-22
INSTITUTIONAL PROTECTION SERVICES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
2022
2021
Notes
£
£
Turnover
1,732,340
1,172,707
Administrative expenses
(1,625,603)
(1,542,323)
Other operating income
11,718
2,717
Operating profit/(loss)
2
118,455
(366,899)
Interest receivable and similar income
10,878
573
Interest payable and similar expenses
(60)
Profit/(loss) before taxation
129,273
(366,326)
Tax on profit/(loss)
5
(25,777)
69,133
Profit/(loss) for the financial year
103,496
(297,193)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
INSTITUTIONAL PROTECTION SERVICES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 7 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
6
45,676
102,494
Tangible assets
7
38,578
47,773
84,254
150,267
Current assets
Debtors falling due after more than one year
8
39,480
39,480
Debtors falling due within one year
8
998,344
460,915
Cash at bank and in hand
649,398
974,750
1,687,222
1,475,145
Creditors: amounts falling due within one year
9
(276,170)
(247,740)
Net current assets
1,411,052
1,227,405
Total assets less current liabilities
1,495,306
1,377,672
Provisions for liabilities
11
(42,794)
(39,077)
Net assets
1,452,512
1,338,595
Capital and reserves
Called up share capital
13
6,250
6,250
Share premium account
1,029,378
1,029,378
Profit and loss reserves
416,884
302,967
Total equity
1,452,512
1,338,595
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 16 August 2023 and are signed on its behalf by:
J S Naughton
Director
Company Registration No. 05247486
INSTITUTIONAL PROTECTION SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
6,250
1,029,378
583,684
1,619,312
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(297,193)
(297,193)
Equity settled share-based payments
12
-
-
16,476
16,476
Balance at 31 December 2021
6,250
1,029,378
302,967
1,338,595
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
103,496
103,496
Equity settled share-based payments
12
-
-
10,421
10,421
Balance at 31 December 2022
6,250
1,029,378
416,884
1,452,512
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
1
Accounting policies
Company information
Institutional Protection Services Limited is a private company, limited by shares, incorporated in England and Wales. The registered office is Third Floor, 1-3 Staple Inn, London, WC1V 7QH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 Section 1A "Small Entities" and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The preparation of financial statements in compliance with FRS 102 Section 1A requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the accounting policies.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the Board has prepared cash flow forecasts and formed a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the Board continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents the fair value of services provided to clients net of value added tax. Fair value reflects the amount expected to be recoverable from clients. Non-contingent fee services provided to clients during the year which at the year end have not been invoiced to clients are recognised on a straight line basis over the specified period. Where revenue has been invoiced in advance of services provided, the income is included within creditors as deferred income.
Turnover is recognised in respect of contingent fees on confirmation of the amount of award to the company's clients following the outcome of a class action. Until this significant act, the directors do not consider this type of revenue to be either probable or capable of reliable estimation.
1.4
Intangible fixed assets other than goodwill
In the research phase of an internal project, it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be measured reliably. Where development expenditure increases the life of the asset the remaining economic life is reviewed.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
5 years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 10 -
Depreciation is recognised so as to write off the cost, or valuation of assets, less their residual values over their useful lives on the following bases:
Leasehold improvements
20% straight line
Fixtures and fittings
25% reducing balance
Computers
25% reducing balance
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.
Fixed assets do not require replacement parts or the cost of major inspections to be recognised separately.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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.
Classification of financial liabilities
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
Basic financial liabilities, including creditors and bank loans, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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.
1.8
Equity instruments
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.
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 11 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current or deferred taxation assets and liabilities are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
No liability is recognised in respect of holiday pay as employees are unable to carry forward holiday into future periods.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.
The assets of the scheme are held separately from those of the company in an independently administered fund.
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.13
Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the profit and loss account is charged with the fair value of goods and services received.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Operating profit/(loss)
2022
2021
Operating profit/(loss) is stated after charging/(crediting):
£
£
Exchange gains
(20,903)
(2,823)
Depreciation of owned tangible fixed assets
13,007
16,703
Amortisation of intangible assets
75,700
71,924
Operating lease rentals
94,560
84,579
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administration
20
19
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Employees
(Continued)
- 13 -
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
910,353
867,916
Social security costs
103,797
97,031
Pension costs
15,542
15,761
1,029,692
980,708
4
Directors' remuneration and dividends
2022
2021
£
£
Remuneration paid to directors
286,333
268,000
Company pension contributions to defined contribution schemes
2,642
2,636
Equity settled share based payment costs
6,024
19,946
294,999
290,582
5
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
29,057
(62,116)
Adjustments in respect of prior periods
(373)
Total current tax
28,684
(62,116)
Deferred tax
Origination and reversal of timing differences
567
(3,174)
Deferred tax on share-based payments charge
(3,474)
(3,843)
Total deferred tax
(2,907)
(7,017)
Total tax charge/(credit)
25,777
(69,133)
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
5
Taxation
(Continued)
- 14 -
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit/(loss) before taxation
129,273
(366,326)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
24,562
(69,602)
Tax effect of expenses that are not deductible in determining taxable profit
5,878
1,184
Adjustments in respect of prior years
(373)
Depreciation on assets not qualifying for tax allowances
1,530
3,174
Deferred tax
(5,820)
(3,889)
Taxation charge/(credit) for the year
25,777
(69,133)
Factors that might affect future tax charges:
The Finance Act 2021 included legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.
6
Intangible fixed assets
Software
£
Cost
At 1 January 2022
359,620
Additions
18,882
At 31 December 2022
378,502
Amortisation and impairment
At 1 January 2022
257,126
Amortisation charged for the year
75,700
At 31 December 2022
332,826
Carrying amount
At 31 December 2022
45,676
At 31 December 2021
102,494
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
7
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2022
14,377
19,586
111,817
145,780
Additions
341
3,471
3,812
At 31 December 2022
14,377
19,927
115,288
149,592
Depreciation and impairment
At 1 January 2022
13,685
15,168
69,154
98,007
Depreciation charged in the year
598
1,160
11,249
13,007
At 31 December 2022
14,283
16,328
80,403
111,014
Carrying amount
At 31 December 2022
94
3,599
34,885
38,578
At 31 December 2021
692
4,418
42,663
47,773
8
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
165,326
303,006
Corporation tax recoverable
62,116
Other debtors
18,643
Prepayments and accrued income
814,375
95,793
998,344
460,915
2022
2021
Amounts falling due after more than one year:
£
£
Other debtors
39,480
39,480
Total debtors
1,037,824
500,395
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
9
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
151,267
27,712
Corporation tax
29,057
Other taxation and social security
31,054
55,748
Other creditors
4,012
134,121
Accruals and deferred income
60,780
30,159
276,170
247,740
10
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
9,644
9,077
2022
Movements in the year:
£
Liability at 1 January 2022
9,077
Charge to profit or loss
567
Liability at 31 December 2022
9,644
11
Provisions for liabilities
2022
2021
£
£
Dilapidations
33,150
30,000
Deferred tax liabilities
10
9,644
9,077
42,794
39,077
Movements on provisions apart from deferred tax liabilities:
Dilapidations
£
At 1 January 2022
30,000
Additional provisions in the year
3,150
At 31 December 2022
33,150
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
11
Provisions for liabilities
(Continued)
- 17 -
Provision is made for property lease dilapidations accruing over the life of the lease which ends on 19 January 2026. However, this timing of this cost may be deferred beyond 2026 if the company chooses to renew its lease at the same premises.
12
Share-based payment transactions
Number of share options
Weighted average exercise price
2022
2021
2022
2021
Number
Number
£
£
Outstanding at 1 January 2022
30,833
20,833
6.49
4.80
Granted
10,000
10.00
Outstanding at 31 December 2022
30,833
30,833
6.49
6.49
Exercisable at 31 December 2022
Share options outstanding at 31 December 2022 had an exercise price ranging from £4.80 to £10 per share, and a remaining contractual life of between 5 and 10 years. Share options can be exercised either on a trade sale of the business, or at 10 years after grant, or at the discretion of the Board.
The company has measured the fair value of options granted using the Black Scholes option pricing model.
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £13,895 (2021 - £20,319) which related to equity settled share based payment transactions.
13
Called up share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
625,047 Ordinary shares of 1p each
6,250
6,250
6,250
6,250
14
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2022
2021
£
£
Total for whole lease
207,552
273,728
207,552
273,728
INSTITUTIONAL PROTECTION SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
15
Related party transactions
There are no related party transactions involving the company, its directors or shareholders which require disclosure in the current or previous financial years.
16
Pension commitments
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. The company contributes a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the company with respect to the scheme is to make the specified contributions.
At the end of the year the company owed £4,012 (2021: £3,923) in respect of pension contributions.
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